Ex-HSBC Banker Guilty of Money Laundering in Paris Drug Case
(Bloomberg) -- A former HSBC Holdings Plc banker was found guilty of money laundering, but cleared of related drug charges in a French trial of four brothers accused of operating a sophisticated ring to distribute money stemming from cannabis trafficking to wealthy clients.
Nessim El Maleh, a former director at HSBC Private Bank Suisse in Geneva, was fined 200,000 euros ($230,000) by a Paris criminal court Friday. His brother Meyer, who ran a wealth-management firm, was sentenced to 6 years in jail and fined 1 million euros after judges said he was the mastermind of the scheme. He now faces an arrest warrant.
The court rejected the drug-related charges after ruling that the family had faced similar allegations in Switzerland covered by double jeopardy rules.
“We considered that he had been already judged for facts that cover in their entirety the charged related to laundering money stemming from drug trafficking,” Judge Bruno Deblois said Friday. Still, Meyer “is found guilty declare of taking part in an organized scam to launder money.” The court came to the similar conclusions concerning Nessim.
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 started earlier this month. 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.
A lawyer for Meyer said his client would appeal the ruling, arguing the doctrine of double jeopardy should have applied to the entire case. A lawyer for Nessim didn’t immediately return a call seeking comment.
The two men’s older brother, Mardoché, who was accused of distributing as much as 12 million euros between 2010 and 2012 in bags full of cash to well-to-do owners of offshore accounts at secret Paris meetings, received a three-year sentence, two of which were suspended. Nessim El Maleh and a fourth brother, Albert, also got suspended jail sentences.
During the Paris trial, Nessim blamed the scheme on his brother Meyer and said he believed the money was linked to tax evasion, not drugs. While Meyer answered investigators’ questions during the probe, he is now in Switzerland and didn’t attend the trial.
The French probe into the El Maleh brothers started in 2012 as a routine drug-running investigation with investigators following the trail of a gang using speedy vehicles to move hundreds of kilograms of marijuana from Morocco to Paris. Inspectors came upon Mardoché, who led them to an Art Nouveau building in Geneva where authorities say Meyer’s wealth-management firm handled about $800 million linked to tax fraud for clients.
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. Perez, who didn’t attend the trial, was sentenced to six years in jail and ordered to pay a 1 million-euro fine.
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