Swedish tv station SVT has investigated suspected money laundering by Russian and Ukranian customers of Swedbank. Oligarchs used accounts at Swedbank’s Estonian branch to move money offshore. The documentary is available online in English: part 1 and part 2.
At the end of part 2, Daria Kaleniuk, executive director of the Anti-Corruption Action Center in Kiev is asked “why do you think they [i.e., the bank] let this happen?”. Ms. Kaleniuk replies “because it’s profitable!”.
However, I’m not convinced that is true. Payments are a low-margin activity that expose banks to a lot of downside risk. Violating anti-money laundering (AML) rules have cost banks hundreds of millions of dollars in recent years.
In my opinion, criminals succeed in money laundering because compliance with AML regulation was (is?) not a priority for top executives. A lack of funding and management attention for compliance leads to a mentality of “just check the boxes, so it looks like we did what we had to do”.
Stronger enforcement, including higher fines and other sanctions, might change that situation.
[A] higher share of women on the boards of banks […] is associated with greater stability. As I have said many times, if it had been Lehman Sisters rather than Lehman Brothers, the world might well look a lot different today. – Christine Lagarde, Managing Director of the International Monetary Fund
In today’s finance & crime news:
“Swedbank AB has fired its chief executive officer, Birgitte Bonnesen, amid allegations the bank was used to launder billions of dollars in Russian money on her watch.” – Bloomberg
For your information, five of the eleven members of Swedbank’s Board of Directors are women.
A fascinating article from Canada’s Global News connects the North American opioid crisis, Chinese gangs, casinos, banks and the Vancouver real estate market:
Secret police study finds crime networks could have laundered over $1B through Vancouver homes in 2016
Createspace enables independent authors to publish their works and to distribute them through Amazon.
Amazon takes care of the printing, shipping, and payments. The author receives a monthly royalty payment. I used Createspace to publish Bankers are people, too.
Unfortunately, criminals have also discovered that they can use the platform for money laundering.
Brian Krebs explains how it works on his blog, KrebsonSecurity. Someone publishes a bogus book and sets an extremely high price for it, e.g. $555. They use stolen credit cards to buy the book. Amazon pays the “author” about 60% of the retail price in royalties. This money looks like a legit income. The stolen money has been laundered. Continue reading “Crooks with books: Laundering money as an “author” (part 1)”