For a long time Switzerland was considered a safe haven for the ill-gotten gains of many dictators, not least because of its banking secrecy. In recent years it has been a leader in fighting dirty money, although the past has not gone away. We look at 15 of the most infamous cases involving illicit funds in Switzerland.This content was published on June 2, 2022 - 09:00
- Deutsch Die grossen Fluchtgeldaffären in der Schweiz (original)
- Español Suiza y el dinero sucio de potentados y dictadores
- Português Fundos de ditadores na Suíça - os maiores escândalos
- 中文 瑞士怎样处理银行里的大笔赃款
- عربي سويسرا.. وأصول الطغاة القذرة المُودعة في مصارفها
- Français La Suisse et l'argent sale des dictateurs
- Pусский Швейцария и грязные деньги диктаторов
- 日本語 資産隠しの重大スキャンダル スイスの過去と現在
- Italiano I più grandi scandali dei capitali in fuga in Svizzera
According to World Bank estimates, $20million-$40 million (CHF19.2 million-CHF38.4 million) disappear in the pockets of corrupt government officials in developing countries every year. As one of the biggest offshore financial centres in the world, Switzerland used to be a great hiding place for illicit funds. However, knowing that such a reputation would harm its image, the Swiss government introduced its first law against illicit assets in 1986.
Since then, Switzerland has taken a leading role in the freezing and restitution of such funds, the process of which is called asset recovery. Nevertheless, the past keeps on catching up with Switzerland.
Under the hashtag #SuisseSecrets, in early 2022 international media outlets published stories on a scandal involving one of Switzerland’s biggest banksExternal link, Credit Suisse. A whistleblower leaked account details to the German daily newspaper Süddeutsche Zeitung. The data exposed kleptocrats, autocrats and criminals who had stashed their money in Switzerland.
We look at some prominent cases which also show how Switzerland has developed its restitution practices; this is not a complete list, but it highlights 15 big cases.
1960s: Rafael Leónidas Trujillo, The Dominican Republic
Rafael Leónidas Trujillo, who came from a simple background, was a brutal dictator who ruled the Dominican Republic for over 30 years. While successful in reducing foreign debt and modernising the country, he is largely remembered for the torture and murder of thousands of civilians.
In 1961, Trujillo was assassinated. His family fled to Madrid and looked for ways to deposit Trujillo’s assets in Europe. Corrupt frontmen acquired two Swiss banks with some of the money. The president of the Swiss Banking Commission turned a blind eye and in return was hosted in Spain a few times. The case was uncovered, the Swiss government sacked the Banking Commission’s president and the scandal made headlines all over the world.End of insertion
1979: Mohammad Reza Pahlavi, the last Shah of Persia
Mohammad Reza Pahlavi was known for his decadent lifestyle and had a special relationship with Switzerland. He went to a boarding school on the shores of Lake Geneva and regularly spent his holidays in the Alpine country. In 1968, he bought a villa in St Moritz, which became his winter residence, and had several Swiss bank accounts to his name.
In October 1971, the Shah organised a mega-party in the ruins of Persepolis for which he constructed his own oasis in the middle of the Persian desert and imported 50,000 birds from Europe. This lavishness and megalomania finally turned the suffering Iranian population and Muslim clergymen against him and led to his downfall. During the Islamic Revolution, the Shah fled the country and the Islamic revolutionary government confiscated all his assets.
The new government also wanted to “nationalise” the money stashed away in Swiss bank accounts, but after the Shah was overthrown, the Swiss refused to freeze his assets. They requested that Tehran’s new rulers pursue the case via ordinary proceedings. The Shah died in 1980. The house in St Moritz is still in the hands of his family.End of insertion
1986: Ferdinand Marcos, the Philippines
Ferdinand Marcos was considered one of the most corrupt rulers in the world. Together with his family, he pillaged the government’s coffers. His wife Imelda, a former beauty queen, is said to have owned thousands of designer shoes, nearly 1,000 mink coats and hundreds of evening dresses.
After the People Power Revolution removed Marcos in February 1986, he fled to the US. As he was trying to withdraw money from his Swiss bank account, his bank immediately alerted the Swiss government. Switzerland blocked his assets, and the Marcos case marked the start of a paradigm shift in Swiss banking. Later, Switzerland handed over millions of Marcos deposits to the Philippines National Bank, which held it in an escrow account. Marcos died in 1989; his wife is still alive.End of insertion
1980s: Jean-Claude ‘Baby Doc’ Duvalier, Haiti
In 1975, the physician François “Papa Doc” Duvalier was elected president of Haiti. Initial hopes for a better life in Haiti soon turned into a brutal dictatorship. “Papa Doc” emptied the government’s coffers and filled his pockets with the profits of the state-owned tobacco company. He had tens of thousands of people killed through his secret service.
When “Papa Doc” fell seriously ill, he amended the constitution so his son, Jean-Claude, could follow in his footsteps. When “Papa Doc” died in 1971, 19-year-old “Baby Doc” became the youngest head of state in the world. Both “Docs” managed to drive the country’s economy into the ground.
