The Swiss former branch manager of Falcon Private Bank in Singapore has become the fifth person to be charged in a probe of scandal-plagued Malaysian 1MDB. He plans to plead guilty to some charges.
Authorities in the city-state have charged the ex-branch manager of Falcon Private Bank, Jens Sturzenegger, with 16 offences pertaining to 1MDB, according to financial news agency «Bloomberg».
He intends to plead guilty to some charges, his lawyer Tan Hee Joek said in court. Malaysian state fund, 1Malaysia Development Bhd, now familiarly known as 1MDB has roiled banks in Singapore, including UBS.
The Monetary Authority of Singapore (MAS) yanked Falcon's license to operate in the city-state three months ago over its 1MDB dealings. It also emerged that Sturzenegger, who is Swiss, had been arrested on October 5.
The MAS stated that it had conducted inspections on Falcon Bank in 2013 and 2015. The 2013 inspection found weaknesses in the bank’s controls for client acceptance and transaction surveillance that led to breaches of MAS’ anti-money laundering requirements.
Details Emerging
Among the 16 charges, Sturzenegger is accused of is being complicit in Falcon's failure to submit reports on suspicious transactions on inflows of $1.26 billion into two of the bank's accounts in March of 2013, to the Suspicious Transactions Reporting Office of the Commercial Affairs Department (CAD), according to a report in the «Straits Times».
In another charge, Sturzenegger is accused of giving false information to a Singapore investigator that he met Eric Tan, a close business associate of Malaysian financier Jho Low, on March 14, 2013 when in fact he had met Low himself.
Low is a now-elusive Malaysian businessman believed by investigators to have masterminded the complex web of financial transactions behind the billion-dollar 1MDB graft, which relied heavily on Swiss banks working hand in hand.
Implications for Brunner
Falcon Bank had been operating as a merchant bank in Singapore since August 2008, offering private banking services. The bank was originally owned by American International Group (AIG) and known as AIG Private Bank. In 2009, AIG Private Bank was acquired by Aabar Investments PJS and renamed Falcon Bank.
The case of Falcon, which is also under investigation in Switzerland, has laid bare how former Abu Dhabi sovereign wealth officials used the bank as a pass-through for illicit funds, against warnings of employees. Two high-ranking former officials are under arrest in Abu Dhabi, which isn’t officially part of the global 1MDB probe.
Singapore's dealing with Sturzenegger also has implications for Hanspeter Brunner, who used to run BSI's private bank in Asia and is waiting to hear whether he will face charges – and it shows that the city-state is prepared to play hardball with Swiss bankers as well as homegrown finance professionals.
BSI was shut down in May in Singapore by regulators, who deemed the Swiss private bank's dealings with 1MDB particularly flagrant.
