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Danske Bank Reveals True Extent Of Money Laundering Scandal Worth €200bn

Danske Bank Reveals True Extent Of Money Laundering Scandal Worth €200bn
The outgoing chief of Denmark’s biggest bank has conceded that most of the funds out of the €200bn that passed through its Estonian branch were money that had been laundered in countries like Russia, the UK and the British Virgin Islands and were being pumped out of those countries.
“It is clear that Danske Bank has failed to live up to its responsibility in the case of possible money laundering in Estonia. I deeply regret this,” said Thomas Borgenm, the outgoing head of the bank in a statement while resigning.  
An independent investigation by the bank authorities has revealed “a series of major deficiencies” with respect to the implementation of the controlling mechanisms for prevention of money laundering, the bank said. The bank estimated that about almost half o the total 15000 customers of the bank in Estonia had suspicious activities.
“We have gone through 6,200 customers starting with the customers hitting most risk indicators first,” the bank said. “Almost all of these customers have been reported to the authorities.”
The bank investigators further found that background and security checks which had ot be conducted by the banks on their customers were compromised with the active participation and collusion of several dozen of the bank employees. The Estonian police had been informed by the bank about some of its current and former employees.
The scandal was a “a deplorable matter”, said the bank’s chairman, Ole Andersen. “The findings of the investigations point to some very unacceptable and unpleasant matters at our Estonian branch, and they also point to the fact that a number of controls at the group level were inadequate in relation to Estonia,” he said. “We take the task of combating financial crime and money laundering very seriously, and we do and will do everything it takes to ensure that we never find ourselves in the same situation again.”
The actual amount of and scale of the scandal was revealed by the bank only this Wednesday after facing increasing political pressure to come clean on the subject and after an investigation in the matter was launched by the US law enforcement agencies this week.
Concerns expressed by other executives over increasing Russian transactions in Estonia were dismissed earlier by Borgen, who was at a point in time responsible for the international operations of the bank including those in Estoinia, prior to him being elevated to the post of CEO. With respect to an investigation conducted in 2010, Borgen had said that he had not “come across anything that could give rise to concern”.
The Danske’s board was fully apprised of the situation about the condition in the Estonian branch under the leadership of Borgen, found an independent report by Danish law firm Bruun & Hjejle on Wednesday.
Accusations that Borgen had violated the law were not found conclusively in the law firm report, he said on Wednesday. “Even though the investigation conducted by the external law firm concludes that I have lived up to my legal obligations, I believe that it is best for all parties that I resign,” he said.

Christopher J. Mitchell

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