A whistleblower has contacted Hermitage Capital Management, the company of investor Bill Browder, disclosing the details of a full-service money laundering package provided by the Estonian branch of Danske Bank.
This whistleblower, whose name is not yet known, provided Hermitage with the details of the full-service package available to Russian intermediaries moving flight capital into Europe. It is understood the whistleblower is a Russian who speaks Estonian and is a former client of Danske Bank.
The first details of the money laundering scandal were broken by a British whistleblower, Howard Wilkinson, who worked inside Danske’s Estonian branch as its head of its trading unit for the Baltic region. It was revealed in September last year that $200 billion of Russian flight capital had moved through the offshore branch in Estonia.
Hermitage has claimed that $200 million of a $230 million tax payment allegedly stolen by Russian government officials and an organised gang passed through the Estonian branch of Danske.
Representatives of Hermitage have met the second whistleblower and vouched for his credibility. The second whistleblower has no connection to Wilkinson. According to Vadim Kleiner, head of research at Hermitage, the second whistleblower had not even encountered Wilkinson.
The full-service package included the provision of an offshore company, together with full documentation signed by nominee directors. The customer was given access to an electronic bank account.
The whistleblower claimed that the client was charged 0.4 percent of the amount he channelled through the bank, using the facilities, Kleiner said.
The magnitude of this commission would indicate “to a reasonable banker” that the service on offer provided the means to facilitate money laundering, Kleiner said.
“There was no movement of goods, this was just moving money.”
Kleiner said that some of the clients were “so lazy that they could not even produce any supporting documents. Those bankers produced fake contracts.”
Hermitage has examined 21 accounts at the Estonian branch of Danske as part of its investigation of the path taken by the $230 million tax payment. Hermitage Capital Management told the Danish authorities in a criminal complaint against Danske served in July 2018 that the turnover on those accounts alone exceeded $9 billion.
“These 21 accounts in turn transacted with a further 169 accounts at Danske Bank, bringing the total number of suspect accounts to 190, with the total turnover on those 190 accounts unknown, but clearly of a very great magnitude,” the document said.
The Hermitage complaint further alleged that the firm had “discovered payments for the benefit of Sergei Roldugin, a close associate of Russian President Vladimir Putin. Specifically, an account at Danske Bank opened for Vaimer Ltd sent funds to a Lithuanian account opened for a shell company which then sent funds to the corporate Swiss account of Mr Sergei Roldugin.”
Hermitage officials including Browder, a noted Kremlin critic who was once the biggest investor in Russia, and Kleiner visited the Danish state authority prosecuting the case in late January. They pressed the case for a thorough investigation of the Danish Financial Supervisory Authority’s (FSA) oversight of Danske Bank’s Estonian branch. They claim this was negligent.
Kjeld Gosvig-Jensen, head of legal affairs at Finans Danmark, the banking sector trade body, said the Danish banking sector had responded to the Danske Bank affair by increasing the number of suspicious activity reports submitted to the local law enforcement agency. Local banks had also increased the strength of their anti-money laundering departments, he said.
The Danish FSA and Danske Bank declined to comment.