Danske Bank pleads guilty to resolve Estonia money-laundering investigation
Danske Bank, Denmark's largest bank, pleaded guilty to bank fraud in Estonia and agreed to forfeit $2 billion as part of the settlement, the U.S. Department of Justice announced on Tuesday.
The settlement comes after a long-running investigation into billions of dollars in illicit payments that flowed from high-risk clients in Russia and elsewhere from bank branches in multiple countries including Great Britain, Denmark and Estonia, it said in a statement.
According to admissions and court documents, between 2008 and 2016, the bank offered banking services through its branch in Estonia, Danske Bank Estonia.
The branch had a lucrative business line serving non-resident customers known as the NRP, the Justice Department said.
It attracted NRP customers by ensuring that they could transfer large amounts of money through the branch with little, if any, oversight.
Its employees conspired with NRP customers to shield the true nature of their transactions, including by using shell companies that obscured actual ownership of the funds, the agency said.
Access to the U.S. financial system via U.S. banks was critical to Danske Bank and its NRP customers, who relied on access to U.S. banks to process U.S. dollar transactions. Danske Bank Estonia processed $160 billion through U.S. banks on behalf of the NRP.
U.S. banks required Danske Bank and Danske Bank Estonia to provide information to open and maintain accounts, including information related to anti-money laundering (AML) controls, transaction monitoring, and customers.
Danske Bank knew that the U.S. banks expected honest, complete, and accurate responses and that the U.S. banks would not maintain, or open, U.S. dollar accounts for Danske Bank Estonia without the required information.
The bank was also aware that its Estonian branch's anti-money laundering program was not up to its standards, prosecutors said.
Danske Bank pleaded guilty to one count of conspiracy to commit bank fraud. Under the terms of the plea agreement, the company has agreed to criminal forfeiture of $2.059 billion.
It will also enter into separate criminal or civil resolutions with domestic and foreign authorities and the department will credit approximately $850 million in payments the bank makes to the SEC and the Danish authorities.
"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," said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department's Criminal Division.
FBI: Guilty plea should be warning for others
"Danske Bank's guilty plea for defrauding U.S. banks should serve as a stark warning to others that we will uncover the truth and deliver accountability," said FBI Deputy Director Paul Abbate.
"The FBI, working with international partners, will vigorously investigate any institution, wherever based, which is engaged in manipulating U.S. financial systems to enable money laundering. The FBI remains committed to safeguarding our national and economic security from threats which could cause harm to American institutions."
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Editor: Helen Wright