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Secret Swedbank Report Shows Russian Money Laundering Ties

Swedbank’s growing scandal which brought about the departure of CEO Birgitte Bonnesen and Chairman Lars Idermark, could get worse with a report commissioned by the bank allegedly showing that institution filtered as much as 20 billion euros ($22.47) in dirty Russian money through its Estonian branch, much more than was previously believed.

Denmark’s biggest bank, Danske Bank, was the subject of a massive $230 billion money laundering scheme through its Estonian branch. Danske’s links to other major European Union banks have damaged the reputation of Nordic banking as a whole.

Norwegian lawyer Erling Grimstad was hired by Swedbank to probe its activities after the scandal erupted. That report now in the hands of Swedish prosecutor Thomas Langrot, who was handed it in a sealed envelope after the bank was raided. Swedbank insists the contents are covered by client-lawyer confidentiality and and should not be released, accusing Langrot of leaking selected information “to cast suspicion over the management of the bank by implying that the management is hampering the investigation,” the Bloomberg financial news agency reported.

Langrot is looking at whether Swedbank committed aggravated fraud in what appeared to be misleading statements given by Bonnesen when the bank published its fourth-quarter earnings in January.

Broadcaster SVT, which had a copy of the report, said Grimstad found Swedbank’s Estonian branch handled possibly criminal transactions from non-resident, high-risk customers from 2010-16. The report, dated Dec. 10, 2018, advised Swedbank to immediately inform authorities in Sweden and Estonia, the date indicating Swedbank’s management – which later backed Bonnesen before firing her – knew about potential breaches of money-laundering rules before they were revealed by the broadcaster on 20 February this year.

In a statement, Swedbank said it won’t waive lawyer-client confidentiality until “all foreseeable consequences are known and assessed. It’s incomprehensible that the prosecutor doesn’t respect the law and instead uses media.”

The Swedish Financial Supervisory Authority received the report and released a redacted version to the media, prompting the Swedish Economic Crime Authority to start its fraud probe with the sealed envelope likely the key piece of evidence.

The Swedish Shareholders’ Association said Swedbank appears to have ignored the law and that it shouldn’t be allowed to name new leadership from with its ranks. “That culture must be stopped,” Joacim Olsson, the CEO of the association, told Bloomberg. “This is such a serious mess,” he said.

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