Swiss authorities file criminal complaint against encryption firm

The economics authority says it was misled by the Zug-based company when it filed export applications for its secretly manipulated encryption devices. Keystone / Alexandra Wey

The Attorney General’s office has received a criminal complaint from the State Secretariat for Economic Affairs (SECO) against Crypto AG, the firm at the centre of a spying scandal that broke last month, the SonntagsZeitung newspaper reports.

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SECO, the authority responsible among other things for the licensing of war materiel exports, believes it was misled by the Zug-based company when it filed export applications for its manipulated encryption devices.

For decades Crypto allegedly sold these secretly manipulated devices to more than 100 countries for spying purposes. Until 2018 the company was owned by the United States Central Intelligence Agency (CIA) and the Germany Federal Intelligence Service (BND), both of whom had the ability to decrypt the devices.

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SECO says it would not have approved the exports if it had been aware of the large-scale fraud. The department filed the complaint against unknown persons on Tuesday, since it is as yet unclear who at Crypto AG knew about the manipulations, the SonntagsZeitung revealsExternal link. At its peak the company had around 400 employees, only a few of whom would have been aware of the covert spying.

The newspaper says it is likely the complaint was filed under Article 14 of the Goods Control ActExternal link, which states that anyone who provides incorrect or incomplete information in a license application is liable to up to ten years in prison and a maximum fine of CHF5 million ($5.18 million), depending on the severity of the crime.

The Swiss Attorney General’s Office will now decide whether the alleged offences are subject to federal jurisdiction and there are sufficient grounds to pursue criminal charges.

The Federal Council, the executive body, launched an investigation into the Crypto affair on February 11, appointing former federal judge Niklaus Oberholzer to lead the probe. This investigation is now being overseen by the parliamentary control delegation, which is pursuing its own inquiry.