Danske Bank's Estonian branch processed $234B in suspicious flows — the CEO resigned

Danske Bank's Estonian branch became a hub for non-resident banking, processing enormous volumes of money from Russia, Latvia, and other former Soviet states. By 2013, the branch held about €20 billion in non-resident deposits — a concentration that should have triggered intense anti-money-laundering scrutiny. Instead, the bank's leadership prioritised the branch's earnings, which contributed significantly to group profits.

Whistleblower Howard Wilkinson, a senior Danske trader, warned management repeatedly that the branch was knowingly processing funds linked to organised crime and Russian state actors. JPMorgan Chase, which processed dollar transactions for Danske, halted services in 2013 due to its own suspicions. Despite these warnings, the bank's board did not intervene. Between 2007 and 2015, approximately €200 billion of suspicious transactions flowed through the tiny Estonian branch.

The scandal became public in 2017. In September 2018, CEO Thomas Borgen resigned, taking responsibility for the bank's failure to prevent the money laundering. The Estonian branch was closed in 2019. In December 2022, Danske Bank pleaded guilty to US charges and agreed to pay $2 billion. The former head of the Estonian branch, Aivar Rehe, died by suicide in 2019 before he could testify. Ten former employees were arrested in Estonia.