Danke Bank pleads guilty to fraud in a multi-billion dollar scheme to gain access to US banks

by Ana Lopez

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Danske Bank, a Denmark-based global financial institution, pleaded guilty earlier this week and will forfeit $2 billion to settle a federal investigation into its fraud against US banks.

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According to an press release of the Department of Justice (DOJ), Danske Bank defrauded US banks by providing false information about customers of its Estonian branch and conducting its anti-money laundering checks. This allowed “high-risk clients”, including Russians, to access the US financial system.

In the press release, Deputy Attorney General Lisa O. Monaco said the plea and the multibillion-dollar fine “demonstrate that the Justice Department will fiercely guard the integrity of the U.S. financial system against tainted foreign money — Russian or otherwise.”

Monaco’s statement continued: “Whether you are a US or foreign bank, if you use the US financial system you must comply with our laws. We expect companies to invest in robust compliance programs – including at newly acquired or distant subsidiaries – and to act and admit wrongdoing when it arises, failing to do so could be a one-way ticket to a multi-billion dollar guilty plea.

According to the DOJ, Danske Bank knowingly allowed billions of dollars to be transferred from its Estonian facility to accounts in the US and elsewhere over an eight-year period. But Danske never obtained adequate anti-money laundering information on the accounts in question. The Estonian branch, prosecutors say, processed as much as $160 billion in that period.

Here’s more from the DOJ:

…Danske Bank Estonia employees colluded with NRP clients to conceal the true nature of their transactions, including by using shell companies that concealed the actual ownership of the funds. Access to the US financial system through US banks was critical to Danske Bank and its NRP clients, who relied on access to US banks to process US dollar transactions. Danske Bank Estonia processed $160 billion through US banks on behalf of the NRP.

That’s not all. The U.S. Securities and Exchange Commission (SEC) also announced a settlement with Danske Bank in another proceeding. In that settlement, Danske will pay $413 million. According to the press release, the FBI is still investigating the matter.

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