In addition to forfeiting $2.059 billion, the bank agreed to a separate settlement with the U.S. Securities and Exchange Commission (SEC) and will pay about $413 million, including a civil monetary penalty of $178.6 million, to settle charges, officials said. The bank also settled with Danish authorities.
Of the $2 billion, the DOJ said it will credit $850 million to resolve the SEC and Danish probes.
The agreement with the United States settles a long-running investigation into billions of dollars in illicit payments that has plagued the financial institution for nearly five years and was part of one of the largest-ever money laundering scandals.
‘Highly Suspicious’ Transactions
Prosecutors alleged that Danske Bank defrauded U.S. banks about Danske Bank Estonia’s customers and anti-money laundering controls in order to allow about 150 billion euros ($160 billion) in funds from high-risk clients living outside of Estonia, including those living in Russia and other countries, to flow through the U.S. financial system.Specifically, prosecutors said that between 2008 and 2016, Danske Bank offered banking services through its branch in Estonia and attracted customers by “ensuring that they could transfer large amounts of money through Danske Bank Estonia with little if any, oversight.”
Prosecutors further allege that employees of Danske Bank Estonia conspired with nonresident customers (NRP) to prevent authorities from knowing the true nature of their transactions. This was allegedly done through the use of shell companies that obscured actual ownership of the funds.
“Access to the U.S. financial system via the U.S. banks was critical to Danske Bank and its NRP customers, who relied on access to U.S. banks to process U.S. dollar transactions,” the DOJ said.
The DOJ noted that Danske Bank and Danske Bank Estonia were legally obligated to provide information to U.S. banks in order to open and maintain accounts, including information related to anti-money laundering controls, transaction monitoring, and customers.
Prosecutors said Danske Bank was aware of these obligations and that U.S. banks wouldn’t agree to open or maintain U.S. dollar accounts for Danske Bank Estonia if they didn’t provide correct and truthful information.
Bank ‘Fully Accepts the Findings and Apologizes’
Despite knowing that, prosecutors allege that Danske Bank lied about Danske Bank Estonia’s anti-money laundering controls and its high-risk customers.“Today’s guilty plea by Danske Bank and two-billion-dollar penalty demonstrate that the Department of Justice will fiercely guard the integrity of the US financial system from tainted foreign money—Russian or otherwise,” U.S. Deputy Attorney General Lisa Monaco said in a Dec. 13 statement. “Whether you are a U.S. or foreign bank, if you use the U.S. financial system, you must comply with our laws.”
“Danske Bank fully accepts the findings and apologizes unreservedly for the unacceptable historical failings and misconduct, which have no place at Danske Bank today,” the bank said.
