From Sweden's Radio P1: The Echo broadcasts immediately when a message has just arrived that Swedbank's CEO, Birgitte Bonnesen is being fired.
It's March 28, 2019.
Swedbank is in crisis. The stock market is crashing and almost 80 billion in share value has been lost.
But now the bank promises change.
Lars Idermark: The Board of Directors reached a unanimous decision that a new leadership is needed to restore and build confidence in Swedbank that has gained a lot of momentum in recent times.
Anders Karlsson: The focus right now for me is to try to create calm in the bank and in the next step to start working on restoring confidence. This trip I intend to start with my almost 15,000 amazing employees.
Anonymous shareholder: I am convinced that you will get this sorted out and the values will come back eventually, if you are long-term.
Johan Sidenmark, CEO AMF: Especially it is important to go to the bottom and see what has happened and you should do the utmost then, I think, from the board and management to go to the bottom with this, and I think you can do much more than what has been done so far.
At the AGM, this is a matter that is at the center of attention.
Should the bank appoint a special independent audit to investigate the extent of money laundering in the Baltic States?
Many smaller shareholders hope for it and vote for it.
But the big owners stop.
Joachim Olsson: You might think that it is possible, so to speak, to remove this issue from the agenda without doing what Danske Bank really did ... Where you did this big investigation and put all the cards on the table.
The decision at the AGM is what makes us continue to dig into Swedbank's business.
Do the job that an independent investigator would do.
And that is when we find a track that is about one of the most serious breaches a bank can commit.
Our research leads us to New York's financial district, the heart of the international banking world.
Several American investigations are currently underway here after our revelations about Swedbank.
Jim McGovern: To the extent that we can use the tools to hold these financial institutions accountable, we ought to do it.
Anders Åslund: The attitude to money laundering is completely different among European and American banks. Here in the US, the banks are terrified of being fined by the Ministry of Finance.
What the punishment can be for what has been revealed so far - we do not know.
But there are more secrets in Swedbank that concern the United States.
We get in touch with a source on Wall Street who agrees to hand over confidential material.
What we get is a black folder with transactions from Swedbank's Baltic branch that has entered the US banking system, in dollars and in euros.
We see company names, account numbers, dates and amounts.
Four transactions are extra interesting.
In total, this is over SEK 10 million.
Not so much money in this context.
But when we look at the companies involved, we understand how politically sensitive the business can be.
If the information in the black folder is correct, Swedbank's problems may be much larger than we previously thought. For this time, the traces not only lead to oligarchs and organized crime, but all the way to the Kremlin and to the Russian war industry.
From CBS News: Russian forces stormed the last remaining airbase in Crimea. Russian flags are flying over bases in the region as troops push all remaining Ukrainian out of the peninsula.
To understand Swedbank's role in this deal, we must go back to spring 2014.
Russia has just annexed the Crimean Peninsula in Ukraine, and a new cold war is a fact.
President Putin: Crimea is our common possession and the most important factor in the region's stability. And this strategic territory must be under a strong stable sovereignty. That, in fact, today could only be Russian. I have no doubt in your support.
President Obama: We have been very clear that we consider the Russian incursion into Crimea, outside of its bases, to be a violation of International law.
Daniel Fried: It was the first time a European country had tried to seize the territory of another European country since World War II. We were immediately seized with this issue. The whole US government knew what a problem this was. And the point we were making is… Russia can have its 'place in the world, or it can invade its' neighbors. But it can't have both. Not if we have anything to say about it.
When the fighting in Ukraine erupts, top diplomat Daniel Fried has a central role in the US State Department. It is he who is assigned to design the diplomatic counter-attack.
Daniel Fried: President Obama drew the right conclusions. Which is that we have to push back. And Obama gave us the greenlight to develop sanctions options. That was the right instruction, and that's all I needed.
President Obama: This morning I signed an executive order authorizing sanctions on individuals and entities responsible for violating the sovereignty and territorial integrity of Ukraine, or for stealing the assets of Ukraine people.
Daniel Fried: These are financial sanctions, and they involve restricting or banning a country from using the US dollar and banning all US persons, meaning companies and individuals, people… From having any business dealings whatsoever with the sanctioned entity.
The sanctions strike against ministers, companies, prosecutors and oligarchs with links to the war in Ukraine. And that is now the focus is on the world's banks with customers from Russia.
The banks are crucial for the sanctions to work.
Mark Galeotti: Banks are the absolutely crucial nodes in the modern global capitalist economy. Many of the sanctions regime instructions essentially expect that financial institutions such as banks will do the policing. They will be the ones who keep an eagle-eye out and if they look, see if a particular individual or a company that is, or might be connected to a sanctioned body, they're the ones who have to say “No, we won't do business with you. ”
One of the companies that the banks are going to stop from doing business is an enriched company in the Russian arms industry.
Reporter: Why did the administration focus on… Russian weapon industry, and especially Kalashnikov?
Daniel Fried: Well… You can figure that out without asking me. The Russians had just invaded their neighbor. So it stands to reason that we would go after the Russian defense industry, which we did. And Kalashnikov is a signature piece of that defense industry.
