Danske money laundering scandal widens with DOJ inquiry

(Reuters) - Danske Bank DANSKE.CO faces a widening investigation into suspected money laundering at its Estonian branch.

Denmark’s biggest lender released a report last month showing the branch handled 200 billion euros ($230 billion) in transactions - 10 times Estonia’s GDP - between 2007 and 2015.

It said of the approximately 6,200 accounts it had examined so far that most were linked to clients registered in Russia, Britain and the British Virgin Islands and “the vast majority of these customers have been deemed suspicious”.

The following timeline summarizes recent developments:

Oct 4 - Danske says it has “received requests for information from the U.S. Department of Justice (DOJ) in connection with a criminal investigation relating to the bank’s Estonian branch”.

Oct 4 - Danske halts a share buyback program 3.2 billion Danish crowns ($493 million) short of its target of 10 billion after Denmark’s Financial Services Authority raised Danske’s capital requirements, citing a rise in its “compliance and reputational risks”.

Oct 2 - The European Parliament invites a whistleblower in the Danske scandal to testify before its special committee on financial crimes, tax evasion and tax avoidance on Nov. 21. Danish newspaper Berlingske a week earlier named him as Howard Wilkinson, Danske’s former head of trading in the Baltics.

Oct 1 - Less than two weeks after saying CEO Thomas Borgen would stay on until a replacement is found, Danske appoints Jesper Nielsen, head of its Danish banking business, as interim chief executive with immediate effect.

Sept 21 - Britain’s National Crime Agency (NCA) says it is “aware of the use of UK registered companies in this case and has related on-going operational activity”.

Sept 19 - Danske Bank CEO Thomas Borgen resigns pending the selection of a successor after the bank publishes a report on suspected money laundering in Estonia. Borgen tells a news conference: “Even though I was personally cleared from a legal point of view, I hold the ultimate responsibility. There is no doubt that we as an organization have failed in this situation.”

Aug 6 - Denmark’s state prosecutor announces the start of a criminal investigation into Danske over alleged money laundering through its Estonian branch.

July 31 - Estonia’s general prosecutor announces the start of a criminal investigation into Danske over alleged money laundering through its Estonian branch.

July 25 - Estonia’s prosecutor’s office confirms U.S. investor Bill Browder, once the biggest foreign money manager in Russia, has filed a criminal complaint concerning Danske.

July 12 - Bill Browder says he has filed a criminal complaint with Danish authorities against Danske. Browder leads a campaign against Russian officials he blames for the 2009 death of his Russian lawyer Sergei Magnitsky while investigating fraud.

($1 = 6.4864 Danish crowns)

($1 = 0.8687 euros)

Compiled by Jason Neely; edited by Alexander Smith