The whistleblower who revealed alleged money laundering involving Danske Bank said on Monday that a major European lender helped process up to $150 billion in suspicious payments and two U.S. banks were also involved.
Payments totalling 200 billion euros ($228.5 billion) made through Danske Bank's tiny Estonian branch between 2007 and 2015 have sparked inquiries in Denmark, Estonia, Britain and the United States in a growing global scandal.
Howard Wilkinson, the head of Danske Bank's trading unit in the Baltics from 2007 to 2014, told a Danish parliamentary hearing that several other lenders were involved in the payments through its Estonian branch, adding that many involved two large U.S. banks and the U.S. subsidiary of a big European bank.
"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 banks in question.
"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."
Deutsche Bank, JPMorgan and Bank of America all cleared dollar transactions for Danske's Estonian branch, some until 2015, sources have told Reuters.
Deutsche Bank and JPMorgan, which one of the sources said ended its correspondent relationship with Danske's Tallinn branch in 2013, both declined to comment while Bank of America was not immediately available for comment.
Wilkinson, who told parliament that he had been offered money by Danske Bank not to speak out, said he had received a waiver last month allowing him to talk to U.S. authorities, but added that he did not expect investigations to lead anywhere.
"We are now here at the back-end of 2018 talking about dirty money from 2007 to 2015, 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 it said the board, the chairman and the chief executive, had not breached their legal obligations. The CEO and chairman have both stood down following the report.
"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."
"In this concrete case we have said that we urge everyone with knowledge about it to go to the authorities," Danske Bank's interim CEO Jesper Nielsen told the Danish lawmakers
"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 added.
In Danske Bank's September report it 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.
Thomas 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".
However, the report concluded that no "red flags" had been shared with Borgen when he held the ultimate executive responsibility for the Estonian branch between 2009 and 2012.
After the bank's Internal Audit's initial findings in February 2014, Borgen recommended an immediate stop to all new business and a controlled closing-down of existing transactions, the bank's report said.
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 the Danish financial regulator did not contact him before issuing a report on the allegations in May 2018. The FSA was not immediately available for comment.
He said Denmark should investigate the FSA's regulation of Danske Bank, including the conduct of senior officials.
The FSA said in May it had not found sufficient basis for launching cases against members of Danske Bank's management.
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