Danske Bank pleaded guilty to one count of conspiracy to commit bank fraud, ending a U.S. criminal case over billions of dollars in illicit payments that passed through its Estonian branch. The plea agreement requires the bank to forfeit $2.059 billion.
The Justice Department said the money came from high-risk clients in Russia and elsewhere and moved through bank branches in several countries, among them Britain, Denmark and Estonia. Between 2008 and 2016, according to admissions and court documents, Danske Bank Estonia ran a lucrative line of business serving non-resident customers, known as the NRP.
How the scheme worked
The branch attracted those customers by promising they could move large sums with little, if any, oversight. Its employees conspired with them to hide what the transactions really were, in part through shell companies that obscured who owned the funds.
U.S. banks were central to the arrangement. NRP customers needed them to process U.S. dollar transactions, and Danske Bank Estonia pushed $160 billion through U.S. banks on their behalf. Those banks required information about anti-money laundering controls, transaction monitoring and customers before they would open or keep accounts. Danske Bank knew they expected honest, complete and accurate answers, and knew they would not hold dollar accounts for the Estonian branch without them. Prosecutors said the bank was also aware that the branch’s anti-money laundering program fell short of its own standards.
What officials said
“Danske Bank lied to U.S. banks about its deficient anti-money laundering systems, inadequate transaction monitoring capabilities, and its high-risk, offshore customer base in order to gain unlawful access to the U.S. financial system,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division.
FBI Deputy Director Paul Abbate called the plea “a stark warning to others that we will uncover the truth and deliver accountability.” The FBI, he said, “will vigorously investigate any institution, wherever based, which is engaged in manipulating U.S. financial systems to enable money laundering.”
Other resolutions
The U.S. deal is not the only one. Danske Bank will enter separate criminal or civil resolutions with domestic and foreign authorities. The Justice Department will credit roughly $850 million in payments the bank makes to the SEC and Danish authorities.
Sources
Sources
- Office of Public Affairs | Danske Bank Pleads Guilty to Fraud on…
- Danske Bank money laundering scandal – Wikipedia
