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Money-Laundering Is Completely Out-Of-Control In Traditional Finance/Banking Industry (#GotBitcoin?)

Money-Laundering Is Completely Out-Of-Control In Traditional Finance/Banking Industry (#GotBitcoin?)

Money-Laundering Is Completely Out-Of-Control In Traditional Finance/Banking Industry (#GotBitcoin?)

Police Raid Sweden’s Leading Bank as Russian Money Laundering Scandal Spreads

The unfolding scandal comes six months after Danske Bank said its tiny Estonia branch had moved more than $230 billion from Russia and other former Soviet states.

Swedish police on Wednesday raided the headquarters of Swedbank AB, the latest Scandinavian banking giant to come under suspicion of laundering billions of dollars in illicit funds from Russia.

The unfolding scandal comes six months after Danske Bank said its tiny Estonia branch had moved more than $230 billion from Russia and other former Soviet states.

The raid is part of a probe into whether Swedbank informed 15 of its largest shareholders of a broadcast about money laundering allegations at its Estonian operations before it was aired last month, according to a spokesman for the Swedish prosecutors’ office.

In a new broadcast on Tuesday, the station provided more details on the transactions that went through Swedbank’s Estonian operations, based on a report by an outside investigator. The report, according to the broadcast, shows between €10 billion and €20 billion (between $11 billion and $22 billion) passed yearly through accounts of nonresident, high-risk customers at Swedbank Estonia between 2010 and 2016.

Swedbank confirmed its offices had been raided, adding that it will cooperate with the authorities, but declined to comment on the new allegations made by SVT on Wednesday.

Prosecutors are separately evaluating whether to open a probe directly into the suspected money laundering that was outlined in the SVT report.

Swedbank shares fell 7% Wednesday and are down by a fifth this year, making it the worst performing large bank in Europe.

Last year, Danske Bank, Denmark’s flagship lender, announced its Estonia branch had moved hundreds of billions of dollars from Russia and other former Soviet states over years before supervisors pressured it into dropping most of those clients. A large part of this was probably illicit, Danske Bank has said.

As with Danske, Swedbank’s problems appear to emanate from its operations in the tiny Baltic nation, where Swedbank is the largest lender. In February, Swedish and Estonian banking regulators began investigating the bank on money laundering concerns.

“We take such info very seriously and launch respective proceedings,” Kilvar Kessler, chairman of the management board of Estonia’s banking supervisor, the Finantsinspektsioon, said in a text message.

Analysts say there are likely to be more revelations about how Scandinavian banks became a crossroads for money leaving the former Soviet Union.

“You see new regulation and tightening up but I think it could be a latch on the stable door. This has been going on for at least a decade,” says. James Oates, the founder of Cicero Capital, a financial adviser in Tallinn, the Estonian capital.

Meanwhile:

Standard Chartered To Pay $1.1 Billion In Iran Sanctions Settlement

The bank took a $900 million provision earlier this year to help cover the settlement of the long-running probe.

Standard Chartered PLC on Tuesday agreed to pay $1.1 billion to settle allegations it violated sanctions on Iran and other countries, marking the end of a long-running probe by U.S. and U.K. regulators that had weighed on the bank’s share price.

The U.K.-based bank took a $900 million provision earlier this year to help cover the settlement. It is one of the largest settlements paid by a bank over alleged sanctions violations, although it is far smaller than the $8.9 billion French bank BNP Paribas paid in penalties in 2014.

Standard Chartered said it accepts full responsibility for the violations identified by authorities including the Justice Department and the U.K. Financial Conduct Authority, while also blaming some of the activities on two unnamed former employees. Existing corporate probation agreements with the Justice Department and the Manhattan district attorney’s office will be extended until April 2021, it said.

In a court filing, the Justice Department said Standard Chartered serviced customers with known Iranian connections through its Dubai branch between 2007 and 2011, resulting in around $240 million in transactions being processed through the U.S. The bank will now forfeit that amount and make settlement payments to the Justice Department, the FCA, the Manhattan DA, the Federal Reserve, the New York Department of Financial Services and the Treasury Office of Foreign Assets Control.

The Justice Department said a former employee in the Dubai branch pleaded guilty, and a former customer of the branch, an Iranian national, has been charged.

The FCA said it found “serious and sustained shortcomings” in the bank’s anti-money-laundering controls. In one instance, it said the bank opened an account for a consulate in the United Arab Emirates with 3 million U.A.E. dirham ($816,750) in a suitcase, without making adequate checks on the source of funds. OFAC said its settlement also resolves other apparent violations of sanctions relating to Cuba, Myanmar, Sudan, Syria and Zimbabwe.

The sanctions probe has hung over Standard Chartered since Chief Executive Bill Winters started in 2015 with the aim of cleaning up the bank’s culture and soured books of loans. On Tuesday, he said the bank will continue to root out any issues that threaten trust in the bank.

In the court filing in Washington, D.C. federal court, the Justice Department said two Standard Chartered employees conspired between 2007 and 2011 to skirt a formal ban by the bank on Iran-related business, and provided false information to bank compliance workers to disguise clients’ Iranian connections.

The bank had first disclosed the probe in 2014, and some analysts initially predicted fines as large as $2 billion. Its shares were up just under 1% after the announcement.

In 2012, Standard Chartered paid $667 million to settle U.S. authorities’ allegations of potential sanctions breaches between 2001 and 2007 that included transactions with Iranian companies.

In Tuesday’s court filing, the DOJ said it opened its probe after U.S. law enforcement learned through an unrelated investigation that Standard Chartered may have continued processing dollar transactions for companies and individuals with ties to Iran and other sanctioned countries after 2007.

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