Danske Bank has pleaded guilty to one count of conspiracy to commit bank fraud and agreed to forfeit $2.059 billion, the U.S. Justice Department announced. The plea closes out a long investigation into illicit payments from high-risk clients in Russia and elsewhere, which moved through bank branches in several countries, including Britain, Denmark and Estonia.
Court documents say that from 2008 to 2016 the bank ran a business line at its Estonian branch, Danske Bank Estonia, serving non-resident customers. Prosecutors call it the NRP. Customers were drawn in with a promise that they could move large sums through the branch with little, if any, oversight. Branch employees worked with those customers to hide what the transactions really were, partly through shell companies that masked who owned the money.
The U.S. dimension is what gave American prosecutors jurisdiction. Danske Bank Estonia processed $160 billion through U.S. banks for NRP customers, who needed dollar accounts to do business. To open and keep those accounts, the American banks asked Danske for details about its anti-money laundering controls, transaction monitoring and customers. The Justice Department says Danske knew those banks expected honest and complete answers, and knew they would not have kept the accounts without them. Prosecutors also said the bank was aware that the Estonian branch’s anti-money laundering program fell short of its own standards.
Under the plea agreement, Danske will also reach separate criminal or civil resolutions with domestic and foreign authorities. The department will credit approximately $850 million of what the bank pays to the SEC and Danish authorities.
Assistant Attorney General Kenneth A. Polite, Jr. of the Criminal Division 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.”
FBI Deputy Director Paul Abbate said the plea “should serve as a stark warning to others that we will uncover the truth and deliver accountability.” The FBI, he added, will work with international partners to investigate any institution, wherever it is based, that manipulates U.S. financial systems to enable money laundering.
Sources
Sources
- Office of Public Affairs | Danske Bank Pleads Guilty to Fraud on…
- Danske Bank pleads guilty to resolve Estonia money-laundering…
