The Estonian branch of Danske Bank closed several accounts in 2013 after very large sums had passed through the bank as part of a large-scale money laundering scheme. A more recent report based on statements of a whistleblower now confirms that the bank completely failed to notice the suspicious payments.
The Organized Crime and Corruption Reporting Project (OCCRP) quoted a financial investigator in its summary of the report on Monday, who maintains that Danske Bank Estonia's failure in this case was spectacular.
"The activity in the account was in every way indicative of money laundering – many large transactions and all of them done in one or two days – money did not linger," L Burke Files explained.
Danske failed to ascertain who controlled one of the companies involved, Lantana Trade LLP. The company falsely reported to the UK Companies House in 2013 that it had no active business, while in fact enormous sums passed through its Danske accounts every day.
The bank only took action after the payments were made, launching an internal investigation. They looked into the ownership of Lantana. It quickly became clear that the company had been involved with several Russian banks that had been closed down in recent years, the OCCRP wrote in its summary.
One of those banks, Promsberbank, lost its license in 2015, at around the same time Lantana was liquidated. One of the bank's board members was Igor Putin, a cousin of Russian President Vladimir Putin.
Putin was a board member of the Russian Land Bank as well, which was implicated in the so-called Russian Laundromat, a criminal scheme that moved €20.8 billion out of the country through 112 bank accounts, involving Russian security service FSB as well as accomplices in other countries' top political and business circles.
Among Promsberbank's shareholders was Alexander Grigoriev, a businessman with ties to the FSB who was arrested in 2015. Another was Alexei Kulikov, arrested in 2016 for large-scale fraud.
All three were also linked to another criminal scheme that they ran at Deutsche Bank in Moscow, where they ran a mirror trading circle that allowed selected Russian clients to convert currency.
The people at Danske tasked with looking into the case were threatened and intimidated, with people in Tallinn receiving threats that they shouldn't walk home alone at night. Soon after, the Estonian branch of the bank closed Lantana's accounts as well as those of 20 other businesses connected with the company.
According to the OCCRP, the bank is still looking into the case and so far is saying that on the basis of what they know now, they should have reacted faster. But according to Files, the actual situation is far worse: someone chose not to look or investigate.
The OCCRP is one of two recipients of the report, the other one being British daily The Guardian.
Financial Supervision Authority may launch investigation
The Estonian Financial Supervision Authority suspects the Estonian branch of Danske Bank of misleading the authority and is currently deliberating launching an investigation into the branch's activity in connection with money laundering.
The Financial Supervision Authority announced that it conducted inspections at the Estonian branch of Danske Bank in 2014, during which the authority identified extensive, long-term and systematic violations of norms concerning the blocking of money laundering. The authority also determined that Danske had not sufficiently analyzed its client, Lantana Trade LLP.
During the aforementioned investigation, Danske's Estonian branch did not provide proof of there being an internal analysis in which suspicions aout Lantana Trade LLP's real beneficiary or corresponding businesses were detected or presented. Among other things, the complaint filed with the bank by the supervision authority involved its inactivity concerning the aforementioned company.
The possible misleading of a financial supervision authority in supervision proceedings is a serious violation if Danske Bank itself had additional information in question about its customer which was not presented during the inspection on site. The Financial Supervision Authority is considering investigating whether this was possibly the case.
Financial Supervision Authority spokesperson Piret Lakson said that the investigation is not public and the authority will not provide more detailed comments on whether and when the investigation will be launched.
Follow this link to get to the OCCRP's summary of the report.
Editor: Dario Cavegn, Aili Vahtla
Source: Organized Crime and Corruption Reporting Project (OCCRP), BNS