Post by anenro on Jul 16, 2019 16:55:08 GMT 4
‘The battle has started’: Ex-Credit Suisse banker’s fraud victims still want an apology
It was December 30, 2015, and Russian businesswoman Olga Kurbatova, who founded a successful Moscow-based beverage company called Happyland Corp, was celebrating the New Year with her son when she got an unexpected phone call from the bank that managed her fortune, Credit Suisse. There had been a most unhappy mistake, she was told. The bulk of the money she thought she had in what she called her “Dream Account” — $35 million — had been credited to her by mistake. It wasn’t actually hers. “For a few hours, I was wondering if it was a gag,” Kurbatova said recently, via a translator. “Then I went into a state of shock.”
Kurbatova’s dream had disappeared — literally. For years, losses in her account had been hidden by her private banker at Credit Suisse, and the money she thought she had didn’t actually belong to her.
In early 2018, that man, Patrice Lescaudron, a French banker who worked in Credit Suisse’s Russia, Ukraine and Central Asia department, was sentenced to five years in prison for running an eight-year scheme in which he made unauthorized trades and moved assets between clients’ accounts while amassing millions in assets for himself, including a Ferrari, a Rolex watch, jewelry, and multiple homes. The court says that damages amounted to over $140 million.
“This is quite a huge fraud, without precedent,” says Giorgio Campá, a lawyer for two of Lescaudron’s former clients.
A ‘terrifying’ stint as a fraudster
Lescaudron does not seem to be your typical unrepentant or delusional fraudster. After he was discovered, he told the police that he was hospitalized for three months for psychiatric problems. At his trial, he added that he had had cancer, suffered from glaucoma and sleeping problems, and lived with a “rather chronic state of depression and…hypertension,” according to a translation of the hearings. He described his years of fraud as “absolutely terrifying,” adding, “It was hell for 5 to 7 years continuously.”
He was set free after just 10 months in prison post-sentence, after being given credit for time already served, health issues, and good behavior. But he told the court that his time in prison wasn’t easy. “It was very difficult to enter this universe of which I knew nothing,” he said. “You really have to struggle to keep your brain in working order.” He’s not barred from further work in banking, and his LinkedIn page notes that he has “excellent knowledge of financial markets and investment products,” but a source familiar with him says that he is having trouble finding another job. Instead, he’s keeping his brain occupied by learning Chinese—which will be his seventh language.
Credit Suisse itself has paid far less of a price, which perhaps explains why Lescaudron’s former clients seem to be not so much angry with the banker as they are with the bank itself. Kurbatova and several of Lescaudron’s other clients, including Bidzina Ivanishvili, the multi-billionaire former prime minister of Georgia, whose lawyers say he has lost several hundred million dollars, and Vitaly Malkin, a former Russian senator who co-founded Rossiyskiy Kredit Bank with Ivanishvili in the early 1990s, and whose lawyers also say he has suffered huge losses, say they have gotten neither recompense nor explanation — let alone an apology — from Credit Suisse. They also claim that they have been unable to obtain documents they want, which they argue will help shed light on what happened. “Credit Suisse did damage to my business, my family, my view of the world overall,” says Kurbatova today. “I have never been treated and lied to like this.”
Malkin says he trusted Credit Suisse as he believed it to be the world’s best bank. “Credit Suisse should obviously be held responsible for my tremendous losses and severe damages,” Malkin says. “This financial scandal is the case of Credit Suisse, certainly not only the case of Patrice Lescaudron.”
Charlie Wigan, a personal representative for Ivanishvili, pointed out that this was not “a sophisticated fraud.” He added, “You would think, ‘this is Credit Suisse.’ And yet, this went on for nine years. How could the bank miss it?”
It was December 30, 2015, and Russian businesswoman Olga Kurbatova, who founded a successful Moscow-based beverage company called Happyland Corp, was celebrating the New Year with her son when she got an unexpected phone call from the bank that managed her fortune, Credit Suisse. There had been a most unhappy mistake, she was told. The bulk of the money she thought she had in what she called her “Dream Account” — $35 million — had been credited to her by mistake. It wasn’t actually hers. “For a few hours, I was wondering if it was a gag,” Kurbatova said recently, via a translator. “Then I went into a state of shock.”
Kurbatova’s dream had disappeared — literally. For years, losses in her account had been hidden by her private banker at Credit Suisse, and the money she thought she had didn’t actually belong to her.
In early 2018, that man, Patrice Lescaudron, a French banker who worked in Credit Suisse’s Russia, Ukraine and Central Asia department, was sentenced to five years in prison for running an eight-year scheme in which he made unauthorized trades and moved assets between clients’ accounts while amassing millions in assets for himself, including a Ferrari, a Rolex watch, jewelry, and multiple homes. The court says that damages amounted to over $140 million.
“This is quite a huge fraud, without precedent,” says Giorgio Campá, a lawyer for two of Lescaudron’s former clients.
A ‘terrifying’ stint as a fraudster
Lescaudron does not seem to be your typical unrepentant or delusional fraudster. After he was discovered, he told the police that he was hospitalized for three months for psychiatric problems. At his trial, he added that he had had cancer, suffered from glaucoma and sleeping problems, and lived with a “rather chronic state of depression and…hypertension,” according to a translation of the hearings. He described his years of fraud as “absolutely terrifying,” adding, “It was hell for 5 to 7 years continuously.”
He was set free after just 10 months in prison post-sentence, after being given credit for time already served, health issues, and good behavior. But he told the court that his time in prison wasn’t easy. “It was very difficult to enter this universe of which I knew nothing,” he said. “You really have to struggle to keep your brain in working order.” He’s not barred from further work in banking, and his LinkedIn page notes that he has “excellent knowledge of financial markets and investment products,” but a source familiar with him says that he is having trouble finding another job. Instead, he’s keeping his brain occupied by learning Chinese—which will be his seventh language.
Credit Suisse itself has paid far less of a price, which perhaps explains why Lescaudron’s former clients seem to be not so much angry with the banker as they are with the bank itself. Kurbatova and several of Lescaudron’s other clients, including Bidzina Ivanishvili, the multi-billionaire former prime minister of Georgia, whose lawyers say he has lost several hundred million dollars, and Vitaly Malkin, a former Russian senator who co-founded Rossiyskiy Kredit Bank with Ivanishvili in the early 1990s, and whose lawyers also say he has suffered huge losses, say they have gotten neither recompense nor explanation — let alone an apology — from Credit Suisse. They also claim that they have been unable to obtain documents they want, which they argue will help shed light on what happened. “Credit Suisse did damage to my business, my family, my view of the world overall,” says Kurbatova today. “I have never been treated and lied to like this.”
Malkin says he trusted Credit Suisse as he believed it to be the world’s best bank. “Credit Suisse should obviously be held responsible for my tremendous losses and severe damages,” Malkin says. “This financial scandal is the case of Credit Suisse, certainly not only the case of Patrice Lescaudron.”
Charlie Wigan, a personal representative for Ivanishvili, pointed out that this was not “a sophisticated fraud.” He added, “You would think, ‘this is Credit Suisse.’ And yet, this went on for nine years. How could the bank miss it?”
