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A sign is seen through a tram window outside a Credit Suisse Group AG bank branch in Geneva, Switzerland.(bloomberg)
(Bloomberg) -- A former Credit Suisse Group AG wealth manager was found guilty of orchestrating a scheme that resulted in damages of 143 million Swiss francs ($152 million) as he diverted cash from client accounts to cover bad trades in one of the biggest financial crimes in Swiss history.
Patrice Lescaudron, who catered to wealthy eastern Europeans, was sentenced to five years in prison Friday in a verdict delivered by a judge in Geneva after two weeks of deliberations. Despite the banker’s claims that he never profited from his illicit trades, the judge found that the 54-year-old gained 30 million francs through his deception.
“The mistakes made by the accused are serious and lasted for eight years,’’ Judge Alexandra Banna said. “His motivations were essentially egotistical, driven by the lure of profits.’’
The judgment caps a tumultuous two years for Credit Suisse’s wealth management unit and Lescaudron, who was described during the trial as a former “star.” The French citizen has been in a Geneva jail since January 2015 as prosecutors investigated how he made unauthorized trades and faked purchase orders to cover his clients’ losses.
The scheme went undetected by Credit Suisse and his clients until a massive wrongway bet on a Californian drugmaker in 2015 exposed Lescaudron’s behavior.
Living in Constant Fear: Credit Suisse Banker Trial in 10 Quotes
Lescaudron was ordered to pay damages of about 130 million Swiss francs in addition to 22 million francs in compensation to his clients. But the former banker’s lawyer said the client-compensation fund is less than prosecutors sought and Lescaudron’s wife was allowed to keep the family home.
"The court is leaving him the possibility to get by financially,” said Lescaudron’s lawyer Simon Ntah.
Ntah said Lescaudron may be able to get out of jail on parole around April 2019 with good behavior and credit for the two years in pre-trial detention. He said it was too early to tell whether he would appeal aspects of the verdict.
Credit Suisse said during the trial last month that the two-year probe never found any wrongdoing by the bank or that his colleagues knew about his crimes.
“We are satisfied with the judgment,” the Zurich-based bank said in an emailed statement. “However, we will run a careful review and assess whether an appeal is made for technical reasons.”
Aside from Lescaudron’s sentencing, the biggest issue for the judges to decide was what to do with the money, bank assets and real estate belonging to Lescaudron as well as his six victims. The assets, worth more than $100 million, had been sequestered pending the outcome of the trial.
Lawyers for six of Lescaudron’s victims, who were allowed to participate in the case pushed the court to pay more attention to the bank, were split on how the verdict divvied up the money.
Giorgio Campa, the attorney for Russian businessmen Zurab Lysov and Sergey Egorov who were clients of Lescaudron, said the decision was “absurd” in how it handled the losses incurred by his clients and that he planned to appeal.
But the lawyer for Vitaly Malkin said the verdict confirmed that his client had never benefited from Lescaudron’s shenanigans, allowing the release of 22 million francs that belonged to the Russian financeer.
Prosecutors had recommended the bank permanently confiscate Lescaudron’s assets and return money to his two biggest victims, Georgian billionaire Bidzina Ivanishvili and Malkin.
The bank was told by Banna to reimburse Ivanishvili for his losses. Maurice Harari, Ivanishvili’s lawyer, declined to comment on the verdict.
(Adds bank’s comment in tenth paragraph.)
--With assistance from Jan-Henrik Förster
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