Data Leak Reveals How Swiss Bank Served Strongmen and Spies

Swiss banks’ client lists are among the world’s best-kept secrets, protecting the identities of some of the world’s richest people and clues to how they amassed their fortunes.

Today, an extraordinary data leak from Credit Suisse, one of the world’s most iconic banks, reveals how the bank held hundreds of millions of dollars for heads of state, intelligence officials, military men and women. sanctioned cases and perpetrators of human rights violations, among many others.

A self-proclaimed whistleblower leaked data on more than 18,000 bank accounts, collectively holding more than $100 billion, to the German newspaper Suddeutsche Zeitung. The newspaper shared the data with a non-profit journalism group, the Organized Crime and Corruption Reporting Projectand 46 other news agencies around the world, including the New York Times.

The data covers accounts opened from the 1940s through the 2010s, but not the bank’s current operations.

Among those listed as holding millions of dollars in Credit Suisse accounts were King Abdullah II of Jordan and the two sons of former Egyptian strongman Hosni Mubarak. Other account holders included the sons of a Pakistani intelligence chief who helped funnel billions of dollars from the United States and other countries to the mujahideen in Afghanistan in the 1980s and Venezuelan officials caught in the trap of a long-running corruption scandal.

The leak shows that Credit Suisse opened accounts and continued to serve not only the ultra-rich, but also people whose problematic backgrounds would have been obvious to anyone who ran their names through a search engine.

Swiss banks have long faced legal bans on taking money linked to criminal activity, said Daniel Thelesklaf, the former head of the Swiss anti-money laundering agency. But, he said, the law has generally not been enforced.

Candice Sun, spokesperson for the bank, said in a statement that “Credit Suisse strongly rejects the allegations and inferences regarding the bank’s alleged business practices.” She said many of the accounts in the leak go back decades, to “a time when the laws, practices and expectations of financial institutions were very different from what they are today.”

Ms Sun said that while Credit Suisse cannot comment on specific clients, many accounts identified in the leaked database have already been closed. “Of the remaining active accounts, we are satisfied that appropriate due diligence, reviews and other control-related actions have been taken, including pending account closures,” she said.

Ms Sun added that the leak appears to be part of “a concerted effort to discredit the bank and the Swiss financial market, which has undergone significant changes in recent years”.

The leak follows the so-called Panama Papers in 2016, the Paradise papers in 2017 and the Pandora’s Papers Last year. They all shine a light on the secretive operation of offshore banks, law firms and financial service providers that allow wealthy individuals and institutions – including those accused of crimes – to move huge sums of money, largely beyond the reach of tax collectors or law enforcement.

The new disclosures are likely to intensify legal and political scrutiny of the Swiss banking industry and, in particular, of Credit Suisse. The bank is already reeling from the brutal evictions of its two senior executives.

With its ironclad bank secrecy laws, Switzerland has long been a safe haven for people looking to hide money. Over the past decade, that has made the country’s biggest banks — especially its two giants, Credit Suisse and UBS — a target for authorities in the United States and elsewhere trying to crack down on tax evasion. , money laundering and other crimes.

In 2014, Credit Suisse pleaded guilty to conspire to help Americans file false tax returns and agreed pay fines, penalties and restitution totaling $2.6 billion.

Three years later, the bank paid the Department of Justice $5.3 billion to settle allegations regarding its marketing of mortgage-backed securities. Last fall he agreed to pay $475 million to US and UK authorities to resolve an investigation into a bribery and corruption scheme in Mozambique. And this month a trial began in Swiss in which Credit Suisse is accused of allowing drug traffickers to launder millions of euros through the bank.

The Department of Justice and the Senate Finance Committee are also looks at whether US citizens continue to hold undeclared accounts at the bank.

Several former Credit Suisse employees told federal prosecutors late last year that the bank continued to hide hundreds of millions of dollars from customers long after its 2014 guilty plea, according to a whistleblower complaint filed. last year by a former bank official and an attorney for other former employees. (The suit was dismissed after the Justice Department said it “threatens to interfere with ongoing discussions with Credit Suisse” over the handling of Swiss bank accounts held by US citizens.)

