Ex-Credit Suisse Banker Charged in Turkish Client ProbeBy
Woman was boss of relationship manager already charged in 2016
Case focused on a Geneva firm managing money for wealthy Turks
Swiss prosecutors have charged a second former employee of Credit Suisse Group AG, widening a criminal investigation into a defunct Geneva-based asset manager that was handling money for the bank’s wealthy Turkish clients, according to people familiar with the case.
The woman, who can only be identified as R. under Swiss law, was charged with complicity in fraud and money laundering for having improperly authorized trade instructions from Geneva-based TG Investments in April 2014, said the people, who didn’t want to publicly discuss an investigation that is ongoing. She was charged for not stopping the trades despite inexplicable fluctuations in valuations, and by extension enabling the fraud, they said.
Geneva Prosecutor Johan Droz in December charged the two founding partners of TG Investments, who left Credit Suisse in 2008 to set up a firm to manage money for their rich Turkish customers, with fraud and criminal mismanagement for forging signatures and faking orders to try to cover losses of at least 150 million Swiss francs ($156 million). G., a Credit Suisse relationship manager who worked with TG Investment Partners to execute account transfers and was charged in December with complicity in fraud, reported to R., the people said.
The widening of the Turkish probe to a second, more senior Credit Suisse manager comes at an awkward time for the bank’s wealth management unit, as one of its former bankers is scheduled to face trial later this year on charges he forged trades to try to cover up losses for his Russian clients. That case, though unrelated, also took place in Geneva and involved a key emerging market where Credit Suisse CEO Tidjane Thiam is looking to expand in wealth management as returns from trading securities slow.
R. was fired from the bank earlier this year, a person familiar with the situation said.
David Bitton, her lawyer, said the charges against R. are “hasty and contradict the facts” of the case. “My client never met the clients of TG, never met the TG partners and was not in charge of this relationship with Credit Suisse,” he said by telephone.
Saverio Lembo, a lawyer for G. who was suspended by the bank in 2015 and later fired, said his client “feels betrayed by the unsuspected and sophisticated fraud” by the two TG partners. G.’s role was at the lower end of the management chain with no decision-making power and his actions were within the law, Lembo said.
Gregoire Rey, a lawyer for one of the two TG partners who can only be identified as H., has acknowledged the trades but has previously said that his client never intended to profit from the transaction and was only doing it to cover the unexpected losses. Ilir Cenko, a lawyer for the second TG partner, was away and not immediately available to comment.
Droz said in an interview in March that it’s likely more Credit Suisse employees will be investigated. The Geneva prosecutor has also considered investigating the bank for money laundering, people familiar with the case said, though two of them have said that is unlikely. Under Swiss law, a bank can be found to have violated Switzerland’s anti-money-laundering law if a judge determines that it didn’t do enough to stop the transfers and that guilt cannot be attributed to a single individual.
“The criminal investigation is directed against representatives of TG Investment and two former Credit Suisse employees, and not against Credit Suisse,” the bank said in an emailed statement, adding that it “complies with all applicable laws and regulations in all countries in which it operates.”