Swiss government files criminal complaint over Crypto AG scandal involving CIA

Crypto AGSwitzerland’s Federal Department of Finance has filed a criminal complaint “against persons unknown” over media reports that a leading Swiss-based cryptological equipment manufacturer was secretly owned by the United States Central Intelligence Agency (CIA).

The complaint relates to Crypto AG, the world’s leading manufacturer of cryptologic equipment during the Cold War, whose clients included over 120 governments around the world. Last month, The Washington Post and the German public broadcaster ZDF appeared to confirm reports that had been circulating since the early 1980s, that Crypto AG was a front for American intelligence. According to the revelations, the CIA and West Germany’s Federal Intelligence Service (BND) secretly purchased the Swiss company in the 1950s and paid off most of its senior executives in order to buy their silence. The secret deal, dubbed Operation RUBICON, allegedly allowed the US and West Germany to spy on the classified government communications of several of their adversaries —and even allies, including Austria, Italy, Spain, Greece, Jordan, Saudi Arabia and the United Arab Emirates.

The revelation about the secret deal has shocked Swiss public opinion and embarrassed the government of a nation that bases its national identity and international reputation on the concept of neutrality. For this reason, the Swiss Federal Department of Finance has filed a criminal complaint about the case. The complaint was announced by the Office of the Swiss Attorney General on Monday, following reports in the Swiss media. It said that it received a criminal complaint by the State Secretariat for Economic Affairs (SECO), which is the part of the Finance Department that authorizes exports of sensitive software or hardware. SECO officials argue that they were deceived into authorizing the export of Crypto AG’s products without realizing they had been compromised by the company’s secret agreement with the CIA and the BND. Accordingly, the secret agreement violates Swiss federal law governing the regulation of exports, SECO officials claim.

The Office of the Attorney General said it would review the criminal complaint and decide whether it warrants criminal proceedings. Meanwhile, a probe into the alleged Crypto AG-CIA-BND conspiracy, which was launched by the Swiss government last month, is already underway, and is expected to conclude in June. The Swiss Federal Assembly (the country’s parliament) is also expected to launch its own investigation into the alleged affair.

Author: Joseph Fitsanakis | Date: 03 March 2020 | Permalink

Swiss neutrality ‘shattered’ as leading cryptologic firm revealed to be CIA front

Crypto AGSwitzerland is reeling from the shock caused by revelations last week that Crypto AG, the world’s leading manufacturer or cryptologic equipment during the Cold War, whose clients included over 120 governments around the world, was a front company owned by the United States Central Intelligence Agency.

The revelation, published last Tuesday by The Washington Post and the German public broadcaster ZDF, confirmed rumors that had been circulating since the early 1980s, that Crypto AG had made a secret deal with the US government. It was believed that the Swiss-based company had allowed the US National Security Agency to read the classified messages of dozens of nations that purchased Crypto AG’s encoding equipment. These rumors were further-substantiated in 2015, when a BBC investigation unearthed evidence of a “gentleman’s agreement”, dating to 1955, between a leading NSA official and Boris Hagelin, the Norwegian-born founder and owner of Crypto AG.

But the reality of this alleged secret pact appears to have been even more controversial. According to last week’s revelations, the CIA and West Germany’s Federal Intelligence Service (BND) secretly purchased the Swiss company and paid off most of its senior executives in order to buy their silence. The secret deal allegedly allowed the US and West Germany to spy on the classified government communications of several of their adversaries —and even allies, including Italy, Spain and Greece, as well as Austria, Jordan, Saudi Arabia and the United Arab Emirates.

What is more, the secret CIA/BND partnership with Crypto AG was known to senior British and Israeli officials, and information derived from it was routinely shared with them. Government officials in Switzerland and even Sweden were aware that Crypto AG had been compromised, but remained silent.

American and German authorities have not commented on the revelations. But the story has monopolized Swiss media headlines for several days. Some news outlets have opined that the traditional Swiss concept of political neutrality has been “shattered”. Meanwhile, a Swiss federal judge has opened an investigation into the revelations, as the Swiss parliament is preparing to launch an official inquiry. Switzerland’s Prime Minister, Simonetta Sommaruga, said on Sunday that the government would discuss the issue “when we have the facts”.

