Switzerland's highest criminal court found the former CEO of Falcon Private Bank innocent of charges related to Malaysian graft scheme 1MDB.
A Swiss criminal court found Eduardo Leemann not guilty of charges related a $5 billion Malaysian graft scandal, according to a ruling released on Wednesday. The Swiss banker ran Falcon, a Zurich private bank, until 2016. The bank itself was found guilty of wrong-doing and will pay a fine of 3.5 million Swiss francs ($3.8 million), plus a clawback of 7.2 million francs.
The ruling represents a landmark for white-collar crime in Switzerland: Falcon, which owner Abu Dhabi was forced to sell itself to a rival after failing to recover from its dealings with 1MDB, is the first Swiss company to be held accountable under an 18-year-old criminal code that until now has never been tested in court.
«In Dubio Pro Reo»
Swiss prosecutors had alleged wrong-doing in a stake that Aabar Investments, the Abu Dhabi vehicle through which the oil-rich emirate controlled Falcon, took in Italian bank Unicredit. Specifically, the charges related to the role of ex-Aabar Chairman Khadem al-Qubaisi. The executive was sentenced to 15 years imprisonment in Abu Dhabi for pilfering state money.
Leemann is a rare banker to be tried for money laundering and enabling corruption. The Swiss native was «effectively the private banker» of al-Qubaisi, the Swiss court wrote in the ruling. However, prosecutors couldn't demonstrate that Leemann knew al-Qubaisi was acting in bad faith, the court ruled, noting it had arrived at the decision «in dubio pro reo».
Causal To Money-Rinse
Falcon wasn't as lucky: the bank had a highly problematic set-up which fostered wrong-doing, the court found. «The organizational deficiencies and inadequate execution through internal orders, or the factual absence, were causal in not recognizing the incriminating business related to money laundering,» presiding judge Silvia Frei wrote in the ruling.
Falcon, which was censured by regulator Finma five years ago, first attempted a revival under new management focused on crypto assets before selling its clients' assets to Geneva's One Swiss Bank last November. The court rejected the bank's, Leemann's, and Aabar's request for compensation of damages.
Emirate Shoulders Fine
Leemann, who led Falcon for two decades, said the ruling was in line with his expectations. «I am very relieved that the accusations levied against me by the Attorney General were found to be unfounded and without merit and that I can repair my good name,» he said in a statement.
Falcon's previous owner, Abu Dhabi, bears the 10.7 million franc penalty, plus its share of the court costs. A spokesman for the emirate didn't comment on the ruling.
