U.S. lawmakers question Credit Suisse over Russian sanctions compliance

Rep. Carolyn Maloney (D-N.Y.), chair of the committee, and Rep. Stephen Lynch (D-Mass.) announced Monday a formal request Credit Suisse turn over all “information and documents about the bank’s compliance with international economic sanctions imposed due to Russia’s war of aggression against Ukraine.”

“We are writing to seek information about a recent report that Credit Suisse asked hedge funds and other investors to destroy documents regarding yachts and private jets owned by Credit Suisse’s clients,” they wrote in a joint press release. “This report raises significant concerns about Credit Suisse’s compliance with the severe sanctions imposed by United States and its allies and partners on the architects and enablers of Russia’s brutal and unprovoked invasion of Ukraine, including Russian President Vladimir Putin and oligarchs in his inner circle.”

The documents were part of an $80 million synthetic securitization deal that occurred near the end of 2021 in which Credit Suisse “sold off risk related to a $2 billion portfolio of loans backed by yachts, private jets, and other assets owned by the bank’s wealthiest clients,” according to the press release.

The release continued: “In an investor presentation, Credit Suisse disclosed that in prior years, borrowers defaulted on these loans due to ‘U.S. sanctions against Russian oligarchs,’ an apparent reference to Russian oligarchs Oleg Deripaska and Arkady and Boris Rotenberg, who were forced to sell their jets as a result of U.S. sanctions.”

The news report referenced by the two members of Congress is a March 2 story in the Financial Times, which alleged Credit Suisse was going “to destroy documents relating to its richest clients’ yachts and private jets, in an attempt to stop information leaking about a unit of the bank that has made loans to oligarchs who were later sanctioned.” The report said the documents were related to “securitization of loans backed by ‘jets, yachts, real estate, and/or financial assets.’”

The Financial Times said it was alerted to the existence of the letters from Credit Suisse by three individuals whose firm or firms received the request.

The letter from Maloney and Lynch addressed to Credit Suisse Chief Executive Thomas Gottstein asked the bank to produce a number of documents by April 11, including:

• All communications related to the request to destroy documents;
• All presentations provided to investors and nonparticipating investors in the securities deal;
• A list of all participating investors in the securities deal;
• Know your customer and customer due diligence documents related to the loans that secured the deal;
• Due diligence conducted to ensure the deal complied with all sanctions; and
• All communications to investors and “nonparticipating” investors related to compliance with sanctions.

A Credit Suisse spokeswoman said the bank would have no additional comment beyond a March 3 press release written in response to the Financial Times report stating the bank requested the documents be destroyed in accordance with a nondisclosure agreement and because previous confidential information about Credit Suisse had been leaked to the press. The request to delete and destroy the information “is good housekeeping and good data hygiene” and is “entirely unrelated to the ongoing conflict in Eastern Europe,” the bank said.

Credit Suisse said no client data was made available, no client data has been erased within Credit Suisse, and the bank is “fully compliant” with sanctions imposed by the United States and its allies.

Credit Suisse in February was the subject of a series of investigative stories called “Suisse Secrets” published by the Organized Crime and Corruption Reporting Project in partnership with German newspaper Süddeutsche Zeitung.

A consortium of more than 160 journalists from 48 outlets spent months parsing through the leaked records of more than 18,000 Credit Suisse accounts, “the largest leak ever from a major Swiss bank,” and found dozens of accounts belonging to corrupt politicians, criminals, spies, dictators, and other dubious characters.