Scores of Bank Leumi Switzerland customers submitted over SF 100 million ($62 million) in claims to the Swiss attorney general in the wake of the embezzlement at the bank, according to Swiss economic weekly "Fact".
The weekly reported that the investigating judge in Zurich estimated the investigation of the affair will last another year. Bank Leumi stated in response that no claims had been submitted against the bank in Switzerland following the embezzlement.
The embezzlement was discovered early this year. It is suspected that the investment manager at Bank Leumi Switzerland in Zurich, Ernst Imfeld, embezzled customers' accounts. The bank immediately fired Imfeld. He is suspected of transferring money from customers' accounts to other accounts, taking loans against these accounts, and investing the money elsewhere, including speculative investments.
Following the discovery of the embezzlement, which is considered to be the largest ever in Israeli banking history, Bank Leumi set aside an allowance of SF 140 million ($87 million) in its financial statement for 2000. The bank's insurance consultants estimate the insurance will cover the loss from the embezzlement.
The Swiss weekly now states that a Swiss Bank Association investigation of Bank Leumi is still open. The investigation will determine whether Bank Leumi violated supervisory regulations, which could result in the bank being fined up to SF 10 million ($6.2 million).
Published by Israel's Business Arena on 30 September 2001