Lombard Odier Fined CHF3m for Money Laundering Failures

A Swiss court has fined private bank Lombard Odier CHF3 million, approximately $3.7 million, for failing to prevent money laundering.

The proceedings concerned funds allegedly connected to Gulnara Karimova, daughter of Uzbekistan’s former president. Prosecutors had alleged that an organisation known as “The Office” channelled hundreds of millions of dollars into Swiss bank accounts between 2005 and 2013, Public reporting indicates that . Proceedings against Karimova were dropped in this case.

Private banking requires persistent source-of-wealth scrutiny

Complex offshore structures, politically connected clients and large cross-border transfers require more than initial onboarding checks. Banks need to understand how wealth was generated, who controls intermediary entities and whether transactions remain consistent with the documented profile.

Adverse information and corruption allegations should trigger reassessment of the entire relationship, including connected persons and legacy accounts. Senior approval must be supported by evidence rather than reputation or commercial importance.

The fine adds to the long-running scrutiny of how private banks handled wealth linked to politically exposed persons. It reinforces the need for durable records and timely escalation when risk indicators accumulate over several years.

Lessons for politically exposed person controls

Private banks should identify whether a client, family member or close associate is politically exposed and determine how public position could relate to the accumulation of wealth. The assessment must examine the economic basis of assets, not only whether a person appears on a screening list.

Long-standing relationships require fresh review when corruption allegations, criminal proceedings or sanctions emerge. Banks should map connected accounts, trusts and companies and consider whether previous transfers need retrospective investigation. Independent senior approval is essential where commercial importance could influence the risk decision.

Private-banking review points

• Verify wealth independently from the customer’s own advisers.
• Identify family members, associates and controlled companies.
• Reassess legacy accounts when corruption allegations emerge.
• Document why residual risk remains acceptable to senior management.