Denmark’s Largest Bank Lands in Hot Water Over Money Laundering Scheme
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Danske Bank, one of Denmark’s largest banks, has agreed to a plea deal and forfeit over $2 billion for its role in allowing foreign actors to funnel illicit funds through its Estonian branch.
The Scheme
The scheme allowed billions of dollars in illegal payments from high-risk clients, including those linked to Russia, to be transferred into the US financial system. The bank’s executives were aware of the potential lawbreaking but chose to overlook the transactions and lie about customer information and risk profiles.
Investigation Findings
The investigation revealed that:
- Danske Bank processed over $160 billion through its Estonia branch between 2007 and 2015 without proper anti-money laundering information.
- Bank employees in Estonia conspired with customers to shield the true nature of their transactions, including by using shell companies that obscured actual ownership of funds.
- Despite being aware of potential wrongdoing, Danske Bank executives chose to ignore the issue and provide false information about customer risk profiles.
Plea Agreement
As part of the plea agreement, Danske Bank has agreed to:
- Plead guilty to one count of conspiracy to commit bank fraud.
- Forfeit over $2 billion.
- The Justice Department will credit the bank approximately $850 million towards settling other claims with the SEC and Danish authorities.
SEC Settlement
The SEC announced a separate settlement with Danske Bank, requiring the bank to pay around $413 million.
Response from Authorities
Deputy Attorney General Lisa Monaco hailed the move, saying:
“Today’s guilty plea by Danske Bank demonstrates that we will fiercely guard the integrity of the US financial system from tainted foreign money - Russian or otherwise.”
The move sends a clear message that banks using the US financial system must comply with US laws, and failure to do so can result in severe penalties.