Switzerland plays a key part in an international mail fraud scheme that has been underway for more than a decade and is the target of ongoing US Justice Department investigations. The country’s trustworthy brand and low taxes make it an attractive place for fraudsters to set up shop, officials say.
Mailing fraudulent letters to vulnerable populations such as the elderly has become a multimillion-dollar business with strong ties to Switzerland, according to a report in the SonntagsZeitung newspaper. Often, the letters promise wealth based on a psychic evaluation, calling on the recipient to send smaller amounts of money in exchange for a larger sum that never comes.
According to an investigation announced last year by the US Justice Departmentexternal link that specifically named a business in St Gallen and an individual in Zurich, Switzerland is part of an international predatory mail fraud ring where correspondence runs through several addresses across the country. Guido Sutter, the head of the legal section of the State Secretariat for Economic Affairs (SECO), told the SonntagsZeitung that Switzerland’s trustworthy reputation, low taxes and legal environment contribute to its attractiveness for such activities.
“To this point, only fines of a few thousand Swiss francs were levelled against such mail fraud perpetrators,” Sutter said, adding that such a small amount doesn’t deter most of them and a legal specification makes it difficult to prosecute the cases as fraud.
“Legally, fraud requires false statements that would not be recognised as such by an ‘average person’”, he said. However, since the schemes are targeted at only the most vulnerable, the average person can spot deception in the letters.
“For that reason, they are considered deception and not fraud”.
Sutter said Switzerland is prosecuting some mail fraud cases in court but that the international ring’s “hydra-like structure” makes it difficult to take real action without legal help from abroad. The American justice system, he said, has succeeded in cutting off financial resources to mail fraud perpetrators, something Switzerland can only do by conducting regular raids and blocking accounts.
The US Justice Department announced its mail fraud crackdown last year; the investigations continue.
swissinfo.ch and agencies/vdv