April 21, 2024

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Swiss bankers accused of running out of millions linked to Putin’s friend

Swiss bankers accused of running out of millions linked to Putin’s friend

GENEVA – Four bankers went on trial in Zurich on Wednesday accused of helping cover up the movements of tens of millions of Swiss francs through accounts opened in the name of a Russian musician with close ties to President Vladimir Putin.

The case centers on two bank accounts in the name of Sergei B. Accounts have been opened in the Swiss unit of Gazprombank, a leading creditor in Russia.

The trial raises broader questions about the role of Swiss banks as a preferred destination for billions of dollars in deposits linked to Russian officials, an oligarch, and ultimately Mr. Putin, especially in the aftermath of Russia’s invasion of Ukraine last year.

Swiss prosecutors say the defendants — the CEO of Gazprombank and three other employees of the bank — were criminally negligent in failing to perform robust due diligence to determine the beneficial owner of the assets flowing through the accounts. The bankers, three Russians and a Swiss, denied the accusation.

Prosecutors say the bankers should have suspected that Mr. Roldugin was not the beneficial owner of those assets but merely, as the indictment notes, a “straw man” or “purse” for Mr. Putin.

The indictment read: “It is well known that officially Russian President Putin has only an income of 100,000 Swiss francs, he is not rich, but in fact he has enormous assets that are managed by people close to him.”

Prosecutors also drew attention to companies set up by the Bank of Russia in Mr. Roldugin’s name, an enterprise whose chairman, billionaire billionaire Yuri Kovalchuk, said, “is considered Mr. Putin’s treasurer.”

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Mr. Roldugin admitted that he is not a businessman. “I don’t have millions,” he said in a 2014 interview, but accounts opened with Gazprombank attributed assets of more than $50 million to him and he receives more than $8 million annually, according to the indictment.

In an interview with Russian TV in 2016, Mr. Roldugin said that his alleged fortune mainly consists of donations from wealthy businessmen to finance the purchase of expensive musical instruments by Russian musicians.

Gazprombank opened the accounts in 2014, after Russia annexed Crimea, and managed them until 2016. Its presence was demonstrated in the 2016 Panama Papers leak, which released more than 11 million documents containing financial details of more than 214,000 offshore business entities.

The Swiss financial market regulator, FINMA, launched an investigation shortly after the leak, which eventually led to criminal charges being filed by prosecutors against Gazprombank.

Switzerland has taken steps to clean up its reputation as a haven for dirty money, and Wednesday’s one-day trial attracted attention as evidence of bankers being held accountable by Swiss authorities. It has also been criticized for the lenient penalties prosecutors are seeking. They requested a suspended sentence of seven months in prison, with two years probation, for each defendant.

“It’s absurd if you want to change the environment in which bankers launder money for Russian officials,” William F. Browder, a British-based financier and campaigner against corruption in Russia, said in a phone interview. “They should face prison sentences, not a slap on the wrist.”

Mr. Browder, who was a major investor in Russia, said he began a campaign to sanction corrupt Russian officials after his tax adviser, Sergei Magnitsky, was arrested, severely beaten and left for dead in prison.

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In 2021, Swiss authorities closed a decade-long investigation into a money laundering scandal involving money hijacked into Swiss bank accounts by Russian officials, without charges being filed. In January, authorities decided to return to Russia more than $14 million in funds frozen in this investigation and held in accounts at Credit Suisse and UBS.