Security & Fraud

Is The Putin Family Using An Estonian Bank For Money Laundering?

Reports out this morning indicated that a whistleblower inside Denmark’s biggest bank warned the institution that its Estonian branch was being used by members of the Putin family as a front for money laundering.  That warning was reportedly in 2013.

A leaked report allegedly indicated that the leadership at Danske Bank knew “of far more serious conditions than previously stated.” It is also alleged that Danske Bank shut down 20 Russian customer accounts following that whistleblower report.

The clients’ identities were kept secret at the time.

Further reports in The Guardian indicate that a group of mostly London-registered firms, including Lantana Trade LLP,  had filed “false accounts.”  Investigation indicates that the ultimate owners of Lantana and related partnerships were Russian — but that fact was pretty carefully hidden.

“Their identities were hidden behind a series of offshore management firms based in the Marshall Islands and the Seychelles,” paper noted.

Danske Bank told the Associated Press that it had done “a thorough investigation to get to the bottom of the events at that time in our Estonian branch,” adding that it had no comments “until the investigation has (been) finalized.”

“Furthermore, we are unable to comment on specific customers, but the entire portfolio in question (non-residents) has been closed down.”

Danske Bank has, in the past, acknowledged illegal transactions at its Estonian branch in 2011-2014.

“As we have previously said, on the basis of what we know now, we should have done this faster. Today, we have a very different and stronger control setup in Estonia,” the bank added.

Estonia’s financial watchdog takes a somewhat dimmer view of the situation and believes Danske Bank’s Estonian branch intentionally mislead the Baltic country’s authorities. The Estonian regulator already conducted a full review of the branch’s activities in 2014. Many extensive and systematic violations of anti-money laundering rules were discovered in that investigation.

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