Danske Bank, Denmark's largest bank, has launched an inquiry to see if companies with ties to Russia are laundering money through the bank.
The Wall Street Journal (WSJ), citing people familiar with the matter, reported that the bank is looking at $150 billion in transactions that were sent through its small branch in Estonia. The money covers a period from 2007 and 2015, and would equal more than a year's worth of corporate profits for all of Russia at the time, noted the WSJ.
A person familiar with the investigation told the WSJ that the flows would stay in the branch for a short period before flowing out of Estonia. That way, they would't show up in deposit statistics, noted the report. The investigation, so far, hasn't determined if the full $150 billion amount, or merely portions of it, are suspicious. It does suggest that the $8 billion that Danske Bank believes to be from money laundering transactions could increase by a lot.
“Any conclusions should be drawn on the basis of verified facts and not fragmented pieces of information taken out of context,” said Danske Bank Chairman Ole Andersen in a statement to the WSJ. “As we have previously communicated, it is clear that the issues related to the portfolio were bigger than we had previously anticipated.”
Danske's Estonian branch is already the subject of criminal investigations both in Denmark and Estonia, prosecutors in the countries said. In May, the Danish Financial Supervisory Authority ordered Danske to hold around $800 million more in capital, but didn't hit the bank with a fine over weak controls.
The paper noted that shell companies, many registered in the U.K., control most of the accounts that are in question, with many having links to people in Russia and other former Soviet Union countries.