Falcon Bank faces Swiss
criminal probe in 1MDB case
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[October 12, 2016]
By Joshua Franklin
ZURICH
(Reuters) - Swiss federal prosecutors have opened criminal proceedings
against Zurich-based Falcon Private Bank for allegedly failing to
prevent suspected money laundering linked to 1MDB, the scandal-hit
Malaysian state fund, prosecutors said on Wednesday.
Falcon becomes the second Swiss bank after BSI to face a criminal
investigation by Switzerland's Office of the Attorney General (OAG) over
links to 1Malaysia Development Berhad (1MDB).
Falcon, owned by Abu Dhabi's International Petroleum Investment Co (IPIC),
said in a statement it would cooperate with the OAG to help ensure a
speedy resolution to the investigation.
The OAG said in January it suspected misappropriations from 1MDB totaled
roughly $4 billion, while alleging last week that a Ponzi scheme may
have been set up to conceal an alleged $800 million fraud.
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Founded by Malaysian Prime Minister Najib Razak, who chaired its
advisory board, 1MDB is the subject of money-laundering investigations
in at least six countries including Switzerland, Singapore and the
United States.
Najib has denied any wrongdoing and said Malaysia will cooperate with
the international investigations.
The OAG has been running an investigation linked to 1MDB for more than a
year and has also opened criminal proceedings against four people.
The criminal proceedings against Falcon are partly based on an
investigation by Swiss financial watchdog FINMA, which on Tuesday
sanctioned Falcon for breaching money-laundering rules.
"The information suggests that the offences of money laundering
currently under investigation in (the) 1MDB case could have been
prevented had the Falcon Private Bank Ltd been adequately organized,"
the OAG said in a statement.
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![](../images/101216pics/busine51.jpg)
The logo of Swiss Falcon Private Bank, owned by Abu Dhabi's
International Petroleum Investment Co (IPIC), is seen at its
headquarters in Zurich, Switzerland September 22, 2016. REUTERS/Arnd
Wiegmann
![](../images/ads/current/demay_inv-lda081412.png)
FINMA has ordered Falcon to turn over 2.5 million Swiss francs ($2.56
million) in what the watchdog said were illegal profits. It also said it
has opened enforcement proceedings against two former Falcon officials,
without naming them.
Separately on Tuesday, the Monetary Authority of Singapore (MAS) ordered
Falcon's Singapore branch to cease operating because of "a persistent
and severe lack of understanding" of Singapore's money-laundering
controls.
($1 = 0.9768 Swiss francs)
(Reporting by Joshua Franklin; Editing by Michael Shields/Keith Weir)
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