Prosecutors are still investigating and haven’t decided yet whether to bring a case to trial.
Years of Deception
The story of the banker’s rise to the stratosphere of global finance and the crash that followed, reconstructed by Bloomberg based on legal filings, including a transcript of the banker’s questioning by Credit Suisse after he was exposed in September, as well as interviews with eight people with direct knowledge of the case, lifts the curtain on a world that prizes secrecy. It raises questions about whether the bank should have done more to question the seemingly stunning successes of one of its top producers, who was reprimanded at least once over the period but managed to keep his alleged fraud a secret.
When Credit Suisse hired him in late 2004, the suspect, then 40 years old, had no banking experience, having worked as an auditor and in pharmaceuticals, he told the bank when questioned after he was exposed. One job had taken him to Russia, where he’d learned the language.
But less than two years after joining Credit Suisse, he said, he was handling the bank’s biggest clients in the region after his boss moved to a rival bank. With as much as $1.6 billion under management, the clients were among the bank’s largest.
The richest by far was Bidzina Ivanishvili, a tycoon who’d made billions in banking, metals and real estate mostly in Russia in the 1990s before returning in 2004 to his homeland of Georgia. In 2012, he would become the country’s prime minister for a year.
Trusted ‘Totally’
The banker said he quickly won his client’s confidence, despite his lack of industry experience. “This client trusted me totally,” he told the bank.
Ivanishvili didn’t respond to requests for comment. Credit Suisse records show the billionaire’s accounts started out smaller but he steadily increased the amount of money he entrusted to the banker, according to a person familiar with the bank’s probe.
The banker said the deception of his biggest client began at the depths of the global financial crisis in the winter of 2009. Betting that markets were bottoming out, he said Ivanishvili decided to move $600 million that had been held in a conservative portfolio of bonds through the bank’s Singapore office into riskier stocks.