Thursday, October 22, 2020

Danske Bank used as hub to launder money from corruption, theft and tax evasion – Jailed Banker

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Currently serving time in prison a former Russian bank chairman alleges that criminals were systematically using Denmark’s biggest lender Danske to launder money. According to him the money stemmed from theft, tax evasion and bribery.

Criminal Russian masterminds used the Estonian branch of Danske Bank – Denmark’s biggest lender – for years to launder large sums of money. The money stemmed from crimes such as corruption, theft and tax evasion according to a former Russian banker.

Boris Fomin is a key figure in a set of linked cases concerning embezzlement and money laundering currently being investigated by Russian authorities.

Fomin is the former chairman of the board of the notorious Russian bank Promsberbank which for years was a focal point for large scale money laundering of funds from especially criminal activities in Russia. At the moment he is serving six years of jail time for embezzlement for his role in the case.

In the book »Dirty Billions« (Danish title: »Beskidte milliarder«), written by Berlingske journalists Eva Jung, Simon Bendtsen and Michael Lund, Boris Fomin speaks out for the first time to Western media about the enormous money laundering machine and the ties to Danske. His words are laid out in a letter sent by Fomin’s lawyer as a result of the authors reaching out to him.

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The money had a criminal origin. This was money from illegal enrichment, fictitious activities or bribery as well as proceeds from other kinds of criminal activity, writes Boris Fomin.

Expert: Extraordinary

British money laundering expert Graham Barrow believes the new information could be of interest to authorities:

»Having confirmation of this from the criminal side of the operation would be extraordinary and might just, possibly for the first time, force those in authority who would prefer to turn a blind eye to this, at long last do something about it, he says to Berlingske.Danske Bank

The money laundering case of Danske Bank is belived to be one of the biggest ever known. The case reached its zenith in the autumn of 2018 when Danske Bank presented its own report on the case, compiled by a law firm: the report identified as suspicious a large part of the €200bn that flowed through the Estonian branch, primarily from so called »non resident« clients in Russia and other former Soviet republics. The results forced the bank’s CEO, Thomas Borgen, and several others to step down.

Going on for 20 years

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According to Boris Fomin this organized money laundering network functioned for almost 20 years and Danske was amongst the banks used for the purpose.

He also alleges that three shareholders of the bank at the time – Russian bankers Ivan Mjasin, Oleg Belousov and Aleksej Kulikov – were the masterminds behind the money laundering scheme. On former occasions Kulikov og Mjasin has rejected this. Berlingske has not been able to reach them for comments. Kulikov is himself serving time in jail while Mjasin is indicted in Moscow.

Related: Danske Bank to exit Russia amid money laundering scandal

»The documents and facts I collected seem to prove clearly that Mjasin, Belousov og Kulikov were cooperating with Danske as well as banks in Latvia, Lithuania and Cyprus. There are also details about payments via British banks,« he says and explains that the network had a long list of companies that were used for laundering the funds – such as British companies Lantana Trade LLP and Ergoinvest LLP, linked to the Danske Bank case and German lender Deutcshe Bank’s money laundering scandal. Also the investment company IC Financial Bridge, known from other high profile criminal cases, was used by the network he claims.

Headquartered in Podolsk south of Moscow Promsberbank was stripped of its’ banking license by The Russian Central Bank in 2015 due to a long list of irregularities – amongst them the bank was providing large and high-risk loans to companies registered offshore.

According to The Russian Central Bank transactions showed »proof of criminal activities conducted by the former management and owners of the bank.« The case is still being investigated by Russian authorities.

The board of Promsberbank also included a member of the Russian president Vladimir Putin’s family, namely his cousin Igor Putin, media reports has shown. And the bank has been linked to the scandal of so-called “mirror trading” money laundering in Deutsche Bank.

According to Fomin the network was also behind several of the global so-called »laundromat« cases where large sums were laundered via an enormous network of bank accounts.

Related: Danske Bank ousts former interim CEO after customers overcharged

The cases that have been called »laundromats« or »mirror trades« are different methods that were used to get the funds transferred to foreign bank accounts. Laundromat was a collective term for a list of different criminal cases,« Fomin writes about the connection to Promsberbank. He also claimed that the network had inside information about control systems in both Danske Bank and Deutsche Bank.

Meanwhile Graham Barrow notices Boris Fomin is now cooperating with authorities from prison:

That is also slightly problematic as there is also a feeling that nothing comes out of Russia without an underlying reason for it.

Fascinating Details

Boris Fomin does not document his allegations and neither Berlingske nor the book’s authors have been able to verify his information.

Still, money laundering expert Graham Barrow finds the new information from Fomin »fascinating« because »there was a feeling that such confirmation would never come out of Russia.

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Danske Bank (along with Deutsche) face significant additional problems if it turns out that their internal systems were so poor that they failed to notice, over such a long period, that their systems were being circumvented to the tune of billions of dollars of dirty money possibly with the help of inside information, says Barrow.

Danske declines to comment on specific customers or transactions:

Meanwhile there is no doubt that a long list of conditions both locally and on group level were criticizable and that it led to the Estonian branch being used for suspicious transactions. Amongst other things there is a suspicion that local employees have actively taken part of suspicious activities or have been accomplices of customers, says Danske Bank who has previously reported eight former employees to the police in Estonia.

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