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Monday, March 9, 2015

Swiss Banks Drawn Into Petrobras Scandl



March 8, 2015 4:14 pm

Swiss banks drawn into Petrobras scandal

Petrobras office©AP
Documents released by a Brazilian court have outlined the alleged use of Swiss bank accounts for the payment of bribes in the Petrobras scandal.
Pedro Barusco, a former Petrobras executive and key witness in what is emerging as Brazil’s biggest graft case, said in a statement filed with a court in Parana that he laundered an estimated $100m in bribes partly through a web of accounts in several banks in Switzerland.
These include Bank Safra, where he claimed to have opened several accounts “with the help of” Julio Faerman, a Brazil-based oil and gas industry consultant, and Denise Kos, a former official at the bank.
Brazilian prosecutors investigating the Petrobras scandal allege former company executives and politicians mostly from the ruling coalition government colluded with the energy group’s contractors to receive millions of dollars of bribes in exchange for business deals.
The Brazilian attorney-general’s office this week sought permission from the supreme court to investigate 54 people, most of them politicians. In Brazil, only the highest court can deal with criminal charges against sitting congressmen.
The alleged use of Swiss bank accounts in the Petrobras case is fuelling efforts in Brasília to investigate accusations of tax avoidance by Brazilians at HSBC in Switzerland. This follows raids by prosecutors last month on HSBC’s offices in Geneva over allegations of tax evasion by wealthy clients of its Swiss private banking arm.
“Brazil appears in fourth place in the number of people with accounts in HSBC in Switzerland,” said Aécio Neves, leader of the opposition PSDB party, who is calling for a congressional inquiry into the matter.
Swiss and Brazilian prosecutors have been co-operating on a criminal investigation into money laundering related to Petrobras since April last year, the Swiss attorney-general’s office said.
“As the investigation is ongoing, the attorney-general’s office cannot provide any further information,” the Swiss authorities said.
In his court statement, which he made as part of a leniency agreement with prosecutors, Mr Barusco said he opened an account at the Republic Bank in Switzerland in 1997, but switched to BBA Creditanstalt and then to Bank Safra, where he opened an account in 2003.
A know-your-customer form for the opening of the Bank Safra account, which was filed to the Parana court alongside Mr Barusco’s statement, was purportedly signed by Ms Kos.

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No one is directly named as account holder on the form. But the description she apparently gave of the beneficial owner of the account — which had the number 601244 — matched Mr Faerman.
Mr Barusco in his statement has accused Mr Faerman of paying him bribes on behalf of Petrobras contractors. The bribes were allegedly paid into account 601244.
Mr Barusco said he also opened other accounts at Bank Safra in the name of shell companies, such as Tropez and Dole Tech, to receive bribes.
In the know-your-customer form for Dole Tech, which appears to have been completed by Ms Kos, no one was directly named as account holder. But a description of the beneficial owner of the account seems to refer to Mr Faerman.
Mr Barusco said in his statement Ms Kos “periodically came to Brazil” and met him and other clients when she was at Safra and later when she moved to Lombard Odier.
Mr Barusco said he went on to open additional accounts at Bank Safra and other banks with operations in Switzerland, including PKB, Royal Bank of Canada, Cramer Bank, Pictet, Julius Baer, Lombard Odier, and with his wife, at HSBC.
Other protagonists in the Petrobras scandal — including Paulo Roberto Costa, a former executive at the energy group who has become a prosecution witness — have also admitted to use of Swiss bank accounts.

Timeline of a scandal

A Petrobras sign is displayed at a gas station of Brazil's government-run oil company Petrobras on February 5 2015 in Rio de Janeiro, Brazil.
A timeline of the corruption crisis in Petrobras that is ricocheting into the rest of the Brazilian economy
Bank Safra in Switzerland, now known as J Safra Sarasin, declined to comment. Ms Kos was not available. Mr Faerman has denied paying bribes.
Pictet, Lombard Odier and Julius Baer declined to comment. PKB, Cramer, Royal Bank of Canada and HSBC, which bought Republic Bank, did not respond to requests for comment.
BBA Creditanstalt was bought by Itaú BBA, a Brazilian bank. Itaú BBA said it never had any operations in Switzerland and otherwise declined to comment.
The Petrobras scandal has raised uncomfortable questions for a Swiss banking industry that has invested heavily in improving its reputation, analysts said.
“This doesn’t come at a good time for them [the Swiss banks],” said Guenther Dobrauz of PwC, the accounting firm, in Zurich. “There is not a single Swiss bank left that will consciously try to make money that way. There is nowhere left to hide.”