Danske’s woes grow as Denmark opens money laundering probe

Bloomberg

Danske Bank A/S’s legal jeopardy is deepening.
Prosecutors in Denmark said they had opened a criminal investigation into the bank, acting on “multiple complaints” that the Estonian unit of the country’s biggest lender was used to funnel billions of kroner of dirty money.
The prosecutors said that they had been following “the case very closely” for a long period “due to the very serious nature and scope of the case” and vowed to “turn every stone.”
A similar investigation was launched by Estonia recently. The probes come after Bill Browder, co-founder and chief executive officer of Hermitage Capital, filed criminal complaints in July alleging that Danske was guilty of “gross negligence and money laundering and related offenses.”
According to Browder, Danske became a hub for financial crime from 2007 to 2015, as more than $8 billion in illicit funds from Russia, Moldova and Azerbaijan were funneled through its Estonian operation and into Europe.
The case takes its starting point in $230 million that Browder says can be traced back to transactions linked to the death of his lawyer, Sergei Magnitsky. He says the full amount laundered through the bank may exceed $9 billion.
The state prosecutor said it was too early to say if the investigation would result in charges.
A spokesman for the office declined to comment about any potential targets or on how long the probe might take.
Danish anti-money laundering legislation allows for financial penalties tied to the number of suspicious transactions, meaning fines may “significantly exceed profits,” prosecutors said.
In a survey of five analysts by Bloomberg last month, estimates of a potential fine for Danske ranged from a high of $4.7 billion to a low of $315 million, with at least two saying the bank may avoid penalties altogether.