From Zurich district court
The alleged good faith of the con man
2 years and 9 months prison for a 15 million frank crime
February 3, 2000
Neue Zuercher Zeitung
Zurich district court has sentenced a 55-year-old businessman, who juggled business investments around on American banks which existed only on paper, to 2 years and 9 months imprisonment. The sum defrauded, according to the judgment, was 15 million franks. The district attorney had asked for 4 1/2 years in prison.
b1. In July of last year, before the 9th department of the Zurich district court, the trial of a 55-year-old attorney and bank officer from eastern Switzerland took place, who, from 1991 to 1994, in cooperation with a German finance manager, who has since disappeared; he handled alleged capital investments in American banks for private customers, without there ever having been an investment made (NZZ 8 July 99). The district attorney filed charges for commercial fraud and counterfeiting documents and asked for 4 1/2 years punishment; the accused put all the blame on the finance manager, whom he said he had trusted fully. The district court judgment, which was handed down December 23, 1999, has now been published in written form: the punishment was set at 2 years and 9 months prison for commercial fraud; charges of falsifying documents were dropped.
Manipulated investments in phantom banks
The accused offered private customers investments yielding dividends far above market from an organization incorporated in Zurich under the name "American Federal Banking Association" (AFBA). Most of the invested money was forwarded to the head of the firm, the German finance manager in Munich (some of which he personally delivered in cash); the other part of the financing was used to cover commissions in the Zurich office.
The AFBA and/or BAB [Swiss name], along with the American banks in which the money was to be invested, were constructions of the German business partner and, in essence, existed only on paper; the New York business address on Wall Street which the customers were given was only an "Office Service Center." It also set the stage for a drama which happens mostly in "sting" movies: for one customer who wanted to pay a personal visit to the bank in which he believed his money was invested, the Office Service Center, under the direction of the accused, was decorated with an ad hoc company plaque and staffed with personnel appropriate for an AFBA establishment.
From the time of that dramatization in November 1993 on, the accused himself could not have believed that he was representing a real financial institution. However he purported, in his court trial, to have complete trust in the charismatic persona of the German finance manager, and had no doubts about the existence of the banks for which he was acquiring customers.
Small share of amount defrauded
The court granted that in the beginning he had possibly not seen through his German business partner's house of lies; in view of the long list of inconsistencies and idiosyncracies in the nature of the business of the peculiar conglomerate of financial institutions and because of the accused's experience as a lawyer and a bank officer, it could not be granted that he acted in good faith up until the time the business dissolved in March 1994, when German victims got suspicious and the German finance manager disappeared. In any case, in its judgment the court took the view that the accused, for the length of 1 year and three months, had an indication of the purpose of the fraudulent dealings in which the amount in question he handled was figured at 15 million franks, of which he kept only 480,000 franks profit as "commission."
Connection to the Scientologists
The motive for the crime, according to the judgment, was the "extremely stressful situation" the accused was experiencing after he had a terrible business failure and himself was the victim of fraud; he had also expended much capital to gain the higher ranks of the Scientologists. In reducing the sentence asked, the court took into account that he had taken part in the external findings of fact in the investigation. The information technician who was also charged, who had gotten to know the accused as a Scientologist, could not convince the court, either, that, as the person responsible for the EDP system of BAB, he had not noticed he was processing manipulated investments; he received six months suspended conditionally for two years.
For more info on the man, Hans Kaspar Rhyner:
German Scientology News