Danes urge no Danske mercy

As the first bankers in Europe’s biggest money laundering scandal get detained by police, the political demand is for a tough response targeting the perpetrators.

A total of 10 former employees of Danske Bank in Estonia were apprehended over the course of Tuesday and Wednesday. Estonian prosecutors suspect they deliberately helped criminals from the former Soviet Union launder money, for personal gain.

In Denmark, where Danske is the biggest bank, the government made clear it’s not in favour of clemency. “It’s very important to come down hard on this case,” Danish business minister Rasmus Jarlov said. “It’s absolutely essential that we ensure that committing economic crimes comes at a cost.”

Danske Bank’s dirty money saga “offends one’s sense of justice and people’s confidence in the financial industry,” Mr Jarlov said.

The minister, who oversees bank legislation in Denmark, has already made clear he thinks there’s evidence that illegal acts were committed in the Danske case.

There are few banks that appear to have been as central to the flows of suspicious funds from the former Soviet Union and into the west as Danske. Between 2007 and 2015, much of about $230bn that gushed through a tiny Estonian branch was probably suspicious in origin, Danske’s management in Copenhagen admitted in September.

The bank is under criminal investigation by the US Justice Department and may face significant fines.

Its stock has plunged more than 40% this year as investors panic. That’s equivalent to over $15bn in lost market value.

Tax evaders and embezzlers from Georgia and Azerbaijan are among the criminals to have turned to Danske to handle their dirty money, according to evidence cited by Estonian prosecutors on Wednesday.

They say it’s highly likely there are more suspects related to the case than the 10 apprehended this week. Prosecutors also say they have other leads, as they stay in contact with authorities in the US and elsewhere.

“It’s paramount, as far as a sense of justice is concerned, that this case be investigated to the very end and that there are consequences,” Mr Jarlov said. “People who commit financial crimes have to be held accountable.”

Bloomberg