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December, 2018 9:54 PM



Danske Bank says US probing money laundering claims

Danske Bank says US probing money laundering claims

Danske Bank said Thursday it was being investigated by the US Department of Justice over possible money laundering related to more than $200 billion transferred through the Danish lender's Estonian branch.

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05.10.2018 09:15 AM

Danske Bank said Thursday it was being investigated by the US 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 centre of a maelstrom and several probes after it said "a large part" of the transactions totalling 200 billion euros ($235 billion) between 2007 and 2015 were "suspicious".

"Danske Bank has also now received requests for information from the US 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," interim CEO Jesper Nielsen said in a statement.

Described by commentators as "the biggest money-laundering scandal in Europe," the case shook the nation's banking sector and forced Danske's chief executive to resign.

Denmark, like its Nordic neighbours, is considered an example of transparent governance, and the amount of the suspicious transactions is 10 times Estonia's national output in 2014.

Danske Bank -- whose shares were down by more than four percent on the Copenhagen Stock Exchange in late trading on Thursday -- might face US fines, the Danish business daily Borsen said.

Denmark's financial market watchdog has ordered Danske to set aside 10 billion Danish kroner (1.34 billion euros, $1.5 billion) to ensure it can remain solvent.

"The US authorities have historically slapped heavy fines related to these types of cases so the likelihood of a fine has increased significantly," Mikkel Emil Jensen, analyst at the Danish Sydbank, told AFP.

The announcement comes nearly two weeks after the European Commission called on the European Banking Authority (EBA), a regulatory authority, to probe what happened to the monitoring of Danske's Estonian office.

Britain's National Crime Agency is also probing the activities of UK-based companies with alleged links to the scandal. 

Money from Russia

In early August, the Danish state prosecutor's office for serious economic and international crime said it was also probing allegations that money, mostly flowing from Russia and other former Soviet republics through the Estonian branch, had been laundered. 

The allegations are linked to a fraud case exposed by Russian lawyer Sergei Magnitsky, who was jailed after he revealed the involvement of 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.

Howard Wilkinson, a British national who headed the Danske's market business in the Baltic region between 2007 and 2014, last month stepped forward to reveal himself as the whistleblower who reported the alleged money laundering.  

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 only began to react in 2013, when Wilkinson wrote a report to the management, the paper said. 

Since early this year, Danske Bank shares have lost roughly one third of their value.
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