Key figures who assisted foreign criminals slip their money around the globe in bulk and fraudulently, via a means they knew was of financial benefit to “name and shame” the crooks, could not be identified, the public prosecutor announced Wednesday.
Denmark-based VTB Bank, which partnered with seven other foreign banks on transactions of up to $70 million last year, was named by the government as one of the main beneficiaries.
The statement comes a month after the World Bank called on foreign financial institutions and multinational corporations to put pressure on firms to crack down on financing that undermines development in countries where the profits are ill-gotten.
Amid a proliferation of financial crime across the globe, agencies such as the International Monetary Fund (IMF) are increasingly looking to uncover the dirty money flooding through Western banks, highlighting their role in the shadowy world of financing financial transactions.
Speaking at a conference on the sidelines of the World Economic Forum (WEF) in Davos, the Deputy Prosecutor General of the Central District of Denmark, Julius Havelen, outlined the bank’s influence as well as the scale of abuses that facilitated the illicit use of shell companies to conceal assets and withdraw wealth.
“VTB Bank, as foreign bank providing such services, would ultimately be obliged to carry out maximum vigilance on transactions involving up to a maximum of 100,000 currencies,” Havelen said.“This is why we believe that VTB is one of the main beneficiaries of the crime networks which scheme fraud against the customers.”
The prosecutor blamed the criminal networks for any corruption or crime going on within foreign organizations.
“This is done by foreign financial institutions and through the donations they make to the criminals,” Havelen said.“The money is either for the direct provision of jobs to the criminals, to the most corrupt, or for the purchase of housing or luxury items. It is also primarily used for bribes and at times for fraud and tax evasion.” The bank’s activities were illegal
The bank moved $70 million worth of illicit money in bulk from 2015, giving its customers three years to repay the funds, Havelen said.
“The fraudster is also able to withdraw a huge amount without having to involve anybody else, which is much worse,” he said.
The alleged crimes were detailed in various government and national media reports in Denmark this month. In February, authorities raided the bank’s head office, seizing documents relating to VTB client activities, as well as passports belonging to staff.
But despite the raid, all of the relevant parties, including the bank, have refused to comment on the allegations and provided the prosecution with documents.
According to Danish daily Aftenposten, investigators want to question VTB’s former head of market regulation, Andreas Geeckel. In February, Geeckel resigned his post after 40 years at the bank.
The newspaper said VTB was among countries with which Denmark had built up a close relationship, including Australia, Sweden, South Korea and the US. It quoted an internal review by the Danish legal department as saying the bank worked with seven other banks on the transfers.
A subsequent investigation showed Geeckel and two other colleagues acted without board approval, allowing bribes of up to 150 million Danish crowns ($21 million), with VTB’s Australian business donating more than $1 million in bribe-laden lumpsum.
VTB declined to comment to AFP.More prosecutions
Some 700 pages of documents have been presented to the prosecutor on the floor of the Danish parliament since February, more than ten months after the raids, Havelen said.
Later, the news that VTB was among companies named by the World Bank, circulated by Norwegian newspapers Haimee Post Nord and Jyllands-Posten in February.
The countries have led a concerted effort to crack down on money laundering and tax evasion in areas from sub-Saharan Africa to South America.
Other international firms investigating crimes including criminal groups, nations and tax officials have all pointed the finger at banks.
Last month, the Council of Europe’s rights council urged banks and financial institutions to work with the international community to combat money laundering and tax evasion.
Arjen Karlsen, head of the finance ministry’s anti-money laundering department at the Czech Republic, said despite requests from at least two national prosecutors, the authorities were still not sure who was the main beneficiaries of the network.
“Unfortunately, we have not been able to name the primary perpetrators,” Karlsen told AFP, on the sidelines of the WEF.
“So now, it’s critical for us to ask the banks and financial institutions to impose controls and to come up with solutions that will further [reduce] the level of taxes imposed.”