Author: Joseph Fitsanakis | Date: 17 February 2020 | Permalink

Britain warns its citizens following detention of alleged Russian spies in Switzerland

Davos SwitzerlandA Swiss newspaper has revealed a previously unreported detention of two Russian diplomats in the luxury Swiss Alpine resort of Davos, which is currently hosting the annual meeting of the World Economic Forum (WEF). The development prompted British authorities to warn some British citizens participating in the WEF meeting that they may be in physical danger.

The brief detention of the two Russians allegedly occurred in August of last year in Davos, a mountain resort in the canton of Graubünden, which is located in Switzerland’s eastern Alps region. According to the Swiss newspaper Tages-Anzeiger, local police detained two Russians during the period between August 8 and 28 of last year. Citing anonymous sources from the police and security services, the paper said that the authorities were alerted about the two Russians by employees at a local resort. The employees reportedly found it strange that the Russians had booked hotel rooms for over three weeks, which is unusually long for Davos’ ultra-luxury resort setting.

When police officers approached the two men and inquired about their background, one of them said he worked as a plumber. However, when asked to provide identification papers, both men reportedly produced Russian diplomatic passports. However, none had received accreditation by the Swiss government, which means they had not been formally registered as diplomats in the Alpine nation. When Swiss police officials contacted the Russian embassy in Bern to inquire about the two men, Russian officials “threatened diplomatic consequences if the men were arrested” said Tages-Anzeiger.

The two Russians were eventually released, as Swiss police “could not ascertain any reason to detain them”, said the paper. However, Swiss officials said that the two Russians “obviously […] had their sights on the WEF” and were probably planning to install surveillance equipment around the Swiss resort town. Soon after the Tages-Anzeiger report was published, British counterterrorism police reportedly warned a number of British citizens attending the WEF meeting that they might be in physical danger.

But the Russian embassy in Switzerland dismissed the Tages-Anzeiger report as “one more attempt to undermine Swiss-Russian relations”. Russian officials at the embassy accused Western countries of trying to “whip out a scandal out of nothing”, adding that Russian authorities had not been officially notified of the incident and that there was “no evidence of espionage” by the two men.

Author: Joseph Fitsanakis | Date: 22 January 2020 | Permalink

Allegations of espionage rock Credit Suisse, as more employees come forward

Credit SuisseCredit Suisse, one of the world’s most powerful banking firms, says it has opened an investigation into claims that it paid private investigators to spy at individuals, just two months after a similar scandal involving espionage and surveillance rocked the company.

In October of this year, two senior Credit Suisse executives resigned amidst a high-stakes espionage scandal, which may have prompted a suicide. The alleged target of the espionage was Iqbal Khan, the former Chief Executive Officer (CEO) of Credit Suisse’s wealth-management division. Khan alleged that he was spied on by private investigators, paid for by Credit Suisse, after leaving the firm. One of the private investigators involved in the case, described as “an external security expert” who mediated between Credit Suisse and the investigation firm, committed suicide.

At the time, Credit Suisse described the surveillance on Khan as “strictly an isolated incident”. However, on December 11, The Wall Street Journal published allegations by another Credit Suisse executive, Colleen Graham, who said that she had been spied on after leaving her job at the firm. She alleged that she underwent three days of intensive surveillance by persons unknown in July of 2017. Credit Suisse was dismissive of Graham’s claims, saying that they were baseless.

But on Wednesday the firm announced the launching of a new probe after a third employee, who used to work directly under Credit Suisse Chief Executive Officer Tidjane Thiam, alleged that he too had been spied on. The allegations were made by Peter Goerke, and were the subject of a headline article by the respected Swiss daily Neue Zürcher Zeitung. The article was accompanied by documents and photographs submitted by Goerke, which are said to support his claims.

There are now concerns that spying on former and current employees may have been a standard operating procedure at Credit Suisse. In an article published on Wednesday, The Wall Street Journal said that the alleged incidents “highlight the ethical and reputational pitfalls companies encounter when they physically monitor employees”.

Author: Joseph Fitsanakis | Date: 19 December 2019 | Permalink

Switzerland claims embassy worker was abducted by Sri Lankan security officers

Swiss embassy Sri LankaSwitzerland has filed a formal complaint after an employee of the Swiss embassy in Sri Lanka was allegedly abducted by men who forced her to divulge sensitive information about the embassy and its activities. The Swiss Ministry of Foreign Affairs said on Tuesday that the embassy employee was kidnapped by four men while walking in the Sri Lankan capital Colombo, on November 25. The men took her to what appeared to be a safe house and interrogated her for several hours.

