ZURICH - Swiss federal prosecutors have opened criminal proceedings against Zurich-based Falcon Private Bank Ltd for allegedly failing to prevent suspected money laundering linked to 1Malaysia Development Bhd (1MDB), prosecutors said yesterday.
Falcon becomes the second Swiss bank after BSI to face a criminal investigation by Switzerland’s Office of the Attorney-General (OAG) over links to 1MDB.
Falcon, owned by Abu Dhabi’s International Petroleum Investment Co, said in a statement it would cooperate with the OAG to help ensure a speedy resolution to the investigation.
The OAG said in January it suspected misappropriations from 1MDB totalled roughly US$4 billion, while alleging last week that a Ponzi scheme may have been set up to conceal an alleged US$800 million fraud.
Founded by Prime Minister Datuk Seri Najib Razak, who chaired its advisory board, 1MDB is the subject of money-laundering investigations in at least six countries, including Switzerland, Singapore and the US.
Najib has denied any wrongdoing and said Malaysia will cooperate with the international investigations.
The OAG has been running an investigation linked to 1MDB for more than a year and has also opened criminal proceedings against four people.
The criminal proceedings against Falcon are partly based on an investigation by Swiss financial watchdog Swiss Financial Market Supervisory Authority (Finma), which on Tuesday sanctioned Falcon for breaching money-laundering rules.
“The information suggests that the offences of money laundering currently under investigation in [the] 1MDB case could have been prevented had Falcon Private Bank been adequately organised,” the OAG said in a statement.
Finma has ordered Falcon to turn over 2.5 million Swiss francs (US$2.56 million/RM10.58 million) in what the watchdog said were illegal profits. It also said it had opened enforcement proceedings against two former Falcon officials, without naming them.
Separately on Tuesday, the Monetary Authority of Singapore ordered Falcon’s Singapore branch to cease operating because of “a persistent and severe lack of understanding” of Singapore’s money-laundering controls. — Reuters