Financial Crime World

Estonian Prosecutor General Closes Money Laundering Investigation Against Swedbank Executives

Prosecutor General Announces Closure of Criminal Investigation

  • Estonian Prosecutor General Andres Parmas holds a press conference to announce the closure of a criminal investigation against Swedbank Estonia and its former executives.
  • Investigated individuals include Priit Perens, Robert Kitt, Ulla Ilisson, Heiki Raadik, Vaiko Tammeväli, Rait Pallo, Kaie Metsla, Toomas Tuuling, and Aleksei Averson.

Suspected Activities and Insufficient Evidence

  • The State Prosecutor’s Office initiated the investigation in March 2022 due to suspected money laundering activities within Swedbank Estonia.
  • Despite finding numerous irregularities and potential money laundering activities, the prosecutor’s office was unable to obtain conclusive evidence to prove the criminal origin of the funds.

Groups Under Investigation

  • Two groups of customers were identified during the investigation for potential money laundering activities.
  • Group one was linked to crime proceeds from Ukraine, and group two was connected to an alleged fraud in Russia.

Alleged Funds and Cross-Border Cooperation

  • The Russian law enforcement authorities accused approximately €81 million ($89 million USD) of allegedly fraudulent funds of being laundered through Swedbank Estonia between 2011 and 2014.
  • International cooperation for evidence collection has not been possible since Russia’s invasion of Ukraine in 2022.

Swedbank’s Cooperation and Shortcomings

  • Swedbank Estonia claimed they had been cooperating fully with the authorities throughout the investigation.
  • The bank had breached several anti-money laundering rules during the period under investigation.
    • Concealed true beneficiaries of 74 high-risk clients.
    • Facilitated repeated intra-bank transfers to conceal the true origin of funds.
    • Allowed conversion and transfer of funds from alleged predicate offense without proper documentation.
    • Provided misleading information to corresponding banks and the Financial Intelligence Unit.

Criminal Proceedings Closure and Bank’s Response

  • The lack of evidence regarding the criminal origin of the funds led to the closure of the criminal proceedings.
  • Swedbank released a statement confirming the end of the proceedings and their full cooperation with the authorities throughout the investigation.

Concluding Remarks

  • Tomas Hedberg, the head of Swedbank’s special task force, commented that they could finally put another investigation of historical shortcomings behind them.
  • Under the Estonian legal system, breaching anti-money laundering requirements alone does not constitute a criminal offense. Instead, the commission of the predicate offense and the origin of the funds from that offense are necessary for a money laundering prosecution.