Swiss Banker’s Trial Rivets With Fraud Prices and Strip Membership Visits

ZURICH — Switzerland’s greatest monetary fraud trial in years has drawn a lot curiosity that court docket officers determined to maneuver it to the Volkshaus Theater, a preferred live performance and efficiency venue in Zurich, to deal with the additional spectators.

There, showing every day in a makeshift courtroom, is the person as soon as named the nation’s “Banker of the Year,” who was acclaimed for turning Raiffeisen, previously a small rural lender that primarily served farmers, into Switzerland’s third-largest financial institution, after UBS and Credit score Suisse.

The previous chief govt, Pierin Vincenz, is accused of utilizing his place on the financial institution to make hundreds of thousands of {dollars} by unlawful facet offers, whereas charging forays to strip golf equipment to his expense account.

Prosecutors have charged Mr. Vincenz, 65, and a longtime marketing consultant, Beat Stocker, with embezzlement, fraud and forgery. Collectively, prosecutors stated, they made round 25 million Swiss francs (over $27 million) by secretly shopping for controlling stakes in corporations after which arranging for these corporations to be purchased by Raiffeisen or Aduno, a bank card firm partly owned by Raiffeisen the place Mr. Stocker was chief govt and Mr. Vincenz served as chairman.

For instance, in 2007, when Aduno acquired Commtrain, a funds firm, the boards of Aduno and Raiffeisen had been unaware that Mr. Vincenz and Mr. Stocker held stakes within the firm. “That was 15 years in the past — I used to be younger and had no expertise,” Mr. Vincenz informed the court docket. “I assumed all of the our bodies concerned had been doing it appropriately.”

Prosecutors are searching for six-year jail sentences for each Mr. Vincenz and Mr. Stocker and reimbursement of a complete of 25 million Swiss francs. The 2 males, and 5 different defendants accused of serving to them, have denied the fees.

However it isn’t simply expenses of hidden monetary pursuits which can be drawing consideration to the Volkshaus Theater every day. The testimony producing the largest headlines entails Mr. Vincenz’s expense account exercise.

These bills, prosecutors say, embrace practically 200,000 Swiss francs, or greater than $216,000, he spent at “cabarets, strip golf equipment and make contact with bars” as a part of what the authorities have described as a “Tour de Suisse” by Switzerland’s pink mild districts. Mr. Vincenz stated these had been needed bills to fulfill potential purchasers and enterprise associates.

Different billings embrace 700 francs (about $750) for an evening out with a lady Mr. Vincenz met on the relationship app Tinder (he informed the court docket that he had been interviewing her for a job), in addition to virtually 4,000 francs (about $4,000) for the refurbishment of a room on the Hyatt in Zurich that was broken throughout a fracas between Mr. Vincenz and a strip membership employee.

Though Mr. Vincenz conceded that some invoices had been mistakenly charged to the corporate, he stated that on the entire his bills had been justified by his enterprise exercise. “I don’t have the sensation I’ve carried out something legal right here,” he informed the court docket.

Attorneys for Mr. Vincenz and Mr. Stocker declined to remark.

Mr. Vincenz, who was Raiffeisen’s chief govt for 16 years, till 2015, was a outstanding govt in Switzerland earlier than prosecutors filed expenses.

Within the Swiss media, he was sometimes called a “down-to-earth banker,” who was nicely appreciated, charismatic and a distinction to the picture of grasping bankers that prevailed after the monetary disaster.

His status began to unravel after a Swiss finance weblog, Inside Paradeplatz, revealed an article in 2016 detailing the surface offers.

Switzerland’s banking regulator, FINMA, initiated proceedings in opposition to Mr. Vincenz, though it dropped them after he agreed to resign and abstain from govt positions at Swiss monetary establishments.

Nonetheless, in 2018, Swiss prosecutors opened a legal inquiry of their very own, and Mr. Vincenz was held in custody for over 100 days as investigators gathered proof. Prices had been formally filed in 2020.

Raiffeisen (which is unrelated to Raiffeisen Financial institution Worldwide, primarily based in Austria) declined to touch upon the legal proceedings. Nevertheless it identified that, after an impartial overview of the financial institution, quite a few “needed modifications” had been made in 2018, together with the substitute of the corporate’s govt administration and board of administrators.

The decision will probably be rendered by the case’s three trial judges. Sabine Gless, a legal regulation professor on the College of Basel, stated it was onerous to foretell how the court docket would rule. “Many individuals assume what has gone on is immoral, however the query is whether or not it’s legal,” she stated.

The trial will prolong into March, and a verdict is predicted a couple of month later.

Regardless of the consequence, the outcomes might be far-reaching for Switzerland’s enterprise group. Professor Gless stated she anticipated the trial to have an effect on the form of enterprise alternatives senior administration might have interaction in.

She stated the trial had additionally triggered a public debate about what types of actions might or needs to be expensed to an employer. An indication of fixing attitudes might maybe be seen within the latest resignation of Credit score Suisse’s chairman, António Horta-Osório, whose quarantine-skipping conduct and use of personal jets precipitated a humiliation for the financial institution.

“C.E.O.s should align their ethical compass to that of right now’s Swiss society,” Professor Gless stated.