The latest Nordic bank to be embroiled in the Danske Bank débâcle is facing allegations about its Estonian business and suggestions that it accepted high-risk customers without doing enough checking, let Paul Manafort receive suspicious payments and misled the Americans about transactions by customers linked to Mossack Fonseca.

A Swedbank spokesperson told Compliance Matters that the bank was only going to respond to the widely publicised money-laundering allegations with a press release bearing the hilariously undescriptive title of "Information on ongoing activity at Swedbank HQ," which states: "We can confirm that EBM (the Swedish Economic Crime Authority) has initiated an activity at the Swedbank HQ in Sundbyberg. At this point of time, no individual or legal entity has been served suspicion of a crime."

Calling in the spooks

One allegation, made by SVT, the country's state TV network, was that 50 clients transferred at least 40 billion crowns (US$4.3 billion) between Baltic accounts at Swedbank and Danske Bank over the same period. On 26 February, Swedbank CEO Birgitte Bonnesen appointed Forensic Risk Alliance to conduct an investigation regarding the 50 named entities referred to in the TV programme Uppdrag granskning.

SVT's website says: "One of the largest banks in Sweden, Swedbank, may have been used for extensive, systematic money laundering for nearly a decade. A total of US$5.8 billion has been funnelled between suspect accounts in Swedbank and Danske Bank in the Baltics. Of this, US$26 million is linked to the Russian tax fraud that was uncovered by accountant Sergei Magnitsky."

Other allegations

Swedbank, according to an SVT person, produced an in-house report that found its way into the hands of the TV station, which says that it contained information about transgressions against AML regulations by, or on behalf of, its business in Estonia. The SVT person said that Swedbank had a branch there.

Elsewhere in the press, there are allegations that the report showed that Swedbank accepted highly risky customers without checking on the sources of their funds, the companies of which they were beneficial owners, the real purpose of their business relationships with Swedbank and various other things. On this subject, as on all the others, Swedbank merely referred Compliance Matters to its short statement.

Swedish and Baltic regulators are thought to be investigating Swedbank for signs of money laundering.

SVT says that the New York Department of Financial Services sent Swedbank a letter a couple of years ago in which it asked the bank to report all its transactions that might be linked to the now-defunct law firm of Mossack Fonseca. Bloomberg reports that leaked documents - presumably those in the hands of SVT - now show that Swedbank did indeed do business with more than 100 companies tied to the famous money-laundering facilitator. SVT is quoted as saying that the customers - or perhaps other customers - with such contacts came from Sweden and Norway. It also alleges that the bank denied to the regulator that it had spotted any reasons to suspect money laundering.

Allegations involving Manafort

SVT also believes that Paul Manafort, President Trump's campaign chairman who is now behind bars for tax fraud and bank fraud, received suspect payments through the bank.

Insider dealing allegations

Meanwhile, the Swedish Economic Crime Authority is sifting through papers and files at Swedbank's head office in a search for signs of insider dealing. The allegation here is that bank executives leaked the news to certain privileged investors that the bank was under investigation for money laundering in Estonia before the news was made public.

An object lesson in PR

In a public relations exercise a few days ago, the bank declared that Forensic Risk Alliance had produced an 'initial' - i.e. far from conclusive - report. It published a copy of the report which, hilariously, contains the kind of widespread redactions and blackings-out that one would expect from an American law-enforcement freedom-of-information disclosure. The most arresting statement in the report is: "(d) we have not been provided with bank-initiated remediation or investigation files, or reports; and (e) our initial and preliminary observations are subject to change as further information emerges." The report then features an entire appendix which contains "details of these and other limitations applying to our work." Perhaps one day the bank will issue a definitive statement about whether it broke any AML regulations, along with supporting facts.

Last figures

One set of figures that the bank released does indicate something, however, in a PDF entitled "Background Information." Most of it contains proclamations of Swedbank's adherence to the highest standards and a run-down of EU legislation that it claims to obey to the letter, but on page 4 it lists the "number of off-boarded non-resident customers" for 2017 and 2018. As the Danske Bank scandal was fully in swing a few years ago, these figures are a little on the late side. They do, however, show that even in the last two years Swedbank has been shedding Baltic customers on a seemingly industrial scale.

The figures for "terminated non-resident customers in the Baltics" are: Estonia - 427 in 2017 and 114 in 2018; Latvia - 190 in 2017 and 37 in 2018; Lithuania - 64 in 2017 and 54 in 2018. These figures suggest consistently (but do not prove) that Swedbank is on the tail-end of an exodus, even at this late stage when it feels that it is safe to publicise the figures.