The men eventually forced the Swiss embassy employee, who is a Sri Lankan national, to unlock her personal cell phone. According to Swiss government officials, they appeared to be looking for information about a senior Sri Lankan police detective who recently fled to Switzerland with his family and was granted political asylum. Some Sri Lankan media identified the man as Nishantha Silva, a police detective who until recently headed the Sri Lankan Criminal Intelligence Division’s Organized Crime Investigation Unit.

Silva is one of hundreds of members of Sri Lanka’s public sector who have fled abroad following the election of President Gotabaya Rajapaksa last month. The Rajapaksa family is one of the most powerful in the country, and has a long history of influencing Sri Lankan politics. Hours after assuming power, the ultra-nationalist Rajapaksa pledged to “hunt down” the leadership of the police and security services who investigated his family after 2015, when the Rajapaksas were ousted from the government. Hundreds of police and security officers have since been arrested or summarily fired.

On Tuesday, a Swiss Foreign Ministry spokesman told The New York Times that the Swiss government had verified the details of the abduction of its embassy worker. The spokesman added that the employee was forced to disclose “embassy-related information” after she was “threatened at length” by the men. The latter released her after warning her that she would be killed if she spoke to anyone about her ordeal.

On Monday, a spokesman for President Rajapaksa told reporters in Colombo that the Sri Lankan government questioned the accuracy of the Swiss embassy worker’s account of her abduction. Later, however, the Sri Lankan government announced that it had launched an investigation into the allegations. It now appears that the Sri Lankan government is preventing the embassy worker from leaving the country while the investigation into her claims is underway.

Author: Joseph Fitsanakis | Date: 04 December 2019 | Permalink

Espionage scandal prompts resignations of top Swiss banking executives

Credit SuisseTwo senior executives of Credit Suisse, one of the world’s most powerful banking firms, have resigned amidst a high-stakes espionage scandal that may have prompted a suicide and has shocked Switzerland. The alleged target of the espionage is Iqbal Khan, the former Chief Executive Officer (CEO) of Credit Suisse’s wealth-management division. The 43-year-old Khan moved to Switzerland from his native Pakistan at the age of 12. In 2013, after working for more than a decade as an auditor at Ernst & Young, he joined Credit Suisse. He quickly rose to head the institution’s wealth-management division and was credited with having nearly doubled its profits between 2016 and 2018.

Khan’s meteoric success brought him immense financial wealth. He soon bought a piece of property that is adjacent to the home of Tidjane Thiam, the 57-year-old CEO of Credit Suisse. Khan and his wife had the house on their property demolished and began a two-year project to build a new house. But the disruption caused by the large-scale construction project gave rise to a dispute between Thiam and Khan. Their rivalry escalated quickly and prompted the intervention of Credit Suisse board chairman Urs Rohner. However, the dispute between the two men was not resolved, and on July 1 of this year Khan left Credit Suisse. On August 29, Credit Suisse’s rival UBS announced that Khan would co-lead its global wealth management division.

It appears that some Credit Suisse executives were concerned that Khan might try to attract their firm’s customers to his new UBS portfolio. These concerns allegedly prompted Credit Suisse’s Chief Operating Officer (COO), Pierre-Olivier Bouee, to instruct the bank’s security department to keep tabs on Khan. The bank reportedly hired a private investigation firm, Investigo, to monitor Khan’s movements. There was an unexpected turn on September 17, when Khan noticed that he was being followed and promptly confronted an Investigo employee in downtown Zurich. On the same day, the former Credit Suisse star manager filed a complaint with the Zurich office of the Swiss Public Prosecutor.

On September 18, Credit Suisse gave orders to Investigo to stop keeping tabs on Khan. It also launched an internal investigation to evaluate the merits of the decision to spy on Khan. Meanwhile, the Swiss Public Prosecutor’s office announced that it had opened a criminal case on Investigo and had arrested three individuals in connection with the case. On September 24, a private investigator, who is believed to have been involved in Khan’s case, committed suicide. Media reports said the unidentified man was “an external security expert” who mediated between Credit Suisse and Investigo.

On Tuesday, Credit Suisse COO Bouee announced his resignation. Swiss media said the head of the bank’s global security division also resigned. Also on Tuesday, Credit Suisse’s internal investigation found that CEO Thiam had not been involved in the decision to spy on Khan.

