(Bloomberg) -- Lombard Odier & Cie and a former employee have been indicted for aggravated money laundering by Swiss prosecutors over their involvement in the long-running bribery scandal linked to the daughter of late Uzbek president Islam Karimov.
They are suspected of playing “a decisive role in enabling the concealment of the proceeds of ‘The Office’ set up by Gulnara Karimova,” which is deemed to be “a criminal organization,” the Swiss attorney general’s department said in a statement on Friday.
Prosecutors in 2017 first opened a probe into suspected wrongdoing by the Geneva-based bank in the case involving the Harvard-educated Karimova that in turn dates back to at least 2012. That’s when Swiss and U.S. prosecutors began investigating the Uzbek businesswoman over bribes she allegedly received from telecoms companies in exchange for the awarding of contracts in Uzbekistan.
Karimova, who for a while enjoyed diplomatic immunity as her country’s representative to the UN in Geneva, was indicted by the Swiss in 2023 for what they said was her role as the “supreme head” of “The Office.” Her father ruled Uzbekistan with an iron fist for a quarter century as president when it gained independence from the Soviet Union in 1991 until his death in 2016.
“The allegations are unfounded, without merit and are firmly rejected by the bank,” Lombard Odier said in a statement on Friday, adding that the “the bank has always fully cooperated with the relevant authorities.” Karimova’s lawyer didn’t have any immediate comment.
The Lombard Odier probe was initiated after the bank said it reported suspicious activity to Switzerland’s money-laundering reporting agency in 2012. Under the Swiss criminal code, banks can be pursued criminally if they don’t take all reasonable and necessary steps to prevent illicit activity.
Nine Bank Accounts
In this case, the prosecutors are charging the bank not just under that corporate criminal liability clause and also for aggravated money laundering because, they say, the bank “failed to comply with anti-money laundering standards and its own internal guidelines in the opening and management of the nine bank accounts” at the heart of the case.
The former employee, who isn’t named by prosecutors, knew Karimova and the other members of the alleged “Office” scam before he began working for the bank through his role with an investment fund that Karimova ran, say prosecutors.
After joining the bank in 2008, he cultivated those ties and opened the nine accounts in the ensuing four years, which were intended to receive “funds derived from crimes committed by this criminal organization,” according to the indictment.
To cover his tracks, he created false beneficial owners for the accounts and labeled one of the units of “The Office” as an operating company even though it was a shell intended purely to receive criminal proceeds, prosecutors allege.
The scandal has hung over Lombard Odier for more than a decade as Uzbekistan turned to the Geneva courts to try and recoup some of the frozen assets in the case. The attorney general’s department, or OAG, has already frozen more than 800 million Swiss francs ($826 million) in the case.
A spokesperson for the Geneva-based bank wasn’t immediately available to comment.
--With assistance from Allegra Catelli.
(Updates with bank’s statement in sixth paragraph)
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