Deutsche Bank AG and Bank of America Corp. have been contacted by U.S. criminal investigators for information about transactions they handled for a small bank branch in Estonia that’s at the center of one of the biggest money-laundering investigations in history, according to two people familiar with the matter.
The Justice Department investigators have also asked questions about JPMorgan Chase & Co.’s work with the branch, another person said.
The largest creditors in the world were the correspondent banks for the A / S branch in Tallinn, Estonia, Danske Bank, the focus of multinational research. The Danish lender acknowledged that the branch carries about a quarter trillion dollars of cash from potential illegal activities in Russia to the global financial system. He used the global presence of three banks to convert foreign currency into US dollars in US dollars until 2015 on behalf of his clients until 2007.
An examination of whether the major banks have conducted a review of Estonian operations is one aspect of a broader Danske Bank investigation from the US Department of Justice in Washington and the prosecutor’s office in Manhattan.
There is no sign that the banks are the target at the early stages of the investigation. None of them contacted the researchers. Banks were discussed in regulatory reports and with a Danske Bank internal inquiry published in September but they did not mention the name.
The Securities and Exchange Commission and the Treasury Department also investigate Danske Bank transactions through global banks.
In 2013, JPMorgan stopped providing correspondent services to Danske Bank. Deutsche Bank and Bank of America continued for two more years, according to reports and people who know the subject. Deutsche Bank said that most of these transactions were dealt with during the period under review.
Spokespersons for Deutsche Bank, Bank of America, JPMorgan and Danske Bank refused to comment. Danske Bank’s shares fell by 1.9 percent at 15.15. Friday in Copenhagen. This year decreased by 44 percent.
Danske Bank, in a statement in September, “Estonian branch, when we start the investigation is much bigger than expected,” he said. The company’s findings indicate that ığ some group-level controls are insufficient in relation to Estonia. Şirket
The Danske Bank investigation sheds light on reporter banking opaque – a $ 160 trillion circulation system in annual cross-border payments that support the global economy, as predicted by McKinsey. Large banks maintain their accounts with other banks, deposit funds there and use them to pay with foreign countries and currencies on behalf of their customers.
Denmark’s largest lender Danske Bank, admitted during the period of Estonia’s branch, a comparable amount of Estonia’s entire economic output of about $ 230 billion, a large part of the suspects were confessed. In recent weeks the chief executive officer and chairman of the bank forced the scandal.
When the US judges the cases in which it claims the illegal use of the financial system, it generally considers dollar-denominated swap banks as deprived or victimized. However, the facts in the case of Danske Bank – the fact that at least one of the correspondent banks had concerns about money laundering, which led to the end of the work with Danske Bank in 2013 – to raise the possibility of reviewing the roles of authorities.
Under US law, correspondent banks should apply anti-money laundering controls to foreign banks, which include periodic review of accounts for suspicious activities. Some foreign banks require additional scrutiny.
In 2013, JPMorgan announced that it had ended its relationship with Danske Bank after years of activity as a dollar-clearing correspondent for the Estonian branch. The branch, which was acquired as part of the merger, was an outpost over 500 miles from Danske Bank’s central Baltic Sea in Copenhagen. The company operates differently from other companies, holds its own correspondent banks and uses them instead of using the ones established by the parent company.
JPMorgan’s banking role included a two-year period between 2011 and 2013 when the majority of Danske Bank customers linked to the European money laundering ring, according to the May report, which Danish regulators identified as banks anonymous.
Regulatory concerns about correspondent banking are well known in the financial sector. Before ending his relationship with Danske Bank, JPMorgan was struck by an order of US bank regulators, who demanded improvements in anti-money laundering controls, after seeing that general practices for the prevention of suspicious transactions were too weak.
As a result, JPMorgan undertook a widespread process known as ve risk mitigation yüzlerce, where hundreds of people were surveyed and suspected. (Order still in place.)
In June 2013, according to Danske Bank’s internal investigation, a JPMorgan manager told Danske Bank board member that she plans to terminate her services for the Estonian branch because it is a sign of potential money laundering for her highly resident clients. Two months later, according to Bank of America’s internal report, one of the correspondent banks of Danske Bank, he decided to expand the dollar-swap business with a branch. It is not clear whether Bank of America is aware of JPMorgan’s concerns.
Meanwhile, internal and external warning signs were beginning. The board of directors responsible for JPBorgan’s withdrawal from Dansbank Bank undertook a separate review of the work and stated that the branch was generating more profits than work, a potential signal that customers were willing to pay excessive to carry out the work of other banks.
The committee was not happy with the rate of earnings from transactions for residents of other foreign countries, mainly Russia – 90 percent of the profit of the Estonian branch. According to the internal investigation, at the end of 2012 there were 4,000 non-resident accounts. At the end of 2014, the report ended more than 850 customer relations.
Doubts of Regulators
Estonian organizers also suspected the activities of the branch. After the summer audits in March 2014 and thereafter, he concluded that Danske Bank’s branch accepts customers as systematic in terms of money laundering.
He also saw that the branch is doing a weak job of focusing on identifying the source of client funds, closing down suspicious client accounts without informing the authorities and making more money at the expense of money laundering controls. According to the Danish regulatory report, Estonian regulators repeatedly issued to Danske Bank to close the branch’s portfolio of foreign accounts and change the management of the branch.
It is unclear how much of this is known by the Bank of America and Deutsche Bank, even when reports in the European news media have begun to take up concerns about the ne washing machine Deutsch operation and the Estonian branch.
According to the internal investigation, an internal whistle player emerged at the end of 2013 with claims from customers using hundreds of shell companies to move money through the financial system, without triggering regulatory agencies or law enforcement.
In May 2015, Bank of America contacted Danske Bank at the corporate level and requested that transactions from the Estonian branch on behalf of the shell companies be made through Bank of America.
Two months later, Deutsche Bank stated that it had determined the bank’s operations not as daki about the branch bir and marked the payments made to the parties in Moldova, especially as part of the l washing machine yapt network. According to Danske Bank’s internal investigation.
While Bank of America and Deutsche Bank left their Estonian branch in US Dollars, Danske Bank has been in the process of closing its customer portfolio in July 2015. he said he would focus their business with a ”strong Scandinavian footprint müş.
Legal warning !
The information, comments and suggestions there are not covered by investment advice. It is based on the author's personal opinions. These views may not fit your financial situation and risk and return preferences. For this reason, based solely on this information, investment decisions may not have the appropriate consequences for your expectation. Our Site is not responsible for any direct or indirect damages incurred by the investors as a result of the use of the information on the Site, deficiencies in the sources, damages incurred by profit, moral damages, or damage to third parties.