Facts

The complainant A.X. was, together with his brother B.X. and his late father C.X., the owner of several holding companies (D. AG, E. Holding AG, F. Holding AG, G. Holding AG) as well as other private companies. The group comprised over 80 subsidiaries in Switzerland and abroad. A.X., as Chairman of the Board of Directors and the highest-ranking executive of the group, exercised significant influence over the management and financial affairs of the companies.

The auditing firm I. AG prepared the consolidated and individual financial statements of the companies for the years 1998 to 2002. A.X. is accused of having, during this period, fraudulently obtained loans in the amount of two- to three-digit million Swiss francs from various banks for the holding companies and other companies in the group, CO having caused the extension of existing loans. To this end, he allegedly deceived the banks with false annual and consolidated financial statements as well as audit reports regarding the financial and earnings situation of the companies in order to enhance their creditworthiness. He is further accused of having, in the context of a framework credit agreement with K. Corporation (UK) PLC, falsely claimed a credit requirement that was 38 million CHF higher than actually needed.

A.X. is also alleged to have, prior to his personal bankruptcy (opened on 13 July 2004), transferred assets (including household goods, vehicles, cash, shares, and real estate) from his private assets free of charge to his partner A.Y. and his then infant sons B.Y. and C.Y., thereby knowingly causing damage to his creditors.

The District Court of Winterthur convicted A.X. by judgment of 22 March 2012 of commercial fraud, multiple forgeries of documents, and multiple creditor damage through asset reduction to a custodial sentence of 8 years (with credit for 1 day of detention). The Higher Court of the Canton of Zurich upheld the conviction for commercial fraud and multiple forgeries of documents by judgment of 13 January 2014, but reduced the sentence to 7 years’ imprisonment (with credit for 1 day of pre-trial detention). An acquittal was granted with regard to creditor damage through asset reduction concerning the purchase of Schloss O. as well as in relation to certain charges of commercial fraud and creditor damage.

A.X. filed an appeal in criminal matters with the Federal Supreme Court, seeking his acquittal and the annulment of all findings and orders of the challenged judgment. He also alleged a violation of the principle of expeditious proceedings. The Federal Supreme Court dismissed the appeal to the extent it was admissible.

Considerations

1. Evaluation of party expert opinions and free assessment of evidence The Federal Supreme Court confirms its consistent practice that private expert opinions commissioned by the accused do not have the same weight as court- CO authority-ordered expert opinions. They are subject to free assessment of evidence and must be qualified as party assertions. Private expert opinions must be assessed with caution, as they are generally prepared in the interest of the client and the expert is not independent. The official expert, by contrast, is an assistant to the judge and not a party. Although the court is free in its assessment of expert opinions, it may not deviate from a court-ordered expert opinion without valid reasons. If the cogency of an expert opinion is questionable in essential points, the court must obtain additional evidence CO dispel the doubts. An expert opinion that suffers from obvious deficiencies (e.g., unfounded conclusions, contradictions) does not constitute a sufficient legal basis. The differing roles of official and private experts justify giving the official expert the opportunity to comment on the statements of a private expert, without granting the private expert a right to reply.

2. Subjective elements of false certification (Art. 251 para. 1 SCC) The complainant admitted that the annual financial statements of the companies were prepared in violation of accounting regulations, thereby fulfilling the objective elements of false certification. However, the subjective elements were in dispute, in particular whether A.X. acted with the intent to obtain an unlawful advantage for himself CO others CO to cause financial harm to third parties. The subjective elements require intent (dolus eventualis suffices) as well as an intent to deceive. The deception must be aimed at creating a false impression in legal transactions regarding the authenticity CO truthfulness of the document. In the preparation of false accounting records, deception of third parties is generally accepted. The advantage need not necessarily be of a financial nature; it may also consist of any other form of improvement in position. The complainant argued that the financial statements had been prepared for tax optimization purposes and had presented an overly positive picture of the financial situation. The lower court, however, found that there was only one version of the financial statements that had been communicated to the banks, and that these statements portrayed the financial and earnings situation of the companies more favourably than was actually the case. The banks had been deceived about the true situation in order to obtain CO extend loans. The handwritten manipulations by A.X. would not have been…