Author: Joseph Fitsanakis | Date: 02 October 2019 | Permalink

Swiss to extradite brother of ‘leading biochemist’ who spied for Chinese firm

GlaxoSmithKlineA Swiss court has ordered the extradition to the United States of the brother of one of the world’s leading biochemists, who spied on a British pharmaceutical firm to help a Chinese startup. The extradition is part of a large corporate espionage case centered on Yu Xue, a Chinese scientist described by US federal prosecutors as “one of the world’s top protein biochemists”. Yu specializes in drug research for cancer and other serious terminal illnesses. From 2006 until 2016 he worked in the US for GlaxoSmithKline (GSK), a leading British pharmaceutical group.

In 2018, Yu was arrested by US authorities for stealing trade secrets from a GSK research facility in the US state of Pennsylvania, and giving them to a Chinese startup pharmaceutical company called Renopharma. He eventually pleaded guilty to stealing proprietary data from GSK, in a case that the US Department of Justice described as a textbook example of Chinese “economic warfare” against America. US government prosecutors also claim that Renopharma is almost wholly funded the Chinese government. The three co-founders of the Chinese firm have also been charged with corporate espionage targeting a US firm.

On May 28 Yu’s brother, Gongda Xue, was arrested in Basel, Switzerland. According to the US government, Gongda used GSK data stolen by his brother to carry out drug experimentation at the Friedrich Miescher Institute for Biomedical Research, where he worked as a post-doctoral trainee between 2008 and 2014. On Tuesday, the Swiss Federal Office of Justice (FOJ), ruled in favor of a request by the US government to extradite Gongda so he can be tried in Pennsylvaia. According to the FOJ, the Chinese scientist will be extradited as soon as his 30-day appeal period expires.

Author: Ian Allen | Date: 17 July 2019 | Permalink

Russian espionage reaching ‘intolerable levels’ say Swiss officials

Jean-Philippe GaudinRussian espionage activities in Switzerland are increasing and are crossing long-established “red lines”, according to senior Swiss defense and intelligence officials who spoke at a news conference last week. The claims were made by Guy Parmelin, head of Switzerland’s Federal Department of Defense, and Jean-Philippe Gaudin, director of the Swiss Federal Intelligence Service (NDB). The two men spoke on Friday before reporters in Bern. Following the news conference, Gaudin spoke with reporters from the Reuters news agency.

Gaudin, who assumed the post of NDB director three months ago, told Reuters that Russian espionage activities in Switzerland have been increasing steadily in recent years. He refused to provide details, but said that “it is clear we have more activities than before”. Additionally, Moscow had more active spies in Switzerland than in previous years, said Gaudin. He refused to provide numbers, saying that he would “share that with [his] colleagues elsewhere and not with the media”. The NDB chief noted that Switzerland had always been a target of Soviet and Russian espionage because it hosts the headquarters of a large number of international and non-governmental organizations. However, what is different today, he said, is that Moscow is targeting Switzerland’s “sensitive infrastructure”, which is “a red line”. He did not provide further information. Speaking alongside Gaudin, Defense Minister Parmelin said that Russian espionage activities against Swiss national infrastructure “has reached intolerable levels”.

These allegations by senior Swiss government officials come a little more than a month after reports that Swiss and other Western intelligence agencies thwarted a plot by two Russians who tried to hack the computer systems of a Swiss government laboratory that investigates nuclear, biological and chemical weapons. The laboratory, located in the western Swiss city of Spiez, had been commissioned by the Organization for the Prohibition of Chemical Weapons to carry out investigations related to the poisoning of Russian double agent //Sergei Skripal// and his daughter Yulia in March of this year. It has also carried out probes on the alleged use of chemical weapons by the Russian-backed government of President Bashar al-Assad in Syria.

The Russian embassy in Bern rejected the accusations of espionage and called the allegations made by Gaudin, and Parmelin “absurd”.

Author: Joseph Fitsanakis | Date: 23 October 2018 | Permalink

Swiss police saw Russian oligarch Abramovich as threat to security, files reveal

Roman AbramovichPolice in Switzerland cautioned that allowing the Russian billionaire Roman Abramovich to live there would threaten public security and damage the country’s reputation, according to files released this week. The Soviet-born Abramovich took advantage of Russia’s privatization laws in the early 1990s to gain considerable financial and political influence there. His friendship with Russia’s first post-Soviet President, Boris Yeltsin, was instrumental in his business career, and eventually placed him in close proximity to Russia’s current President, Vladimir Putin. Unlike many other oligarchs, Abramovich is believed to have remained close to Putin, despite living mostly in the United Kingdom in the past decade. The Russian oligarch has been staying in a mansion valued at close to $120 million in London’s exclusive suburb of Kensington. His lawyers have been renewing his British residence visa every six months.

