Danske Bank money laundering scandal: Bank faces US criminal investigation

The investigation is being
led by the US Department of Justice.
REUTERS / Jonathan Ernst

• Danske Bank reveals that it is subject to a criminal
  investigation in the United States of America over money
  laundering scandal.
• “We are co-operating with the authorities investigating
  us as a result of the case. However, it is too early to
  speculate on any outcome of the investigations,” interim CEO
  Jesper Nielsen said.
• The US Department of Justice probe centres around
  activities within Danske Bank’s Estonian branch.
• Analysts believe that the scandal could end up costing
  Danske Bank as much as $8 billion in fines, if it is found to
  have committed any wrongdoing.

Danske Bank on Thursday revealed that it is subject to a criminal
investigation in the United States of America over the Estonian
money laundering scandal which hit the bank last month.

In a statement on Thursday morning, the bank said that
investigations by US authorities are taking place both in Denmark
and Estonia, and that it has been asked by the US Department of
Justice for information about the investigations. Danske Bank is
cooperating fully with the investigations, it said.

“We are co-operating with the authorities investigating us as a
result of the case. However, it is too early to speculate on any
outcome of the investigations,” Jesper Nielsen,
who was announced as interim CEO of Danske Bank just three days
ago, said in a statement.

Danske Bank added that the investigations’ outcome, and the
timing of its completion are uncertain.

The investigation into suspicious transactions at Danske Bank’s
Estonian branch centers on so-called nonresident transactions —
effectively transactions done by people not based in Estonia but
using the bank’s facilities there.

When announcing the scale of the issues in early September,
Danske said it had identified about 10,000 customers who fit the
profile of nonresidents, with 6,200 of those fitting what the
bank called “the most risk indicators.” Of these customers,
Danske Bank said, the “vast majority have been found to be
suspicious.”

It did, however, emphasize that just because a customer had “been
found to have suspicious characteristics does not mean that there
is a basis for considering all payments in which the customer in
question was involved to be suspicious.”

As well as the initial 10,000 customers, a further 5,000
customers with nonresident characteristics have also been
identified.

In total, Danske Bank says, these 15,000 customers undertook
about 9.5 million payments, with the total value of the money
flowing about 200 billion euros, or $234 billion.

Analysts believe that
the scandal could end up costing Danske Bank as much as $8
billion in fines,if it is found to have committed any
wrongdoing.