Swiss bank staff implicated in Brazil fraud

Reading currency exchanges in the financial district in Rio de Janeiro Keystone

Swiss banking giants UBS and Credit Suisse have confirmed that both have an employee embroiled in a money laundering affair in Brazil.

This content was published on November 7, 2007 - 19:00

The two employees are currently in jail in São Paulo. The sum involved in the fraud is reported to be around $500 million (SFr665 million).

Brazilian police arrested 19 people on Tuesday on suspicion of money laundering and making illegal currency remittances.

"We have taken note of the fact that an employee from UBS Switzerland has been arrested in São Paulo," UBS spokeswoman Rebeca Garcia told the Swiss news agency, adding that the bank itself was not the subject of the probe.

The second case concerns Clariden Leu, a unit of the Credit Suisse Group. A spokesman for Clariden Leu said the bank was in contact with the authorities in Brazil.

The 17 other people arrested are said to be Brazilian businessmen, managers and currency exchangers.

Brazilian police say those arrested are accused of transferring money from companies or wealthy individuals without informing the proper authorities.

The scheme is also alleged to involve the United States-based American International Group Inc., the world's largest insurer.

Long-term scheme

Ricardo Saadi, the federal police detective in charge of the investigation, said that in the past 18 months up to 1 billion real (SFr665 million) had been siphoned off and deposited abroad for unnamed local companies.

These firms are then said to have used the money for acquisitions in the US and China that were in turn shipped to Brazil, Saadi was quoted as saying.

The 19 people are under detention for five days while the authorities continue their investigation. They have not yet been charged.

The investigation into the banks began after seven Credit Suisse executives were detained last year in a federal money-laundering probe, codenamed "Operation Switzerland", Saadi said.

This focused on allegations that large sums of money had been illegally transferred overseas for Brazilian clients.

Saadi gave no update on the status of that investigation, but Credit Suisse spokeswoman Regula Arrigoni told news agencies that no charges had been filed against the bank or its employees in this case.

Observers say Brazil's federal police have cracked down on money laundering and other white-collar crimes over the past three years.

Last month police arrested executives of US-based technology and network company Cisco Systems. The company has denied any wrongdoing. The executives were later released.

swissinfo with agencies


UBS was created in 1998 from the merger of Union Bank of Switzerland and the Swiss Bank Corporation. In June 2003, the bank adopted the single UBS brand for all its major businesses.

UBS oversees more than SFr.3.1 trillion ($2.6 trillion) in assets and wealth, making it the world's largest keeper of rich people's fortunes. Private banking accounts for more than 40% of UBS revenue.

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Clariden Leu

Clariden Leu came into being in January 2007 as a result of the merger of Credit Suisse's four private banks – Clariden, Bank Leu, Bank Hofmann, and BGP Banca di Gestione Patrimoniale – as well as the securities dealer Credit Suisse Fides.

It has 20 offices worldwide. With assets under management of around SFr133 billion (June 30, 2007 figures), Clariden Leu is one of Switzerland's biggest asset managers.

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