However, the attempted assassination of Russian former spy Sergei Skripal earlier this year prompted the British government to intensify its scrutiny of Britain’s sizeable Russian expatriate community. London introduced tighter regulations that require Russian citizens applying to live in the UK to declare the source of their income in a far greater detail than previously. Soon after the new regulations were put in place, Abramovich’s lawyers withdrew his application to renew his British residency visa. Then, in May of this year, the Russian oligarch acquired Israeli citizenship. He has made it clear, however, that he does not intend to live in Israel. Instead, his legal team focused on an application for Swiss residency, which Abramovich first filed in the summer of 2016. In the application papers, Abramovich wrote that he intended to reside full time in Verbier, an Alpine village in the canton of Valais that is a popular holiday destination for celebrities and royalty.

A year later, following resistance and increasingly persistent questioning from the Swiss government, Abramovich’s legal team withdrew his residency application. Last February, when the Swiss press attempted to investigate the reasons behind the Swiss government’s reluctance, Abramovich’s lawyers secured an injunction forbidding the publication of information regarding his application to live in Switzerland. But the injunction was overturned late last week, and on Tuesday the Swiss media conglomerate Tamedia published some of the relevant documents. They include a letter from the Swiss Federal Police that strongly cautions against allowing the Russian-Israeli oligarch to resettle in Switzerland. The letter remarks that Abramovich has been repeatedly implicated in “suspicion of money laundering” and that the billionaire is “presumed [to have] contacts with criminal organizations”. Additionally, the letter states that Abramovich’s “assets are at least in part of illegal origin”. The letter concludes by strongly cautioning against allowing the oligarch to move to Switzerland, and argues that doing so would pose a “threat to public security” and be detrimental to the country’s international reputation.

The letter has raised eyebrows since its publication, because Switzerland is known for being highly welcoming of foreign billionaires while displaying minimal curiosity about the sources of their fortunes. Moreover, there are no known court rulings against Abramovich for money laundering or connections to organized crime. It is therefore presumed that the Swiss police report is based mostly on confidential informants and other informal sources. On Wednesday, Abramovich’s Swiss lawyer, Daniel Glasl, issued a statement saying that the Russian-Israeli magnate has never been charged with involvement in money laundering. He also reminded readers that his client has a blank criminal record.

Author: Joseph Fitsanakis | Date: 28 September 2018 | Permalink

Western spy agencies thwarted alleged Russian plot to hack Swiss chemical lab

OPCW HagueWestern intelligence agencies thwarted a plot involving two Russians intending to travel to a Swiss government laboratory that investigates nuclear, biological and chemical weapons, and hack its computer systems. According to two separate reports by Dutch newspaper NRC Handelsblad and Swiss newspaper Tages-Anzeiger, the two were apprehended in The Hague in early 2018. The reports also said that the Russians were found in possession of equipment that could be used to compromise computer networks. They are believed to work for the Main Intelligence Directorate, known as GRU, Russia’s foremost military intelligence agency. The apprehension was the result of cooperation between various European intelligence services, reportedly including the Dutch Military Intelligence and Security Organization (MIVD).

The laboratory, located in the western Swiss city of Spiez, has been commissioned by the Netherlands-based Organization for the Prohibition of Chemical Weapons (OPCW) to carry out investigations related to the poisoning of Russian double agent Sergei Skripal and his daughter Yulia in March of this year. It has also carried out probes on the alleged use of chemical weapons by the Russian-backed government of President Bashar al-Assad in Syria. In the case of the Skripals, the laboratory said it was able to duplicate findings made earlier by a British laboratory.

Switzerland’s Federal Intelligence Service (NDB) reportedly confirmed the arrest and subsequent expulsion of the two Russians. The Swiss agency said it “cooperated actively with Dutch and British partners” and thus “contributed to preventing illegal actions against a sensitive Swiss infrastructure”. The office of the Public Prosecutor in the Swiss capital Bern said that the two Russians had been the subject of a criminal investigation that began as early as March 2017. They were allegedly suspected of hacking the computer network of the regional office of the World Anti-Doping Agency in Lausanne. The Spiez laboratory was a target of hacking attempts earlier this year, according to a laboratory spokesperson. “We defended ourselves against that. No data was lost”, the spokesperson stated.

