A spectacular case involving French and Swiss citizens and linking drug smuggling, money laundering and tax evasion is likely to further tarnish Switzerland’s image as a “tax haven”, only too ready to accept “dirty money”.
At the heart of the scandal on the Swiss side are two bankers, while in France most attention has been focussed on a Green Party politician, Florence Lamblin, deputy mayor of one of the 13th arrondissement – or district – of Paris.
On October 10, after a discreet seven month investigation, the French police detained 17 people. One of them, known only as M, is suspected of conducting a huge cannabis smuggling operation between Morocco and France. Lamblin for her part, is being questioned over possible money laundering.
The police discovered €400,000 (SFr484,000) in low-value notes in Lamblin’s flat and in safes belonging to her. She is one of eight French citizens suspected, at best, of having had assets in a Swiss bank account in order to hide them from the taxman, or, at worst, of having knowingly laundered drugs money.
The same day, M’s two brothers were taken into custody in Geneva. One is the managing director of GPF SA a small wealth management business, while the other works for the Geneva branch of the HSBC bank. Both are Swiss citizens of Moroccan origin. They were allegedly involved in recycling the proceeds from M’s drug smuggling operation in France.
100 million euros
In Switzerland the case is being handled by four examining magistrates from Geneva, headed by the chief cantonal prosecutor, Yves Bertossa.
The sums involved are huge: the French justice authorities put the drugs proceeds alone at €40 million, while French Interior Minister Manuel Valls says that when all the laundered money is taken into account the amount is as much as €100 million.
The deal allegedly went like this: when approached by clients wanting to transfer money discreetly from Switzerland to France, the M brothers would suggest a quick meeting in a Paris café, during which the client would be given bags containing low-value bank notes – in exchange for an eight per cent commission.
It is not clear if the clients knew what was going on. Lamblin’s lawyer, Jérôme Boursican, says she did not.
“If anything, my client may be guilty of tax fraud, over the transfer back to France of a sum of €350,000 from a family inheritance which was placed in a Swiss bank account in 1920,” he explained.
Bankers in Geneva are anxious to refute suspicions that they have been lax.
The HSBC bank has confirmed that its employee was involved in the affair, but says that it has been “cooperating actively with the authorities about this over the past few months”. The Swiss newspaper Le Temps reports that GPF SA is about to dismiss the other brother.
Switzerland in the firing line
In an interview with the French news magazine Le Nouvel Observateur, the well-known investigating magistrate, Eva Joly, described drug smuggling and tax evasion as „two sides of the same coin“.
“What’s most interesting about this affair is that it shows the public the connection between tax fraud and money laundering,” she said.
“It’s unusual to have a case that illustrates so clearly what I’ve been saying for 20 years: you find the same middlemen involved with money laundering, embezzlement, corruption and drugs.”
She regretted that Switzerland did not consider simple tax evasion to be a matter that warranted international cooperation.
The French government has not so far reacted to the affair, although Budget Minister Jérôme Cahuzac announced measures aimed at helping officials involved in fighting tax fraud and evasion.
But in a country where successive governments, of whatever political colour, have been fighting tax evasion, the latest case could play into the hands of the enemies of Swiss banking secrecy, providing them with a simple message: tax evasion leads (sometimes) to organised crime.