Swiss prosecutors have indicted private bank Lombard Odier and a former employee on charges of "aggravated money laundering," marking a rare legal case against one of Switzerland's oldest and largest wealth management institutions. The charges stem from allegations of enabling the concealment of proceeds from a criminal enterprise linked to Gulnara Karimova, the imprisoned daughter of Uzbekistan's late president, Islam Karimov.
Allegations Against Lombard Odier
The Swiss Attorney General's Office (OAG) accused Lombard Odier and the former employee of playing a key role in managing funds tied to Karimova, who has faced multiple allegations of corruption and embezzlement. Prosecutors allege the bank failed to comply with anti-money laundering standards and its own internal guidelines when handling nine bank accounts under suspicion.
The accounts in question are believed to have been used to channel bribes worth hundreds of millions of dollars from telecom companies. The scheme, allegedly operated by Karimova and a criminal organization referred to as "The Office," reportedly laundered the illicit funds through Switzerland between 2005 and 2012.
Bank's Response to the Charges
Lombard Odier, a Geneva-based institution with a history dating back to 1796, denied any wrongdoing. In a statement, the bank emphasized that the investigation was initiated following its own report to Swiss authorities in 2012.
"The allegations are unfounded and without merit and are firmly rejected by the bank," the statement said. The bank added that it had fully cooperated with authorities throughout the investigation.
The Former Employee's Role
The indicted former employee worked in Lombard Odier's private clients section from 2008 to 2012. Prosecutors suspect the individual of opening or facilitating the opening of the accounts tied to the alleged money laundering activities.
While the bank faces potential fines under Swiss criminal law, further sanctions could be imposed by financial regulators if a conviction is secured. Experts, however, suggest the case's impact on Lombard Odier’s business will likely be limited.
"It's highly unusual for a bank to be charged," said Peter V. Kunz, a professor of business law at the University of Bern. "The allegations are damaging for Lombard Odier irrespective of the outcome."
Economic historian Dominik Gross from Swiss NGO Alliance Sud noted that private banks are less exposed to market risks than larger institutions like Credit Suisse, which faced its own money laundering scandal before its collapse in 2023.
Gulnara Karimova, aged 52, is currently serving a prison sentence in Uzbekistan after being jailed in 2019 for violating the terms of her house arrest. Her legal troubles began with charges of embezzlement and extortion in 2015, leading to a further sentence in 2020. The Swiss OAG has linked her to the alleged laundering of proceeds from bribes paid by telecom companies.
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