Dirty Money Scheme Lands Danske Bank as 2018’s Most Corrupt

Jan 24, 2019

A non-profit media organization name Danske Bank the 2018 Actor of the Year in Organized Crime and Corruption for its €230 billion money laundering scandal.

Danske Bank nudged out 22 other contenders to nab the award bestowed by the Organized Crime and Corruption Reporting Project (OCCRP). The organization, which is comprised of investigative journalists, shines a light on individuals or institutions that have done the most to advance organized criminal activity and corruption in the world during the previous 12 months.

The award, which has been given out for the last seven years, was given to Danske Bank because the financial institution showed its role in enabling international corruption and crime. Journalists and the public nominated entities for the award.

Why OCCRP Chose Danske Bank

OCCRP selected Danske Bank, because its branch in Azerbaijan, “was the conduit for bribes, parking stolen assets, and the theft of national resources for one of the most vindictive and corrupt regimes in the world,” said Paul Radu, OCCRP co-founder and judge.

Estonia has arrested 10 ex-employees of that local branch of Danske Bank, accusing them of laundering more €200 billion from non-residents. The arrests cap an international investigation led by authorities in Denmark, Estonia, Britain, and the United States that continue to investigate payments that were made between 2007 and 2015 at this Estonian branch of Denmark’s largest bank. In light of the arrests, France also started a criminal investigation into payments that were handled at Danske Bank.

As the investigation continues, it has been reported that the scandal involves more than 30 currencies and other companies from Cyprus, the British Virgin Islands, and the Seychelles.

Additional Background on Danske Bank

In January, the Glen Falls, New York-based pension fund, the Plumbers & Steamfitters Local 773 Pension Fund, filed a lawsuit in the U.S. District Court in Manhattan against Danske Bank and four former top executives. The pension fund is seeking class-action status, as well as damages for investors in Danske’s American depositary shares from Jan. 9, 2014 to Oct. 23, 2018. In the suit, it accuses the bank of defrauding investors and inflating its share price by hiding and failing to stop widespread money laundering at its Estonian branch.

In the complaint, the pension funds accuses Danske Bank of being “intentionally less than forthcoming” with Danish regulators even after the financial institution was notified of suspected money laundering.

The bank’s former Chief Executive, Thomas Borgen, former chairman, Ole Andersen, and two former chief financial officers were named as defendants in the suit. Borgen resigned last September following an internal probe that uncovered about $231 billion worth of payments being made between 2007 between 2015 through its small Estonian branch and concluded that many payments appeared suspicious.

Other Contenders for OCCRP’s Award

OCCRP had 22 others that could have been named the recipient of the 2018 award. Other contenders included:

  • Saudi Arabian Crown Prince Mohammed bin Salman, who was implicated in the death and dismemberment of Washington Post columnist, Jamal Khashoggi.
  • President Donald Trump, whose presidential campaign, family business, and family business has been embroiled in scandal and investigations.

Past Award Recipients

Previous winners of the award include Russian President Vladimir Putin (2014), Philippines President Rodrigo Duterte (2017), and the Romanian Parliament (2013).

About OCCRP

OCCRP serves as an investigative reporting platform that stretches from Europe to Central Asia and across the Atlantic into Latin America. It works to advance public understanding of how organized crime and corruption affect lives.

In Conclusion

As Danske Bank’s money laundering scandal continues to unfold, as well as the extra spotlight placed on it by OCCRP, expect more organizations to review their compliance programs. Expect them to take steps to avoid the types of actions and governance issues that Danske Bank became trapped in.

Despite efforts to make the payments industry safer and more repellent to corruption, banks and providers need to work harder.

If you are a merchant looking for a provider who can set you up, so that you can accept debit and credit cards, then turn to eMerchantBroker.com (EMB). EMB works with businesses from all backgrounds, including high-risk merchants. Apply online today.

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