U.S. authorities to scrutinise Danske Bank over money laundering scandal: report

A multi-million kroner money laundering case at Danske Bank’s Estonian branch could be investigated by US authorities.

U.S. authorities to scrutinise Danske Bank over money laundering scandal: report
Photo: Ints Kalnins/Ritzau Scanpix

The Justice Department, Treasury Department and Securities and Exchange Commission are each examining Danske Bank over the allegations of money laundering flows, according to a report by the Wall Street Journal.

The investigations are the result of a complaint made by a confidential whistleblower to US authorities more than two years ago, according to a person familiar with the matter and documents reviewed by the WSJ, the newspaper writes.

In early August, the Danish state prosecutor's office for serious economic and international crime said Danske Bank was being investigated and prosecutors would decide whether to press charges.

Danske Bank has launched two internal probes of its own regarding the allegations, and Estonian authorities are also investigating.

In 2017, newspaper Berlingske claimed the bank had been involved in the laundering of around $3.9 billion of dirty money from several eastern European countries.

But The Wall Street Journal reported earlier this month that investigators were probing transactions of up to $150 billion “from companies with ties to Russia and the former Soviet Union” that transited Danske Bank's Estonian branch between 2007 and 2015.

The complaint filed with authorities is related to transfers between Danske Bank’s Estonian branch and Deutsche Bank and Citigroup.

“As a financial company we are under the auspices of regulators and are therefore in contact with authorities in various countries. However, as a general rule, we do not comment,” Danske Bank said in a written comment according to Ritzau.

Danish and Estonian authorities have shared information with counterparts in the United States, according to the WSJ report.

The involvement of US authorities could result in much larger fines for any transgressions, analysts said.

“It is clear that, when American authorities go in and investigate, the probability increases in relation to seeing fines to the extent of billions of kroner,” Sydbank economist and analyst Mikkel Emil Jensen told Ritzau Finance.

Danske Bank’s share price fell by around two percent on Friday afternoon.

READ ALSO: Danske Bank shares fall again after new money laundering claims


Danish police drop money laundering case against Danske Bank directors

Denmark’s economic crime unit SØIK has dropped potential charges for money laundering against three leading former directors of Danske Bank, Denmark’s largest bank, but investigation of the bank itself continues.

Danish police drop money laundering case against Danske Bank directors
File photo: Jacob Gronholt-Pedersen/Reuters/Ritzau Scanpix

The three directors, Thomas Borgen, Henrik Ramlau-Hansen and Lars Stensgaard Mørch were investigated in relation to a scandal involving large-scale money laundering at the Estonian division of the bank.

Each of the three confirmed to newspaper Børsen that charges have been dropped.

In a written statement to media, SØIK said it had not uncovered “evidence that any individual has shown negligence to such an extent that it can be characterised as gross” and that the law had therefore not been broken.

“For an individual to be convicted under money laundering laws, they must have committed gross negligence. In this case we have conducted a vert comprehensive and thorough investigation with a number of investigative steps,” acting head of SØIK Per Flig also said in the statement.

The bank itself is still under investigation for possible breach of money laundering laws, however, Flig noted.

READ ALSO: US files lawsuit against scandal-hit Danske Bank

No individuals now remain under suspicion in the investigation, meaning SØIK has dropped cases against all leading bank executive who were suspected by police in March 2019.

Around 1,500 billion kroner from foreign customers flowed through the Estonian division of Danske Bank between 2007 and 2015, an investigation found.

A large proportion of that money is considered to be suspicious. The scandal resulted in Borgen’s resignation as CEO and the bank closed its Estonian branch in 2019.

READ ALSO: More on the Danske Bank money laundering scandal