Danske Bank A/S admitted to fraud and agreed to forfeit $2 billion to end a long-running U.S. probe into money laundering at its Estonia branch, an embarrassing episode that led to the ouster of top management and pushed thousands of customers to leave.
The company pleaded guilty Tuesday to conspiring to commit bank fraud and admitted providing banking services to suspicious customers — including some in Russia — through its Estonian branch despite knowing there was a risk of money laundering, the US Justice Department said in a statement.
"For years, Danske Bank lied and deceived US banks to pump billions of dollars of suspicious and criminal funds through the U.S. financial system," Manhattan U.S. Attorney Damian Williams said in a statement. The largest bank in Denmark "deliberately disregarded U.S. law" and "facilitated the laundering of criminal and suspicious proceeds" through the U.S. financial system, he said.
The scheme was unveiled when an overlooked whistle-blower who worked in the Estonian branch contacted Danish media and revealed that the bank had ignored signs indicating "potentially criminal transactions" to move billions of dollars to the West from 2008 to 2017, including from Russian customers, the Justice Department said. Danske Bank said in September 2018 that it failed to adequately screen 200 billion euros ($212 billion) in nonresident cash.
The amount of the fine matches the provisions Danske has set aside to cover the case, most recently in October, when it said it was closing in on agreeing to a $2 billion fine. The Copenhagen-based lender said it will pay the U.S. Justice Department $1.21 billion, the U.S. Securities and Exchange Commission $179 million and the Danish Special Crime Unit 4.75 billion kroner ($678 million).
"The resolutions mark the end of the investigations by U.S. and Danish authorities," Martin Blessing, Danske's chairman, said in a statement. "We have cooperated since we were approached by the authorities and accept the terms of the resolutions."
— With assistance from Christian Wienberg and Chris Strohm.
