Financial Crime World

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Denmark’s Danske Bank Pleads Guilty to Money Laundering Scheme, Forfeits $2 Billion

In a major blow to Denmark’s financial reputation, Danske Bank A/S, the country’s largest bank, has pleaded guilty to a massive money laundering scheme and agreed to forfeit a staggering $2 billion.

The Guilty Plea

According to court documents, Danske Bank conspired to commit bank fraud by lying to US banks about its anti-money laundering controls and transaction monitoring capabilities. The bank also failed to disclose suspicious transactions involving high-risk customers from Russia and other countries.

The Scheme

Between 2008 and 2016, Danske Bank’s Estonian branch processed a whopping $160 billion in transactions through US banks for non-resident customers known as the NRP. However, the bank’s employees conspired with these customers to shield the true nature of their transactions, including using shell companies to obscure actual ownership of funds.

Investigation Findings

The investigation revealed that Danske Bank knew about the suspicious and potentially criminal transactions but chose to lie to US banks about its compliance program and risk profile. The bank’s failures were evident as early as February 2014, when internal audits and regulatory information raised red flags about NRP customers’ activities.

Cooperation and Remediation

The guilty plea comes after a lengthy investigation by the FBI and the Department of Justice, which found that Danske Bank had failed to cooperate fully with the probe. However, in a bid to mitigate penalties, the bank provided substantial cooperation and remediation efforts, including:

  • Enhancing its compliance program
  • Agreeing to the appointment of an independent expert

SEC Settlement

The SEC has also reached a separate settlement with Danske Bank, requiring the bank to pay approximately $413 million, including a civil monetary penalty of $178.6 million.

Prosecution and Investigation Team

The case is being prosecuted by:

  • Trial attorneys Margaret A. Moeser and Patrick B. Gushue of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS)
  • Assistant U.S. Attorneys Tara M. La Morte and Sheb Swett for the Southern District of New York
  • The Justice Department’s Office of International Affairs provided critical assistance in the case

Impact on Global Financial System

The MLARS’ Bank Integrity Unit, which investigated the case, has been instrumental in combating financial crimes and maintaining the integrity of the global financial system.