Following the sanctions in 2014, no new weapons of the Russian brand may be sold or produced in the United States.
So how come there is a factory in Florida that manufactures Kalashnikov rifles?
Kalashnikov USA: For a number of years our potential customer base and our current customers have been denied access to truly Russian-designed firearms. And now they have the best of both worlds. They have the Russian design and the American-made, all rolled into one. Russian heritage - American innovation.
We are in Pompano Beach, Florida.
This is the black folder with the transactions from Swedbank has taken us.
Those who have received the money here are directly linked to Kalashnikov USA.
Now we will try to find out how the sanctions work in practice.
And we start at a regular gun shop in West Palm Beach.
Reporter: Hello!
Alex, Gunstore owner: Hello, how are you!
Reporter: My name is Axel, and I'm from Swedish Television.
Alex, Gunstore owner: Pleasure, nice to meet you, I'm Alex.
Reporter: I'm interested in… To know more about the Kalashnikov rifle.
Alex, Gunstore owner :: Easy.
Reporter: Got them here?
Alex, Gunstore owner: Of course. All right, so… Which one would look better on TV?
Reporter: I don't know ... I don't know anything about guns.
Alex, Gunstore owner: This is Kalashnikov rifle. So it was designed in 1940's… By the guy named Kalashnikov. He was in the hospital, wounded, and was thinking of a way to create a better gun for guys trying to win the war, so that's basically the outcome of his stay in the hospital. One of the nurses was helping him with the drawings.
Reporter: Really?
Alex, Gunstore owner: And the gun was born in the hospital.
Reporter: So this is the famous…
Alex, Gunstore owner: AK47
Reporter: The original?
Alex, Gunstore owner: Well, no, it's not the original. This is the current production. This one was actually made in the US.
Reporter: Oh really?
Alex, Gunstore owner: The Russian guns are banned in the US because of the fact that we have sanctions…
Reporter: Uh-huh?
Alex, Gunstore owner: There is nothing from Russia coming in to the US, so we don't have any Russian guns, but this is the design of a Russian firearm, they're just made in US.
Reporter: One of these companies is called Kalashnikov USA, right?
Alex, Gunstore owner: Correct. They're located here in Pompano, and also in Florida. This is Kalashnikov USA 12-gauge shotgun.
Reporter: Oh, it's heavy. Is there a logo on here or something? Yeah, there it is. K USA… And… So it's still Kalashnikov, but it's not Russian?
Alex, Gunstore owner: Apparently from what they're saying, no… Apparently they bought part of the patent, or the patent, and it's gonna be US-based… Corporation, so…
Reporter: With no connections to Russia?
Alex, Gunstore owner: From what they say, no, they just paid for the… For the right.
Reporter: This is the RWC, that's the Russian Weapon Company. They are the ones who own Kalashnikov USA, and ... They are the ones who are not allowed to have contact with Russia.
Alex, Gunstore owner: I have a cool box that'll be… It'll be good for TV. It's called Zombie Rounds. Ready?
Reporter: Ready.
Alex, Gunstore owner: Dave, going hot!
Dave: Go for it!
Alex, Gunstore owner: No more piggie.
Everything in this gun shop seems to be handled according to the rules.
Kalashnikov USA is thus an independent company that is not subject to the sanctions against the Russian company of origin.
By simply transferring the rights to production, Kalashnikov's classic American vintage weapons can continue to be sold in the most important private arms market in the world.
The new company has become a success and now 8 different weapons are sold in the US with the well-known name from Russia. But the success story is based on one condition.
That no business is being done in secret between the new factory in Pompano beach and the old company in Moscow.
No money may be sent between the companies.
Kalashnikov USA has repeatedly promised that there are no connections.
Yet that is exactly what the data in the black folder seems to show.
The four transactions are sent from large owners in Russian Kalashnikov - with the help of Swedbank - from companies registered in the British Virgin Islands tax haven and finally land in the US.
The largest of almost SEK 10 million, which is referred to as a loan.
The money is deposited in the Bank of America accounts with central people in Kalashnikov USA.
One of them is the founder and owner of the company.
A Russian living in Florida.
TELEFONARE
Female automatic voice: Thank you for calling Kalashnikov USA. If you know your three-digit extension, please dial 8.
Kevin: Kalashnikov USA, how can I help you?
Reporter: Yes, hello, my name is Axel. Who am I speaking to?
Kevin: Kevin.
Reporter: And this is for a… I'm looking for a representative of the Kalashnikov company, I'm from Swedish television. I'm a journalist.
Kevin: We don't, we're not talking to anybody right now…
For a long time we have been trying to get an interview with the gun company over the phone.
But they don't want to talk to us.
That's why we go to the factory for answers.
Reporter: It feels like we're in the right area anyway. But there are no signs or anything, so we look a little carefully here, see what is going on. I don't know if it's guards or anything ... Gates and stuff like that you have to ... It's very anonymous. I think this is it. There comes someone. Maybe take down the camera? What's on his shirt? Does it say Kalashnikov USA there? I try to go and tap on it, so you can sit in the car, so only the sound can come with me. And then we see if they are interested in talking.
