Danske Bank investigation: Employees implicated in $234 billion money laundering scandal
20 Sep 2018

Workers at Danske Bank’s Estonian unit may have colluded with customers in laundering cash, according to a probe into a money laundering scandal which involved 200 billion euros ($234 billion) flowing through its systems, covering thousands of customers over an eight-year period.

In a report into its investigation published Wednesday, Denmark-based Danske admitted a number of shortfalls, including that it had acquired a large number of non-resident customers in Estonia ‘that we should have never had’ and that they carried out large volumes of transactions ‘that should have never happened.’

The bank also said the Estonian branch operated too independently from the rest of the Group with its own culture and systems ‘without adequate control and management focus from the Group.’

“There is suspicion that there have been employees in Estonia who have assisted or colluded with customers,” Danske said in a statement.

“When it comes to individual accountability, it has been established that a number of former and current employees, both at the Estonian branch and at Group level, have not fulfilled their legal obligations forming part of their employment with the bank,” it also said.

The investigation identified a total of around 10,000 customers as belonging to the non-resident portfolio, and to ensure that all relevant aspects were covered, the investigation covered a total of around 15,000 customers with non-resident characteristics (that is, a further 5,000 customers).

The non-residents portfolio is understood to have included customers from Russia, Azerbeijan, Ukraine and other former-Soviet states.

The total flow of payments amounted to around EUR 200 billion, it said.

The probe also found that only part of the suspicious customers and transactions were historically reported to the authorities as they should have been, and that the Estonian control functions did not have a satisfactory degree of independence from the Estonian organisation.

In general, the Estonian branch had insufficient focus on the risk of money laundering, and branch management was more concerned with procedures than with identifying actual risk, the report said.

Image: Danske Bank offices in Lithuania

Read more:

Money laundering at Danske Bank: Lessons for financial crime professionals (Part 1)

Money laundering at Danske Bank: Lessons for financial crime professionals (Part 2)

Standard Chartered faces ‘substantial’ UK fine over poor financial crime controls

You can claim CPD minutes for reading this article, by signing up to our CPD Wallet

FREE CPD Wallet
Must Read

Elise Bean – The Inside Track – The US Senate’s Investigations into Financial Crime

Elise Bean joins Tom Devlin (from KYC360) in conversation to discuss her new book, highlights of her investigative career, and learning points for both banks and financial crime investigators arising from the PSI's work Read More

Financial crime: Court orders banks to open account for convicted fraudster

The Royal Court in Jersey has ruled that a trust for a convicted fraudster should be allowed to open a bank account on the Isle, despite being denied banking services in other jurisdictions. The case put before the Jersey court is linked to another infamous scam, unrelated to the trust… Read More