The Federal Prosecutor has finished investigating Switzerland’s connections to the multibillion investment fraud carried out by US investment broker Allen Stanford. All the assets remaining in Switzerland will be handed over to victims.
The company Stanford Group (Suisse) in Liquidation has been fined CHF1 million ($1.14 million) for aggravated money laundering and sentenced to pay compensatory claims of CHF6-9 million, as well as to bear the costs of the proceedings.
Both the fine and the compensatory claims will go to the victims of the investment fraud.
The Swiss criminal prosecution of Stanford and his two accomplices has been abandoned on grounds of their conviction in the United States. Stanford is serving a 110-year prison sentence.
On February 27, 2009, the US Securities and Exchange Commission said Stanford and his accomplices had operated a «massive Ponzi scheme», misappropriated billions of dollars of investors’ money and falsified the Stanford International Bank’s records to hide their fraud.
A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from existing capital or new capital paid by new investors, rather than from profit earned by the individual or organisation running the operation.
Swiss investigation
Based on the suspicion that a part of the funds that were obtained by means of this investment fraud had made their way into Switzerland, the Federal Prosecutor opened a criminal investigation into Stanford on February 23, 2009, on suspicion of money laundering.
On May 27, 2010, the proceedings were extended to include two additional American nationals, and on June 5, 2013, extended again to the company Stanford Group (Suisse) AG in Liquidation in view of possible corporate criminal liability.
With the support of the US judicial authorities, the proof of money laundering criminal offences was obtained by way of international legal assistance. In return, Switzerland provided the US authorities with banking documents and transcripts of the hearings of Swiss bank employees for use in the criminal proceedings being conducted in the US.
During the course of its investigations, the Federal Prosecutor lifted the freeze imposed on bank accounts in Switzerland representing assets in excess of CHF200 million. These funds were given to the Swiss Financial Market Supervisory Authority (FINMA) – as representative of the bankruptcy estate of Stanford International Bank Limited, Antigua – to ensure that the victims of Stanford may be compensated in the best possible manner once the bankruptcy procedure has run its course.