On April 14, Russian Minister of Foreign Affairs Sergei Lavrov stated that he had obtained the confidential Spiez lab report about the Skripal case “from a confidential source”. That report confirmed earlier findings made by a British laboratory. But the OPCW, of which Russia is a member, states that its protocols do not involve dissemination of scientific reports to OPCW member states. Hence, the question is how Foreign Minister Lavrov got hold of the document.

As intelNews reported in March, in the aftermath of the Skripals’ poisoning the Dutch government expelled two employees of the Russian embassy in The Hague. In a letter [.pdf] sent to the Dutch parliament on March 26 —the day when a large number of countries announced punitive measures against Russia— Holland’s foreign and internal affairs ministers stated that they had decided to expel the two Russian diplomats “in close consultation with allies and partners”. The Russians were ordered to leave the Netherlands within two weeks. It is unknown whether the two expelled Russian diplomats are the same two who were apprehended in The Hague, since none have been publicly named.

A November 2017 parliamentary letter from Dutch minister of internal affairs Kajsa Ollongren, states[4] that Russian intelligence officers are “structurally present” in the Netherlands in various sectors of society to covertly collect intelligence. The letter added that, in addition to traditional human intelligence (HUMINT) methods, Russia deploys digital means to influence decision-making processes and public opinion in Holland.

Author: Matthijs Koot | Date: 17 September 2018 | Permalink

Germany drops espionage case against senior Swiss intelligence official

Paul ZinnikerGermany has dropped a criminal case against the second-in-command of Switzerland’s intelligence agency, who was accused by Berlin of authorizing an espionage operation against the German tax collection service. A year ago, Germany launched an unprecedented investigation into three senior officials of Switzerland’s intelligence agency, the Federal Intelligence Service (NDB). The probe was launched on suspicion that the Swiss officials masterminded a spy operation against German tax investigators who were probing the activities of Swiss banks. The German probe was launched three months after authorities in Germany arrested a Swiss intelligence officer, identified only as “Daniel M.”, for engaging in espionage on German soil.

The German government believes that billions of euros have been deposited by its citizens in banking institutions in European tax-havens like Liechtenstein, Switzerland or Monaco. For the past decade, German authorities have resorted to bribing whistleblowers in offshore banks in order to acquire internal documents that reveal the identities of German citizens who are hiding their money in foreign bank accounts. It is estimated that over a hundred million dollars have been paid to whistleblowers by German authorities since 2006. The latter argue that the proceeds collected from unpaid taxes and fines more than justify the payments made out to whistleblowers. But the Swiss government has strongly criticized Berlin for encouraging Swiss banking sector employees to steal internal corporate information that often breaks Switzerland’s stringent privacy laws. It is believed that the NDB has been instructed by the Swiss government to monitor efforts by German tax-fraud investigators to approach potential whistleblowers working in the Swiss banking sector.

The man identified as “Daniel M.” appears to be one of several Swiss spies who have been collecting information on the activities of German tax investigators. For a while it appeared that German counterintelligence officials were intent on targeting Paul Zinniker (pictured), Deputy Director of the NDB. They claimed that Zinniker was the main support officer of the operation that “Daniel M.” was participating in when he was arrested in Germany in 2017. According to the Germans, it was Zinniker’s who conceived the operation in 2011. But on Monday a spokesman for Germany’s federal prosecutor told the Swiss News Agency that Berlin dropped the case against Zinniker back in June. The revelation came less than 48 hours after a report in the Sunday edition of the Swiss newspaper Neue Zürcher Zeitung claimed that the charges against Zinniker would be dropped. According to the German federal prosecutor’s office, the case against the Swiss spy official was dropped because of the lack of cooperation by Swiss authorities, which made it impossible to prove that Zinniker was indeed the mastermind of the espionage operation against Berlin.

Author: Joseph Fitsanakis | Date: 04 September 2018 | Permalink

Swiss trying to change image as Europe’s spy hub, say officials

Federal Intelligence Service SwitzerlandOfficials in Switzerland say new laws enacted in recent months will help them change their country’s image as one of Europe’s most active spy venues. For decades, the small alpine country has been a destination of choice for intelligence officers from all over the world, who use it as a place to meet assets from third countries. For example, a case officer from Britain’s Secret Intelligence Service (MI6) will travel to Switzerland to meet her Algerian agent. She will exchange money and documents with him before she returns to Britain and he to Algeria, presumably after depositing his earnings into a Swiss bank account.

