Credit Suisse has been embroiled in a major fraud in Singapore by a former adviser after the siphoning off of an estimated US$13 million from a client account, according to knowledgeable bankers in the city-state.

The adviser, believed to be female and to have formerly worked at Citibank, has been dismissed and the affair is currently subject of a police inquiry. No charges have apparently been filed as yet.

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Credit Suisse declined to make any comment over the scam; although a spokeswoman did confirm that while the bank is "not in a position to comment on this matter, pending investigations, it is our policy to actively cooperate with all the relevant authorities."

The Swiss banking giant is understood to have completely overhauled its back office and compliance and monitoring systems in the meantime. The fraud may have been going on as long as six years.

There was surprise earlier this year at the sudden announcement of the resignation of Marcel Kreis, CS chairman of private banking for the Asia-Pacific region. He was succeeded by Francesco de Ferrari as Asia head.

If the size of the fraud is confirmed, it will rank as one of the biggest in international private banking since a famous episode at HSBC in Monaco. Stephen Troth, a HSBC private banker was convicted in the principality in 2001 of stealing many millions from the bank’s celebrity clients.

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He later served two years in jail after investigators found that as much as US$20 million was missing from client accounts, mainly involving sports and entertainment stars. Formula One champion Michael Schumacher alone reportedly lost about US$10 million in the Troth scam.

The latest affair shouldn’t represent any last damage to Singapore as the premier Asian financial centre, bankers say. The city-state has been upgrading its regulations and standards for the private banking industry to among the highest anywhere, they say, noting that it can be notoriously difficult to guard against employees determined to conceal internal fraud.