A whistleblower at Danske Bank said other banks had processed suspicious payments

COPENHAGEN (Reuters) – The whistleblower who revealed suspicions of money laundering involving Danske Bank (DANSKE.CO) said on Monday that two large US banks and a European bank were among the banks that contributed to the processing of suspicious payments.

Payments totaling € 200 billion ($ 228.5 billion) made through Danske Bank's tiny Estonian branch between 2007 and 2015 triggered investigations in Denmark, Estonia, Britain and the United States in a growing global scandal.

Howard Wilkinson, head of the Danske Bank's bargaining unit in the Baltic States from 2007 to 2014, said at a Danish parliamentary hearing that several other lenders were involved in payments via his Estonian branch, adding that many involved two major US banks and the US subsidiary of a major European bank.

"I suppose that 150 billion dollars have passed through this bank (the big European bank) in the United States," said the British, without naming any of the banks in question.

"Nobody really knows where this money went. All we know is that the last three banks to see it were these three big banks in the United States. It was the last check; and when that failed, the money was poured into the global financial system. "

Wilkinson, who told Parliament that Danske Bank had offered money for not speaking, said he received a waiver last month allowing him to talk to the US authorities, but added that he did not expect investigations.

"By the end of 2018, we are talking about dirty money from 2007 to 2015, there is no chance in the world … that all this money be tracked down and that all criminals lose a single cent," he said.

"LACK OF INTEREST"

Danske Bank acknowledged that the anti-money laundering controls in Estonia were insufficient, but in a report published in September, the board of directors, the chairman and the managing director, did not breach their legal obligations. The CEO and the President both withdrew from the report.

"In April 2014, it became clear that the bank did not intend to do anything," said the former Danske Bank employee, referring to previous reports on whistleblowing. "There was a curious lack of interest at the management level."

"In this case, we urged all those who have knowledge about it to address the authorities," said Danske Bank's Danish President Jesper Nielsen.

"We have exceeded the expectations of society vis-à-vis us. The case and the course of events do not reflect the bank we want to be, added Nielsen.

In Danske Bank's September report, it was reported that the first whistleblower report, entitled "Disclosure of Alert – Knowingly Deal with Criminals in Estonia", had been sent to his council at the end of December 2013. administration, in the service of the group's compliance and its internal auditor.

Thomas Borgen left his position as CEO following the September report, claiming that even though he had been "laundered from a legal point of view," he was assuming "the ultimate responsibility."

However, the report concluded that Borgen had not escaped all "red flags" when he held the ultimate executive responsibility of the Estonian branch between 2009 and 2012.

After the initial results of the bank's internal audit in February 2014, Borgen recommended that all new business be terminated immediately and that existing transactions be closed in a controlled manner, according to the bank's report.

ROLE OF THE REGULATOR

The scandal came on the heels of a major government-imposed tax scandal and fraud scandal at the Danish Ministry of Social Affairs, undermining trust in once-trusted institutions and prompting calls for action from legislators.

Wilkinson said the Danish financial regulator had not contacted him before the publication of a report on the allegations in May 2018. The FSA was not immediately available for comment.

He said Denmark should investigate the Danske Bank's regulation by the FSA, including the conduct of senior officials.

The FSA said in May that it had not found a sufficient basis to prosecute Danske Bank's management.