Biggest Danish bank’s money laundering scandal

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Money Laundering Claims: Billions of Euros illegally moved via Estonia says Danske Bank

19 September 2018

The results have been released of an inquiry into one of Europe’s biggest money laundering scandals.

After similar scandals at many other banks, eg, at the very big HSBC …

Translated from Dutch NOS TV today:

Boss of Danish bank leaves in big money laundering scandal

The money laundering scandal at the largest bank in Denmark costs CEO Thomas Borgen his job. In the period 2007-2015, probably 200 billion euros in criminal money or money of unclear origin went through the bank offices in Estonia, including from Russia.

The bank says it is unable to provide an accurate estimate of the number of suspicious transactions and cash flows in Estonia. According to previous estimates, the bank is said to have made 1.5 billion euros by money laundering.

At that time, Borgen was head of the department responsible for, eg, the bank accounts in Estonia. Until 2015, non-Estonians were also welcome at the bank, mainly Russians, Moldovans and Azerbaijanis.

Breathtaking

According to an independent banking survey, in 2013 alone 80,000 transactions are said to have occurred for 30 billion dollars in potentially criminal money. “These are breathtaking amounts and numbers for such a small bank office, and when such sums flow through the bank, that raises questions”, says one of the researchers.

Deutsche Bank broke ties with Danske Bank in Estonia in 2015 because of concerns about the customer base. Deutsche Bank said they only felt safe about 10 percent of the customers. Especially the Moldovan customers looked suspect.

Whistleblower

For years, the bank did nothing with rumours about criminals using the bank. Only after reports by a whistleblower in 2013 did the bank start its own investigation into malpractice banking practices. However, that did not go deep and was not shared with the top level of the bank.

In 2014, a few measures were taken, but they were not very successful. For example, the Estonian banking activities did not go through the Danish IT systems and they were not covered by the anti-money laundering procedures of Danske Bank.

The Public Prosecution Service started a criminal investigation in August. The Danish regulator already said that Danske Bank risks getting a fine of 650 million euros. The bank also fears retaliatory measures by US regulators such as disconnection of US bank relations, so that Danske Bank will be excluded from the international financial network. Danske Bank itself does not have a banking license in the US. …

Recently, [Dutch bank] ING was also fined for money laundering by failing to comply with the control and compliance rules for customers and accounts. The bank had to pay 775 million euros and the responsible financial director Koos Timmermans resigned.

However, the CEO of ING, Ralph Hamers, is still the big boss.