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Bank Julius Bär sued for $40 million

The bank says the accusations are outrageous Keystone Archive

Swiss bank Julius Bär is being sued in the United States for allegedly defrauding, looting and converting millions of dollars in depositors' assets.

New York-based law firm Leahey and Johnson is demanding at least $40 million (SFr50 million), plus interest and punitive damages.

Julius Bär has told swissinfo that the allegations and accusations are “ridiculous” and that it would, if required, “vigorously defend” its actions.

The bank, based in Zurich, also described the claims against it as possible grounds for legal action against the Wall Street law firm.

Leahey and Johnson filed the complaint in the Supreme Court of the State of New York against a number of defendants, including the honorary chairman of Julius Bär Holding, Hans J Bär, and another family member, Raymond J Bär, the present chairman of the bank.

Long-standing scheme

In a faxed statement, Leahey and Johnson said the bank was being sued, along with several of its subsidiaries, employees, agents, servants, controlling officers and directors.

They are accused of allegedly participating in a long-standing scheme to defraud, loot and convert money deposited by a Manhattan antique dealer who fled Jewish persecution in Iran to become a US citizen.

A 115-page verified complaint has been filed on behalf of plaintiff Bijan Nassi and his company, BBCFD, by the law firm.

Also named as a defendant is Yehuda Shiv, a financial adviser, who, according to lawyers, has been convicted of securities fraud.

It is alleged that Shiv and the bank were involved in an “elaborate scheme” to divert money away from Nassi’s investments to their benefit.

Custodian bank

Although the bank told swissinfo that it could not comment on a pending legal case, it said it was important to note that Julius Bär – which has strong Jewish roots – had acted in this instance as a custodian bank, only performing administration duties.

In its statement, the law firm accuses Bank Julius Bär of being “best known for its Holocaust controversy whereby the Bank stonewalled the claims of heirs to bank accounts opened by Jewish people slaughtered during the Holocaust”.

Bank spokesman Jürg Stähelin described the charge as “outrageous”, pointing out that Hans J Bär had been a prominent member of the Paul Volcker committee of eminent persons which had found “an appropriate solution” to the row over Holocaust-era accounts.

“We are disgusted that the plaintiff’s attorneys in this case have resorted to making completely unfounded statements about Julius Bär’s handling of Holocaust-related claims,” he said.

The complaint details allegations that Nassi deposited family assets in the Madison Avenue branch of the Swiss bank.

It is claimed that he was then “swindled” by the bank, which was in league with a “convicted con man” who had the run of the bank and was a de facto employee.

Powers of attorney

The allegation is that with the bank’s knowledge and or negligence, powers of attorney were illegally used to transfer millions of dollars from Nassi and other accounts for the benefit of Shiv and the bank.

“Shiv had his office at the bank, was part of the bank’s computer and communications networks, and was rewarded by the bank for bringing in business,” said Peter James Johnson, a lawyer for Nassi and his company, in the statement.

“The complaint alleges that bank officials were aware of, or should have been aware of, this massive fraud on depositors and on American banking officials,” he added.

A chart showing 99 “unauthorised” transactions of Nassi’s funds, totalling nearly $19 million between 1988 and 2001, is included in the complaint.

Many of the transfers were to Shiv’s Sagam Corporation, an investment management company which, it is alleged, operated as a joint venture with the bank.

Cooperation with the authorities

In a statement to swissinfo, Julius Bär said it had been cooperating with law enforcement and regulatory authorities about the case against Shiv since early 2002.

The bank described Shiv as an investment manager who maintained accounts at Julius Bär on behalf of his clients.

“We were shocked to have learned that Mr Shiv and his companies were for years supplying false information to his clients about the performance of the assets he managed,” it said.

“We at Bank Julius Bär have adhered to all banking regulations and internal bank policies in the handling of Mr Shiv’s accounts and have cooperated fully with the authorities investigating this matter.”

“While we are sympathetic to Mr Shiv’s clients, we are confident that we have consistently fulfilled our responsibilities as a custodian bank and will, if required, vigorously defend our actions,” it added.

swissinfo, Robert Brookes

A New York law firm is suing Bank Julius Bär in the State Supreme Court for at least $40 million.

The bank is accused of defrauding, looting and converting millions of dollars in depositors’ assets.

Julius Bär has described the accusations as “ridiculous”, adding it would, if necessary, “vigorously defend” its actions.

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SWI - a branch of Swiss Broadcasting Corporation SRG SSR