Geneva Fund Manager Echeverria Found Not Guilty in Madoff Trial

  • Echeverria awarded more than 2 million Swiss francs in ruling
  • Lawyer says decision gives Echeverria back his `dignity'

Manuel Echeverria was found not guilty of mismanaging a Geneva fund that streamed clients’ money to Bernard Madoff, ending a six-year effort by Swiss prosecutors to punish local investment managers with ties to the American con man.

There was no reasonable expectation that Echeverria, who ran Banco Santander SA’s Optimal Investment Services business from the Swiss city, could have known of Madoff’s fraud, said Judge Alexandra Banna as she delivered her verdict at Geneva’s criminal courthouse on Friday. She awarded him 1 million Swiss francs ($1.02 million) in compensation for economic damages, plus 1 million francs for legal fees and a further 15,000 francs to cover moral damages.

“Mr. Echeverria never set foot on the 17th floor of the Lipstick building nor saw Mr. Madoff’s operations,” Judge Banna said, referring to the New York headquarters of Madoff’s firm.

Echeverria was first charged in 2009, the same year Madoff was sentenced to 150 years in prison after he pleaded guilty to orchestrating a $17.5 billion Ponzi scheme that took money from new investors to pay old ones. While the charge against Echeverria of mismanagement with intent to enrich carried a maximum penalty of five years’ imprisonment, Geneva prosecutor Marc Tappolet had only sought a fine of 150,000 Swiss francs with a three-year suspended jail term.

‘Honesty and Integrity’

The decision gives Echeverria back his “dignity, honesty and integrity” and “he’s glad he’s been recognized as a victim,” said his lawyer Saverio Lembo in a brief interview after the verdict. The entire case was a waste of taxpayer money and an “ideological crusade” on the part of the Geneva prosecutor, Lembo said.

Echeverria’s acquittal means there’s yet to be a conviction of a European fund manager with ties to Madoff. A settlement in September between the five former fund managers at Geneva-based Aurelia Finance SA charged with aggravated mismanagement gave the plaintiffs “strong” compensation in return for the charges being dropped. Other cases in Luxembourg have either stalled or become bogged down in legal proceedings.

Optimal, a unit of Madrid-based Santander, had about 2.33 billion euros ($2.53 billion) of client money invested with Madoff at its peak. Optimal has been exonerated by the civil courts in Spain as well as by the trustee in charge of Madoff’s liquidation in the U.S., Irving Picard, Lembo, Echeverria’s lawyer, said before the trial began.

Santander, without admitting fault, agreed in 2009 to pay Picard $235 million to settle claims related to its profits from Madoff’s Ponzi scheme.

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