COPENHAGEN, Denmark (AP) — Denmark’s largest bank “deliberately ignored” a warning about a massive money laundering scheme through its Estonian branch, a former employee and whistleblower said Monday.
Howard Wilkinson, a British citizen, worked as a trader for Danske Bank’s Estonia branch from 2007 to 2014. During that time, he says he wrote four whistleblower reports about the dirty money, some of which was coming from Russia.
“Sometimes the alarm goes off when there is a fire in the basement, which no one sees,” he told hearing at Denmark’s Parliament on Monday. “There was a big smoke alarm that started. But (Danske Bank) tried actively to turn off the smoke alarm.”
He also said Denmark’ financial regulator only reacted nine years after he first reported something was wrong.
In September, Danske Bank admitted that some 200 billion euros ($235 billion) had been flowing through its accounts from 2007 to 2015, after which its CEO resigned. The findings prompted Denmark’s financial regulator to reopen a probe and Danish prosecutors have started a criminal investigation.
Jesper Berg, the head of Denmark’s Financial Supervisory Authority, admitted it wasn’t until Denmark’s Berlingske daily in February cited an internal Danske Bank report that it launched an investigation.
“When you look at all the information today, one may wonder why one didn’t do more,” Berg said. He believed Danske Bank’s Estonian branch had some kind of unit “that did everything to hide these transactions.”
“Therefore, it was hard to spot, also for our Estonian counterparts,” he said. Berg said “Russia is the biggest risk factor for money laundering in our part of the world. And the Baltic countries are particularly vulnerable.”
In the report leaked to Berlingske, Wilkinson indicated Danske Bank’s management was aware of what was going on and that family members of Russian President Vladimir Putin and Russia’s spy agency were using its Estonian branch for money laundering.
Wilkinson, who has signed a nondisclosure agreement with his former employer, remained cautious, saying “at least 10 banks were involved” in the scheme but stopped short of naming them. He described them as two “large” U.S. banks and subsidiaries of U.S., Russian and European banks.
Danske Bank’s interim chief executive, Jesper Nielsen, said “the bank had customers we should not have had.” Namely 15,000 customers in the Estonian branch were suspicious, he said, the bulk being from Russia, but also from Britain and the Virgin Islands.
“We did not know what we were dealing with,” Nielsen said.
Prior to his Parliament appearance, Wilkinson’s attorney Stephen M. Kohn said he did it “despite the threat of civil and criminal prosecution under bank secrecy laws and other rules that restrict whistleblower rights in Europe.”
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