Swiss bankers charged with helping to hide Putin’s money

Swiss bankers charged with helping to hide Putin’s money

Thu, Mar 2nd 2023

Prosecutors say a Swiss bank knowingly allowed Putin’s ‘best friend’ to open millions of Swiss francs’ worth of accounts, without conducting due diligence into whether the money belongs to him or the leader of Russia.
Sergei Roldugin, Vladmir Putin and another unnamed man in an old photo (Keystone SDA).

Swiss prosecutors this week indicted four bankers with criminal charges related to hiding tens of millions of Swiss francs on behalf of Russian President Vladmir Putin. It is the first case involving western sanctions and the Russian president’s assets directly.

‘A straw man’

The prosecutors have charged the former head of privately-owned Russian bank Gazprombank’s Swiss subsidiary, Roman Abdulin, and three of his colleagues with criminal negligence over allowing Swiss accounts to be opened under Putin’s confidant’s name, Sergei Roldugin.

Roldugin is a Russian cellist and conductor, godfather to Putin’s daughter, and has often been described as “Putin’s best friend.” But he is best known as the “secret caretaker” of Putin’s offshore accounts, as was revealed in the “Panama Papers” scandal in 2016. Through that investigation, it was exposed that Roldugin worked directly with Swiss lawyers to covertly funnel Putin’s wealth to shell business accounts registered in the British Virgin Islands and Panama.

“It is notorious that Russian President Putin officially has an income of just over CHF100,000 and is not wealthy, but in fact has enormous assets managed by people close to him,” the indictment says. “The declared assets were in general in no way plausible as Roldugin’s own assets. Roldugin… [is] a straw man.”

After the Panama Papers revelations, Swiss financial regulator FINMA opened an investigation into Gazprombank Schweiz AG and concluded that it was “in serious breach of its anti-money laundering” efforts and was prohibited from accepting new private clients. In October 2022, the bank announced it had decided to cease operations in Switzerland.

Gazprombank Schweiz headquarters in Zurich (Keystone SDA).
Due diligence?

Even after Switzerland imposed strict sanctions on Russia and froze PEP bank accounts, they “continued the business relationship inadmissibly, although they themselves had serious doubts about the correctness of the information about the beneficial owner,” according to the 18-page Swiss indictment.

The bankers opened accounts with at least 50 million Swiss francs under Roldugin’s name, as well as signing off on plans to funnel another CHF10 million through a complex spiderweb of shell companies and other accounts related to Roldugin, prosectuers say.

The four men charged – Abdulin, two senior executives and a client manager – were aware of Roldugin’s history, as well as being aware that he is considered a “politically exposed person” (PEP) in the Swiss banking vernacular. Gazprombank failed to properly investigate whether the cellist was the actual owner of the accounts’ assets or not and signed formal declarations that he was not a PEP, according to prosecutors.

In the bank’s due diligence file on Roldugin, there was only a single page printout from the Mariinsky theatre website where Roldugin is a conductor, as well as a negative search result on the database Worldcheck, according to the Financial Times. And many of the companies set up under Roldugin’s name, were verified by employees at Bank Rossiya via anonymous email addresses, according to the indictment.

“Bank Rossiya is the bank of Russia’s leading politicians and its majority shareholder and chair of the board [Yuri Kovalchuk] is considered Putin’s treasurer,” the indictment reads.

The Trial

Under Swiss law, the four men are considered innocent until proven guilty. The trial is set to begin next week in Zurich. Swiss prosecutors are seeking a seven month’s jail sentence and two years’ probation for all four bankers.

Ultimately, the trial will be a valuation of where Switzerland stands with Russia and how far it is willing to go during this politically tense moment in history.

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