(Bloomberg) -- The former head of Gazprombank’s Swiss unit and three of his colleagues were hit with criminal charges in Zurich over their alleged mishandling of financial transactions tied to a cellist confidant of Vladimir Putin.
The chief of Gazprombank Schweiz AG, two senior executives at the bank and a client relationship manager knew that Sergei Roldugin, who held accounts on behalf of shell companies in Panama and Cyprus, was a “close friend” of the Russian president and was godfather to his daughter, according to the 18-page Swiss indictment.
Despite knowing he was a PEP or “politically exposed person” in Swiss bank vernacular, the bankers failed to carry out proper checks into whether Roldugin was actually the beneficial owner of the accounts’ assets, the prosecutors wrote. Roldugin, who is also a cellist and conductor, rose to public prominence after it emerged that he was the beneficial owners of offshore accounts that were exposed in the Panama Papers investigative reporting project in 2016.
The four men, three of whom are Russians and one Swiss, “continued the business relationship inadmissibly, although they themselves had serious doubts about the correctness of the information about the beneficial owner,” according to prosecutors. They are seeking a seven-month suspended sentence with two years of probation for the men, who can’t be identified under Swiss law.
Gazprombank declined to immediately comment.
The Panama Papers revelations prompted Swiss banking regulator Finma to investigate Gazprombank’s Swiss unit, which concluded in 2018 that the bank had “serious shortcomings” in the measures it took to combat money-laundering. Gazprombank had failed to carry out adequate economic background checks on its clients, Finma decided at the time as it prohibited the Swiss bank from accepting new private clients until further notice.
Gazprombank Schweiz wound down operations last year in the months after Russian’s invasion of Ukraine.
Read more: Cold War Banker to Putin Billionaires Walks Sanctions Wire
The trial, if the accused show up and it goes ahead, will be a test of Switzerland’s willingness and ability to prosecute a politically-charged case. Although the country has been neutral for centuries, it broke with that tradition to adopt European Union sanctions against Putin and those around him a year ago.
The country, long a magnet for Russian wealth, and its politicians are now wrestling with whether it should go further and allow the re-export of Swiss munitions to Ukraine to help in its fight against Russia, something conservative parties in the country are pushing back on.
©2023 Bloomberg L.P.