Lugano trial opens over roughly 60-million-franc fraud

A trial opened on Tuesday in Lugano over an alleged international fraud worth around 60 million francs. The case spans several financial centres: Dubai, Luxembourg, London and, indeed, Lugano.

At the centre of the case is the fortune of a Georgian citizen living in Dubai. He had entrusted his money to an Italian consultant active in Lugano, in order to move it away from Dubai, a place he considered unsafe for his investments.

The consultant had been introduced to him by an Iranian citizen, also based in Dubai, who had in the meantime become a trusted figure for the Georgian man. To manage the fortune, an investment structure based in Luxembourg was chosen. That is where a third defendant came in, a Belgian entrepreneur active in that city.

According to the prosecution, led by deputy attorney general Chiara Borelli, the three defendants instead used the money for personal gain. Most of the funds ended up in a fund based in London, which the Georgian citizen believed he controlled. That belief rested on a series of fake documents created using artificial intelligence.

The money was then reportedly reinvested in various areas, including real estate and commodities, with the aim of laundering it.

The question of jurisdiction

The defendants' lawyers challenged the choice of Lugano as the venue, arguing that the offences had not been committed in Ticino. The court nonetheless decided to proceed with the case there.

The case illustrates how complex it is to prosecute fraud built across multiple jurisdictions, made even more sophisticated by tools such as generative artificial intelligence, capable of producing fake documents that are hard to distinguish from genuine ones. For a financial centre like Lugano, cases like this raise the question of how effectively consultancy firms' internal controls actually catch fraudulent schemes of this scale before they reach court. It also remains to be seen how much such a complex international trial will cost Ticino's public finances, and whether the individual responsibility of the professionals involved in wealth management will be established rigorously.