Singapore fines Credit Suisse, UOB for 1MDB-related offenses
Wednesday, May 31, 2017 at 7:28AM
Richard L. Cassin in 1 Malaysia Development, 1MDB, BSI SA, Credit Suisse, Falcon, Singapore

Singapore's central bank Tuesday fined Credit Suisse and United Overseas Bank for breaching anti-money laundering rules in connection with Malaysian sovereign wealth fund 1Malaysia Development Berhad.

The Monetary Authority of Singapore (MAS) said in a statement it fined Credit Suisse about $505,000 and UOB about $650,000.

MAS said it didn't detect "pervasive control weaknesses" in the banks. But it did find "weaknesses in conducting due diligence on customers and inadequate scrutiny of customers' transactions and activities."

Prosecutors in Singapore, the United States, and Switzerland believe about $3.5 billion was improperly diverted from the Malaysian sovereign wealth fund.

The U.S. Justice Department used evidence developed by Singapore to prepare a 144-page civil forfeiture complaint against about $1 billion in assets allegedly bought with money looted from 1MDB.

Singapore last year seized property and bank accounts worth about $177 million linked to money allegedly diverted from 1MDB.

Tuesday's statement from MAS marked the end of the regulator's two-year review of the Malaysian fund.

In the statement, MAS announced lifetime bans against the former Singapore branch manager of Falcon Private Bank, Jens Fred Sturzenegger, and two other former Falcon employees.

The bans, known in Singapore as Prohibition Orders, are effective from May 29 and bar the bankers from working in Singapore's financial sector.

Sturzenegger was sentenced earlier to 28 weeks in jail and fined about $92,000. MAS said he pleaded guilty to six charges related to Falcon Bank's AML failures.

MAS stripped two banks of their Singapore bank licenses for money-laundering violations related to 1MDB.

In May 2016, MAS withdrew BSI Bank's license and fined it $9.6 million, citing "serious breaches of AML (anti-money laundering) requirements, poor management oversight of the bank’s operations and gross misconduct by some of the bank’s staff."

The agency also withdrew the license held by Falcon Bank in late 2016 and fined the bank $3.1 million. MAS said it found "serious failures in AML controls and improper conduct by senior management at the Head Office in Switzerland as well as the Singapore Branch." 

During the 1MDB investigation, MAS also fined DBS Bank about $720,000, Standard Chartered Bank $3.7 million, and Coutts & Co $1.73 million.

Among the eight indivuals MAS sanctioned for 1MDB-related offenses were Tim Leissner, the former chief of Goldman Sachs (Southeast Asia). MAS banned him for ten years from March 13, 2017. 

MAS said Leissner issued an unauthorized reference letter to a bank in Luxembourg in June 2015, using Goldman Sachs letterhead. The letter vouched for a central figure allegedly involved in 1MDB.

Leissner resigned from Goldman Sachs in February 2016.

MAS said Leissner managed the client relationship with 1MDB for its three bond issues from 2012 to 2013.

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Richard L. Cassin is the publisher and editor of the FCPA Blog.

Article originally appeared on The FCPA Blog (http://www.fcpablog.com/).
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