Beautiful Virgin Islands

Saturday, Jul 05, 2025

Newly Obtained Audit Report Details How Shady Clients from Around the World Moved Billions Through Estonia

Newly Obtained Audit Report Details How Shady Clients from Around the World Moved Billions Through Estonia

On a warm Monday morning in June 2014, two auditors from Estonia’s financial regulator stepped into the Tallinn office of Danske Bank, armed with a single piece of graph paper handwritten with the names of 18 of its clients, and demanded to see their records.

At first glance, the customers on the list sounded boring. They were mostly obscure trading companies with generic names like Hilux Services and Polux Management. But the auditors — who had been tipped off by a police unit that tracks financial crime — didn’t have to dig too deep before things got very strange.

The companies were moving huge amounts of money through Danske Bank from Russia, Azerbaijan, and Ukraine, and justifying them with nonsensical contracts.

One company with no website or internet presence, started by a 21-year-old from Azerbaijan, received millions of dollars from Russian state arms company Rosoboronexport for no clear reason. Another company from Uzbekistan bought $2 million worth of “building materials” from the remote British Virgin Islands. A third company agreed to loan out $150 million, but inexplicably transferred $582 million instead.

After more than a month poring over Danske’s books, the auditors produced a damning report about the bank’s failure even to try to understand what its own clients were doing, But it was never made public, even after the goings-on at Danske Estonia sparked one of the biggest money laundering scandals of all time.

In 2017, a team from OCCRP and the Danish newspaper Berlingske revealed that billions of dollars in dirty money had been moved through the bank’s Estonian branch. Only then, three years after it had been produced, did Danske’s head office get around to translating the Estonian audit.

Now, a copy of the report has been obtained by Berlingske and shared with OCCRP. It describes in exacting detail how the bank breached at least 47 different anti-money-laundering regulations — and how employees at the Tallinn branch enabled this by systematically ignoring hundreds of bizarre transactions.

In parts, it reads like a point-by-point list of the techniques offshore companies and politically exposed people use to transfer huge sums of money without accounting for their origin — and of the bank’s failure to question them.

“Danske was a textbook case where the bank’s risk level and its risk management were not in balance,” Kilvar Kessler, the head of the Finantsinspektsioon, or Estonian Financial Supervision Authority (FSA), told OCCRP.

“Why weren’t they? Because the profit coming from the branch with the risk was so high. If there would have been adequate risk control in place, such income wouldn’t have been possible.”

After seeing the first draft of his auditors’ report, Kessler was appalled. He immediately called Danske Estonia’s CEO, Aivar Rehe, and asked for a meeting. Soon afterwards, they were sitting together at an upscale restaurant in Tallinn’s picturesque Old Town.

“What have you guys been doing here?” he asked Rehe in dismay.

The bank head responded that without its lucrative offshore unit, Danske wouldn’t have a profitable business in Estonia.

Kessler asked if the head office in Copenhagen knew what was going on in Tallinn.

“Of course they knew,” he remembers Rehe saying.

Rehe committed suicide in 2019 amid a money-laundering probe into operations at the bank. He was not a suspect in the case but had been sought as a witness.

Danske Bank declined to answer specific questions related to this story. A press officer for the bank, Stefan Singh Kailay, directed journalists to a previous statement in which the bank acknowledged that it should never have had its portfolio of offshore customers.

“It is also obvious that we were too slow to acknowledge the scale of the problems and get the portfolio closed down,” Kailay said.

Thousand-Dollar Paint Cans and Nonexistent Addresses


The heart of Danske’s dirty business in Estonia lay in what was known as the “non-resident banking unit,” a team of about a dozen bankers who catered exclusively to foreign customers in places like Azerbaijan and Russia.

Last year, OCCRP reported on how these bankers — known as “relationship managers” — actively helped their clients evade anti-money-laundering regulations by running offshore companies for them.

But even when they weren’t conspiring with their clients, the relationship managers were ignoring obvious signs of money laundering, the FSA audit found.

For example, they accepted documentation from clients written in Azerbaijani, even though nobody on the team spoke the language. (The bank’s official policy was to only accept documents in English, Estonian, or Russian.) When asked about this, the bank replied that one relationship manager, Oksana Lindmets, had “some knowledge” of Azerbaijani and supplemented this with Google Translate.

They also accepted documents signed by Stan Gorin, a Latvian who had become notorious for selling his identity as a nominee company director, even though at that point there were hundreds of media reports detailing how his name had been used for illegal businesses, from weapons trafficking to pyramid schemes.

Perhaps most importantly, the relationship managers did not appear to pay much attention to the contracts that justified their clients’ transfers of millions of dollars, even when they were clearly absurd.