There are multiple reasons that explain Switzerland’s preferred status as a meeting place for spies and their handlers. The country is suitably located in the center of Europe and is a member of the European Union’s Schengen Treaty, which means that a passport is not required to enter it when arriving there from European Union member-states. Additionally, the country features an efficient transportation and telecommunication infrastructure, and its stable political system offers predictability and security, despite the limited size and strength of its law enforcement and security agencies. Perhaps most important of all, the Swiss have learned not to ask questions of visitors, many of whom flock to the country to entrust their cash to its privacy-conscious banking sector.

But, according to the Swiss Federal Intelligence Service (FIS), foreign spies and their handlers should find another venue to meet in secret. Speaking to the Sunday edition of Switzerland’s NZZ newspaper, FIS spokeswoman Isabelle Graber said she and her colleagues were aware that their country is a venue for meetings between intelligence operatives from third countries. Such meetings have “continued to rise in the last few years” and include “everyone from security agency employees to freelancers”, as “the market in trading secrets has exploded”, she said. That trend, added Graber, has led to a corresponding rise in meetings aimed at exchanging information for money. Many such meetings take place throughout Switzerland, she noted, and are “in violation of Swiss sovereignty and can lead to operations against the interests of the nation”.

In the past, said Graber, FIS was unable to prevent such activities on Swiss soil, due to pro-privacy legislation, which meant that the agency’s ability to combat foreign espionage in Switzerland was “far more limited than in other countries”. However, said the intelligence agency spokeswoman, the law recently changed to permit FIS to break into homes and hotels, hack into computers, wiretap phones, and implement surveillance on individuals believed to be spies or intelligence officers of foreign countries. Armed with the new legislation, the FIS is now “working hard to clear up third-country meetings [and] to prevent these from happening or at least disrupt them”, said Graber. Several times this year alone, FIS had forward information about “third-country meetings” to judicial authorities in Switzerland, she said.

Author: Ian Allen | Date: 06 February 2018 | Permalink

French-Swiss firm allegedly bribed Islamic State to keep its factory working in Syria

LafargeHolcimThe world’s largest building materials manufacturer, LafargeHolcim, which is headquartered in France and Switzerland, allegedly bribed the Islamic State to keep its factory working in Syria, according to court witnesses. The company specializes in the manufacture of building materials such as cement, concrete and various byproducts. It was formed in 2015 by a merger of France-based Lafarge and Swiss-based Holcim, and currently employs an estimated 120,000 employees in nearly 100 countries around the world.

In 2011, soon after the Syrian Civil War broke out, various militant groups began operating in the area around one of LafargeHolcim’s plants, located in in north-central Syria, 10 miles south of the Syrian-Turkish border. In June of 2016, French newspaper Le Monde published allegations that LafargeHolcim’s subsidiary, Lafarge Cement Syria (LCS), which owns the plant, bribed various militias to stay away from its factory. According to the paper, at least €20,000 (approximately $24,000) went to the Islamic State, which eventually conquered the area around the LafargeHolcim plant. The article further claimed that LCS managers in Syria sent detailed emails to LafargeHolcim executives in Europe about their dealings with various militias, including the Islamic State. LafargeHolcim approved the use of funds to bribe the militias, said Le Monde, in order to allow the factory to remain operational and to avoid having their employees taken hostage.

The newspaper’s allegations prompted the Office of the Public Prosecutor in Paris to launch a preliminary investigation in October of the same year. Eventually, an official complaint was filed by the French Ministry of Finance, which argued that the activities of LCS may have constituted illicit financial relations between a French-owned company and a terrorist group. An official investigation was opened in June of 2017 into whether LafargeHolcim illegally financed terrorist groups through its subsidiaries, Lafarge and LCS. Investigators are also examining claims that the company presented the French government with forged accounting documents in order to hide the bribes it gave to various Syrian armed groups.

Last week, investigators heard from the first time from witnesses, three of whom were LCS employees in 2014, when the company first made contact with Islamic State militants. They allegedly told prosecutors that the French-Swiss company paid approximately $20,000 a month to various armed groups, including al-Qaeda, al-Nusra Front, and the Islamic State. Prosecutors did not discuss details about the witnesses’ testimonies, but Le Monde said it spoke to individuals with direct knowledge of the investigation, who said that the witnesses’ testimonies were particularly damning for LafargeHolcim. The probe continues.

