Holenweger acquitted of money laundering

Holenweger (left) leaves the court along with his lawyer Lorenz Erni Keystone

Zurich banker Oskar Holenweger has been acquitted of money laundering charges, in one of the most spectacular court cases in recent memory.

Eight years after Holenweger was first arrested on charges of laundering money for South American drug cartels, the Federal Criminal Court in Bellinzona on Thursday cleared him of all charges, which also included bribery, falsifying documents and mismanaging client assets.

The Bellinzona court awarded Holenweger SFr420,000 ($476,730) in compensation.

Prosecutors said during the trial that Holenweger opened 163 different accounts in his private bank and some commercial banks to help French energy group Alstom funnel SFr80 million to officials in exchange for contracts in South America and Asia.

The Swiss government froze Alstom’s money that Holenweger deposited in Swiss commercial and private banks. Alstom was not on trial and the company has refused to comment on the case.

“The question whether Holenweger knew that the money would be used for bribery remains unanswered,” said the president of the court, Peter Popp.

The decision represents a significant defeat for federal prosecutors who had sought a 30-month prison term for the banker.

Colombian claims

The investigation was based on claims by Colombian narcotics baron José Ramos that Holenweger was involved in laundering drug money.
 
Investigators were unable to prove the claims against Holenweger despite hiring a German private investigator for a failed sting attempt.

The court also ruled that the use of testimony from Ramos was illegal since he used questionable means to gather evidence, working undercover and attempting to incite Holenweger to commit illegal acts.

A decisive factor in the court’s ruling involved the use of such means as telephone tapping during the investigation. The judges said that the vague details provided by Ramos did not warrant the approval of such a measure.

Tough on corruption?

The verdict is a blow for prosecutors who had described the case as an attempt to bolster Switzerland’s efforts to get tougher on corruption.

Holenweger lawyer, Lorenz Erni, said he was pleased with the ruling, while the prosecutor’s office said it would decide later whether to appeal to Switzerland’s highest court.

The decision could also have implications for the federal prosecutor, Erwin Beyeler. A question left unanswered concerns his involvement with the illegal deployment of Ramos.

At the time, Beyeler was head of the Federal Police and has denied being directly involved despite documents published in magazines including the Weltwoche showing otherwise.

The former federal prosecutor, Valentin Roschacher, resigned in connection with the Holenweger case, and Beyeler must go before parliament later this year to be confirmed in his post. Following the court verdict, pressure on Beyeler is expected to mount.

Case history

Summer 2003: Swiss state prosecutor Valentin Roschacher launches an investigation into Zurich banker Oskar Holenweger after allegations of drug money laundering by convicted Colombian narcotics baron René Manuel Ramos.
 
In that same year, Holenweger allegedly accepts €840,000 from an undercover German investigator posing as a drug dealer.
 
December 2003: Holenweger is arrested and locked up for seven weeks as the investigation proceeds.
 
March 2004: Investigating judge Ernst Roduner takes over as head of the investigation.
 
June 2006: Justice Minister Christoph Blocher orders an investigation into the state prosecutor’s office after several controversial actions, including the Holenweger case.
 
July 2007: Roschacher resigns as state prosecutor.
 
September 2007: A parliamentary commission criticises Blocher for the way he handled the Roschacher affair. Three months later, Blocher is voted out of ministerial office by parliament.
 
December 2009: The original investigation into Holenweger’s alleged connection to South American drug cartels is closed.
 
May 2010: Based on evidence gathered in connection with Alstom, the state prosecutor charges Holenweger with money laundering, bribery, falsifying documents and misuse of client funds.
 
April 11, 2011: The trial of Holenweger begins at the federal court in Bellinzona.

April 21, 2011: Court acquits Holenweger on all charges.

(With input from Gerhard Lob in Bellinzona)