Correspondent Banks ‘Least Culpable’ in Laundromat, Browder Says
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Bill Browder, the activist investor who’s hunting down banks that launder money, said correspondent banks probably bear the least responsibility.
After unveiling his most recent criminal complaint against a Nordic bank this week, Browder said in an interview with Bloomberg Television’s Guy Johnson that responsibility for the laundering primarily lies with the banks where the accounts were opened, and with the regulators and legal authorities whose job it is to monitor banks and investigate allegations.
“I don’t want to let them off the hook but I would say that in the level of complicity, these people are so far away from the center of this problem, they’re probably the least culpable,” Browder said. “Of all the institutions, they are the furthest removed from this type of stuff.”
Correspondent banks have come under scrutiny following revelations last year that $230 billion, much of it suspicious, flowed from the former Soviet Union and through a tiny Estonian unit of Danske Bank A/S. Among correspondent banks that did transactions tied to the Danske case were Deutsche Bank AG, JPMorgan Chase & Co. and Bank of America Corp.
Deutsche Bank has repeatedly said it hasn’t found any evidence to date that it was doing anything wrong when it provided dollars to Danske’s Estonian unit until 2015. Chief responsibility for properly vetting clients lies “with the bank that has the immediate contact with the client -– while the correspondent bank by contrast has downstream monitoring obligations,” Deutsche Bank’s legal head Karl von Rohr said in February.
“They’re in a situation where there’s no way that they’re going to know the customer of Swedbank or Danske bank, because it’s Danske Bank and Swedbank’s responsibility to know their customer and to know the reasons for transactions,” Browder said.
The Hermitage Capital Management co-founder this week filed his latest criminal complaint against a Nordic bank, alleging that Swedbank handled $176 million connected to the death of Sergei Magnitsky. Sweden’s Economic Crime Authority has confirmed receipt of the complaint, which is dated March 4, and says it’s now looking into the claims.
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