In 1986, Duvalier was ousted and fled to France. At Haiti’s request, Switzerland blocked all his assets in Swiss bank accounts.
As the situation remained unstable in Haiti, Duvalier was not brought to trial. Switzerland was unable to provide legal assistance and could not restitute the money. Switzerland took urgent steps to pass a new law on returning illicit dictator funds without launching legal proceedings. Switzerland is currently looking into options for returning the money through UNICEF projects. Duvalier died in 2014.End of insertion
1991: Moussa Traoré, Mali
After a military coup in 1968, Moussa Traoré became Mali’s head of state. His 23 years in power were marked by corruption, torture and killing members of the opposition. In 1991, a coup d’état put an end to Traoré’s rule, which prompted the new government to launch an investigation into the embezzlement of public money. It asked Switzerland to provide legal assistance. A court in Mali sentenced Traoré and his wife Mariam to death, but they were pardoned a few years later. In 1997, Switzerland returned CHF3.9 million to Mali, and although it was a relatively small sum, the Traoré case made history. Switzerland paid the fees of the lawyer who represented the government of Mali. This was the first time Switzerland had returned money to an African country. Traoré died in 2020.End of insertion
1995: Raúl Salinas, Mexico
In 1988, Carlos Salinas was elected president of Mexico. His brother Raúl was heavily involved in dealing with drug cartels, making hundreds of millions of dollars. In 1995, Raul was arrested on charges of masterminding the murder of their brother-in-law, ruling party secretary-general José Francisco Ruiz Massieu.
As Raúl Salinas was put behind bars in Mexico, his wife walked into a Geneva bank to withdraw a large amount of money. Little did she know that the bank had received an advance warning. She was arrested, and the money was confiscated.
In 2005, Raúl’s conviction for the murder of Massieu was overturned, but part of the money deposited in Swiss bank accounts stemmed from illegal activities, according to Swiss investigations. In 2008, Switzerland returned $74 million to the Mexican people.End of insertion
1997: Mobutu Sese Seko, Democratic Republic of Congo (formerly Zaire)
Mobutu Sese Seko was president of the Democratic Republic of the Congo (formerly Zaire) from 1965 to 1997. He lined his pockets with money from the trade in copper, cobalt, diamonds and gold. While Zaire was suffering from famine and disease, the dictator chartered the supersonic airliner Concorde to go shopping in Paris and bought properties all over the world, including a mansion in Switzerland. In 1997, when Mobutu died, the opposition in Zaire requested that Switzerland provide legal assistance and block all of Mobutu’s assets. When the opposition leader declared himself president of Zaire, Switzerland froze the funds of Mobutu and his family. The new government failed to initiate legal proceedings over Mobutu’s ill-gotten gains, and in 2009 Switzerland was forced to unfreeze the funds, as the statute of limitations had run out.End of insertion
Sani Abacha, Nigeria
Sani Abacha ruled Nigeria with an iron fist from 1993 to 1998. The military dictator got rid of opponents by executing them. Estimates vary, but Abacha and his entourage are thought to have taken $1 billion-$5 billion from Nigeria's oil revenues out of the country. Some of the money ended up in Swiss bank accounts. In 1998, Abacha died unexpectedly aged 54. Switzerland has reimbursed to Nigeria over $700 million, the highest amount in the world in an asset recovery case.End of insertion
2000: Vladimiro Montesinos, Peru
It sounded wonderful at the beginning: “The modernisation of the state to which we aspire is mainly for the benefit of the poor.” These were the words of agricultural engineer Alberto Fujimori when he was running for president of Peru in 1990. However, his ten years in office were characterised by massacres of civilians, human rights violations and corruption scandals. The head of the intelligence service, Vladimiro Montesinos, played a major part in this.
When in 2000 a bribery scandal came to light, Fujimori, who had taken refuge in Japan, sent his resignation by fax. Montesinos fled abroad but was arrested in Venezuela and extradited to Peru. Switzerland blocked Montesinos’s illicit assets worth CHF200 million, which had been deposited in several bank accounts. Peru became the first country to establish its own confiscation order, which enabled Switzerland to return illicit assets to its people. In 2002, Switzerland transferred a first tranche of $77.5 million to Peru, followed by further transfers in 2006 and 2017. In 2020, Switzerland and Peru signed an agreement on the restitution and use of the remaining millions. The funds were earmarked for strengthening rule of law and fighting corruption in Peru.
Fujimori and Montesinos are serving their sentences in a Peruvian prison.End of insertion
2000: Nursultan Nazarbayev, Kazakhstan
Nursultan Nazarbayev, who was born into a poor family and started his professional life in a steel plant, served as Kazakhstan’s president for 29 years. During this time he and his entourage drew huge benefits from the revenues of the country’s rich natural resources.
