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Danske Bank admitted that its money laundering problem was even worse. More than 200 billion dollars worse.
As part of a team of international journalists last year, Barron helped to expose about 1.2 billion dollars of suspicious funds from Russia via a branch of Danske Bank– The largest financial institution in Denmark. On Wednesday, the bank (DANSKE.Denmark) released its own survey of its branch in Estonia. And Danske estimates that the total funds possibly laundered amounted to 200 billion euros, about 230 billion dollars.
Thomas Borgen, CEO of Danske, also resigned with the announcement. "It's been a while since the resignation would be the right thing to do," he said in a statement, "but I delayed the decision because I felt the responsibility to see the bank through this difficult time . to the presentation of the surveys. "
Danish prosecutors are investigating the mess, but the bank's report says that Borgen, along with Danske's chairman and other directors, did not violate his legal obligations to the bank. The bank also says it will donate its estimated profit on transactions – about $ 230 million – to charities. And he took the opportunity to warn that the weakness of Danske's activities now requires him to reduce his forecasts on the results of 2018, about 19 billion crowns, or about $ 3 billion, to 16-17 billion or $ 2.5-2.66 billion.
Danske Bank acquired the Estonian operation on the acquisition of Sampo Bank in 2007. The Estonian unit did not lend much, according to Danke's report, and mainly made profits by making transfers from electronic funds and Like many Baltic banks, Sampo's Estonian subsidiary had historical ties with Russian customers and maintained its own computer systems and registers in Russian and Estonian, all outside the monitoring of the money laundering compliance of Danske. According to the report, an internal whistleblower came forward at the end of 2013 and Danske realized that all his lines of defense had failed: customers and suspicious transactions were virtually unmanageable within the Estonian unit. At that time Danske indicates that 44% of the deposits of its Estonian subsidiary came from non-Estonians.
Nearly 10 million suspicious transactions were recorded in nine years, according to the Danske report, involving some 15,000 customers. The bank says it has looked at around 6,200 customers so far and that "the vast majority of these customers have been deemed suspicious". Suspicious activity reports have been submitted to the Estonian authorities, but Danske Bank warns that such reports do not mean the customers. or their transactions laundered money or were involved in crimes. More than 40 employees and outside finance professionals were involved in the transactions and Danske reported eight of his former employees to the Estonian police.
Danske complains about the distraction and costs of the 2008 financial crisis and admits that she did not respond to the warnings she received shortly after the 2007 acquisition. At the time, regulators Russia and Estonia have raised the possibility of money laundering amounting to billions of rubles per month. The money they said was related to "pure criminal activity".
The hedge fund investor and human rights activist, Bill Browder, had also asked the Estonian regulators for his suspicions of Russian money laundering in the Danske branch. Another missed opportunity came in 2013, when a western bank ended its clearing relationship with the Estonian unit on suspicion of money laundering. But even after the "disturbing" warnings of a whistleblower at the end of 2013, Danske claims not to have conducted full investigations of the activities of the Estonian subsidiary until the 2017 reporting coordinated by the Draft Report on Crime. organized and corruption. The bank then ordered an internal investigation from the Danish firm Bruun & Hjejle.
Write to Bill Alpert at [email protected]
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