Swedbank laundering case: $ 10 billion found in revision


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The oldest Swedish bank may have handled many more suspicious transactions related to the money laundering scandal in Estonia than previously announced.

Swedbank AB, which dominates the financial markets in the Baltic region, reportedly left about 95 billion Swedish crowns ($ 10.2 billion) in the form of questionable flows circulating in its accounts between 2007 and 2015, according to the main Swedish broadcaster, SVT , which quotes an internal review conducted in 2018 by the Bank.

The amount is more than double that reported by SVT less than a month ago. The date of this review also raises questions about the vehement denials of CEO Birgitte Bonnesen at the end of 2018 that his bank would have something to hide.

Swedbank shares fell 2.6% on Friday, bringing losses since the first allegation back in February to around 17%.

This is not the first time that a money laundering case against a major Nordic bank is gaining momentum. Danske Bank, which is under investigation by the US Department of Justice and the Securities and Exchange Commission, acknowledged last year that much of the approximately $ 230 billion paid by the intermediate of a very small Estonian unit had a suspicious origin. This scandal began with reports of questionable flows of only $ 200 million.

Investigations in Swedbank

Swedbank is already under investigation by the Swedish and Estonian financial supervisory authorities. The Swedish FSA also had to explain the case to the officials of the US Embassy in Stockholm. Meanwhile, Hermitage Capital Management filed a criminal complaint against the bank, alleging that it had manipulated money from the tax fraud related to Sergei Magnitsky's death. The Swedish Economic Crime Authority has confirmed that it is examining these allegations.

In a statement to the stock market Friday, Swedbank said that she "takes responsibility for preventing and detecting money laundering very seriously".

The bank said the figure mentioned in the SVT report represents all the transactions between Danske and Swedbank in 2007-2015, identified during the application of a number of risk indicators. About 2,000 customers were examined more closely, he added. Swedbank says that it is not clear that all the transactions reviewed were suspicious.

"In many cases, it was not necessary to act further, but in some cases we have made reports to the financial police," the bank said.

Swedbank hired the Forensic Risk Alliance last month to review SVT's previous report, which reported about 40 billion SEK in questionable flows related to the Danske case. The result of this survey must be published no later than March 28, at the bank's annual general meeting with the shareholders.

Calls for transparency

Alecta, one of Swedbank's largest owners, said he hoped the lender would also provide the Forensic Risk Alliance with the evidence behind the latest disclosures to ensure a thorough review.

"Money laundering is a serious crime that, if not handled properly, risks compromising confidence in the financial system," said Ramsay Brufer, property manager at Alecta. .

According to SVT, the internal report revealing suspicious flows of 95 billion kroner had been sent to Bonnesen in September of last year, a month before she publicly declared that the bank had no link with Danske's whitening scandal.

According to Robert Kitt, CEO of Swedbank's Estonian unit, there is nothing to indicate that his employees have committed wrongdoing. He also said that the culture had changed, compared to a decade ago, in terms of conduct acceptable to a bank.

"The situation has changed dramatically compared to 10 years ago," he told Eesti Paevaleht. "The business culture has changed a lot. Until 2015, it was thought that resorting to off-shore companies was not forbidden. Anything that is not forbidden is allowed. Now, it is clear that this is not accepted.

– With the help of Ott Ummelas and Hanna Hoikkala.

To contact the reporter on this story: Niklas Magnusson in Stockholm at nmagnusson1@More Bank.net

To contact the makers of this story: Tasneem Hanfi Brögger at tbrogger@More Bank.net, Frances Schwartzkopff

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