The continuing bank scandal that hit Deustche Bank has now
expanded to two more European banks. Austria Raiffeisen Bank International
Estonian branch and Denmark’s Danske Bank are under suspicion for allegedly
laundering dirty money from former Soviet Union states. A Kremlin critic filed
a case requesting Vienna lawyers to look into the flow of $967 million from the
Danske Bank to Raiffeisen and other local banks by Russian syndicates.
As much as $230bn of questionable funds from Danske bank are
channeled through the Raiffeisen Bank whose officials chose to ignore and not
report it to the regulators. A case of gross negligence or acquiescence was
filed against the bank. As a result, shares began to drop to 12% on March. A
Raiffeisen bank spokesman said it is conducting an internal investigation.
All of this was disclosed by Bill Browder, an
anti-money-laundering activist and investor, who sent evidence to Vienna Public
Prosecutor’s Office. It is construed that Austrian financial institutions have
for years have turned the other way when it comes to the Russian underworld
laundering dirty money outside their countries.
Mr. Browder, who is in charge of Hermitage Capital
Management, said several of the companies that send the illegal money are just
dummy corporations or do not have enough capital. These are found in obscure
jurisdictions like Belize, the Seychelles, the British Virgin Islands or
The people who receive these funds have no permanent
business address there and usually purchase expensive houses, yachts and even
chartering large jets.
It is just one of the
numerous European banks that is caught in the web of deception and by-passing
bank laws to hide illegal money of criminal organizations from government tax
Some of the banks involved are the Helsinki-based Nordea and
Sweden’s Swedbank. The scheme called the “Troika Laundromat” has cost the banks
to lose €20bn ($22.6bn) in stock prices in the past six months.
Criminal cases were filed by Mr. Browder against Nordea in
all four Nordic countries alleging it processed around €700m of illicit money
from the former Russian states. Prosecutors from those countries are now
investigating the case.
A large-scale money laundry scandal such as this has
Deutsche Bank, Bank of America and JPMorgan Chase being investigated. They are under
scrutiny for transferring the dirty money from Danske.