A European lender and two US banks alleged to be involved in money-laundering case

This article is more than 1 year old

This article is more than 1 year old

A major European lender and two US banks have become embroiled in an alleged €200bn (£178bn) money-laundering scandal at Danske Bank, following new testimony by a key whistleblower.

Howard Wilkinson, who served as head of Danske Bank’s trading unit in the Baltic region until 2014, told a Danish parliamentary hearing that other lenders were involved in processing billions of dollars worth of suspicious payments with links to Danske’s Estonian branch.

“I would guess that $150bn (£117bn) went through this particular bank [the large European bank] in the US,” the Briton said, though he stopped short of naming any of the lenders involved.

Officials in Denmark, the US, Estonia and Britain are investigating about €200bn worth of payments made through Danske’s small Estonian branch between 2007 and 2015.

“No one really knows where this money went. All we know is that the last people to see it were these three large banks in the US. They were the last check and, when that failed, the money was into the global financial system,” Wilkinson said.

Deutsche Bank, JP Morgan and Bank of America were all reportedly involved in clearing dollar transactions for Danske’s Estonian branch in Tallinn.

It is understood that JP Morgan ended its relationship with that branch in 2013, while reports have said Deutsche did the same that year.

It is not known whether these are the banks referred to in Wilkinson’s comments. They have not been accused of any wrongdoing. All three banks declined to comment.

No one really knows where this money went. The last people to see it was were these three large banks in the US Howard Wilkinson

Danske was also thrown into hot water after Wilkinson said the bank had offered him hush money to stop him speaking out. However, he was given the go-ahead to speak to US authorities last month.

Wilkinson said he began looking into some of the three most profitable accounts involving British limited liability partnerships (LLPs) in January 2014 but it became clear by April that year that “the bank didn’t intend to do anything”.

“They were all fake. Not just that, they all basically looked the same. And it turned out they all had the same registered office in a suburb in north London … I passed those on. By April, none of the accounts … had been closed down,” Wilkinson said.

“I warned them [Danske] that if they didn’t do a proper investigation and make the appropriate report to the police, then I was going to do it myself,” Wilkinson said.

Now he worries there is little chance that the funds will be recovered.

“There is no chance in the world … that any of that money is ever going to be tracked down and that any criminals lose a single cent,” he said.

Speaking to Danish lawmakers following Wilkinson’s testimony, Danske Bank’s interim chief executive, Jesper Nielsen, lamented the damage to the lender’s reputation.

“We have breached the expectations society had of us. The case and the course of events around it does not reflect the bank we want to be,” he said.