Apr 21, 2011 - 21:01 

http://www.swissinfo.ch/eng/swiss_news/Holenweger_acquitted_of_money_laundering.html?cid=30061936

Zurich banker Oskar Holenweger has been acquitted of money laundering charges, in one of the most spectacular court cases in recent memory.

Eight years after Holenweger was first arrested on charges of laundering money for South American drug cartels, the Federal Criminal Court in Bellinzona on Thursday cleared him of all charges, which also included bribery, falsifying documents and mismanaging client assets.

The Bellinzona court awarded Holenweger SFr420,000 ($476,730) in compensation.

Prosecutors said during trial that Holenweger opened 163 different accounts in his private bank and some commercial banks to help French energy group Alstom funnel SFr80 million to officials in exchange for contracts in South America and Asia.

The Swiss government froze Alstom's money that Holenweger deposited in Swiss commercial and private banks. Alstom was not on trial and the company has refused to comment on the case.

"The question whether Holenweger knew that the money would be used for bribery remains unanswered," said the president of the court, Peter Popp.

The decision represents a significant defeat for federal prosecutors who had sought a 30-month prison term for the banker.

Colombian claims

The investigation was based on claims by Colombian narcotics baron José Ramos that Holenweger was involved in laundering drug money.

Investigators were unable to prove the claims against Holenweger despite hiring a German private investigator for a failed sting attempt.

The court also ruled that the use of testimony from Ramos was illegal since he used questionable means to gather evidence, working undercover and attempting to incite Holenweger to commit illegal acts.

A decisive factor in the court’s ruling involved the use of such means as telephone tapping during the investigation. The judges said that the vague details provided by Ramos did not warrant the approval of such a measure.

Tough on corruption?

The verdict is a blow for prosecutors who had described the case as an effort to bolster Switzerland’s efforts to get tougher on corruption.

Holenweger lawyer, Lorenz Erni, said he was pleased with the ruling, while the prosecutor’s office said it would decide later whether to appeal to Switzerland’s highest court.

The decision could also have implications for the Federal Prosecutor, Erwin Beyeler. A question left unanswered concerns his involvement with the illegal deployment of Ramos.

At the time, Beyeler was head of the Federal Police and has rejected being directly involved despite documents published in magazines including the Weltwoche showing otherwise.

The former Federal Prosecutor, Valentin Roschacher, resigned in connection with the Holenweger case, and Beyeler must go before parliament later this year to be confirmed in his post. Following the court verdict, pressure on Beyeler is expected to mount.