Banking Industry Whistleblower Stories in Sweden: Ex-Swedbank CEO Charged with Fraud Over Money-Laundering Scandal

A Three-Year-Old Money-Laundering Scandal Continues to Haunt Sweden’s Banking Sector

A money-laundering scandal that has been ongoing for three years is still casting a dark shadow over Sweden’s banking sector. The former CEO of Swedbank, one of Sweden’s big three lenders, has been charged with fraud relating to statements she made in 2018 and 2019 about anti-money-laundering controls at her bank.

Lax Anti-Money-Laundering Regime

As later investigations by Swedish authorities and lawyers appointed by Swedbank itself showed, the bank’s anti-money-laundering regime had been too lax. This allowed money to flow from countries including Russia into Europe via Estonia without adequate checks. The former CEO of the bank, Birgitte Bonnesen, has denied the charges.

Charges Against Bonnesen

Sweden’s Economic Crime Authority said in a statement accompanying its decision to prosecute Bonnesen that comments she made in 2018 and 2019 broke Swedish law. “The former CEO of the bank intentionally or through gross negligence … disseminated misleading information about the bank’s measures to prevent, detect, and report suspicions of money laundering in Swedbank’s operations in Estonia,” lead prosecutor Thomas Langrot said.

Not an Isolated Incident

This is not an isolated incident. The charging of Bonnesen is the latest development in a painful reckoning with years of missteps by some of the region’s largest banks in their dealings with customers in the Baltic states. Denmark’s Danske Bank, for example, was also embroiled in a money-laundering scandal after it became clear that millions of euros had flowed through its Estonian branch.

European Commission’s Strategy to Combat Money Laundering

The European Commission has launched a strategy to combat money laundering, including a proposal to create a new EU authority to combat the crime. The aim of this package is to improve the detection of suspicious transactions and activities, and to close loopholes used by criminals to launder illicit proceeds or finance terrorist activities through the financial system.

Evidence of a Cover-Up

Tuesday’s charges against Bonnesen showed that the job of investigating the missteps of the past is still not complete. Langrot said the Swedish Economic Crime Authority’s preliminary investigation had shown that there was a “clear strategy” from Bonnesen and others to stop information about problems with Swedbank’s anti-money-laundering processes in Estonia from reaching the market.

The Case Ahead

The case is set to be heard in court, but no trial date has been given.