A whistleblower report obtained by Danish newspaper Berlingske – shared with OCCRP and the Guardian – exposed the complete failing of anti-money laundering procedures at Danske Bank’s Estonian branch and showed that it aided suspicious transactions by a company whose actual owners included Russia’s intelligence service, FSB, and family of Vladimir Putin.
The bank’s board had been discussing the situation with Morch over the past few weeks. Morch was responsible for the Bank’s Baltic operations since 2012 and received warnings in early 2014 from the banks internal auditors about the Estonian branch.
Danske Bank Chairman Ole Andersen said he respected Morch’s decision to resign.
“We now have a bit more clarity from the ongoing investigations. And even though Lars contributed to a number of initiatives in 2014 to correct the situation, we can conclude today that it wasn’t enough,” Andersen said, according to Reuters.
On Friday, the news agency Reuters added that the bank hired Christian Baltzer as its new chief financial officer and that it will reorganize its personal and business banking divisions. Tonny Thierry Andersen, the bank’s head of wealth management also decided to leave.
A spokesman for the bank said that the new changes were not related to Morch’s departure.
The whistleblower report shows that Lantana Trade LLP falsely described itself as dormant and having a low turnover to the UK Companies House while it passed huge sums of money through an account with Danske Bank.
The bank’s Estonian branch had failed to establish who controlled Lantana while the company was making “suspicious payments just under compliance control limits,” the report stated.
Up to ten million dollars could have been laundered through the scheme on a daily basis for the period of the account’s operation, OCCRP reported.
Only after the transfers were made did the bank investigate its owners, which turned out to be hidden behind various banks, one of which was Promsberbank.
Promsberbank lost its license in 2015, the same year that Lantana dissolved. On the little bank’s board was Igor Putin, Vladimir Putin’s cousin and one of its shareholders was Alexander Grigoriev, a banker with FSB ties.
The whistleblower had alerted Danske in December 2013 about the money laundering. The bank has been criticized for failing to take appropriate measures.
The Russian Laundromat, another investigation by OCCRP, previously revealed that Danske Bank was involved in a network of global banks that laundered US $20–80 billion of Russian money.
Morch will be formally released of his duties at the end of October 2019 and in the meantime will continue to be paid. He worked for the bank for 19 years.
