this bank scandal is of EPIC proportion! This is how Vlad keeps stealing from Russia and the world.

(Long read)

The world’s biggest money-laundering scandal had yet to be uncovered in August 2015, but management at Danske Bank were trying quietly to close down the business at the heart of it. Russian entities and others from former Soviet states had moved €200bn through the Estonian branch of Denmark’s biggest lender since 2007, roughly 10 times the size of the Baltic state’s economy.

Then executives from Deutsche Bank, which was handling much of the cross-border payments for Danske and is itself no stranger to scandal, made an astonishing claim. They told Danske the problem was getting worse. 

Despite a reduction in payments from Estonia in the previous two years, there had been an increase in the proportion of suspect cases the German lender was having to investigate from the small branch. “In [the second quarter] of 2015 alone there had been 16 cases related to such crimes as narcotics, ID stealing, etc,” state the minutes of the meeting between senior managers from both banks and seen by the Financial Times.

Deutsche later that month identified 10 Danske customers who had been involved in “suspicious behaviour”. Danske managers complained in an internal email that Deutsche was “not allowed by the FBI and DEA [Drug Enforcement Administration] to inform us about the cases with direct links to active criminal cases”.

The German bank terminated its relationship to clear US dollars for Danske out of Estonia. But it would take another three years before the story emerged of how a small branch of a mid-sized European bank became a pipeline for an enormous flow of money out of Russia, Azerbaijan and Latvia on a scale that puts other money laundering scandals in the shade.

No one comes out of it well: not Danske executives, its board nor regulators. It has cost the chief executive Thomas Borgen his job, and triggered investigations in at least six countries. And despite the bank’s own report on the scandal, published in September, much remains unknown — from the source of the money to where it ended up and just what the final damage will be to Danske and even Denmark itself.

“€200bn is of a different order than anything seen thus far,” says Graham Barrow, a UK money laundering expert who has reviewed thousands of transactions from Danske and others. “It sets an unwelcome benchmark for money laundering scandals.” 

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