Danske Accused of Lying to French Investigators over Alleged Money Laundering

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After being accused of “openly lying” to authorities in France, Danske Bank A/S says it now faces the prospect of fresh charges being brought against it in connection with a $230 billion money laundering case.

Denmark’s biggest bank said on Friday [Jan. 11] that it’s been summoned for questioning by French authorities. The lead investigative judge “envisages placing Danske Bank under formal investigation,” the lender said.

The announcement follows a presentation by Bill Browder, the co-founder of Hermitage Capital Management and a driving force behind criminal money laundering complaints against banks, alleging that top-level employees at Danske lied to authorities. The development prompted Danske to temporarily delay a bond sale as investors digested the information. Browder said on Thursday [Jan. 10] he was unaware of Danske’s bond sale plans and that he didn’t time his presentation to coincide with them.

Danske is under investigation in multiple jurisdictions, including in the U.S. But when it comes to France, the bank said a year ago that it was no longer facing charges in an anti-money laundering investigation by authorities there, and that its status had been changed to that of assisted witness. In a presentation delivered at the Danish parliament on Thursday, Browder said French authorities decided to review that decision, based on his evidence.

Browder says the new information he presented in Copenhagen concerns “official statements from the top legal representatives of the bank” which he says “reflects very poorly on Danske Bank.” Speaking in an interview, he also said “it raises questions about the credibility of statements they’re making to other authorities.”

In a written comment on Thursday, Danske spokesman Kenni Leth said the bank does “not believe that we have provided incorrect information to the French authorities. On the contrary, it is clearly in our interest to obtain as accurate a picture of what happened in Estonia as possible.”

In material accompanying his presentation, Browder said Danske’s former general counsel, Flemming Pristed, misled a French judge as recently as January 2018. In October of that year, Danske announced that Pristed was leaving the bank, without having lined up another job.

“The fact that they were relegated from suspect to witness never made any sense to me,” Browder said. “And now that I’ve been able to see the transcripts of the interrogation, I understand why the French did that. But the answers that Danske Bank gave were false.”

Danish lawmaker Michael Aastrup hosted Browder’s press conference, which followed a parliamentary briefing on the Magnitsky Act. The Act is named after Sergei Magnitsky, a former colleague of Browder who died in a Russian prison in 2009 after investigating widespread corruption. Browder has lobbied for Europe-wide adoption of the Act, which targets human rights offenders.

Danske now faces fines potentially in the billions of dollars. Its share price plunged almost 50 percent last year, while Thursday’s string of bad news sent the stock down about 3 percent.

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