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FRAUD

Ex-Credit Suisse bankers guilty of mortgage fraud

Two former Credit Suisse executives on Wednesday pleaded guilty to falsely inflating subprime mortgage-related bond prices as the US housing market tanked, authorities said.

The Manhattan US attorney general and the FBI said that fraud charges were filed against the two men, David Higgs and Salmaan Siddiqui, who worked in the investment banking division of the Swiss bank.

Fraud charges were also filed against another former Credit Suisse employee, Kareem Serageldin, who was the global head of structured credit in the department’s securities business.

Higgs and Siddiqui each pleaded guilty to one count of conspiracy to falsify books and records and commit wire fraud, the statement said.

Each face a maximum sentence of five years in prison and a fine of at least $250,000.

The two men are cooperating with the government’s investigation, it said.

The defendants were charged with jacking up the prices of asset-backed bonds, which comprised subprime residential mortgage-backed securities (RMBS) and commercial mortgage-backed securities (CMBS) in Credit Suisse’s accounts.

Serageldin, Higgs and Siddiqui were able to secure significant year-end bonuses for themselves through the alleged fraud since bonus amounts were largely based on trading books’ profitability, officials said.

“While the residential housing market was in free fall, and shock waves were reverberating throughout the economy, these defendants decided they were above the rules of the market and above the law,” said Preet Bharara, the Manhattan US attorney general.

“As alleged, they papered over more than a half billion dollars in subprime mortgage-related losses to secure for themselves a big payday at the same time that many people were losing their homes and their jobs.”

The fraud took place between late 2007 and early 2008, as the collapsing US housing bubble sent millions of home mortgages into default and wiped off hundreds of billions of dollars in value from mortgage backed securities widely held by banks and other institutional investors.

In March 2008 Credit Suisse announced if was restating its 2007 year-end earnings with a $2.65 billion write-down, a large portion of it related to the fraud.

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FRAUD

How to avoid the most common online scams in Switzerland

Swiss authorities are warning the public against the most common current online, telephone and postal scams and issuing useful advice on how to avoid these shady schemes.

How to avoid the most common online scams in Switzerland
Beware of scams circulating in Switzerland. Photo by Greg Baker / AFP

The number of attempts to extort money from unsuspecting individuals is on the rise in Switzerland, and the National Cyber Security Centre (NCSC), as well as other authorities, are advising the public to be vigilant of any scheme asking for bank account or credit card numbers.

These are some of the most common scams that should ring alarm bells:

Tax arrears

Geneva officials have alerted taxpayers not to fall victim to telephone scams where the callers identify themselves as employees of the cantonal tax office. The person is told that he or she owes money for unpaid taxes, and callers demand the number of the bank account to withdraw the amount owed.

In case the taxpayer refuses, fake employees threaten the victim with a 200,000-franc fine. If the person is elderly — often the most vulnerable victim — the scammers exert pressure by saying their social security payments will be suspended until payment is made.   

Geneva authorities urge the public to inform the police if they receive such a phone call.

READ MORE: Switzerland: Zug residents receive fake letters telling them to quarantine

Package delivery against payment

You may receive an email, supposedly from well-known parcel delivery services, notifying you that a package addressed to you will be delivered once payment is made.

The parcel notification email contains a link to a page asking for credit card details or to activate a service on the mobile phone by sending a text message.

IT support

A caller pretending to be an employee of Microsoft or another IT company tells you that your computer is infected with a virus and new software has to be installed.

The aim of these cyber-attackers is to trick you into downloading a program that will give them access to your computer. 

In most cases, the callers will also try to sell you software licence or another service by asking for your credit card information.

Competitions and prizes

You may get emails, allegedly from well-known Swiss retailers, promising you vouchers for expensive prizes. But in order to receive them, personal data such as credit card details, name, email address, and mobile phone number have to be entered on a fake website.

The fee is immediately charged to your credit card and, unbeknownst to you, you will take out an expensive long-term subscription to a product or service you may or may not get.

The list of all the current scams in Switzerland is here.

If you receive any of the above or similar messages by post, email or phone, the NCSC advises to:

  • Ignore these messages by hanging up the phone and / or deleting emails, moving them to the Spam folder
  • Never give out your credit card number or bank account information to people you don’t know
  • If you did give your card number, contact your credit card company immediately to have the card blocked. Likewise, if you gave out your banking details, get in touch with your bank.
  • In the event of financial loss, the NCSC recommends filing a criminal complaint with the cantonal prosecution authorities. You can search for police stations in your area and their telephone numbers on the Police website.

A good rule to remember is that if an offer or a deal sound too good to be true, or if threats and pressure are involved, they are more than likely scams.

READ MORE: Swiss public warned about fake emails sent from banks and police

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