MBaer Merchant Bank AG Accused of Money Laundering

MBaer Merchant Bank AG, Zurich, which was co-founded in 2018, has been forced to close due to alleged breaches of AML (anti-money laundering) laws. No less a figure than Scott Bessent, the United States Treasury Secretary, has stated that the bank dealt with intermediaries acting on behalf of Russia and Iran, with in excess of USD 100 billion allegedly funnelled back to these two countries. It was Secretary Bessent’s intervention that ultimately brought the curtain down on this small but lucrative private bank.

US investigators working for Financial Crimes Enforcement Network (FinCEN), a division of the US Department of the Treasury, identified illicit AML links to Venezuela as far back as 2020. They allege that further activity over the following five years enabled Russia to finance its ongoing invasion of Ukraine, while Iran, including the Revolutionary Guard Corps, received funds linked to oil sales.

FinCEN stated in an official document issued on 2nd March:

“MBaer has also provided access to the US financial system to persons providing material support to Iran-related money laundering and terrorist financing efforts, including support to Iranian foreign terrorist organisations.”

Officials went on to accuse the bank of organising illicit payments on behalf of the Quds Force* of Iran’s Revolutionary Guard in connection with money laundering schemes and international oil smuggling.

*The Quds Force is a specialised branch of Iran’s Revolutionary Guard Corps responsible for extraterritorial operations, unconventional warfare, and military intelligence. It is known for supporting proxy groups such as Hezbollah, Hamas, and the Houthis, and is designated by the United States as a foreign terrorist organisation.

In 2023, Swiss Financial Market Supervisory Authority (FINMA) and US authorities began a more intensive investigation into MBaer, followed by a 2024 review of the bank’s operational structure by Wenger Vieli Ltd, which identified widespread systemic risks. A formal investigation by FINMA later that year found that 98% of the bank’s recent client assets originated from high-risk sources. The report concluded that the bank had failed to carry out adequate due diligence on its clients and had assisted them in avoiding asset freezes.

Two senior executives, Mike Baer, the bank’s co-founder, and Von Merey, have now left the firm. Sources close to the investigation suggest that FINMA has begun proceedings against four unnamed individuals associated with the bank. The bank’s high-risk clients now face prolonged uncertainty, with experts warning that any resolution could take years. In the meantime, it is considered unlikely that other Swiss financial institutions will offer them services.

Elsewhere in the United Kingdom, it was announced that the *Prudential Regulation Authority (PRA) has fined the Bank of London £2 million for misleading the regulator regarding its capital position. The bank was found to have fabricated documents that concealed its financial health. The PRA concluded that the bank failed to maintain adequate financial resources between October 2021 and May 2024 and breached more than a dozen regulatory requirements in the process.

*PRA – is a UK financial services regulatory body, part of the Bank of England and was formed as one of the successors to the Financial Services Authority (FSA) – now known as the Financial Conduct Authority(FCA). Established in 2013, it is responsible for ensuring capital adequacy, sound risk management, financial stability across 1200 banks, building societies, credit unions and insurers. 

The Bank of London was first thrust into the spotlight in September 2024 when UK tax authorities issued a winding-up order over an unpaid tax debt, which was later withdrawn. In August 2025, the regulator instructed the bank to stop onboarding new customers, a restriction that was formally enforced on 18th March 2026. The bank has accepted the PRA’s findings and stated that a new management team is now in place to strengthen governance and regulatory reporting.