Five former Geneva wealth managers have paid "substantial compensation" to settle criminal complaints brought by clients whose assets they had invested with U.S. fraudster Bernard Madoff, the Geneva prosecutor's office said on Friday.
The case was launched in 2009 against five directors of Aurelia Finance, a Geneva-based private bank that prosecutors said had lost up to $800 million of clients' money by investing in Madoff's "Ponzi" scheme, which used money from new investors to pay existing clients.
The five men - Vladimir Stepczynski, Pascal Cattaneo, Olivier Ador, Laurent Mathysen-Gerst and Jean-Marc Wenger - were charged with criminal mismanagement of client money by putting too many assets into a Madoff "feeder fund".
All five resigned from Aurelia's board and their assets were frozen.
Prosecutors told a Geneva court at the time that the directors had enriched themselves on management fees, finder fees and commissions paid for fictitious returns that were never verified. The Swiss newspaper Le Temps reported last month that the five defendants had been due in court on Oct. 12.
The financial institutions that lost money in the fraud, through asset management units, include Spain's Santander, Italy's UniCredit and Swiss-based EFG International.
Swiss asset managers were among the biggest investors in Madoff's scheme, with firms based in Geneva particularly hard hit.
Madoff, 77, is serving a 150-year prison term in the United States after pleading guilty in 2009 to masterminding the Ponzi scheme, estimated to have cost investors $17 billion in principal.
In the United States, 15 people including Madoff either pleaded guilty or were convicted at trial in connection with the collapse of the scheme. The final Madoff defendant in the United States was sentenced to six months in prison last month.
It was not possible to contact the Aurelia defendants or their lawyers. Mathysen-Gerst had told the newspaper Tribune de Geneve in 2009: "There is nothing criminal in our actions."
He was quoted as saying that investments had been allocated to Madoff's funds "at the explicit demand of the client" or after a discussion of the risks involved, and as denying that management commissions had been out of line with industry standards.