A former Coutts banker has been found guilty of breaching anti-money laundering laws by allowing Jho Low, the alleged mastermind of the 1MDB investment scandal, to transfer hundreds of millions into Swiss accounts without warning regulators.
In a judgment on Friday, Switzerland’s top criminal court handed down a fine of SFr50,000 ($55,000) to the banker — a former compliance officer — who it found was guilty of repeatedly ignoring internal warning signs. As is common in many Swiss legal proceedings, the court withheld the identity of the individual found guilty.
The verdict is not final and may be subject to appeal.
The case centred around a $700m transfer made by Mr Low in 2009 into a Swiss account from an offshore company controlled by the Malaysian businessman.
Prosecutors alleged that Coutts had been aware of numerous warning signs indicating the dubious origins of the money. According to Swiss law, the country’s anti-money laundering body, MROS, should have been immediately informed of the suspicions.
The individual found guilty was responsible for compliance and reporting of the transactions concerned, but had failed to act.
Judges agreed with the Swiss federal prosecutors’ central accusation that he had “intentionally” ignored the rules.
“The court determined that there were several suspicious instances of [possible] money laundering that raised serious concern, and which grew stronger over the course of the relationship with Jho Low and his offshore company,” the federal prosecutor’s office said in a statement following the decision.
“Despite being aware of these well-founded suspicions, [the individual] failed to report to MROS until he had left the bank,” it added.
The international arm of Coutts, including its Swiss business, was sold by Royal Bank of Scotland, recently renamed as NatWest, in 2016.
NatWest said: “The ongoing trial and investigation relates to individual failings within Coutts & Co AG, the group’s former Swiss arm. The bank has fully complied with all legacy investigations into this issue, and will continue to do so if required.”
Mr Low is currently a fugitive from authorities in Malaysia, Singapore and the US, who have accused him of being the architect of a sprawling fraud that saw him siphon as much as $4.5bn from Malaysian sovereign wealth and investment fund 1MDB.
Mr Low has denied wrongdoing.
Mr Low used Coutts as one of his main banks — initially establishing a relationship with the British business’s Singapore branch, before switching the focus of his activities to Switzerland.
Last year, two Coutts bankers were fined by Swiss financial regulators over their role in facilitating Mr Low’s business transactions through Switzerland. In total, according to Finma, Coutts’ Swiss bankers processed more than $2.4bn of illicitly earned money.
Coutts was ordered by the regulator to pay back $6.5m in “unlawfully generated” profits relating to the relationship in 2017.
Friday’s judgment is the first criminal finding in Switzerland relating to the affair.
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