Danske Bank Says U.S. Probing Money Laundering Claims
Danske Bank said Thursday it was being investigated by the U.S. Department of Justice over possible money laundering related to more than $200 billion transferred through the Danish lender's Estonian branch.
Denmark's largest lender is at the center of a storm of controversy and several inquiries after it said "a large part" of transactions totaling 200 billion euros ($235 billion) at its Estonian branch between 2007 and 2015 were "suspicious."
"Danske Bank has also now received requests for information from the U.S. Department of Justice (DOJ) in connection with a criminal investigation relating to the bank's Estonian branch conducted by the DOJ," the bank said.
"We are cooperating with the authorities investigating us as a result of the case. However, it is too early to speculate on any outcome of the investigations," the lender's interim CEO Jesper Nielsen said in a statement.
Described as "the biggest money laundering scandal in Europe" by Denmark's business minister Rasmus Jarlov, the case shook the banking sector in the Nordic nation and forced Danske's chief executive to resign.
"The U.S. authorities have historically slapped heavy fines related to these types of cases so it's very likely that (Danske) is facing fines," Mikkel Emil Jensen, analyst at th Danish Sydbank, told Ritzau news agency.
The announcement comes nearly two weeks after the European Commission called on the EU's regulatory authority, the European Banking Authority (EBA), to probe what happened to the monitoring of Danske's Estonian office.
- Money from Russia -
In early August, the Danish state prosecutor's office for serious economic and international crime said it too was probing allegations that money, mostly from Russia and other former Soviet republics, which had flowed through the Estonian branch had been laundered.
The allegations are linked to a fraud case exposed by the Russian lawyer Sergei Magnitsky, who was jailed in Russia after he revealed the involvement of several high-ranking Russian officials in stealing massive tax payments from several companies, including the investment fund Hermitage Capital.
Magnitsky died in 2009 aged 37 after being held in a Russian jail for a year, where he was denied medical care.
The whistleblower who unveiled alleged money laundering at Danske Bank's Estonian branch came forward last month: British national Howard Wilkinson, who headed the lender's market business in the Baltics between 2007 and 2014.
He described in a report how the Estonian branch handled customers associated with top Russian politicians and companies based in Denmark, according to Danish daily Berlingske, which broke the story last year.
The bank was warned for the first time in 2007, but it only began to react in 2013, when Wilkinson wrote a report to the management to address the problems, the paper said.
Shares in Danske Bank were down by more than three percent on the Copenhagen Stock Exchange in late morning trading.
Source: Agence France Presse
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