Author: Joseph Fitsanakis | Date: 25 September 2017 | Permalink

Germany’s celebrity spy Werner Mauss on trial for multi-million dollar tax evasion

Werner MaussGermany’s most famous living spy is on trial this week for hiding assets totaling $50 million in offshore bank accounts. He claims the money was given to him by unspecified “Western intelligence agencies” for his services. Werner Mauss became widely known in 1997, when he was arrested in Colombia for using a forged passport. He had traveled to the Latin American country to secure the release of a German woman who had been kidnapped by leftist guerrillas. The Colombian authorities eventually released him, following heavy diplomatic pressure from the German government. But the German media began investigating his background, and it soon became apparent that he was working for the German Federal Intelligence Service.

Following his unmasking in 1997, Mauss enjoyed celebrity status in Germany. Published accounts of his exploits claim that he was directly involved in neutralizing over 100 criminal gangs and that his work led to the capture of 2,000 criminals and spies. Mauss also claims to have helped prevent dangerous chemical substances from falling into the hands of terrorist groups, and that he stopped the Italian Mafia from killing Pope Benedict. Last year, however, Mauss saw his celebrity status diminish after the German government charged him with tax evasion. German prosecutors uncovered several overseas bank accounts belonging to him, which they said contained tens of millions of dollars in hidden income. They alleged that Mauss used the funds to finance a luxurious lifestyle centered on expensive overseas holidays, luxury cars, expensive gifts to women, as well as a private jet.

On Monday, the 77-year-old Mauss made his final plea in a lengthy court case concerning two of his off-shore accounts, located in UBS bank branches in the Bahamas and Luxembourg. The prosecution alleges that he failed to pay tax on assets totaling in excess of $50 million in the decade between 2002 and 2012 alone. Additionally, it is claimed that Mauss traveled from Germany to Luxembourg several times a year, to withdraw approximately $330,000 in cash per month from his secret accounts. But the accused former spy claims that the money was given to him by “Western intelligence agencies” in return for his services against international crime and terrorism, and that he should not have to pay taxes on it. In previous court appearances, he claimed that the money was not his, but belonged to various Western intelligence agencies and he simply used it to carry out intelligence operations.

The trial continues. If Mauss is convicted, he could spend nearly seven years in prison.

Author: Ian Allen | Date: 19 September 2017 | Permalink

Germany investigates Swiss intelligence officers over espionage claims

Germany SwitzerlandGermany has launched an unprecedented investigation into three officers of Switzerland’s intelligence agency on suspicion that they spied on German tax investigators who were probing the activities of Swiss banks. News of the investigation comes three months after authorities in Germany arrested another Swiss intelligence officer, identified only as “Daniel M.”, for engaging in espionage on German soil. German media report that the three unnamed men are officers of Switzerland’s Federal Intelligence Service (NDB). They are suspected of engaging in the same type of activity as “Daniel M.”, namely monitoring German tax-fraud investigators.

The German government believes that billions of euros are deposited by its citizens in banking institutions in European tax-havens like Liechtenstein, Switzerland or Monaco. For the past decade, German authorities have resorted to bribing whistleblowers in offshore banks in order to acquire internal documents that reveal the identities of German citizens who are hiding their money in foreign bank accounts. It is estimated that over a hundred million dollars have been paid to whistleblowers by German authorities since 2006. The latter argue that the proceeds collected from unpaid taxes and fines more than justify the payments made out to whistleblowers. But the Swiss government has strongly criticized Berlin for encouraging Swiss banking sector employees to steal internal corporate information that often breaks Switzerland’s stringent privacy laws. It is believed that the NDB has been instructed by the Swiss government to monitor efforts by German tax-fraud investigators to approach potential whistleblowers working in the Swiss banking sector.

According to German media, the investigation against the three NDB officers was launched earlier this month. The news is likely to further complicate relations between Berlin and Bern. The two governments have been at loggerheads since the arrest of “Daniel M.”. Switzerland responded to the arrest by issuing arrest warrants for a number of German tax investigators. But Germany dismissed the move, saying it would refuse to comply with the warrants. On Monday, several European news media quoted German foreign minister Sigmar Gabriel, who described the alleged activities of the NDB as “incredible” and warned that the ongoing dispute between Germany and Switzerland could “wreck” their bilateral relationship.

Author: Joseph Fitsanakis | Date: 16 August 2017 | Permalink