An investigation by the US Department of Justice into Danske Bank has resulted in a $2 billion fine from the Danish financial institution. It’s the receipt for a money laundering scandal of massive proportions.
Danske Bank, Denmark’s largest financial institution, draws a line under a historic scandal.
Danske Bank, Denmark’s largest financial institution, has accepted a fine totaling a good two billion dollars in a settlement with American and Danish authorities to draw a line under a massive money laundering scandal that broke out in 2018. This comes from a Media release from Danske Bank on Tuesday out.
It states that the bank has reached a coordinated agreement with the US Department of Justice, the US Securities and Exchange Commission and a special agency of the Danish police to investigate abuses and wrongdoing at its former Estonian branch. We fully accept the findings of the investigation and apologize unreservedly for historical failures and behavior that have no place in Danske Bank today. Extensive measures have been taken to prevent similar incidents from now on.
Behind these technical-sounding formulations lies one of the biggest money laundering scandals in Europe. Danske Bank came to Estonia through an acquisition in 2007 and subsequently ran a profitable business with non-resident customers. It came at a time when wealthy individuals from the former Soviet Union area were showing keen interest in bringing assets into the western financial system. Estonia, a member of the EU since 2004, was a perfect hub for this.
According to estimates by analysts, between 2007 and 2015 suspicious transactions totaling around 200 billion euros took place in the western financial system. The bank is said to have not always been precise enough with the verification of customers. An internal report that raised the possibility of large-scale money laundering was apparently blocked by the bank’s highest authority in 2014. The scandal became known in 2018 and triggered major shocks in the management of the financial house. As a result, the market value of Danske Bank shrank by half.
The US Department of Justice accused Danske Bank of the existence of unfair transactions since February 2014 at the latest to have been in the picture, both because of a whistleblower from within the bank itself and because of information from regulators. She also knew that the measures taken by her Estonian branch to combat money laundering were inadequate. Through her practices, she has given high-risk customers from Russia and other countries access to the American banking system.