More European banks are being drawn into money-laundering allegations centered on dirty Russian money, adding to the scandal in an industry still recovering from the financial crisis.
Initially centered on Danske Bank A/S in Denmark and Sweden’s Swedbank AB, allegations of suspicious transfers widened this week to include Raiffeisen Bank International AG in Austria and at least two Dutch institutions. Danske has lost half its market value since admitting its role in a money laundering scandal in 2016.
The disclosures describe a network of banking relationships that was used to export funds from criminals in the former Soviet Union to western nations, often via Estonia and Lithuania. Investigations are under way in the Baltic nations, the U.S., the U.K. and the Nordic countries, but almost daily revelations suggest there are more surprises to come on the scale of the misconduct.
Raiffeisen Bank International AG led declines in European banking shares after a fresh round of revelations -- dropping as much as 15 percent -- after Bill Browder’s Hermitage Fund said the bank ignored warning signs that would have helped stop the laundering of funds from Russian criminal activity. Dutch banks fell after a report that the three largest were used by a group labeled the Troika Laundromat to move cash from Russia.
Almost daily revelations are exposing the breadth of suspicious activity that has enmeshed banks across the continent. While it’s not clear what share of the cash flow was illegitimate, investigations under way in Baltic members of the European Union that once were Soviet states, the Nordic countries, the U.S., the U.K. and elsewhere, suggest it may be months before the full extent is uncovered.
A picture is forming of Nordic banks that, often via their Baltic units, became hubs for Russian criminals who channeled funds to the West. Nordea Bank Abp allegedly handled about 700 million euros ($793 million) in potentially dirty money, some of it linked to the death of Russian lawyer Sergei Magnitsky, according to Finnish broadcaster YLE on Monday.
Nordea Chief Risk Officer Julie Galbo said in an interview late on Monday that much of the allegations were already known publicly and the bank was trying to establish whether any were new. Any suspicious behavior would be reported to the authorities, she said.
Separately, the Guardian reported in the U.K. that an estimated $4.6 billion was sent to Europe and the U.S. from a Russian-operated network of 70 offshore companies with Lithuanian accounts. The newspaper cited data on banking transactions obtained by the Organized Crime and Corruption Reporting Project, or OCCRP, and 15min.lt, a Lithuanian website. The Guardian said there’s no suggestion that the end recipients of funds were aware of the original source of the money.
The two reports are part of a broader OCCRP investigation into the Troika Laundromat. It’s the fourth such scheme that the group has uncovered with the help of news media. The others were the Proxy Platform, the Russian Laundromat, and the Azerbaijani Laundromat.
Accounts at the three largest Dutch banks were used by the Troika Laundromat to move cash from Russia, according to Dutch magazine De Groene Amsterdammer, part of the OCCRP journalist group. About 43 million euros were paid to the Rabobank account of Dutch yacht builder Heesen for construction of two boats, the newspaper said, while approximately 190 million euros went through bank accounts at an ABN Amro unit that later became part of Royal Bank of Scotland.