Title: Swiss Asset Manager Finaport Caught Up in Financial Fraud Allegations: Due Diligence Concerns

Subtitle: Leaked Documents Reveal Finaport’s Associations with Politically Exposed Persons, Embezzlers, and Fraudsters

Zurich-based asset manager Finaport Holding, known for its prestigious clientele and commitment to preserving wealth and generating income, has faced serious allegations of associating with high-risk clients involved in financial fraud and other illegal activities following the release of leaked documents.

Finaport’s Connection to High-Risk Clients

From 2017 to 2019, Finaport managed assets for several clients implicated in legal scandals, corruption, or criminal charges, most notably Russians with questionable backgrounds. Despite this, Finaport reported only two suspicious transaction alerts to the Swiss regulator during this time.

1. Over $500 million withdrawn: One client withdrew over $500 million from a Russian bank that later collapsed.
2. Alternative identities: Another client established bank accounts under an alternative identity and moved money into it.
3. Businesswoman and state-owned firm: Finaport worked with a businesswoman who was the romantic partner of the head of a Russian state-owned firm supporting the war effort in Ukraine.

Finaport’s Response and Emails

Finaport dismissed the leaked documents as arbitrary, outdated, and incomplete. Emails from Finaport employees showed reluctance to adhere to due diligence checks requested by banks. One instance involved a senior employee referring to compliance requests as “harassment.”

Compliance Expert Concerns

Despite Finaport’s claims, compliance experts expressed concerns over the firm’s due diligence checks and procedures, which allegedly did not meet the required standards of the Swiss financial authority.

Questionable Due Diligence Reviews

One example of inadequate due diligence checks was conducted by Alexander Rabian, a lawyer at the Zurich firm Streichenberg, who was Finaport’s chief adviser. Rabian typically completed due diligence reviews in 15-20 minutes if all necessary documents were included. However, this time frame is considered short for assessing higher-risk clients effectively.

Radamant Finance AG and Yugra Bank

Finaport’s association with Radamant Finance AG, through which the Khotin family owned Yugra Bank, raises further concerns. Finaport provided directors for Radamant, including a senior Finaport executive. The Khotins allegedly drained Yugra of over €2 billion and stashed their fortune in Cyprus companies during this period.

1. €587 million payment: Finaport’s sole director executed a series of payments worth €587 million from Radamant’s account at Yugra to a Cypriot company, Bittos Logistics Enterprises Ltd.
2. Transactions lacking transparency: Compliance experts question the economic rationale of such large transactions, which were never properly explained.

Finaport’s Continued Association with Radamant

Finaport ceased its arrangement with Radamant in July 2019 but continued to have lawyers work on the deal until at least 2021 according to leaked communications.

Swiss Law and Regulatory Compliance

Swiss law requires asset managers like Finaport to report suspicious transactions to the Money Laundering Reporting Office (MROS) if there’s a reasonable suspicion that assets involved in the business relationship are connected to criminal activity or if the funds or assets may be the proceeds of a felony. Finaport’s apparent disregard for regulatory compliance raises additional concerns.