The billionaire and former Georgian prime minister was the victim of a fraudulent Credit Suisse client advisor.
(Photo: PD)
Zurich Once again, a legacy may cost Credit Suisse dearly. In the legal dispute with the oligarch Ivanishvili, the major bank is expecting a judgment to the detriment of a life insurance subsidiary in the tax haven of Bermuda, as Credit Suisse announced late Wednesday evening. This could cost the bank up to $500 million.
Credit Suisse has already made provisions for the case. However, it is still being examined whether further capital needs to be set aside for the first quarter of 2022, the bank said in a statement.
This marks a victory for the Georgian billionaire and ex-Prime Minister Bidzina Ivanishvili in a year-long legal battle against the major bank. Ivanishvili was a customer of Credit Suisse and, according to his own statements, had meanwhile stashed more than a billion dollars at the bank. For tax reasons, the bank managed a large part of the assets through a life insurance policy in the Bermuda Islands.
However, Ivanishvili’s client advisor, Patrice Lescaudron, embezzled funds on a large scale. Between 2010 and 2015 he diverted millions for his own benefit. In 2018, a Geneva court sentenced him to five years in prison and 130 million Swiss francs in damages for fraud and forgery. In 2020, Lescaudron took his own life.
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However, Ivanishvili and other former clients of Lescaudron see the bank as partly to blame. They have sued Credit Suisse in Bermuda and Singapore, among other places. In Switzerland, the public prosecutor’s office in Geneva is investigating against the bank.
Complex insurance structures in focus
Ivanishvili demands a high three-digit million amount from the bank. The bank has so far rejected a comparison because of the high demands. With the forthcoming verdict in Bermuda, the former Georgian prime minister is likely to have come closer to his goal. A spokesman for Ivanishvili declined to comment. The bank said it would “follow all available legal action.”
The Bermuda trial also highlights the bank’s practice of setting up complex insurance structures in tax havens for super-rich clients. The life insurance policy that the bank issued for customers like Ivanishvili was intended to save taxes. The assets were managed from Switzerland.
During the course of the court proceedings, it became public that the bank had only a few employees in Bermuda, whose functions were often unclear. According to process observers, an amount in the low double-digit billions has meanwhile been stashed away at the CS life insurance subsidiary in Bermuda.
More: Former Georgian prime minister threatens Credit Suisse with lawsuit in the United States