Danske Bank CEO quits as money laundering scandal grows to $234B

Thomas Borgen stepped down as CEO of Danske Bank after an investigation found more than $230 billion had been laundered through its Estonia branch. Photo by Nils Melvang/EPA-EFE

Sept. 20 (UPI) — The CEO of Denmark’s largest bank has resigned as the scale of a money laundering case linked to the bank increased to more than $230 billion.

A year-long investigation revealed that a tiny Danske Bank branch in Estonia had billions of dollars in illegal money flowing from Russia and other ex-Soviet states into the West.

Danske Bank CEO Thomas Borgen announced that he would step down as the results became public.

Danske Chairman Ole Anderson has dropped hints that he could leave the bank, too, after the case ends. He said there’s reason to believe a large part of the $234 billion at the Estonian branch “potentially can be classified as suspicious.”

The $234 billion total is nearly nine times Denmark’s gross domestic product.

“It is clear that Danske Bank has failed to live up to its responsibility in the case of possible money laundering in Estonia,” Borgen said in a statement. “I deeply regret this.”

Borgen, who became CEO in 2013, failed to inform the board of directors of an internal report about the money laundering scandal from 2014. The scheme wasn’t shut down until 2015. Borgen did not breach his legal obligations, the investigators found.

More than 6,200 suspicious accounts were found.

Danske shares fell 7 percent in European trading and have shed one-third of their value this year.

U.S., Danish and Estonian authorities are investigating the matter. The U.S. Treasury could fine the bank and order American banks to cut Danske’s access to U.S. dollars.

Several European banks have been tied to money laundering schemes, including Deutsche Bank AG, which paid a $700 million fine last year. ING Group NV paid a $900 million settlement in a money laundering case this month.

Danske’s fines could be as high as $800 million, according to analysts surveyed by Bloomberg.


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