The men of the Chiasso branch

Ernst Kuhrmeier

Ernst Kuhrmeier was the central figure of the affair. He was deputy director of the Chiasso branch when Texon was created in 1961 and later became its director. In January 1975 the bank appointed him principal director (directeur principal), a sign of the esteem in which Zurich held the results of his branch.¹ The sources describe a banker with a remarkable personal following among Italian clients, a sense of discretion that his clients valued and a readiness to take decisions without referring them upwards. When the affair broke, he presented himself as the one responsible. At his trial in June 1979 he declared that he alone had made the error, a statement that the Italian press reported with some scepticism.²

It would be wrong to describe Kuhrmeier as an embezzler in the ordinary sense. The evidence presented in the criminal proceedings, as summarized in the contemporary press, shows a director who used the bank's name and the bank's guarantees to keep a system of deposits and loans running, and who concealed the losses of that system from his superiors when the Italian borrowers could no longer pay. The money of the depositors went to Italian companies. Kuhrmeier's motive, as far as the sources allow a conclusion, was the defence of a structure he had built and of the reputation that came with it. The sources consulted here do not describe personal enrichment as the purpose of the scheme, and the criminal case turned on the damage done to the bank.³

Claudio Laffranchi and the other officers

Kuhrmeier did not act alone. His two vice-directors were arrested with him on 24 April 1977, among them his deputy Claudio Laffranchi.⁴ According to the cantonal account, the investigators found that Kuhrmeier and Laffranchi had for years placed Italian flight capital under the guarantee of the Credito Svizzero, without the knowledge, as they said, of the head office in Zurich. The court later treated Laffranchi as Kuhrmeier's equal in professional responsibility. The sources consulted here do not describe the individual tasks of the officers in detail, and the judgment itself was not available.⁵ The branch also relied on outside professionals. Texon had been set up with the assistance of lawyers in Ticino and Liechtenstein, who provided the corporate shell, acted as its officers and signed the documents that the structure required.⁶ Two of these lawyers were later tried together with the bank officers. The involvement of professionals bound by secrecy was not incidental. It allowed the branch to present Texon as an independent client company, while in fact the branch decided on every movement of money.

Autonomy and ignored warnings

The question that dominated the public debate in 1977 was how the head office in Zurich could have failed to notice. The answer lies partly in the organization of a big bank in the 1970s and partly in a series of warnings that went unheeded. In 1968 the Swiss tax authorities found an irregularity related to the Chiasso branch, but the bank discussed the matter with Kuhrmeier only in 1969 and took no lasting measures.⁷ Other banks in Ticino complained about the branch's conduct in the market for deposits. In January 1976, more than a year before the collapse, Philippe de Weck, the head of the Union Bank of Switzerland, warned Heinz R. Wuffli, a member of the Kreditanstalt's general management (directeur général), about "the practices of the Chiasso branch". Even then the bank did not intervene.⁸

The Federal Banking Commission later identified the institutional reasons. The internal audit of the Kreditanstalt, it found, had fulfilled its tasks at the Chiasso branch "only partly", while the external statutory auditors had "never audited the Chiasso branch". As a result, the construction remained undetected "for a whole decade".⁹ At the time, Swiss law required an annual audit of each bank by a recognized auditing firm, but it did not prescribe how the auditors should cover a network of branches. Large banks relied on their internal audit for the branches and on the head office's own controls. When a profitable branch reported good results and the head office saw no reason for concern, nobody examined the off-balance-sheet business conducted in its name.

Common misconception. The Chiasso affair is often remembered as a case in which a branch director stole the money of his clients. The sources describe something different. The money of the depositors was lent to Italian companies, and the losses arose because these companies failed after the oil crisis of 1973. The offence lay in using the bank's name and guarantees without authority and in concealing the resulting losses, which is why the arrests of April 1977 were made on a charge of unfaithful management (amministrazione infedele).

Notes

1. Le Temps, "Grandes affaires économiques suisses (26)" (above): Kuhrmeier, deputy director of the Ticino branch, was named principal director in January 1975 ("Ernst Kuhrmeier, directeur adjoint de la filiale tessinoise"; "Kuhrmeier est même nommé directeur principal, en janvier 1975"). ↩
2. Orazio Pizzigoni, "[…] lo scandalo della Texon. Il buco di mille miliardi in una Svizzera inedita", l'Unità, 4 June 1979, 3, https://archivio.unita.news/assets/main/1979/06/04/page_003.pdf, reporting Kuhrmeier's statement before the court that he alone had made the error. ↩
3. The assessment rests on Ente Ticinese per il Turismo, "Lo 'scandalo' di Chiasso" (above), according to which Texon "reinvestì i fondi in partecipazioni a società italiane", on SWI swissinfo.ch, "La grande leçon du scandale Texon" (above), on the deficits of the companies held in Texon, and on "Chiasso retour", Der Höngger, 13 July 1979 (below). The judgment of the Ticino court itself was not consulted. ↩
4. Ente Ticinese per il Turismo, "Lo 'scandalo' di Chiasso" (above): on 24 April the director "Ernst Kuhrmaier e i due suoi vicedirettori vengono arrestati con l'accusa di amministrazione infedele", naming Claudio Laffranchi as Kuhrmeier's deputy. SWI swissinfo.ch, Gemma d'Urso, "La grande leçon du scandale Texon", 23 April 2002, https://www.swissinfo.ch/fre/la-grande-le%C3%A7on-du-scandale-texon/2671070, confirms the arrest of Kuhrmeier and two associates on 24 April 1977. ↩
5. Ente Ticinese per il Turismo, "Lo 'scandalo' di Chiasso" (above) ("Gli inquirenti scoprono che Kuhrmeier e il suo vice Claudio Laffranchi avevano riciclato per anni, assicurando la garanzia del Credito Svizzero all'insaputa, dissero, dei vertici di Zurigo, capitali italiani in fuga"); "Chiasso retour", Der Höngger, 13 July 1979 (below) ("den auch beruflich gleichgestellten Laffranchi"). ↩
6. SWI swissinfo.ch, "La grande leçon du scandale Texon" (above): Texon was a shell company set up in the 1960s "with the assistance of Ticino and Liechtenstein lawyers". ↩
7. Le Temps, "Grandes affaires économiques suisses (26)" (above): a tax irregularity was discovered by the fiscal authorities in 1968, but the discussion with Kuhrmeier took place only in 1969. ↩
8. Le Temps (above): in January 1976 Philippe de Weck of the UBS warned Heinz Wuffli of the Kreditanstalt about "the practices of the Chiasso branch". The English Wikipedia article "Chiasso scandal" dates a warning by a UBS manager to 1968; the dating in Le Temps, based on Jung's company history, is preferred here. ↩
9. EBK, Jahresbericht 1977 (above), 23–24: the internal audit "erfüllt seine Aufgaben in der Filiale Chiasso nur teilweise"; the external auditor "hatte die Filiale Chiasso nie geprüft"; the business remained undetected "während einem ganzen Jahrzehnt". ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.