Four former bankers with the now-shuttered Swiss affiliate of a major Russian bank have gone on trial over allegations that they didn't properly check accounts opened in the name of a Russian cellist with longtime ties to President Vladimir Putin.
The one-day trial in Zurich district court Wednesday stems from information about secretive financial flows revealed in the Panama Papers leaks in 2016 that implicated musician and Putin's childhood friend Sergei Roldugin. It took years for prosecutors to unravel the web of money and bring the case to court.
The trial opens a rare window into allegations from the Panama Papers that a member of Putin’s circle of friends helped funnel millions abroad and that financial employees may have turned a blind eye to such inflows. Putin has denied the accusations.
Both before and since Putin ordered forces into Ukraine, Western nations have imposed sanctions against oligarchs and others with close ties to his government, including Roldugin. The U.S. Treasury Department describes Roldugin as “part of a system that manages President Putin’s offshore wealth.”
The former Gazprombank employees — three Russian-born and one Swiss-born who cannot be named under Swiss law — are charged with failing to adequately check whether Roldugin, who was a client of the bank from 2014 to 2016, actually owned the assets in the accounts.
Documents filed when the accounts were opened listed expected transactions of 11.5 million Swiss francs ($12.2 million). The indictment doesn't indicate how much of that may have arrived at the bank.
It is “publicly known that Russian President Putin officially has an income of just over 100,000 Swiss francs and is not wealthy, but in fact has enormous assets managed by people close to him,” according to the indictment.
The document says Gazprombank maintained the accounts despite “abundant” media reports about Roldugin's relationship to Putin, including that he was godfather to one of Putin's daughters.
The bank's documents listed Roldugin's income as 1 million Swiss francs a year, his assets at 10 million francs and his occupation as a musician, indicating that the money flows were “in no way plausible as Roldugin's own wealth" and that the way the accounts were structured indicated he was being used as “a straw man,” the indictment shows.
It cited a New York Times article published in 2014 that quotes Roldugin as saying he did not have millions. He was registered as beneficial owner on the accounts of two companies, one based in Panama and one in Cyprus.
In 2016, when reports named Roldugin as the owner of $2 billion in offshore assets, Putin denied having any links to offshore accounts and described the Panama Papers leaks as part of Western efforts to weaken Russia.
Putin noted that even though his name didn’t figure in any of the documents leaked from a Panamanian law firm, Western media pushed the claims of his involvement in offshore businesses.
Putin said Roldugin had done nothing wrong and emphasized that he was proud of the musician who spent his personal money to advance cultural projects in Russia.
The Kremlin made no comment Wednesday on the trial of the four former bankers.
The public prosecutor’s office is calling for the defendants to receive a seven-month suspended prison sentence.
For years, Switzerland has sought to clean up its reputation as a secret haven of billions in ill-gotten or laundered money, including through legislation that requires bankers to scrutinize the origin of funds associated with “politically exposed persons.”
In one high-profile case, Swiss prosecutors helped crack down on billions linked to former Malaysian Prime Minister Najib Razak, in what was called the 1MDB scandal.
The Swiss affiliate of Gazprombank announced in October that it was ceasing operations after consultations with Swiss financial market regulator FINMA.
