Julius Baer has thus far not been under public scrutiny for laundering money out of Venezuela. However its former client advisor Matthias Krull poses a risk to the Swiss private bank.
Julius Baer has mandated a U.S. firm of attorneys to examine all the accounts and customer deals of its former employee Matthias Krull, who is now being charged with money laundering activities in Venezuela. The probe involves some 500 accounts and more than $500 million, for which Krull was responsible, the news agency «Bloomberg» reported Tuesday.
The New York-based attorneys Quinn Emmanuel Urquhart & Sullivan, who have previously worked with Julius Baer, is conducting the probe into Krull’s accounts. Neither the bank, known as the law firm UBS used in its major tax scandal ten years ago, nor the attorney firm would comment on the report.
No Accounts Known
Krull was arrested in Miami in July on suspicion of money laundering. Two months later, he pleaded guilty to U.S. charges in a cooperation agreement. The 44-year-old German, who worked for Julius Baer in Panama until earlier this year, has admitted laundering more than $1.2 billion, emanating from Venezuelan oil concern PDVSA.
The private banker, who earlier worked in Venezuela for Credit Suisse before moving to Julius Baer, had close contacts with the business establishment surrounding the country’s President Nicolas Maduro. He is, however, thought not to have used Julius Baer accounts for his illegal activities. The bank itself does not form part of the ongoing U.S. inquiry.
Controlling Compliance Woes
Julius Baer wants to stamp out any uncertainty, and has thus taken U.S. lawyers to investigate. The internal probe will incinerate up to $20 million in spending, according to «Bloomberg».
The private bank is struggling to firefight its various compliance problems. It is the subject of an enforcement probe by Swiss regulator Finma into various violations of anti-money laundering rules. Julius Baer is suspected to have taken money linked to PDVSA, as well as corruption money tied to Brazilian oil firm Petrobras, and that of South American FIFA representatives.
Tide Turned
Banker Krull was one of the most successful «hunters» of new clients and money for Julius Baer in Latin America. But with the increasingly obvious compliance risks from the business as well as a local management handover, the tide has turned. Beatriz Sanchez took over last year from Gustavo Raitzin, who had converted ex-CEO Boris Collardi’s aggressive growth targets into reality.
Krull left the bank this spring for Geneva’s Gonet Mourgue d' Alge, together with the management of Julius Baer’s Bahamas team. Julius Baer says that Sanchez is in the process of reorganizing its Latin American business to more sharply focus on onshore markets Brazil and Mexico as well as Argentina, where it does not have an office.