One high-risk client, Milecome Enterprises LLP, bought 10,500 one-gallon paint cans for an average price of over $1,000 each. Another supposedly sold a batch of metal pipes for $500 million, which would have added up to 344,820 metric tons — an unlikely amount, given that a full shipping container can hold only around 28. Inexplicable trades, especially those involving round numbers, are a classic sign of money laundering.

Another company, Riverlane LLP, was registered barely a month before it became Danske’s client. It had no website and only about 15,500 British pounds in cash assets, and declared its address at a location in Azerbaijan that didn’t appear on Google Maps.

Despite this, it almost immediately started moving huge amounts of money through the bank, mostly to other shell companies on the back of dubious contracts for the sale of electronics, textiles, building materials, and metals.

Auditors pointed out that many of these documents were nearly identical in form and content. In many cases, the buyer agreed to pay in advance for goods that would only be delivered after a month or more. One contract was signed a year before Riverlane was founded, while another was for the sale of an object whose name, the auditors said, was just gibberish: “the EP 70 KVA Sanay Puntasi 50cm.”

Danske often did not even bother to collect contracts at all, or check whether the trades actually took place.

“Danske Bank has not put in enough effort to determine where and when the goods would be delivered to the carrier and, moreover, whether the goods were carried at all,” the auditors wrote. “[F]or example, how and by what means were 282,138 tonnes of wire rod or workbenches valued at $250 million transported, and [were] they were transported at all.”

In just a year and a half, 65.7 million euros and over $1 billion passed through Riverlane’s accounts, an average of around $2.5 million for every working day — even though Danske never appeared to know who its customer was.

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
A new online platform has emerged in the United Kingdom, specifically targeting Muslim men seeking virgin brides
Trump Celebrates Independence Day with B-2 Flyover and Signs Controversial Legislation
Boris Johnson Urges Conservatives to Ignore Farage
SNP Ordered to Update Single-Sex Space Guidance Within Days
Starmer Set to Reject Calls for Wealth Taxes
Stolen Century-Old Rolls-Royce Recovered After Hotel Theft
Macron Presses Starmer to Recognise Palestinian State
Labour Delayed Palestine Action Ban Over Riot Concerns
Swinney’s Tax Comments ‘Offensive to Scots’, Say Tories
High Street Retailers to Enforce Bans on Serial Shoplifters
Music Banned by Henry VIII to Be Performed After 500 Years
Steve Coogan Says Working Class Is Being ‘Ethnically Cleansed’
Home Office Admits Uncertainty Over Visa Overstayer Numbers
JD Vance Questions Mandelson Over Reform Party’s Rising Popularity
Macron to Receive Windsor Carriage Ride in Royal Gesture
Labour Accused of ‘Hammering’ Scots During First Year in Power
BBC Head of Music Stood Down Amid Bob Vylan Controversy
Corbyn Eyes Hard-Left Challenge to Starmer’s Leadership
London Tube Trains Suspended After Major Fire Erupts Nearby
Richard Kemp: I Felt Safer in Israel Under Attack Than in the UK
Cyclist Says Police Cited Human Rights Act for Riding No-Handed
China’s Central Bank Consults European Peers on Low-Rate Strategies
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Musk Battles to Protect Tesla Amid Trump Policy Threats
Air France-KLM Acquires Majority Stake in Scandinavian Airlines
UK Educators Sound Alarm on Declining Child Literacy
Shein Fined €40 Million in France Over Misleading Discounts
Brazil’s Lula Visits Kirchner During Argentina House Arrest
Trump Scores Legislative Win as House Passes Tax Reform Bill
Keir Starmer Faces Criticism After Rocky First Year in Power
DJI Launches Heavy-Duty Coaxial Quadcopter with 80 kg Lift Capacity
U.S. Senate Approves Major Legislation Dubbed the 'Big Beautiful Bill'
Largest Healthcare Fraud Takedown in U.S. History Announced by DOJ
Poland Implements Border Checks Amid Growing Migration Tensions
Political Dispute Escalates Between Trump and Musk
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
US Senate Votes to Remove AI Regulation Moratorium from Domestic Policy Bill
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
Jury Deliberations in Diddy Trial Yield Partial Verdict in Serious Criminal Charges
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
King Charles Plans Significant Role for Prince Harry in Coronation
Two Chinese Nationals Arrested for Espionage Activities Against U.S. Navy
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
Trump Administration Considers Withdrawal of Funding for Hospitals Providing Gender Treatment to Minors
Texas Enacts Law Allowing Gold and Silver Transactions
×