Vincenz case highlights complexity of economic crime trials

The appeal hearing in the case involving former Raiffeisen chief executive Pierin Vincenz has highlighted why economic crime trials are often complex and lengthy, SRF reports. The proceedings before the Zurich Higher Court have been under way for more than a week.

The court is reviewing a first-instance ruling that found Vincenz guilty. The indictment is almost 400 pages long, six people are accused and the proceedings have now lasted nearly ten years.

Two main sets of allegations

The case concerns two main groups of allegations. One involves excessive expenses by Vincenz and his former business partner Beat Stocker. The two businessmen allegedly spent several hundred thousand francs in strip clubs, restaurants and hotels, recording the expenses as business costs.

The second, and legally more significant, concerns several company takeovers by Raiffeisen and the credit card company Aduno, now known as Viseca, in which Raiffeisen holds a stake. The prosecution alleges that Vincenz secretly acquired stakes in four companies that were later bought by Raiffeisen or Aduno.

According to the indictment, he made millions of francs in personal profits from the transactions, damaging his employer in the process.

At first instance, Vincenz was convicted, among other offences, of fraud, misappropriation, criminal breach of trust and falsifying documents. He was sentenced to three years and nine months in prison and fined 840,000 francs. Stocker was also given a prison sentence of four years.

Almost all parties to the proceedings appealed the district court’s ruling. Six men are appearing as defendants before the Zurich Higher Court. One other co-defendant died after the first-instance judgment.

Why economic crime cases are complicated

Claudia V. Brunner, a lawyer and expert in economic crime, said the complexity of such proceedings sets them apart from conventional criminal cases. In a typical criminal case, the court may have to determine whether someone was injured or robbed.

Economic crime cases, by contrast, often involve business matters. Courts must first clarify questions under civil, corporate or supervisory law before deciding whether a criminal breach of duty occurred, Brunner said. This makes such proceedings expensive and time-consuming.

In the Vincenz case, the court is examining a company in which Vincenz invested without Raiffeisen’s knowledge. Raiffeisen later bought the company, allowing Vincenz to make a profit.

The court must determine whether this conduct was criminal or merely a breach of rules that should be dealt with under civil law rather than through criminal prosecution. Brunner said criminal law was the state’s strongest instrument and should therefore be used only in the most serious cases.

Dispute over whether Raiffeisen suffered damage

According to Brunner, an act of economic crime requires three elements: conduct in a business context, a breach of duty and damage. The parties in the Vincenz case are arguing most intensely over whether damage occurred. Observers expect that question to play a decisive role in the verdict.

The proceedings have drawn criticism because of their cost and duration. The case is almost certain to be appealed to the Federal Supreme Court, meaning it could end no earlier than 2029. Experts say the defendants have been burdened by the case for years, while the proceedings could nevertheless conclude with relatively mild sentences because the question of damage is so difficult to resolve.