But in 2020 Nazarbayev’s grandson Aisultan made a public statement on his Facebook page claiming that his grandfather was also his father from a liaison with his own daughter Dariga. Aisultan went on to call the country’s elite corrupt. In the same year, Aisultan, who was a drug addict, died of heart failure.
At the turn of the millennium, Nazarbayev’s Swiss bank accounts were blocked. Switzerland literally stumbled upon the alleged dirty money amounting to $115 million but was faced with a tricky situation: how could the money be returned to Kazakhstan while Nazarbayev was still in office?
In 2007, an agreement was struck between Kazakh officials, the Swiss, the US and the World Bank to set up an independent foundation as a way to return the funds to the country and support poor families. Another tranche of $48 million was transferred to the World Bank to support the Kazakh population.
In 2019, Nazarbayev resigned but kept the title of the “Leader of the Nation” until January 2022, when a sharp increase in gas prices led to riots among the population. Nazarbayev suddenly disappeared. His family still owns various properties in Switzerland.End of insertion
2011: Hosni Mubarak, Egypt
During the Arab Spring in 2011, tens of thousands of people took to the streets in North Africa. They were dissatisfied with their living conditions and suspected the elite of having enriched themselves at the expense of the population.
The Swiss government reacted with the precautionary blocking of assets invested in Switzerland. Among other things, it blocked funds belonging to the entourage of the outgoing Egyptian President Hosni Mubarak - 30 minutes after his resignation was announced. Initially, CHF410 million were involved, later the sum rose to around $700 million.
But the situation in Egypt is unstable, and legal aid failed. In 2017, Mubarak was acquitted by Egypt's highest court. The Swiss government partially lifted the block on Mubarak's funds.
The Office of the Attorney General of Switzerland is still conducting criminal proceedings* for participation in a criminal organisation and for money laundering. It concerns five persons, including the two sons of the now deceased former president Hosni Mubarak. The sum of the blocked funds amounts to around CHF400 million.
*Update on October 7, 2022: the Office of the Attorney General of Switzerland has dropped the proceedings against the five persons associated with Mubarak and released the CHF400 million.
*Update on October 19, 2022: after a complaint by Hosni Mubarak’s descendants to the SWI swissinfo.ch ombudsman, a sentence has been removed from this article.End of insertion
2011: Laurent Gbagbo, Ivory Coast
Laurent Gbagbo was president of Ivory Coast for ten years. In the 2010 presidential elections, he refused to concede defeat to the winner Alassane Ouattara. This sparked riots and violence during which more than 300 people were killed.
When in 2011 Gbagbo was arrested, Switzerland froze assets worth CHF70 million belonging to the former president and his entourage.
Ivory Coast extradited Gbagbo to the International Criminal Court (ICC) in The Hague which wanted him for alleged crimes against humanity. However, the ICC acquitted him in a surprise 2019 verdict. It has not been established whether his assets are illicit.End of insertion
2012: Gulnara Karimova, Uzbekistan
Gulnara Karimova is the eldest daughter of Islam Karimov, who ruled Uzbekistan from 1991 to his death in 2016. Gulnara, a diplomat, fashion designer and singer, was considered her father’s successor but fell into family disgrace in 2013. She was accused of having filled her pockets with more than $1 billion from telecommunication companies for issuing mobile communication licences in Uzbekistan.
In 2012, Switzerland blocked CHF800 million of Karimova’s assets in Swiss bank accounts and is currently looking into ways to return the funds to Uzbekistan via a trust fund. The foreign ministry is working on an agreement with Uzbekistan but said some of the money should be returned to Karimova as its criminal origins could not be proven. Karimova, 49, is currently serving a long sentence in an Uzbekistan prison.End of insertion
2014: Viktor Yanukovych, Ukraine
The Russia-friendly government under Yanukovych rejected the Ukrainian European Association Agreement in 2013. This did not go down well with the Ukrainian people, who wanted to establish closer ties with the West. Yanukovych’s move sparked mass protests and the president fled to Russia.
Switzerland reacted by freezing about $70 million of Yanukovych’s funds, suspecting that they stemmed from illicit sources. In March 2022, the Ukrainian newspaper Pravda reported that Yanukovych was in Minsk, the capital of Belarus, and was getting ready for Russia to reinstate him as the president of Ukraine.End of insertion
2015: Najib Razak, Malaysia
Najib Razak served as Malaysia’s prime minister from 2009 to 2018. He set up a fund called 1MDB, which allegedly aimed to promote the economic and social development of Malaysia. Billions of taxpayers’ money went into the fund, which was completely bankrupt six years after its establishment. In 2015, the Office of the Attorney General of Switzerland started investigating the case as part of the allegedly embezzled funds were deposited in accounts owned by Swiss banks. In 2021, Najib Razak was sentenced to 12 years in prison for corruption and tampering with the 1MBD fund. He appealed against the verdict. Unlike other countries, Switzerland has not yet restituted funds worth millions to Malaysia.End of insertion
Translated from German by Billi Bierling
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