LDN - Business

Former Credit Suisse 'star' gets five-year jail term for 'clever fraud'

[February 09, 2018] By Stephanie Nebehay and Brenna Hughes Neghaiwi

GENEVA (Reuters) - Former Credit Suisse client adviser Patrice Lescaudron was sentenced to five years imprisonment by a Geneva court on Friday for abusing the trust of clients and putting in place a fraudulent scheme that brought him tens of millions of francs.

Lescaudron, who is French, appeared in court for the verdict wearing a gray fleece sweatshirt emblazoned with Ferrari, the name of the Italian sports car he was said to have purchased with the money he amassed.

Judge Alexandra Banna said the ex-banker was guilty of serious fraud and forgery in his handling of former clients, including former Georgia Prime Minister Bidzina Ivanishvili and Russian oligarch Vitaly Malkin, "over a very long period of eight years".

Reading the three-judge tribunal's verdict, she said he had caused losses totaling 143 million Swiss francs ($152 million) and made personal gains of 30 million francs.

The adviser was "considered as a star" on the bank's Russia desk, but had "fooled the bank and the client" through a "clever fraud" in which he "copy-pasted signatures on documents so as to falsify transfer orders", Banna said.

Lescaudron, 54, admitted in court to having falsified trades and hidden mounting losses.

CRIMINAL ENERGY

Lawyers for billionaire Ivanishvili have said that fraudulent activities by the adviser lost the former Georgian leader hundreds of millions of dollars.

Zurich-based Credit Suisse has said Lescaudron violated internal rules and Swiss law and worked to conceal these actions from the bank.

"The former relationship manager demonstrated a high degree of criminal energy, violating internal controls and rules as well as Swiss law and concealing his criminal activities from Credit Suisse colleagues," the bank said in January.

"Two years of criminal investigation have not revealed any indication that the former relationship manager was helped with his criminal actions by other Credit Suisse employees."

But lawyers for Ivanishvili have said Lescaudron was not a lone wolf, saying senior management had knowledge of his activity and that the bank did not take action but instead continued to charge commission payments on the products sold. They said in August that Ivanishvili was suing Credit Suisse.

Maurice Harari, a lawyer for Ivanishvili, was quoted by the Swiss daily Le Temps as telling the court during the pleadings: "Surveillance was not insufficient, it was non-existent."

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Geneva prosecutor Yves Bertossa stands outside the courthouse after the verdict of the trial of Patrice Lescaudron a Credit Suisse banker in Geneva, Switzerland, February 9, 2018. REUTERS/Denis Balibouse

Ivanishvili's complaints relate to the handling of portfolios between 2005 and 2015, when it is alleged money was stolen and substantial losses resulted from unauthorized investments.

Prosecutor Yves Bertossa on Friday told reporters he would not comment on the bank's role in the matter because it was the subject of a parallel procedure.

Lescaudron's sentence matched what prosecutors had sought.

VAST FORTUNES

Lescaudron amassed a personal wealth of 32 million francs, including houses in Switzerland and the Italian seaside resort of Porto Cervo, and a Picasso lithograph, said to be missing.

His assets, including the Ferrari, a Rolex watch and jewels that had been "financed with ... commissions" said to be the product of his crimes, were seized among items listed in a seven-page sequestration.

He was ordered to make repayments totaling more than $130 million, but was not barred from future work in banking.

The Porto Cervo house was seized, but the Lescaudrons were allowed to keep their family home in Arzier, Switzerland.

Lescaudron has already spent two years in pre-trial detention, where he was noted for cooperation on the case and exhibiting "exemplary behavior", the court said.

"The sentence is very harsh," Lescaudron's lawyer Simon Ntah said. "But it leaves a bit of hope, it allows him to have a perspective." Ntah added he hoped the sentence would be commuted for good behavior so Lescaudron could be released in 2019.

Lescaudron sat passively throughout the reading, stood for the verdict and was escorted back to prison at the end.

($1 = 0.9389 Swiss francs)

(Reporting by Stephanie Nebehay, writing by Brenna Hughes Neghaiwi; Editing by Michael Shields and Catherine Evans)

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