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US: Danish Danske bank pleads guilty in fraud case

December 13, 2022

The US has been investigating the bank's conduct in regards to accusations it has granted high-risk foreign creditors, including Russians, access to US banks.

https://p.dw.com/p/4Kt23
View of the Danske Bank building in Copenhagen. Denmark, Tuesday, November 13, 2018
The bank came to the center of a scandal some five years ago over allowing high-risk customers access to US banks via its Estonia branchImage: Danil Shamkin/NurPhoto/picture alliance

The Danish Danske bank pleaded guilty to bank fraud on Tuesday in a lawsuit filed in the US over the bank's activities in the country, according to the US Justice Department.

Denmark's largest bank also agreed to forfeit $2 billion (€1.88 billion) after it admitted defrauding American banks between 2008 and 2016 by allowing, through its Estonia branch, access to US banks for high-risk customers who were neither Estonian nor residents of Estonia, including some in Russia.

Suspicious transactions worth some €200 billion ($212 billion) were made during that period from the accounts of 15,000 non-resident clients, according to a 2018 internal report.

The bank said it was unable to determine where the money came from, noting that some 23% of incoming funds were received from Russia.

Danske Bank chief executive Thomas Borgen resigned shortly before the report was published.

What settlement did the bank agree to?

In parallel to the criminal plea, the Danske Bank also settled on Tuesday a civil investigation with the US Securities and Exchange Commission.

The US Justice Department also plans to credit the bank $850 million (€800 million) to fund the resolution of other separate criminal and civil claims with the SEC and the Danish authorities, it said.

The Latvian branch of the Danske Bank in Riga, Latvia.
Prosecutors accused the bank's Estonia office of luring clients by promises of large transfers with little oversightImage: Edijs Palens/Xinhua/picture alliance

Prosecutors accused the bank's Estonia branch of luring clients by promises of large transfers with little oversight.

The Justice Department added that the bank's employees also concealed the nature of the illicit transactions by utilizing shell companies to hide the funds' ownership.

Global financial scandals concerning Russian assets have come under increased scrutiny since the country invaded Ukraine in February and was slammed heavy sanctions as a result.

rmt/msh (AFP, Reuters)