- Written by Imogen Foulkes, David Thompson, and James Oliver
- in Geneva and London
The trial of four former executives of Russia’s Gazprombank branch in Zurich, Switzerland, has begun.
The three Russians and a Swiss are accused of helping Russian musician Sergei Roldugin launder money suspected of belonging to the Russian president.
Mr Roldugin is said to have deposited $50m (£42m) into Swiss accounts between 2014 and 2016, with no credible explanation as to where the funds came from.
At that time, he presented himself as a cellist with a modest income.
He became famous as a musician, but he never made huge amounts of money. He once told the New York Times that he is not a businessman, and certainly not a millionaire.
So where did he find millions of dollars to deposit in Swiss bank accounts?
That is the question Zurich prosecutors should have asked the accused former bankers. The cellist was known to be a close friend of Russian President Vladimir Putin, and was rumored to be godfather to Putin’s daughter.
According to Swiss law, banks are required to refuse or close accounts if they have doubts about the account holder or source of funds.
They are also expected to treat “politically exposed persons” with extreme caution. As a known friend of the Russian leader, who invested millions in Switzerland after the illegal annexation of Crimea and subsequent sanctions against Russia in 2014, Sergei Roldugin should have sounded the alarm. The prosecution will claim that it did not happen.
The case is seen as a test of how strictly Switzerland enforces its money laundering laws, which, on paper at least, are very strict.
The Swiss authorities have worked hard in recent years to move away from the image of Switzerland as a country where the dirtiest money can be laundered from the most brutal dictator or the most corrupt white businessman.
Roldugin’s elusive money was exposed for the first time, not by Swiss investigators, but by journalists, including a team from BBC Panorama, involved in an international investigation into the Panama Papers data leak organized by the IFJ Investigation in 2016.
They uncover evidence of shady transactions involving Roldugin’s offshore companies worth hundreds of millions of dollars, as well as his Swiss bank accounts.
Swiss prosecutors only launched their own investigation after this evidence came to light. The indictment, currently before a Zurich court, alleges that the musician played “Putin’s wallet”, funneling money through front companies in Cyprus and Panama to Gazprombank in Zurich.
The four defendants are accused of failing a “due diligence” test and failing to verify – or ignoring – the true source of his money. They all pleaded not guilty.
Gazprombank has since ended its activities in Switzerland, and Sergey Roldugin himself is on the Swiss sanctions list.
But if convicted, the four bankers face moderate suspended prison sentences of up to seven months. To secure a guilty verdict, the plaintiffs will have to convince the court that Roldugin’s millions, in fact, belong to Vladimir Putin.
This is no easy task now because the usual cooperation between countries – in this case Switzerland and Russia – in money laundering investigations has not taken place.
Nobody really knows how much President Putin and his entourage have. The Swiss indictment says his alleged salary was just over $100,000 (£84,400).
But there are rumors that his fortune could be as high as $125 billion (£105 billion), carefully hidden in an intricate web of shell companies and the accounts of friends like Sergei Roldugin.
This is why, despite modest sentences, a guilty verdict can be so significant. This would send a signal not only to the Russian president, his cronies, and the rest of his political establishment that it is no longer so easy to hide their money, but also to the professionals who manage it.
Tom Keating, director of the Center for Financial Crime and Security Studies at the Royal United Services Institute, said Roldugin is not alone in his alleged role as Putin’s “guard”.
Banks and law firms that provide services to other associates close to Vladimir Putin should know that it is clear that the authorities are actively working to bring their cases to court. »