Band of brothers: An HSBC banker, drug money and 20-euro notes
The allegations are part of a blockbuster French criminal case where Nessim El Maleh, formerly a director at HSBC Private Bank Suisse, and his sibling Meyer, who ran Geneva wealth-management firm GPF SA, are on trial for multiple counts of money laundering.Updated: Oct 02, 2018 19:30 IST
A former Geneva-based HSBC Holdings Plc banker and two of his brothers are at the center of a ring that prosecutors say laundered drug money by providing wads of bills at secret meetings in Paris to dozens of well-to-do individuals seeking to spend loot they’d stashed in offshore accounts.
The allegations are part of a blockbuster French criminal case where Nessim El Maleh, formerly a director at HSBC Private Bank Suisse, and his sibling Meyer, who ran Geneva wealth-management firm GPF SA, are on trial for multiple counts of money laundering. Their older brother, Mardoché, is accused of distributing as much as 12 million euros ($14 million) between 2010 and 2012 in bags full of cash to the owners of the offshore accounts.
During testimony in Paris Monday, Nessim blamed the scheme on his brother Meyer and said he believed the money was linked to tax evasion, not drugs.
“We weren’t aware it was coming from any traffic and thought it was tax-fraud money,” Nessim, 44, said when interrogated by judges at the Paris criminal court.
France has been cracking down on tax fraud operated via Switzerland with the conviction of a former minister and a trial against UBS Group AG set to begin next week. The affair is one of the highest profile white-collar cases in Paris since the trial of former Societe Generale SA trader Jerome Kerviel engrossed the country a decade ago.
Nessim and Meyer both argue that the charges should be dismissed under the doctrine of double jeopardy because they pleaded guilty to similar charges in Switzerland in 2013. While Meyer answered investigator’s questions during the probe he is now in Switzerland and won’t attend the trial.
The French probe into the El Maleh brothers started in 2012 as a routine drug-importation investigation with investigators following the trail of a gang using the so-called “go-fast” technique to move hundreds of kilograms of marijuana from Morocco to Paris in speedy vehicles. Inspectors then came upon Mardoché who soon led them to an Art Nouveau building in Geneva where authorities say Meyer’s GPF managed about $800 million linked to tax fraud.
To obtain large amounts of cash in France, Meyer and Nessim would go through a Morocco-based broker, or “saraf,” called Simon Perez who would get Mardoché to travel across Paris for collections several times a month, authorities say. Mardoché would then make the deliveries in cafes or restaurants.
Nessim told the court Monday that he thought the money Mardoché was collecting in France through Perez’s contacts came from grocer stores that weren’t declaring part of their revenue. He says that he provided about 700,000 euros in total for three of his own French clients and helped Meyer out at times.
Judge Bruno Deblois expressed doubt that Nessim could have failed to figure out the money came from drugs. “At your age? With your experience?’’ he asked.
“I had no idea about the amounts Meyer was handling,’’ Nessim said. “Mine were quite small in comparison so it’s quite plausible’’ that the money would have come from shop owners.
No Small Bills
Investigators wiretapped the El Maleh family’s phones. Deblois highlighted one call where Nessim told Mardoché that they didn’t want him to collect small bills anymore.
Nessim said in one of the recorded calls that they already had plenty of 20-euro notes they couldn’t offload. “It has to be 50 or more,” the former banker told his brother.
Nessim further sought to minimize his role on Monday. He said he would only help out at times when Meyer was away on business trips and added that he took no commission for providing his own three clients with cash in France.
The Paris trial, which started last month, has already examined the role of the alleged drug importers and is set to take a look at the actions of some of Meyer’s clients. Several of his customers, including entrepreneurs and a former Paris town hall official, already pleaded guilty last year.
Meyer and Nessim El Meyer argue the French case is based on identical facts to the French case, but investigators say the new probe is broader than money-laundering charges and encompasses different facts.
While Nessim received a two-year suspended jail sentence in Switzerland, part of Meyer’s penalty required him to spend six month in prison. The authorities also confiscated over $1 million from Meyer’s safe.
“Our question from day one has been: what are the facts in this case that haven’t already been ruled upon?’’ Nessim’s lawyer, Pierre Cornut-Gentille, asked the court.
Sebastien Schapira, defending Meyer at the Paris trial, echoed the same sentiment to explain his client’s absence. “He’s already been judged,’’ Schapira said. “There is no need to force another trial on him.’’
Since his conviction and firing by HSBC, Nessim says he’s moved on and found a new job. He told the court that he now works for a family office in Geneva and earns about 12,000 Swiss francs ($12,200) a month. “I give people a picture of the state of their wealth.’’
Judge Deblois said that the court’s verdict is to be expected shortly after the trial concludes on Oct. 12.
First Published: Oct 02, 2018 19:30 IST