BEFORE YOU GO...
Check how Shufti Pro can verify your customers within secondsRequest Demo
SDNY sentences Danske Bank with three years of probation on the tale of whistleblowing and misleading US Banks.
The SDNY (Southern District of New York) sentenced the Danske Bank to three years of probation and forfeiture of $2.059 billion earlier this month. The sentencing is capped as the massive scope of the emerging bank’s AML (Anti-Money Laundering) compliance problems, covering a global scandal that became public several years ago. Over a hundred billion in questionable trades allegedly were processed overtime at the bank’s former Estonian branch.
As a result of sentencing, Danske bank was obliged to make an actual payment of $1,209,062,646. It received a credit for the rest of the forfeiture amount based on a $178.6 million payment to the Securities and Exchange Commission and a $672.3 million payment to Denmark authorities.
Danske Bank was charged not with BSA (Bank Secrecy Act) violations but rather with bank fraud. As per a PR released in December 2022 by DOJ (Department of Justice) at the time of the Bank’s plea, stating, the bank has “defrauded U.S. banks regarding Danske Bank Estonia’s customers and [AML] controls to facilitate access to the U.S. financial system for Danske Bank Estonia’s high-risk customers, who resided outside of Estonia – including in Russia.”
The DOJ’s choice of charge bank fraud probably was indicated by the problems connecting the US jurisdictions and the actual materiality of the BSA to Danske Bank and actions in Estonia. Still, the crux of a criminal case in the Danske Bank allegedly hid its own AML collapses from three US banks, thereby preventing the US banks’ AML programs and compliance with the BSA.
The appeal consensus includes a lengthy statement of facts full of eye-catching allegations. The Estonian branch employees showed major misconduct associated with loose management and implicit support, or at least tolerance, of such conduct by the people in executive administration.
Danske Bank is subject to a probationary period of three years. Yet, the saga is not over entirely; the plea demands multiple compliance obligations by the bank, including marked compliance certificates and self-reporting AML failures. The concern also involved cases brought by investors asserting to have been cheated, although the bank successfully safeguarded the actions.