Chiasso scandal
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The Chiasso scandal (German: Der Fall Chiasso) was a financial affair that broke out in the spring of 1977 in Switzerland against a branch of Credit Suisse.
In the 1960s, three executives of Credit Suisse (then Schweizerische Kreditanstalt), including the deputy manager of the Chiasso branch, Ernst Kuhrmeier, set up a Liechtenstein shell company called "Texon" without the knowledge of their management. The front was used for many years to illegally launder money from Italy.
It took several years for the bank's Zurich management to react, despite an initial alert in 1968 following a complaint by a UBS manager about the methods employed by Credit Suisse employees; not only was no action taken, but Ernst Kuhrmeier was even appointed Senior Director in January 1975.[1]
It wasn't until 1977 that the scandal broke: in the wake of the first oil crisis, several companies managed by Texon became loss-making, and the whole financial package collapsed, revealing a debt of 2.2 billion Swiss francs for Credit Suisse. On 24 April 1977, Kuhrmeier and two bank directors were put under arrest.[2] Faced with the risk of financial panic, the Swiss National Bank offered a bridge loan of three billion Swiss francs; this offer, however, was rejected by the bank's management.[3]