Daily Beast: Danske Bank Scandal Whistleblower Allegedly Killed

Published: 11 October 2018

Danske Bank TallinnDanske Bank, Tallinn (Photo: Pjotr Mahhonin, CC BY-SA 4.0)

By Alex Cooper

In 2006, the first deputy chairman of the Russian Central Bank, Andrei Kozlov, attempted to tell authorities in Estonia about a money-laundering scheme that had been created in the Baltic financial system. Three months later he was dead, age 44, and the scheme would later be revealed as the US$200 billion Danske Bank scandal, according to the Daily Beast.

The latest information on the scandal comes from a diplomatic cable from United States officials, the outlet reported. Those officials had briefly began looking into Kozlov’s trip to Estonia after he died. However, the magnitude of the scheme was then unknown.

The Estonian branch of Danske Bank, Denmark’s biggest bank, closed the accounts of several companies in 2013 after realizing they had been used to launder huge amounts of money, among others by a member of Vladimir Putin’s family and Russia’s intelligence service, the FSB.

The volume of money is staggering: more than the GDP of Estonia, and more than the annual corporate profits of Russia at that time.

The suspicious activities involved some $233 billion of Russian money that flowed through the bank’s small Estonian branch between 2007 and 2015. The bank says it suspects that employees of that branch actively helped thousands of clients circumvent money laundering controls.

The latest information shows that the scheme would have began before 2007.

After playing a football match in September of 2006, Kozlov and his driver were killed by three assailants at the parking lot of the sports complex.

Because he had been involved in revoking licenses of a number of small banks, Russian authorities claimed that he had probably been killed by gang members, according to the Daily Beast. An operator of one of those banks, Alexei Frenkel, was convicted and sentenced to 19 years in prison.

There seems to have been more serious threats to Kozlov than had previously been known.

When Kozlov traveled to Estonia, he had demanded several bank accounts be closed when he met with the head of anti-money-laundering for the country’s Financial Supervision Authority (FSA), Andres Palumaa.

The Daily Beast now reports that the story never became international news because the scale of the money-laundering operation was undisclosed, though the Estonian investigative outlet Eesti Ekspress reported the visit to Tallinn.

A telegram shows that U.S. officials went to speak with Palumaa after the original story was published. It said, “Palumaa said that after Kozlov’s warning, the FSA followed up with their Russian counterparts in Moscow, but the Russians said that they had no information to substantiate Kozlov’s accusations.”

The Daily Beast writes that this may have led to Russian officials being tipped on the attempts by Kozlov to close the flow of dirty money.

Danske had around 200 accounts connected to the Russian Laundromat, a scandal OCCRP uncovered and that saw over $20 billion laundered out of Russia. Seventy-five accounts were connected to another OCCRP investigation called the Azerbaijani Laundromat.

The U.S. has recently began to investigate the money laundering as well.

Authorities have not reopened the investigation into Kozlov’s murder, the Daily Beast reported, even amidst doubt of Frenkel’s involvement by the international community.