A precious metals and gems trader in Switzerland stood trial on May 20 for helping Italian criminals launder money by purchasing diamonds for them. He bought diamonds worth $750,000 on behalf of the Italian criminals. The three Italians, who were accomplices of ‘C’, as he is named under local reporting restrictions, were convicted and sentenced to prison in 2011. They managed a VAT tax scam and collected $35 million by issuing fake tax receipts.
Swiss prosecutors said that ‘C’ should have known that buying the diamonds was linked to Italy’s organised tax scam.
The case puts a lens on the activities of criminal organisations that are turning to gold, gems and diamonds in order to launder and then store their wealth in Switzerland. While Switzerland used to be a haven for illegally obtained wealth and tax-evaders, tougher rules have been implemented in the landlocked European nation.
The new rules include more stringent ‘know-your-customer’ requirements as well as banks keeping an eye out for large cash deposits. Switzerland often serves different geographical markets, being surrounded by larger European nations. It also has lingual hubs like Lugano for Italians, Zurich for Germans and Geneva for the French.
Since 2013, Switzerland also regularly provides access to details of bank accounts and its holders to different countries. In 2021, the number of countries that Switzerland was sharing such data with was 81.
Criminal organisations as a result have started purchasing bullion and precious gems, and storing them in regulated safety deposit boxes as a way of funnelling wealth and laundering money.
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