Luxembourg stops investigation against Swiss ambassador

Friederich was arrested less than two weeks ago in Switzerland Keystone Archive

Luxembourg has ended its investigation against Peter Friederich, the Swiss ambassador, for money laundering.

The move comes just two weeks after Friederich was arrested while in Switzerland.

“We cannot launch legal proceedings against a diplomat,” said Carlos Zeyen, the Luxembourg deputy prosecutor.

The decision to call off investigations comes as a surprise, since the Swiss and Luxembourg authorities cooperated on the case for over eight months. “The investigation could be relaunched if the Swiss make such a request,” added Zeyen.

A spokesman for Switzerland’s federal prosecutor said a request to extend Friederich’s detention has been made.

Lawyer to appeal

The ambassador’s lawyer, Jean-René Mermoud, is planning to appeal against the authorities’ request on Wednesday. He told Swiss radio on Sunday that there was no reason to keep Friederich in jail, since his arrest and detention were common knowledge.

According to Mermoud, Friederich never took part in money laundering, and never falsified documents.

However, Switzerland’s federal prosecutor’s office said last week that the diplomat admitted that he had lied about the origin of deposits worth SFr1.25 million ($750,000) in Luxembourg during the second half of 2001.

A spokesman for the federal prosecutor added that Friederich also admitted to falsifying documents related to the deposits, claiming the money had come from the sale of private goods to an acquaintance.

Friederich also admitted to falsifying the signature of the alleged buyer.

Fall guy

Mermoud believes that Friederich is the “fall guy” in an affair that was fabricated to preserve Luxembourg’s reputation.

According to the German-language “Sonntagszeitung”, Mermoud sent a letter to Luxembourg’s justice minister on July 12.

The letter allegedly included a series of documents showing that Friederich was the victim “of manipulations by secret services and political schemers”.

The documents apparently include an Interpol report about a confidential meeting last January in Luxembourg between bankers, politicians and a representative of the firm Coldstream.

Coldstream, a financial clearinghouse established in Luxembourg in 1971, was accused last year of hiding illegal transactions. The ensuing investigation forced the company’s Swiss director to resign.

The aim of January’s meeting was allegedly to find a way of turning attention away from accusations against Coldstream, which was having a negative impact on Luxembourg’s image abroad.

According to the Interpol report, it was decided that the best way to turn attention away from Coldstream was to reveal a money-laundering affair.

Two weeks after the January meeting, the Dexia bank denounced Friederich to Luxembourg’s money-laundering services, run by Carlos Zeyen.

Friederich, currently being held in a Swiss jail, has been Switzerland’s ambassador to Luxembourg since 1999.

swissinfo with agencies