London Daily

Focus on the big picture.
Sunday, Sep 28, 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

0:00
0:00
Close
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
Trump Claims FBI Planted 274 Agents at Capitol Riot, Citing Unverified Reports
India: Internet Suspended in Bareilly Amid Communal Clashes Between Muslims and Hindus
Supreme Court Extends Freeze on Nearly $5 Billion in U.S. Foreign Aid at Trump’s Request
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
China Deploys 2,000 Workers to Spain to Build Major EV Battery Factory, Raising European Dependence
Speed Takes Over: How Drive-Through Coffee Chains Are Rewriting U.S. Coffee Culture
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Ringo Starr Champions Enduring Beatles Legacy While Debuting Las Vegas Art Show
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
FBI Removes Agents Who Kneeled at 2020 Protest, Citing Breach of Professional Conduct
Trump Alleges ‘Triple Sabotage’ at United Nations After Escalator and Teleprompter Failures
Shock in France: 5 Years in Prison for Former President Nicolas Sarkozy
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
BNP Paribas Abandons Ban on 'Controversial Weapons' Financing Amid Europe’s Defence Push
Typhoon Ragasa Leaves Trail of Destruction Across East Asia Before Making Landfall in China
The Personality Rights Challenge in India’s AI Era
Big Banks Rebuild in Hong Kong as Deal Volume Surges
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Arnault Denounces Proposed Wealth Tax as Threat to French Economy
Study Finds No Safe Level of Alcohol for Dementia Risk
Denmark Investigates Drone Incursion, Does Not Rule Out Russian Involvement
Lilly CEO Warns UK Is ‘Worst Country in Europe’ for Drug Prices, Pulls Back Investment
Nigel Farage Emerges as Central Force in British Politics with Reform UK Surge
Disney Reinstates ‘Jimmy Kimmel Live!’ after Six-Day Suspension over Charlie Kirk Comments
U.S. Prosecutors Move to Break Up Google’s Advertising Monopoly
Nvidia Pledges Up to $100 Billion Investment in OpenAI to Power Massive AI Data Center Build-Out
U.S. Signals ‘Large and Forceful’ Support for Argentina Amid Market Turmoil
Nvidia and Abu Dhabi’s TII Launch First AI-&-Robotics Lab in the Middle East
Vietnam Faces Up to $25 Billion Export Loss as U.S. Tariffs Bite
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Indonesia Court Upholds Military Law Amid Concerns Over Expanded Civilian Role
Larry Ellison, Michael Dell and Rupert Murdoch Join Trump-Backed Bid to Take Over TikTok
Trump and Musk Reunite Publicly for First Time Since Fallout at Kirk Memorial
Vietnam Closes 86 Million Untouched Bank Accounts Over Biometric ID Rules
Explosive Email Shows Sarah Ferguson Begged Forgiveness from Jeffrey Epstein After Taking His Money
Corrupt UK Politician Ed Davey Demands Elon Musk’s Arrest for Supporting Democracy
UK, Canada, and Australia Officially Recognise Palestine in Historic Shift
Alibaba Debuts Open-Source Deep Research Agent with Benchmarks Rivaling OpenAI
Marcos Faces Legacy-Defining Crisis as Flood Projects Scandal Sparks Massive Tide of Protests
China’s Micro-Drama Boom Turns Stalled Real Estate Projects into Lavish Film Sets
New Eye Drops Show Promise in Replacing Reading Glasses for Presbyopia
'Company Got 5,189 H-1B Visas, Then Laid Off 16,000 Americans': US Defends New $100,000 H-1B Visa Fee
Golf legend tells Omar she should be 'sent back to Somalia' after her Kirk comments
EU Set to Bar Big Tech from New Financial Data Access Scheme
China Bans Livestreaming and AI in Religion Amid Crackdown on Shaolin Temple Scandal
×