12/08/21

SWITZERLAND: Hope for Swiss Bankers Stranded by Indictments.

As published on finews.com, Thursday 12 August, 2021.

A U.S. court decision could open the door for indicted Swiss bankers to unshackle themselves of indictments dating as far back as 2010.

Muriel Bescond was indicted four years ago over allegedly rigging Libor on Societé Générale’s treasury desk in Paris. The French banker just won herself a key victory in an issue that has also vexed a handful of Swiss bankers for more than a decade.

Bescond is not a fugitive, a U.S. circuit court last week ruled – the first time a U.S. court has effectively stopped U.S. prosecutors from pursuing foreign bankers in industry-wide scandals like Libor. «It’s a game-changer,» New York-based defense attorney Marc Agnifilo told finews.com.

Agnifilo is well-known for in 2017 winning an acquittal for Stefan Buck, who used to run now-defunct Bank Frey’s wealth arm, on conspiracy charges related to Swiss offshore accounts. Buck is one of two prominent Swiss bankers to successfully fight an U.S. indictment.

Raoul Weil, who oversaw UBS’ private bank until 2007 and was acquitted in 2014, is the other. Buck, who is now in real estate full-time after a stint with Swiss bank Bergos Bergman, faced the U.S. charges voluntarily. Weil was nabbed during a surreptitious trip to Bologna, Italy, and extradited.

U.S. prosecutors have increasingly coaxed guilty pleas from defendants on the offshore charges – as recently as last October, from ex-Wegelin bankers Michael Berlinka, Urs Frei and Roger Keller (blasted in the «New York Post» following their indictment in 2012 as «fondue for brains»).

But a small, discreet handful of bankers remain on the hook – and they want to avoid Weil’s fate. They do so by sticking to the narrow confines of the Swiss borders (Switzerland doesn’t extradite its citizens).

Bescond’s surprise victory in circuit court redraws the map for U.S. prosecutors, which in recent years have increasingly argued their power reaches into the furthest corners of the world. «This is a ruling that says that’s not necessarily true,» Bruce Baird, a white-collar defense attorney in Washington who has represented foreign clients in U.S. indictments, told finews.com.

«You can't just indict someone for actions anywhere in the world and make them come to the U.S. before they can defend themselves,» Baird added. He has previously represented Roger Darin, a former managing director at UBS who was indicted together with Tom Hayes over alleged Libor manipulation in 2012.

In Switzerland, the Bescond decision affects more private bankers than it does traders: The majority of outstanding indictments are from 2010 to 2012 when the U.S. tax crackdown on Switzerland’s offshore industry was at its peak. Jurisdictions including New York’s Southern and Eastern districts as well as in Florida – where Weil was charged and acquitted – were particularly aggressive in targeting foreign bankers.

«No written law has changed [with Bescond’s circuit court decision] but the definition of 'fugivity has',» Agnifilo said. «A lot of people are looking for this option. Now they have a mechanism to address it.»

They include bankers like Beda Singenberger, an independent Swiss financial adviser indicted in 2011, or Martin Duenki, a retired Rahn + Bodmer client adviser who was indicted in 2014, just after Weil was acquitted. Neither Singenberger, who has since left finance, nor Duenki, who works part-time for a Zurich-based tax adviser, could be reached for comment.

Bescond’s ruling doesn’t address the merits of her case, but it does lift some of the onus from defendants by acknowledging that strictly speaking, they haven’t fled. «The battle is not over, but 'fugitivity' is a first step,» Baird said. «The law will start to get developed depending on further rulings down the road.»