Since the start of October, two events strongly indicate that Danske Bank – already under the pitiless glare of publicity for its acknowledgement that $234 billion in potentially suspicious transactions had moved through its Estonian branch – has now entered a new and substantially more worrisome phase of law enforcement scrutiny. First, on October 4, Danske Bank itself acknowledged not only that it was “in dialogue” with Danish and Estonian authorities regarding criminal investigations by both countries into the Estonian branch’s activities, but also that it also had “received requests for information from the U.S. Department of Justice (DOJ) in connection with its own criminal investigation relating to the Estonian branch . . . .” The bank further stated that It “is cooperating with these authorities,” adding that “[t]he timing of completion of the investigations by, and subsequent discussions with, the authorities is uncertain, as is the outcome.”
Second, on October 12, according to ERR News (the English-language service of Estonian Public Broadcasting), Estonian Prosecutor General Lavly Perling informed the Legal Affairs Committee of the Riigikogu (Estonia’s unicameral Parliament) that the criminal investigation into the Estonian branch “is expected to progress enough by the end of the year that the Prosecutor’s Office will be able to reveal new information about it.” Perling, who has been the Prosecutor General since 2014, also reportedly stated that cooperation with Danish prosecutors “has been good,” but “cooperation with Russia, the alleged source of the money laundering, has been difficult,” and that Estonian authorities had sent “appeals for legal assistance” to European and unspecified other countries. Although ERR News said that Danske Bank “has reported eight people to the Estonian police in connection with the suspected money laundering,” Perling declined to specify the number of people currently under investigation.
Note: That Danish, Estonian, and even United Kingdom authorities are conducting criminal investigations into the myriads of suspicious transactions through Danske Bank’s Estonian branch is old news. Confirmation of a U.S. Department of Justice investigation into that subject is not. To date, the Justice Department has not confirmed Danske Bank’s statement, and is unlikely to say anything about the scope and scale of that investigation until and unless it reaches a resolution with Danske Bank.
For now, it is reasonable to assume that the primary focus of the Justice Department investigation will be whether any of the bank’s or Estonian branch’s conduct indicates criminal violations of the U.S. money-laundering offenses. U.S. agents and prosecutors will certainly want to determine whether any possible laundering transactions by non-resident customers in Estonia flowed from Danske Bank’s Estonian branch through U.S. correspondent banks. Given the titanic scale of cross-border transactions that flowed through Estonia over nearly a decade, however, it is by no means impossible that as the Department receives and reviews material from Danske Bank and other sources, it may find a factual basis on which to expand its investigation beyond Danske Bank to other Estonian banks or branches of foreign banks.
In any event, the pace of all of these investigations is likely to be far slower than any of the investigating agencies – let alone Danske Bank – would want. As each new jurisdiction opens its own investigation and seeks documents from foreign authorities, the challenges for each investigating agency in reviewing and analyzing documentation, deciding on next steps in its investigation, and coordinating with other jurisdictions can mount exponentially. At least for participating European Union Member States, it may soon be worthwhile considering the establishment of a Joint Investigation Team (JIT), in conformity with the European Union’s model JIT agreement, to improve investigative coordination and reduce the financial burdens on less populous countries. Any coordination measures that might shorten what otherwise could be a years-long process to bring these disparate investigations to fruition would be welcome.