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article imageDanske Bank says US probing money laundering claims

By Camille BAS-WOHLERT (AFP)     Oct 4, 2018 in World

Danske Bank said Thursday it was being investigated by the US Department of Justice over possible money laundering related to more than $200 billion transferred through the Danish lender's Estonian branch.

Denmark's largest lender is at the centre of a storm of controversy and several inquiries after it said "a large part" of transactions totalling 200 billion euros ($235 billion) at its Estonian branch between 2007 and 2015 were "suspicious".

"Danske Bank has also now received requests for information from the US Department of Justice (DOJ) in connection with a criminal investigation relating to the bank's Estonian branch conducted by the DOJ," the bank said.

"We are cooperating with the authorities investigating us as a result of the case. However, it is too early to speculate on any outcome of the investigations," interim CEO Jesper Nielsen said in a statement.

Described by commentators as "the biggest money laundering scandal in Europe," the case shook the Nordic nation's banking sector and forced Danske's chief executive to resign.

Danske Bank -- whose shares were down by almost four percent on the Copenhagen Stock Exchange in afternoon trading on Thursday -- might face US fines, the Danish business daily Borsen said.

"The US authorities have historically slapped heavy fines related to these types of cases so the likelihood of a fine has increased significantly," Mikkel Emil Jensen, analyst at the Danish Sydbank, told AFP.

The announcement comes nearly two weeks after the European Commission called on the European Banking Authority (EBA), a regulatory authority, to probe what happened to the monitoring of Danske's Estonian office.

Britain's National Crime Agency is also probing the activities of UK-based companies with alleged links to the scandal.

- Money from Russia -

In early August, the Danish state prosecutor's office for serious economic and international crime said it too was probing allegations that money, mostly from Russia and other former Soviet republics, which had flowed through the Estonian branch had been laundered.

The allegations are linked to a fraud case exposed by Russian lawyer Sergei Magnitsky, who was jailed after he revealed the involvement of high-ranking Russian officials in stealing massive tax payments from several companies, including the investment fund Hermitage Capital.

Magnitsky died in 2009 aged 37 after being held in a Russian jail for a year, where he was denied medical care.

The whistleblower who unveiled alleged money laundering at Danske Bank's Estonian branch came forward last month: British national Howard Wilkinson, who headed the lender's market business in the Baltics between 2007 and 2014.

He described how the Estonian branch handled customers associated with top Russian politicians and companies based in Denmark, according to Danish daily Berlingske, which broke the story last year.

The bank was warned for the first time in 2007, but only began to react in 2013, when Wilkinson wrote a report to the management, the paper said.

Since early this year, Danske Bank shares have lost roughly one third of their value.

More about Denmark, US, Banking, Investigation, Fraud
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