Estonia bank employees may have colluded with customers in $234 billion money laundering, 2007-2015-Marketwatch, Bloomberg

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9/19/18, “Danske Bank CEO resigns over internal probe,” marketwatch.com, Adam Clark

“Danske Bank A/S (DANSKE.KO) Chief Executive Thomas Borgen has resigned after the lender released the results of an internal investigation into its branch in Estonia, which found its employees may have colluded with customers making suspicious transactions.

Danske Bank said its investigation covered 15,000 customers who made a total of 9.5 million payments via the branch in a period from 2007 to 2015. The total flow of payments covered amounted to around 200 billion euros ($233.7 billion).

The bank said it can’t provide an accurate estimate of the number of suspicious transactions, but has reported almost 6,200 customers to Danish authorities. The lender also said there is “suspicion that there have been employees in Estonia who have assisted or colluded with customers.”

Danske said the investigation, which was carried out by an external law firm, found that a number of former and current employees at both the Estonian branch and group level didn’t fulfill their legal obligations. However, it concluded that the board of directors, chairman, and CEO didn’t breach their legal obligations.”…
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Added: Bloomberg article

9/19/18, “Bank CEO resigns after $234 billion money laundering scandal,“ Bloomberg, Frances Schwartzkopff and Peter Levring

“Danske Bank A/S Chief Executive Officer Thomas Borgen will step down amid allegations his bank was at the center of a major European money laundering scandal with as much as $234 billion flowing through a tiny Estonian unit.

Danske said it can’t provide an accurate number for how much dirty money it may have laundered. But the bank’s $234 billion estimate of total flows through its Estonian unit — a figure that’s almost nine times the Baltic nation’s gross domestic product — raises major questions about how serious management was about preventing money laundering….

Shares in Danske opened more than 6 percent lower in the Danish capital, bringing losses this year to 32 percent. Since its latest peak in May 2017, Danske’s market value has plunged by about $14 billion.

Borgen, who was promoted to run Denmark’s biggest bank in 2013, will continue in his job until a replacement is found, Danske said on Wednesday. It didn’t give any indication of how long that might take.

“It is clear that Danske Bank has failed to live up to its responsibility in the case of possible money laundering in Estonia,” Borgen said in the statement. “I deeply regret this.”

At a press conference, Chairman Ole Andersen hinted he may also resign, but said he felt it made more sense to stay on for now to deal with the “task” at hand.

The total flows in the Estonian unit between 2007 and 2015 cover about 15,000 accounts, of which Danske says roughly 6,200 have the “highest risk indicators.” The bank said “almost all of these customers have been reported to the authorities.”

Danske is the latest in a string of big European banks to have been tainted by money laundering scandals, prompting authorities in the bloc to look into tougher measures. Deutsche Bank AG was fined almost $700 million last year for helping wealthy Russians move about $10 billion out of their country. ING Group NV earlier this month agreed to pay about $900 million to settle a laundering case.

Analysts surveyed by Bloomberg have estimated that Danske may need to pay about $800 million in fines for its breaches. The bank made no mention of provisions in Wednesday’s press release.
Borgen, 54, is leaving after half a decade at the helm of Denmark’s biggest bank. His career spanned a number of key roles at Danske, most notably, as head of its international operations while much of the laundering was taking place.

Wednesday’s report shows Danske was warned as early as 2007 that there were suspicious transactions taking place at the Estonian unit, followed by a steady flow of continuous red flags thereafter.

The case has shocked Denmark, a country generally associated with some of the world’s lowest levels of corruption and highest levels of transparency.”…

[Ed. note: Not accurate. Denmark’s corrupt government made it the center of massive carbon trading fraud. Prior to 2009 Copenhagen Climate Summit, the government even spent months setting up a lax business environment: 6/15/2010, “Carbon Carousel: European Market a Haven for Tax Fraud,” pbs.org: “Back in 2007, long before COP 15 arrived, the Danes began working behind the scenes to host a growing cadre of carbon brokerage firms, which have become central to trading the world’s fastest growing commodity. To make it easier for these financial firms to set up shop in the Danish capital, the Ministry of Finance decided to skip background checks on companies being vetted to trade on the country’s national carbon exchange. According to a string of reports in the Danish newspaper Ekstra Bladet, all the government asked companies to provide was an email address. This laissez-faire attitude succeeded in channeling close to a third of all EU carbon trades through Denmark, and has since backfired badly.The paper reported that one firm after another was little more than a front company for transacting complicated financial scams.“….UK Telegraph article]

(continuing): “Criminal complaints against Danske have so far suggested its Estonian unit was used to launder as much as $9.1 billion between 2007 and 2015, with the illicit funds stemming mostly from Russia. Official investigations are ongoing in Denmark and Estonia and Danish media reported last month that U.S. authorities are also looking at the case….

The government has already made clear that Wednesday’s report won’t be the final word on the case, pointing to ongoing criminal investigations in Denmark and Estonia, which are likely to drag on for several months.”…
 


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