The media consortium dubbed the latest leak “Swiss Secrets”. Of the more than 18,000 bank accounts involved, about 100 US citizens held accounts, but none are public figures.

One of the biggest revelations is that Credit Suisse continued to do business with clients even after bank officials reported suspicious activity involving their finances.

One of the account holders was Venezuela’s former deputy energy minister, Nervis Villalobos.

Employees of Credit Suisse’s compliance department had reason to be reluctant to do business with him. The bank had a 2008 report from an outside due diligence firm detailing corruption allegations involving Mr. Villalobos and Venezuela’s state-owned oil company, Petróleos de Venezuela, according to a Spanish police report obtained by the media consortium. . (The Times reviewed the report.)

Credit Suisse nevertheless opened an account for him in 2011, according to leaked bank data. The account, which was closed in 2013, held up to $10 million.

The lawyers for Mr. Villalobos, who was charged by the Department of Justice in 2017, did not respond to requests for comment.

In total, there were 25 Credit Suisse accounts, containing a total of around $270 million, which belonged to people accused of involvement in a large conspiracy surrounding the Venezuelan oil company. The accounts remained open after the scandal began to become public, but were closed when criminal charges were filed.

The bank has also opened accounts for a Zimbabwean businessman who sanctioned by US and European authorities for his ties to the government of the country’s longtime president, Robert Mugabe. The accounts remained open for several months after the sanctions were imposed.

The leaked banking information included numerous accounts linked to government officials across the Middle East and beyond. The data raises questions about how officials and their relatives amassed vast fortunes in a region plagued by corruption.

The sons of former Egyptian President Hosni Mubarak, Alaa and Gamal Mubarak, held a total of six accounts at various times, including one in 2003 worth $196 million.

In a statement to The New York Times, lawyers for the Mubaraks declined to comment on specific accounts, but said the suggestion that any of the Mubaraks’ assets were “tainted with any illegality or the result of patronage or use of influence” would be “both unfounded and defamatory”.

All of the assets they held, the statement said, came from their “successful professional business activities.”

King Abdullah II of Jordan, one of the few leakers who remains in power, had six accounts, including one with a balance of over $224 million.

The Royal Hashemite Court of Jordan said in a statement that there was no “unlawful or improper conduct” regarding bank accounts. They held part of the king’s private wealth, which was used for personal expenses, royal projects to help Jordanians and the upkeep of Islamic holy sites in Jerusalem, of which he is the guardian.

Senior intelligence officials and their descendants from several countries that cooperated with the United States in the war on terror also had money stashed away at Credit Suisse.

As head of Pakistan’s intelligence agency, General Akhtar Abdur Rahman Khan helped funnel billions of dollars in cash and other aid from the United States and other countries to the mujahideen in Afghanistan to support their fight against the Soviet Union.

In 1985, the same year President Ronald Reagan called for greater scrutiny of aid going to Afghanistan, an account was opened in the names of three of General Khan’s sons. (The general was never charged with stealing aid money.) Years later, the account would reach $3.7 million, according to leaked documents.

Two of the general’s sons, Akbar and Haroon Khan, did not respond to requests for comment from the draft report. In a text message, a third son, Ghazi Khan, called the account information “not correct”, adding: “The content is conjectural”.

In 2003, the year the United States invaded Iraq to overthrow Saddam Hussein, Saad Kheir, the head of Jordan’s intelligence agency, opened an account that would eventually contain $21.6 million.

The account was closed after Mr. Kheir died in 2009.

The family of Mr. Mubarak’s brutal and longtime spymaster, Omar Suleiman, also had an account. Mr. Suleiman died in 2012. Efforts by the reporting project to reach his family were unsuccessful.

The leaked recordings were provided to Germany’s Süddeutsche Zeitung more than a year ago by an unidentified whistleblower. Of the dozens of news organizations collaborating on the project, none were based in Switzerland, where a 2015 law banned journalists from writing stories based on internal banking data.

The whistleblower said in a statement to the media consortium that Swiss banking secrecy laws were “immoral”.

“The financial privacy pretext is just a fig leaf covering the shameful role of Swiss banks as collaborators of tax evaders,” the whistleblower said.

Katie Benner contributed to the reports and Kitty Bennett contributed to the research.

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