Before Thomas Borgen was CEO of Danske Bank, he ran the bank's Estonian branch from 2009-2013, presiding over years of neglect of basic, commonsense money-laundering controls, allowing more than €200B to flow through the bank from well-known financial secrecy jurisdictions like the British Virgin Islands, as well as Russia.
The money was moved on behalf of corporations with the reddest of red flags: 3500 of them were registered to the same private mailbox company, 1700 of them filed obviously fake paperwork, 500 of them had previous money-laundering activity on their records. Internal whistleblowers were also ignored by bank management.
Borgen has stepped down.
The largest number of shell companies were based in the UK, whose complicity in money laundering is epidemic.
Danske Bank is donating its profits from the operation to a charity that fights international financial crime. It is facing an estimated €6B in fines.
Danske said about €200bn of payments had flowed through its Estonian branch from non-resident customers — from countries such as Russia, the UK and the British Virgin Islands — but that it could not yet estimate how many of these were suspicious.
An analysis of 6,200 of the riskiest customers — out of 15,000 non-resident clients in total — showed that the "vast majority have been found to be suspicious".
Thomas Borgen, who was in charge of international banking including Estonia from 2009 to 2012 and has been chief executive since 2013, faced allegations he ignored warning signs of trouble.
Danske Bank chief Thomas Borgen quits over money laundering scandal [Richard Milne and Caroline Binham/Financial Times]
Danske Bank: 3,500 obvious mailbox companies at shared addresses, 1700 filing fake accounts, 500 with moneylaundering "form". Not clear how many shellcos are UK, but UK companies were the single biggest contributor to the problem sector from 2010 onwards. pic.twitter.com/mo2dWt3vfZ
— Richard Smith (@ncsmiff) September 19, 2018
(via Naked Capitalism)