An internal report published by Danske Bank on a Wednesday in September 2018 found that €200 billion of transactions between 2007 and 2015 were suspicious. They ran through the accounts of 15,000 non-resident clients, nearly all handled by the bank’s branch in Estonia.
The bank said it could not establish where the money came from. About 23 percent of the incoming funds arrived from Russia. Chief executive Thomas Borgen resigned shortly before the report came out.
“The biggest scandal we have now in Europe”
EU Justice Commissioner Vera Jourova used those words the next day when asked about the €200 billion ($235 billion) at Denmark’s largest lender. She said she would meet the finance ministers of Denmark, Estonia and Finland in October to find out “where the main errors happened,” and to ask whether supervisors had also failed.
Denmark’s Financial Supervisory Authority moved the same day. It had closed its investigation into the bank in May. Now it was reopening it. “When new information emerges, we have to look at it and assess if there is need to take action,” FSA chief Jesper Berg told the broadcaster TV2.
Danske already faced a criminal inquiry at home. Danish state prosecutors said in August that they were looking into serious economic and international crime tied to alleged money laundering.
The scandal landed hard in a country that ranked second in Transparency International’s 2017 corruption perceptions index. Prime Minister Lars Lokke Rasmussen, speaking at an informal EU leaders’ summit in Salzburg, said that “the fact that Denmark has been at the center of money laundering of this size is frankly quite horrible.”
Heavy fines from European regulators were possible, DW reported, and the fallout could grow if US authorities took interest. Danske said none of the suspicious accounts broke US sanctions rules.
What investigators later found
A later account by the compliance firm Sumsub described how the scheme worked. Danske’s internal investigation covered about 15,000 customers and 9.5 million payments totalling around €200 billion. Money came through shell companies that hid its real owners, mostly from Russia and former Soviet states. Branch employees conspired with customers to disguise who owned the transactions, and $160 billion of the flow was processed through US banks.
Warnings had come from internal audits, regulators and a whistleblower. Even so, Danske misrepresented the branch’s customers and its anti-money-laundering controls to American banks.
The US case ended in 2022, when Danske pleaded guilty to conspiracy to commit bank fraud. Coordinated resolutions with US and Danish authorities totalled approximately $2.06 billion.
Sources
- Danske Bank hit by 'biggest scandal in Europe'
- Inside the Biggest Money Laundering Scandals of the Decade
