Danske whistleblower says big European bank handled $150 bln of payments
* Whistleblower says Danske did not take warnings seriously
* Wilkinson says was offered money by bank to keep quiet
* Wilkinson given waiver to talk to U.S. authorities
* $150 bln involved big European bank in U.S. -whistleblower
(Writes through with context)
By Teis Jensen and Jacob Gronholt-Pedersen
COPENHAGEN, Nov 19 (Reuters) - The whistleblower who
revealed alleged money laundering involving Danske Bank
said on Monday that a major European bank helped
process up to $150 billion in suspicious payments and two U.S.
lenders were also involved.
Authorities in Denmark, Estonia, Britain and the United
States are investigating payments totalling 200 billion euros
($228.5 billion) made through Danske Bank's tiny Estonian branch
between 2007 and 2015 in a growing global scandal.
Howard Wilkinson, who was head of Danske Bank's trading unit
in the Baltics from 2007 to 2014, told a Danish parliamentary
hearing that other banks were also involved.
"I would guess that $150 billion went through this
particular bank (the large European bank) in the U.S.," the
Briton said, without naming any of the other banks.
Deutsche Bank, JPMorgan and Bank of
America all cleared dollar transactions for Danske's
Estonian branch, some until 2015, sources have told Reuters.
The leading German bank and JPMorgan, which one of the
sources said ended its correspondent relationship with Danske's
Tallinn branch in 2013, both declined to comment. Bank of
America, which has previously declined to comment on the case
did not immediately respond to an email seeking comment.
"No one really knows where this money went. All we know is
that the last people to see it was these three large banks in
the U.S. They were the last check, and when that failed, the
money was into the global financial system," Wilkinson said.
Interim CEO Jesper Nielsen said the affair had tarnished the
reputation of Danske Bank.
"We have breached the expectations society had of us. The
case and the course of events around it does not reflect the
bank we want to be," Nielsen told the Danish lawmakers after
Wilkinson said that he had been offered cash by Danske Bank
not to speak out, but had got a waiver last month allowing him
to talk to some U.S. authorities, adding that he did not expect
investigations into the "dirty money" to bear fruit.
"There is no chance in the world ... that any of that money
is ever going to be tracked down and that any criminals lose a
single cent," he said.
"LACK OF INTEREST"
Danske Bank has acknowledged that its money laundering
controls in Estonia were insufficient, but in a report issued in
September said its board, chairman and chief executive had not
breached their legal obligations.
"In April 2014 it became clear that the bank didn't intend
to do anything," the former Danske Bank employee said, referring
to earlier whistleblower reports. "There was a curious lack of
interest at senior management level."
Wilkinson said that at the start of January 2014 he had
looked at the three most profitable accounts involving British
limited liability partnerships (LLPs).
"They were all fake. Not just that, they all basically
looked the same. And it turned out they all had the same
registered office in a suburb in North London ... I passed those
on. By April none of the accounts ... had been closed down."
"I warned them (Danske) that if they didn't do a proper
investigation and make the appropriate report to the police,
then I was going to do it myself," Wilkinson said.
In September this year Danske Bank said the first
whistleblower report, which was titled "Whistleblowing
disclosure – knowingly dealing with criminals in Estonia
Branch", was sent to its executive board, group compliance and
internal auditor at the end of December 2013.
However, the bank's report concluded that no "red flags"
were shared with ex-CEO Thomas Borgen when he held ultimate
executive responsibility for Estonia from 2009 to 2012.
Borgen stepped down as CEO following the September report,
saying that although he was "cleared from a legal point of view"
he held "the ultimate responsibility".
The scandal has emerged at the same time as a major
government tax scandal and a fraud case in the Danish ministry
for social affairs, undermining confidence in once trusted
institutions and sparking calls for action from lawmakers.
Wilkinson said that Denmark's FSA financial regulator, which
was not immediately available for comment, did not contact him
before issuing a report on the allegations in May 2018 and
called for Danish authorities to investigate the FSA's role.
"If Howard Wilkinson is correct in that he can't talk to the
Danish authorities without being prosecuted that must obviously
be changed. Authorities should investigate the case thoroughly
and they can only do that if they can get the information,
Danish business minister Rasmus Jarlov said on Twitter.
The FSA said in May it had not found sufficient basis for
launching cases against members of Danske Bank's management.
($1 = 0.8760 euros)
(Reporting by Teis Jensen, additional reporting by Stine
Jacobsen; Writing by Alexander Smith; Editing by Keith Weir)
First Published: 2018-11-19 12:07:29
Updated 2018-11-19 17:00:49
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