Denmark’s Danske Bank has pleaded guilty to fraud, agreeing to a $2.1bn penalty to settle probes into money laundering facilitated through its now-closed Estonia branch.
This bank, which is the largest lender in Denmark, agreed to a settlement agreement of around $1.21bn with the US Department of Justice (DoJ) and around $178.6m under its agreement with the Securities and Exchange Commission (SEC).
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Besides, it will pay another $678m to Denmark’s Special Crime Unit.
DoJ said that the bank defrauded US lenders about the Estonia branch’s anti-money-laundering controls, and enabled high-risk customers, including from Russia, to gain access to the US financial system.
It further noted that the bank lied about the risk profile of its clients even after being aware of their potentially criminal dealings since 2014.
Justice Department Criminal Division assistant attorney general Kenneth A. Polite, Jr. 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.”
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By GlobalDataThe Copenhagen-based bank was under the scanner for nearly €200bn in suspicious transfers from its Estonian branch between 2007 and 2015.
The matter erupted in 2018, which resulted in police cases and ouster of its then chief Thomas Borgen.
Accepting the failures, Danske Bank chairman of the board of directors Martin Blessing called them unacceptable and said that the bank takes full responsibility for the lapses.
“We have learnt from our mistakes and we have taken the steps necessary to ensure that Danske Bank has robust measures in place to do everything possible to prevent these failures taking place again,” he stated.
In 2019, Danske Bank withdrew from Russia and the Baltics over the Estonia case.
This year in October, the bank booked a further provision of $1.87bn over the Estonia money laundering scandal.
