Swedbank Dirty Money Scandal Reportedly Has Ties to Manafort

Mar 27 2019, 6:53 AMMar 27 2019, 8:32 AMMarch 27 2019, 6:53 AMMarch 27 2019, 8:32 AM

(Bloomberg) -- Accusations of money laundering against Swedbank AB grew more serious on Wednesday as Sweden’s main broadcaster published a report alleging the bank misled U.S. authorities.

Former Trump campaign chairman and convicted felon Paul Manafort was among those to have received suspicious payments made through the Stockholm-based lender, broadcaster SVT also reported.

Shares in the bank opened more than 5 percent lower in the Swedish capital, putting it at the bottom of the Bloomberg index of European financial stocks.

The revelations suggest the laundering scandal engulfing Sweden’s oldest bank may be considerably broader in scope than previously thought. The news comes on top of reports alleging that Swedbank was used to handle more than $10 billion in potentially suspicious transactions tied to the Danske Bank A/S Estonian laundering case.

Swedbank Losing Grip on Snowballing Dirty-Money Links: BI React

But the Swedbank amounts requiring closer scrutiny -- transactions by so-called non-resident high-risk customers in Estonia -- were as high as 20 billion euros ($23 billion) in some years in 2010-2016. Deposed Ukrainian President Viktor Yanukovych, who’s now in hiding in Russia, is among those alleged to have used Swedbank’s services.

In an emailed statement, Swedbank spokesman Gabriel Francke Rodau provided the following comment:

“Swedbank is limited by applicable law to comment on the existence of, or the contents of, any confidential potential communication with the New York State Department of Financial Services. Swedbank cooperates fully and communicates clearly, correctly and with the best intentions with all relevant authorities.”

Shareholder Confrontation

The bank will face shareholders on Thursday at its annual general meeting. The dirty money case has raised serious questions as to whether the chief executive officer, Birgitte Bonnesen, may have deliberately misled the public as to what the bank knew about potential laundering activities.

Read More: Swedbank CEO’s Future at Stake as Investor Showdown Nears: Q&A

Wednesday’s SVT report alleges that Swedbank misled U.S. authorities seeking more information on its involvement in the 2016 Panama Papers scandal. The broadcaster claims that, in April of that year, the New York State Department of Financial Services, DFS, sent a letter to Swedbank’s local office, asking the bank to report all transactions that can be linked to Mossack Fonseca.

Read More: Dirty Money Allegations Against Swedbank Trigger U.S. Interest

Leaked documents now show that Swedbank did business with over 100 companies tied to Mossack Fonseca. But the bank told the DFS that it “did not identify reasons to suspect money laundering,” according to SVT.

Since the laundering allegations were first leveled against Swedbank in a Feb. 20 SVT report, the bank has lost more than a fifth of its market value.