Saturday, October 31, 2020

Ex-Bankers of Private Bank Coutts International Fined for Roles in 1MDB Money Laundering Scheme


Coutts International isn’t the biggest Swiss bank in the 1MDB scandal – but the British bank’s overseas unit was heavily sanctioned two years ago for its dealings with Jho Low. American officials believe Low was at the nexus of a $4.5 billion Malaysia graft scheme.

Two former top executives at Coutts didn’t do enough to prevent Low from using the bank for wrong-doing, according to a Swiss federal sanction reported by Swiss daily «Tages-Anzeiger».

Appealing Sanction

The men, whose names or current professional status weren’t disclosed, were sanctioned by Switzerland’s finance ministry and fined, the outlet reported, citing a 50-page government report. The former anti-money laundering expert at Coutts International was given an undisclosed fine, which he is appealing.

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The executive’s boss, whose role isn’t clarified in the Swiss report, was also fined, to the tune of 13,000 Swiss francs ($13,000). Emails between the two bankers from 2009, when Low opened an account with Coutts International, and 2013, when he closed out his accounts, show how the Swiss-based went back and forth on dealing with him, as previously reported.

Zurich vs Singapore

Low deposited $700 million at Coutts’ Zurich office soon after opening accounts. In parallel, the Malaysian businessman had already sparked an alarm at the bank’s Singapore offices, where he also maintained ties. A banker there said he was alarmed about Low’s propensity to splash out on gambling and for jewelry.

A curious exchange between bankers in Zurich, who argued that Swiss banks «better understood» the Asian client mentality than local firms, and in Singapore, which continued to raise alarm, ensued.

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Spendacious Malaysian

When Low began appearing in U.S. society pages as a mysterious Malaysian known for voracious spending at New York parties, bankers at Coutts in Singapore escalated the matter to Zurich. The outlet reported that the then-CEO of Coutts International decreed that the bank would be more cautious with transactions relating to Low’s personal spending in Singapore.

The outlet reports that Low’s rental of private jets, yachts, and gambling in Macau and Las Vegas were financed out of money held by Coutts. He financed the purchase of a private jet with money that passed through Coutts on its way to an undisclosed U.S. law firm, «Tages-Anzeiger» reported.

Swiss Banks Hit

The assets and clients of Coutts International were acquired by Union Bancaire Privee in 2015. Swiss banks including Falcon, UBS, and Credit Suisse were hit by the scandal. Banca della Svizzera Italiana, now part of EFG International, was effectively wiped out by it.

1MDB isn’t the only huge money laundering scandal to hit Switzerland’s wealth management industry recently, but it is one of the worst. Swiss regulator Finma has parsed the sins of private banks in unusually frank detail, often quoting verbatim from internal emails.

Source: finews


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