Two bankers who worked at Coutts private bank in Zurich were fined by the Swiss authorities for failing to report suspicious transactions linked to the sovereign wealth fund 1MDB scandal, it was reported on Sunday.
The Sonntag Zeitung and Le Matin Dimanche newspapersexternal link reported on Sunday that two Coutts bankers who had dealt with Jho Low, the Malaysian financier allegedly at the heart of the 1Malaysia Development Berhad (1MDB) scandal, were fined by the Federal Department of Finance in September.
A risk control manager at Coutts received a CHF13,000 ($13,000) for negligence, while an anti-money laundering manager has appealed against his fine, the papers said. The two managers left Coutts, which was sold by Royal Bank of Scotland to Union Bancaire Privée in March 2015.
1MDB is at the centre of money laundering probes in at least six countries, including the United States, Switzerland and Singapore.
The US authorities say about $4.5 billion (CHF4.5 billion) was siphoned from 1MDB, founded in 2009 by then-Malaysian prime minister, Najib Razak. He is facing a third corruption trial, which opened last week, linked to the looting of the 1MDB fund.
According to the Swiss newspaper report, billions of dollars passed via Zurich, Lugano and Geneva. Based on a 50-page penal decree from the finance ministry, the article alleges that 28-year-old Low opened accounts at Coutts Bank in 2009 and reportedly transferred millions from 1MDB.
Low, who faces charges in the United States and Malaysia over what authorities say is his central role in the 1MDB case, has denied wrongdoing. Last month, the US Department of Justice reportedly struck a deal with Low to recoup $1 billion in funds allegedly looted from the Malaysian state fund. The deal did not include an admission of guilt or wrongdoing and was not tied to the criminal action against Low.
According to the Tages-Anzeiger newspaper, the Office of the Attorney General of Switzerland is conducting criminal proceedings against six individuals and the private banks Falcon and BSI. It said the Swiss financial watchdog FINMA has identified serious violations of Swiss money laundering rules at the banks BSI, Falcon, Coutts, Rothschild and JP Morgan, and has also issued a complaint to UBS and Credit Suisse.
In 2017 Finma sanctioned Coutts for breaching money-laundering regulations in its business relationships with 1MDB and ordered the bank to “disgorge unlawfully generated profits” of CHF6.5 million.
In April 2019, the Swiss Federal Court rejected an appeal by Falcon against CHF2.5 million in “illegally generated profits” that Switzerland’s financial watchdog seized from the private bank in 2016. BSI private bank was also forced to sell up to the EFG banking group in 2016 after being sanctioned by FINMA.