Danish prosecutors have charged the former chief executive of Danske Bank over his involvement in one of the world’s largest money laundering scandals.
Thomas Borgen is the first person to be charged in relation to the scandal, which saw money laundering and suspicious transactions worth billions through Danske’s Estonian branch. As a result, Denmark’s biggest bank is currently being investigated by several countries, including the U.S., and could get hit with massive fines.
A recent report by the European Banking Authority (EBA) found that Danske ignored warnings from the Central Bank of Russia about the transactions, showing the extent of bank supervisors’ failures to catch the money laundering or stop it from happening. According to the document, Danske was warned by the Russian bank after it acquired Finland’s Sampo Bank and its Estonian business in February 2007.
In June 2007, the Russian central bank wrote a letter, saying that “‘clients of Sampo Bank permanently participate[d] in financial transactions of doubtful origin’ that were worth billions of rubles, on a monthly basis.” Yet, neither Danish or Estonian authorities did anything about the Russian warnings.
Borgen, who had been in charge of Danske Bank’s international operations, including Estonia, between 2009 and 2012, resigned in September. Reuters reported that prosecutors raided Borgen’s home on March 12. In addition, unnamed sources said the Danish prosecutors also charged at least two other former Danske managers in relation to the case. However, no names were revealed. Borgen and his lawyer did not respond to calls, while prosecutors and Danske Bank both declined to comment.
Danske isn’t the only one facing repercussions over the scandal. Sven Giegold, an EU lawmaker, said legal actions should be initiated against Denmark and Estonia because of the scandal. EU Justice Commissioner Vera Jourova agreed, saying, “The case of Danske Bank is not closed for us, regardless of the decision of [the] EBA.”