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Swiss Banker’s Trial Rivets With Fraud Charges and Strip Club Visits

ZURICH — Switzerland’s biggest financial fraud trial in years has drawn so much interest that court officials decided to move it to the Volkshaus Theater, a popular concert and performance venue in Zurich, to handle the extra spectators.

There, appearing daily in a makeshift courtroom, is the man once named the country’s “Banker of the Year,” who was acclaimed for turning Raiffeisen, formerly a small rural lender that mainly served farmers, into Switzerland’s third-largest bank, after UBS and Credit Suisse.

The former chief executive, Pierin Vincenz, is accused of using his position at the bank to make millions of dollars through illegal side deals, while charging forays to strip clubs to his expense account.

Prosecutors have charged Mr. Vincenz, 65, and a longtime consultant, Beat Stocker, with embezzlement, fraud and forgery. Together, prosecutors said, they made around 25 million Swiss francs (over $27 million) by secretly buying controlling stakes in companies and then arranging for those companies to be bought by Raiffeisen or Aduno, a credit card company partly owned by Raiffeisen where Mr. Stocker was chief executive and Mr. Vincenz served as chairman.

For example, in 2007, when Aduno acquired Commtrain, a payments company, the boards of Aduno and Raiffeisen were unaware that Mr. Vincenz and Mr. Stocker held stakes in the company. “That was 15 years ago — I was young and had no experience,” Mr. Vincenz told the court. “I assumed all the bodies involved were doing it correctly.”

Prosecutors are seeking six-year prison sentences for both Mr. Vincenz and Mr. Stocker and repayment of a total of 25 million Swiss francs. The two men, and five other defendants accused of helping them, have denied the charges.

But it is not just charges of hidden financial interests that are drawing attention to the Volkshaus Theater each day. The testimony generating the biggest headlines involves Mr. Vincenz’s expense account activity.

Those expenses, prosecutors say, include nearly 200,000 Swiss francs, or more than $216,000, he spent at “cabarets, strip clubs and contact bars” as part of what the authorities have described as a “Tour de Suisse” through Switzerland’s red light districts. Mr. Vincenz said these were necessary expenses to meet potential clients and business associates.

Other billings include 700 francs (about $750) for a night out with a woman Mr. Vincenz met on the dating app Tinder (he told the court that he had been interviewing her for a job), as well as almost 4,000 francs (about $4,000) for the refurbishment of a room at the Hyatt in Zurich that was damaged during a fracas between Mr. Vincenz and a strip club worker.

Although Mr. Vincenz conceded that some invoices had been mistakenly charged to the company, he said that on the whole his expenses were justified by his business activity. “I don’t have the feeling I have done anything criminal here,” he told the court.

Lawyers for Mr. Vincenz and Mr. Stocker declined to comment.

Mr. Vincenz, who was Raiffeisen’s chief executive for 16 years, until 2015, was a prominent executive in Switzerland before prosecutors filed charges.

In the Swiss media, he was often referred to as a “down-to-earth banker,” who was well liked, charismatic and a contrast to the image of greedy bankers that prevailed after the financial crisis.

His reputation started to unravel after a Swiss finance blog, Inside Paradeplatz, published an article in 2016 detailing the outside deals.

Switzerland’s banking regulator, FINMA, initiated proceedings against Mr. Vincenz, although it dropped them after he agreed to resign and abstain from executive positions at Swiss financial institutions.

However, in 2018, Swiss prosecutors opened a criminal inquiry of their own, and Mr. Vincenz was held in custody for over 100 days as investigators gathered evidence. Charges were officially filed in 2020.

Raiffeisen (which is unrelated to Raiffeisen Bank International, based in Austria) declined to comment on the criminal proceedings. But it pointed out that, after an independent review of the bank, a number of “necessary changes” were made in 2018, including the replacement of the company’s executive management and board of directors.

The verdict will be rendered by the case’s three trial judges. Sabine Gless, a criminal law professor at the University of Basel, said it was hard to predict how the court would rule. “Many people think what has gone on is immoral, but the question is whether it is criminal,” she said.

The trial will extend into March, and a verdict is expected about a month later.

Whatever the outcome, the results could be far-reaching for Switzerland’s business community. Professor Gless said she expected the trial to affect the kind of business opportunities senior management could engage in.

She said the trial had also triggered a public debate about what sorts of activities could or should be expensed to an employer. A sign of changing attitudes may perhaps be seen in the recent resignation of Credit Suisse’s chairman, António Horta-Osório, whose quarantine-skipping conduct and use of private jets caused an embarrassment for the bank.

“C.E.O.s ought to align their moral compass to that of today’s Swiss society,” Professor Gless said.

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