Canada Markets closed

Singapore court jails Swiss banker in 1MDB-linked probe

Men walk past a 1Malaysia Development Berhad (1MDB) billboard at the fund's flagship Tun Razak Exchange development in Kuala Lumpur March 1, 2015. REUTERS/Olivia Harris/File Photo

By Fathin Ungku

SINGAPORE (Reuters) - A Singapore court on Wednesday sentenced the former local branch manager of Swiss-based Falcon Private Bank AG to 28 weeks in prison and a fine of S$128,000 ($89,155.12), in an investigation tied to scandal-hit Malaysian state investment fund 1MDB.

The bank, which is also under investigation at home, was the second Swiss lender whose Singapore unit was ordered to cease operations last year after BSI Bank Ltd.

The action came as the city state tried to repair the reputation of its financial centre, which played host to some activity related to 1 Malaysia Development Berhad.

Jens Sturzenegger, the fifth person to be taken to court in Singapore's biggest crackdown on money laundering, pleaded guilty to six of the 16 charges filed by the prosecutors, with the rest taken into consideration during sentencing.

The Swiss national is the first foreigner to be charged in the 1MDB-linked probe by Singapore authorities.

Defence lawyer Tan Hee Joek said the banker was unlikely to appeal against the verdict. Falcon, in Switzerland, declined to comment.

"Jens Sturzenegger is a former employee of the bank and the investigation was against him as an individual and not against the bank," a bank spokesman told Reuters in an email.

"Therefore we can’t comment on that."

Singapore prosecutors also said Malaysian financier Low Taek Jho, better known as Jho Low, had used the alias "Eric Tan" to mask suspicious transactions identified in the 1MDB investigation.

"Eric Tan was not merely an alias for Jho Low, but was in fact a real person," public prosecutor Leong Weng Tat told the court, adding that Sturzenegger had seen a copy of the passport and curriculum vitae of the individual, Eric Tan Kim Loong.

In November, Singapore authorities had identified Low as a key figure in the money-laundering scandal linked to 1MDB.

Low is also among the people named in civil lawsuits filed by the U.S. Department of Justice, which alleged that more than $3.5 billion was misappropriated from 1MDB.

Singapore authorities have also frozen Low's assets, but the 34-year-old has not been charged with any offence in the 1MDB investigation.

1MDB, founded by Malaysian Prime Minister Najib Razak, is the subject of money-laundering investigations in at least six countries, including Switzerland, Singapore and the United States.

U.S. investigators tracked nearly $700 million sent from an account at Falcon in Singapore in 2013 to accounts in Malaysia belonging to "Malaysian Official 1", which U.S. and Malaysian officials have told Reuters refers to Najib.

Najib, who also chaired 1MDB's advisory board, has denied wrongdoing and said Malaysia will cooperate with international investigations. 1MDB has also denied wrongdoing.

Falcon is owned by Abu Dhabi's International Petroleum Investment Co.

Singapore last year jailed three ex-BSI bankers in what it has called its most complex money-laundering case.

($1=1.4348 Singapore dollars)

(Reporting by Fathin Ungku; Editing by Clarence Fernandez)