More than five years after the money laundering scandal surrounding Danske Bank became known, the criminal investigation is progressing in Estonia. A criminal trial against six former employees of the bank began this week in a district court in the capital Tallinn. The defendants are said to have laundered billions of dollars through Danske Bank accounts in the Estonian branch for years.
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Senior Public Prosecutor Maria Entsik read out the indictment against the five men and one woman in Tallinn. The defendants are accused of laundering at least 2007.2015 billion dollars and 1 million euros between 6 and 6, apparently concealing the owners of the funds of criminal origin. Entsik spoke of "professional money laundering" in the indictment.
The defendants, who previously worked together as client managers in Danske Bank's international banking department, had repeatedly asserted their innocence before the start of the trial and denied the allegations. If convicted, the suspects face long prison sentences. The Criminal Chamber of the Court has set hearing dates until October 2024.
According to the Prosecutor General's Office in Tallinn, the group is said to have set up its "own money laundering business" within the Estonian branch of Danske Bank, which they concealed from the other departments. In particular, they are said to have helped customers disguise payment flows on their accounts. As can be seen from the indictment, it is said to have been primarily about concealing electronic traces of bank transfers and transit transactions to foreign accounts. Many transfers between natural persons were made without economic content for the sole purpose of concealing the trace of the owner and the origin of the funds, the prosecutors claim.
Crimes in other countries
The trial was preceded by years of investigations by the Estonian authorities, and in many cases they had also been dependent on the help of other states – because, as under German law, the criminal offence of money laundering also requires a punishable predicate offence in Estonia. The Prosecutor General's Office had already reported to journalists about this comprehensive work a few months ago. In the preliminary proceedings, information on various predicate offences had been collected in international cooperation, said Senior Public Prosecutor Entsik this spring. The indictment includes eight predicate offenses committed in Russia, Azerbaijan, Georgia, the United States, Switzerland and Iran.
Danske Bank's money laundering scandal came to light in 2018. Suspicious transactions amounting to 200 billion euros were processed through the Estonian branch. In September 2018, the then CEO Thomas Borgen had to resign from office. His successor, Jesper Nielsen, resigned in June 2019. He was responsible for an investment product for which clients had paid excessive fees.
The bank had to invest immensely in its internal control systems and in the fight against money laundering, at times the cost of administrative expenses rose by 10 percent. In addition, the European Banking Authority (EBA) launched a comprehensive investigation.