Ex-Credit Suisse adviser sentenced to five years for “clever fraud“

Geneva prosecutor Bertossa stands outside the courthouse after the verdict of the trial of Lescaudron a Credit Suisse banker in Geneva. (Reuters)
Updated 09 February 2018
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Ex-Credit Suisse adviser sentenced to five years for “clever fraud“

GENEVA: Former Credit Suisse client adviser Patrice Lescaudron was sentenced to five years imprisonment by a Geneva court on Friday for abusing the trust of clients and putting in place a fraudulent scheme that brought him tens of millions of francs.
Lescaudron appeared in court for the verdict wearing a grey fleece sweatshirt emblazoned with Ferrari, the name of the Italian sports car he was said to have purchased with money he amassed.
Judge Alexandra Banna said the ex-banker was guilty of fraud in his handling of former clients, including former Georgia Prime Minister Bidzina Ivanishvili and Russian oligarch Vitaly Malkin. She said he had caused losses totalling 143 million Swiss francs ($152 million) and made personal gains of 30 million francs.
The adviser had “fooled the bank and the client” through a “clever fraud” in which he “copy-pasted signatures on documents so as to falsify transfer orders,” Banna said.
Lawyers for Ivanishvili have said that fraudulent activities by the adviser lost the former Georgian leader hundreds of millions of dollars.
Zurich-based Credit Suisse has said the former adviser violated internal rules and Swiss law and worked to conceal these actions from the bank.
“The former relationship manager demonstrated a high degree of criminal energy, violating internal controls and rules as well as Swiss law and concealing his criminal activities from Credit Suisse colleagues,” the bank said in January.
“Two years of criminal investigation have not revealed any indication that the former relationship manager was helped with his criminal actions by other Credit Suisse employees.”
Representatives for Ivanishvili argued the adviser was not a lone wolf, however, saying senior management had knowledge of his activity and that the bank did not take action but instead continued to charge commission payments on the products sold.
Ivanishvili’s complaints relate to the handling of portfolios between 2005 and 2015, when it is alleged money was stolen and substantial losses resulted from unauthorized investments.
Prosecutor Yves Bertossa on Friday told reporters he would not comment on the bank’s role in the matter because it was the subject of a parallel procedure.
Lescaudron’s sentence matched what prosecutors had sought.
Lescaudron amassed a personal wealth of 32 million francs, including houses in Switzerland and the Italian seaside resort of Porto Cervo, and a Picasso lithograph, said to be missing.
His total assets, including the Ferrari and jewels that had been “financed with ... commissions” said to be the product of his crimes, were seized among items listed in a seven-page sequestration.
He was orderd to make repayments totalling more than $130 million.
The Porto Cervo house was also seized, but the Lescaudrons were allowed to keep their family home in Arzier, Switzerland.
Lescaudron has already spent two years in pre-trial detention, where he was noted for exhibiting “exemplary behavior,” the court had said.
“The sentence is very harsh,” Lescaudron’s lawyer Simon Ntah said. “But it leaves a bit of hope, it allows him to have a perspective.” Ntah added he hoped the sentence would be commuted for good behavior so Lescaudron could be released in 2019.
Lescaudron sat passively throughout the reading, stood for the verdict and was escorted back to prison at the end.


Malaysia sets up task force to probe 1MDB scandal

Updated 21 May 2018
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Malaysia sets up task force to probe 1MDB scandal

  • 1Malaysia Development Berhad was set up in 2009 ostensibly to promote the development of the Malaysian economy
  • Huge sums of money from the fund are believed to have been funneled round the world in a complex web of transactions

KUALA LUMPUR: Malaysia on Monday set up a task force to probe allegations that billions of dollars were looted from sovereign wealth fund 1MDB in an audacious fraud overseen by ousted leader Najib Razak.
New Prime Minister Mahathir Mohamad led a reformist alliance to a shock victory at the May 9 polls over Najib’s coalition, which had governed Malaysia uninterrupted for over six decades.
A major reason for the success of 92-year-old Mahathir was public disgust at allegations of endemic corruption among the country’s ruling elite, and in particular an explosive scandal surrounding state fund 1MDB.
The fund, 1Malaysia Development Berhad, was set up in 2009 ostensibly to promote the development of the Malaysian economy.
But it is alleged that Najib, his family and cronies looted the investment vehicle in a massive fraud stretching from the Cayman Islands to New York, with stolen funds used to buy everything from real estate to artworks.
Since Najib’s ouster, Malaysians have been gripped by a series of police raids on properties linked to the ex-leader, which have yielded a stash of hundreds of luxury handbags believed to belong to his despised wife Rosmah Mansor, as well as suitcases stuffed with cash and jewels.
Mahathir — who first served as premier from 1981-2003 and came out of retirement to take on Najib — had pledged to reopen probes into 1MDB.
The new task force will be charged with seizing back assets and pursuing legal action against those suspected of breaking the law in relation to the fund, said the prime minister’s office.
“The government hopes the setting up of this task force, comprising a multi-agency enforcement unit, will help restore the dignity of Malaysia that has been tainted by the 1MDB kleptocracy scandal,” said Mahathir’s office.
The task force will include representatives of the anti-graft agency, the police and the attorney-general’s office. Some of those on the body were part of previous probes into the controversy but were pushed out by Najib’s regime as he moved to shut down domestic investigations.
Several current and former senior government officials will lead the task force, including Abdul Gani Patail, the former attorney-general who was removed from his post in 2015 as he was leading investigations into 1MDB.
Huge sums of money from the fund are believed to have been funneled round the world in a complex web of transactions, and the task force’s remit will include reaching out to law enforcement agencies in other countries, including the US, Switzerland, Singapore and Canada, according to Mahathir’s office.
The US Statement Department alleges in civil lawsuits that $4.5 billion was stolen from 1MDB and sent to the US, where it was spent on funding the Hollywood film “The Wolf of Wall Street” and lavish purchases including Monet and Van Gogh paintings.
Najib and 1MDB have consistently denied any wrongdoing.
The ex-leader, 64, sought to mount a fightback over the weekend, insisting he had not stolen any public money during a speech to hundreds of supporters in the constituency where he has been an MP for decades.
Mahathir, a former mentor of Najib who turned on him over 1MDB, is determined to breathe new life into democratic institutions that suffered under the ex-premier’s increasingly authoritarian rule and usher in a new dawn for the country.
In a speech to civil servants Monday, Mahathir said that Malaysia’s debt had ballooned to more than one trillion ringgits ($251 billion).
“We must realize that before our country was respected, but now it is no longer respected,” he said.