Lugano is an Italian town permanently trapped inside the Swiss canton of Ticino, much like a two-headed mouse fixed in a jar of formaldehyde.

Sheltering on the banks of the large, quiet lake that bears its name, at first glance Lugano appears to be little more than an overgrown depot on the main line of the St. Gotthard railway. There are a few decent hotels. There are some good restaurants. But this is not Lausanne, a sophisticated watering hole. This is not Geneva or Zurich, a crossroads for international business. Nor does anyone ever mistake this place for Gstaad or St. Moritz, the beautiful people don’t come here to play. The locals like to think of Lugano as the Rio de Janeiro of Switzerland and lumber on about how a nearby mountain peak looks exactly like — well, okay, sort of like — Corcovado. But the beach below is hardly Copacabana. And anyway, the Swiss do not samba.

In the past, the main reason for stopping here was because Lugano was a terrific place to hide money. All that supposedly changed a few years ago when the Swiss introduced new banking regulations to combat fraud, tax evasion and, specifically, money laundering. Since then, Lugano is still a terrific place to hide money.

There’s a thriving casino across the lake, on the Italian side, with frequent ferry service back and forth. Especially during the summer months, it’s not uncommon to find well-dressed men and women stepping off the morning’s first boat at the Debarcadero Centrale, to take their croissant and espresso breakfast at one of the cafes on the Piazza Manzoni, or further along the Riva Giocondo Albertolli, near the lush Parco Civico on the lake’s shore. It’s hardly a coincidence that many of the cafe tables empty at about the same time the banks open.

According to London’s Financial Times, 40 percent of all private assets worldwide are managed in Switzerland, a staggering amount of money. But then, in 1994, there were 108 banks in Lugano, and three times that many throughout Ticino. As it happened, there were more banks there than in the more populated, more accessible Canton of Geneva. In fact, Lugano still boasts one of the highest banks-per-capita ratios in the world, more than twice that of Switzerland’s acknowledged banking capital, Zurich.

While every bank in Lugano is regulated by Swiss banking laws, governed every bit as fastidiously as all banks in the country, the easy approach from Italy and the proximity of a well-established casino make banks here especially attractive for anyone seeking an especially “discreet” relationship. And because discretion is such a salient commodity, one learns quickly that you can’t just walk into any bank and announce that hiding money is what you intend to do.

“I’d like to open a secret bank account,” came the request in a forthright tone. “Un compte secret.”

A woman at the first bank didn’t disguise her annoyance with such obvious clumsiness. “We’re not interested in any new business of that kind,” she said.

The aspiration was repeated, in a slightly less hearty voice, at the second bank. “I’d like to open a secret bank account. Un compte secret.”

A woman there was hardly more congenial. “Do you mean, a compte anonyme? May I suggest another bank which might be more receptive.”

She did. It wasn’t.

“We are not taking on any new private banking business,” a man at the third place explained to an increasingly unobtrusive inquirer. “Perhaps you might try somewhere else.”

An official at the fourth stop, directly across the street, was even less affable, despite the ever diminishing decibels. “There is no such thing here as a secret bank account. I’m terribly sorry to disappoint you. Secret Swiss bank accounts are only for the movies.”

However, at the fifth bank, a properly hushed desire to discuss, “various benefits of private banking,” was met a businesslike nod by the Special Affairs teller who directed her prospective client to a carpeted suite of offices behind a locked door. There, an impeccably tailored Gentleman introduced himself, wondering if Signor would care to speak French, Italian, English or German. Signor suggested English. So, with a perfectly practiced British accent, the Gentleman offered Signor, “A coffee? Perhaps some tea?”

After two pitch-black espressos arrived on a silver tray carried by a suitably tuxedoed waiter, the Gentleman closed his office door and asked how he might be of assistance.

Signor said he was interested in, “A discrete private banking relationship. Perhaps something along the lines of un compte anonyme.”

“I must caution you,” the Gentleman began, “that this kind of facility has been much romanticized over the years. The so-called secret Swiss bank account, the sort you might have read about in James Bond, is strictly for pulp fiction and the cinema.”

“Now where do you suppose they got such a notion?”

He speculated, “Perhaps they’ve misinterpreted the banking rules in this country as they actually exist. What we do have to offer is a code that protects all bank accounts. Everything from your conventional current account to your child’s savings account. By law, it’s a crime in Switzerland for anyone working in a bank, or anyone who has ever worked in a bank, to reveal any information whatsoever about an account. It is against the law even to say that a specific account exists.”

“You mean you’d be breaking the law if you told me your wife kept her checking account in this branch?”

“That’s correct.”

But that’s only half the story.

Swiss silence is by design, and in all but the rarest circumstances, not merely 24 carat gold, it’s inlaid with diamonds, rubies and sapphires. Every account is protected, at times to the extreme. Take the case where someone dies and his heirs attempt to discover if he’s been stashing money in an account they know nothing about. The only reply they will ever get out of any Swiss banker is a hollow stare and a slightly chilly reminder that banking codes prohibit disclosure of any information concerning any accounts. Although, in this case, there’s more to it than a mere requirement to comply with the law. Banks zealously cloister their business behind the strict banking codes because they’re permitted to reap the bounty of accounts that have lain dormant for 20 years. If you die and no one knows about your compte anonyme, the bank can claim your money. One estimate has it that, at any given time, there are tens of billions of dollars sitting unclaimed in Swiss banks.

So, technically, the Gentleman was right. What he hadn’t endeavored to say was that, in Switzerland, not all accounts are protected equally, that some are considerably more equal than others.

Extracted from “The Laundrymen – Inside the World’s Third Largest Business, Money Laundering
© Jeffrey Robinson, 1994, 2012


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