Swedish Bank Fined $386 Million for Hiding Money-Laundering
After Swedish public service television SVT had looked
closer at Swedbank’s operations in Estonia, the inspection revealed a large number
of suspicious transactions. These discrepancies prompted the Swedish FSA to
start investigations into the findings. Closer scrutiny found the bank had
hidden identification details on bank account holders, going so far as to
keeping separate books on clients – one official, and one ’under the table,’ to
help facilitate money-laundering and tax evasion.
The bank also failed to act to prevent illicit transactions
and money-laundering on a large scale, according to the investigations which
caused the FSA’s motivation to sanction the bank 4 billion Swedish krona
($386m). The report on Swedbank’s misbehavior found more than 1,000 clients
with Swedbank-accounts in the Baltics, but with addresses in high-risk
jurisdictions such as The British Virgin Islands and Belize. When examined
closer, the companies registered in such jurisdictions often lacked
documentation or annual reports, or had published fake financial statements.
Other names found in the client list belonged to well-known high-risk
individuals.
The investigations have had other more far-reaching
implications; it was found that a number of the transactions facilitated by the
bank helped former Ukraine president Viktor Yanukovych, who was convicted for
treason in 2019 and transferred millions in funds into his personal bank
accounts. Other transactions were connected with Russian oligarch Iskander
Makhdumov, who is associated with organized crime.
The findings also linked transactions from Swedbank to the
most extensive tax fraud in Russian history, exposed by accountant Sergei
Magnitsky, who paid for his revelations with the ultimate price; death. 50
accounts in Swedbank received a total of $26 million USD from the tax fraud.
The money was transferred via companies suspected of money laundering in the
highly publicized scandal in Danske Bank.
Swedbank is also under investigation in the U.S., as they
operate an office in New York and deal in U.S. dollars. After being exposed, an
investigation was conducted for Swedbank by the independent law firm Clifford
Chance in London. It found that €36.7 billion in transactions, all carrying a
high risk for money laundering, were processed through the bank’s branch
network. The report also said Swedbank actively targeted high-risk customers
from Russia and former Soviet states. The bank may face even larger fines than
dealt with by the Swedish FSA when U.S. investigations are concluded. The
bank’s stock price has tanked more than 30% since the money-laundering
disclosures were published.
Money-laundering is generally helped by our current fiat
money system’s opaque characteristics, which also affords most commercial banks
the magical ability to create new money out of thin air, when lending, also
inflating our base currency. If banks, and by association also governments,
were forced to use a transparent blockchain and fixed supply money system
they’d have a much harder time hiding illicit transactions and inflate our
currency.
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