The Office of the Attorney General said the bank and its former employee are suspected of having played a key role in concealing proceeds from the activities of the "Office" founded by Gulnara Karimova, which the OAG says is a criminal organisation. Lombard Odier says the allegations against it are "without merit."

Switzerland’s Office of the Attorney General (OAG) has filed criminal charges against Lombard Odier & Cie SA and one of its former employees – a former asset manager – for “aggravated money laundering.”

The body said the Geneva-headquartered bank and the employee (who is not identified by name) are suspected of “having played a key role in concealing proceeds from the activities of the 'Office' founded by Gulnara Karimova, which the OAG classifies as a criminal organisation."

The former asset manager worked in Lombard Odier's private client department between 2008 and 2012.

Lombard Odier said the case lacked merit.

“We have taken note of the decision of the Office of the Attorney General of Switzerland to bring charges against the bank for insufficient controls. This step follows the opening of a formal investigation against the bank initiated and made public in 2016. For the bank, the allegations are unfounded and without merit. The bank plans to defend itself vigorously," Lombard Odier told WealthBriefing in a statement when contacted. "As a reminder, the underlying case began after a proactive reporting of suspicions to the Swiss authorities (MROS) made by Lombard Odier in 2012. The proceedings have been ongoing since then and the bank has fully cooperated with the relevant authorities. This matter has previously been reported in the media.”

OAG said the filed indictment is based on the facts that prompted it to indict Gulnara Karimova, daughter of the former President of the Republic of Uzbekistan, and a second defendant before the Federal Criminal Court on 28 September 2023. They are accused of having been involved in a criminal organisation called "Office" active in various countries.

Between 2005 and 2012, they are said to have laundered assets in Switzerland that came from crimes committed by this criminal organisation, whose top boss is said to be Gulnara Karimova according to the indictment of the Federal Prosecutor's Office, the OAG’s statement continued. 

According to the indictment, the investigations in the criminal proceedings have confirmed the suspicion that some of the funds laundered in Switzerland were transferred via banking relationships at Banque Lombard Odier & Cie SA (hereinafter: Lombard Odier) in Geneva. 

The bank and one of its former employees are said to have played a key role in concealing the proceeds from the criminal activities of the criminal organisation "Office," the statement said.

A former employee
The former employee is, according to the OAG, said to have known Gulnara Karimova and several members of "Office" before he was employed by Lombard Odier, particularly due to his role as a member of the investment committee of a fund owned by Gulnara Karimova. After joining the bank in 2008, he is said to have maintained active contact with members of "Office" and offered some of them cooperation.

According to the indictment, the former employee is accused of having opened or commissioned nine banking relationships of "Office" in his capacity as asset manager at Lombard Odier between August 2008 and August 2012, which were intended to receive funds from crimes committed by this criminal organisation.

The person is said to have subsequently managed these banking relationships and failed to report within the bank that false beneficial owners had been named for these accounts, although he is said to have known that the true and only beneficial owner of the funds was Gulnara Karimova. 

In this context, the accused is also said to have declared an "Office" company as an operating company, although he is said to have known that it had neither business operations nor employees and had been founded by the criminal organisation solely for the purpose of providing a legal cover for forwarding money from criminal activities. 

The accused is also accused of not having clarified the economic background of the credits and debits on the nine banking relationships in question, or of having clarified them incorrectly, or of having clarified them incorrectly and late, and of not having informed compliance monitoring of this, thereby violating the obligation to report immediately to the Money Laundering Reporting Office (MROS).

In addition, in November 2011 and June 2012, the former employee is said to have given an unauthorised member of "Office" access to a safe belonging to the banking relationships at Lombard Odier. This member of "Office" is said to have removed documents from the safe that were intended to legally justify the money transfers or moved all of the documents to another safe.

According to the indictment of the BA, the accused is said to have known that the funds transferred to the nine banks mentioned came from criminal activities by "Office," in particular from acts of corruption in the Uzbek telecommunications sector. With his actions, he is said to have thwarted the investigation of the origin, the discovery and the confiscation of assets that he knew came from criminal activities and thus made himself guilty of aggravated money laundering in accordance with Article 305bis, paragraphs 1 and 2 of the Criminal Code.

Against the bank
The bank is accused of not having complied with the anti-money laundering standards applicable at the time and its own internal guidelines when opening and managing the nine business relationships mentioned.

In particular, an investigation revealed shortcomings in the identification and renewal of the identification of the beneficial owner of the business relationships in question, in the obligation to additionally clarify business relationships with increased risk, in the acceptance and annual review of business relationships with politically exposed persons (PEPs), in the obligation to identify and clarify transactions with increased risk, and in the internal organisation.

The indictment said Lombard Odier's anti-money laundering programme had “numerous deficiencies” from at least 2008 to 2012, so that the repeated and ongoing money laundering activities allegedly committed by the employee responsible for the nine "Office" banking relationships could neither be prevented nor uncovered.

In the OAG statement, the bank is said to have “failed to take all necessary and reasonable organisational measures to prevent the commission of serious money laundering within the bank.”