Saturday, 22 September 2018

Danske Bank CEO Quits As Money Laundering Scandal Swells To $234 Billion

Estimates of Danske Bank's staggering fraud have grown since news that the US had launched an investigation broke last week. Since then, the total amount laundered through the bank by shadowy figures in the former Soviet Union has risen to an estimated 200 billion euros - or $234 billion. For context, that's many times the roughly $17 billion that flows through Estonian banks during an average year, meaning that the money laundering perpetuated by Danske effectively transformed the Estonian banking system into a giant front for organized crime groups. And as evidence has proliferated that the bank's leadership did nothing to inhibit the financial crimes despite being confronted with evidence from internal and external sources, the bank has determined that the time has come to make a token sacrifice so that the wider institution may survive.

And that sacrifice came earlier Wednesday when the Financial Times reported that Danske CEO Thomas Borgen has decided to step down as reports that he was effectively complicit in the fraud have proven deeply embarrassing to him and the bank.

What's worse, as the scandal has unfurled, the abject inadequacy of the bank's internal controls have become staggeringly apparent. According to an internal probe cited by the FT, Danske found that "the vast majority" of 6,200 "risky" customers of the bank's Estonia branch were "suspicious."

[Posted at the SpookyWeather blog, September 22nd, 2018.]

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