Photographer: Scratch it a little. Yes I do.
Reporter: Good. Then we test.
Photographer: Yes. Good luck.
Kalashnikov representative: Can I help you with something?
Reporter: Yeah, sorry, my name is Axel .:
Kalashnikov representative: Axel, how do you do?
Reporter: And I'm looking for like the manager or the president?
Kalashnikov representative: Who do you want to speak to, Kalashnikov USA or…?
Reporter: Yeah, Kalashnikov USA ?:
Kalashnikov representative: Okay, what do… Discuss specifically? Covering our guns or something like that? Or what…
Reporter: Yeah, so we're looking into US sanctions. Into Russian weapon industry, and that's why we're interested in Kalashnikov USA, because you know ...
Kalashnikov representative: Then you should all speak to the manager…
Axel: Thank you.
We have to wait in the lobby of Kalashnikov.
We do not know if we will get any answers.
But we are not the first journalists on the scene here.
A year earlier, another reporter knocked on and asked the same questions as we did.
Michael Smith: The first thing I thought was: How can you have Kalashnikov here, if that same entity in Russia is sanctioned and can't do business with the United States? So it was a big mystery in the beginning. And then we started looking through the records of the company and we found this guy. Aleksey Krivoruchko. And once I looked up his name I figured out that there is a definite connection between what's in Florida and what's in Russia.
What the prestigious Bloomberg news agency revealed in 2018 was that the then CEO of Kalashnikov Russia, Aleksey Krivoruchko, now Russian Deputy Minister of Defense, before the sanctions had extensive business with people behind Kalashnikov USA.
When Bloomberg presented his information, the US arms company promised that all relations with former Russian partners would cease following the sanctions.
US prosecutors launched an investigation into the suspicion that the Russian state secretly controlled the US weapons factory, a scheme to circumvent the sanctions and a threat to national security, it said.
It looked suspicious, but the definitive evidence was taken.
Michael Smith: We ... We were never able to prove, and still can't, haven't been able to ... That there was violation of sanctions.
Reporter: What was the missing link?
Michael Smith: The missing link was showing… Direct lines of business. Financing… That's sort of the usual way that sanction violation will prove ... That the Russians are sending something real and tangible to this entity and this entity is sort of acting on their behalf.
We show our research based on the black folder for Bloomberg, how the money that went through Swedbank landed in the US.
Michael Smith: Wow… That's… It looks, I mean, it looks pretty significant because you're making some connections that I had no way of making when I was looking into this originally… There we have proof of a… Sort of a financial flows…… Yeah, I’d like to show this to them and see how they respond….
We sit in the lobby waiting.
The question we want to ask is why money is flowing from Russia - to the US.
And what role Swedbank played in the deal.
Representative Kalashnikov: I asked and they are not going to be able to help you out today.
Reporter: Really it's just one question we have, it's about like if there is, due to the sanctions, is there any connection with Russia Kalashnikov and Russia USA?
Kalashnikov representative: Of course there is not. But, shoot me an email and we can send you whatever information you want.
Reporterl: But, will we be able to do an interview if we send?
Kalashnikov representative: They probably will, that's what I said, get his information, email me. Our managers, I gave you my card, shoot me an email and then we will go from there…
But Kalashnikov USA never returns.
We can leave Florida without their answer.
But if it is a penalty offense, it is Swedbank, above all, who will answer our questions.
It is the bank's job to stop or report these types of high-risk transactions.
Daniel Fried: Well, OFAC, which is the Treasury's office of foreign asset control, which administers financial sanctions, has a compliance unit, and… They monitor questionable sanctions. Something like this could easily attract their attention. . And they are perfectly capable of imposing serious penalties. You don't want to be in OFAC's target.
Since Swedbank's Annual General Meeting in March, much has happened.
In June, former prime minister Göran Persson is elected new president and he promises big cleaning.
Göran Persson: I think the term cleaning is pretty good. So I think that the absolute most important and right thing to do is to stop so much of this on site ...
No independent investigation has yet been set up, but Swedbank says that they go through 30 billion transactions internally to identify the suspected money laundering ....
But some sanctions violations do not seem to have been found so far.
That was the message from the new CEO Jens Henriksson in the latest quarterly report.
Jens Henriksson: I have not been informed of any sanction breaches. But this is an ongoing work and if the investigators find something, if they find something important, they immediately go to us….
We will soon meet the new CEO Jens Henriksson.
But to explain how we found the sensitive kalashnikov deal in Swedbank, we must first go back and focus on the bank's largest customer in the Baltic region.
Oligarch Iskander Makhmudov.
Anders Åslund: Iskander Makhmudov was a person that people did not want to speak out loud, because he was considered to be the most dangerous of the Russian oligarchs.
José Grinda González: Iskander Makhmudov used two approaches to create a successful business. Corruption and violence.
This spring we were able to reveal how the infamous Makhmudov spent several billion SEK on tax havens through over 200 companies in Swedbank. What we did not know from the beginning was that Makhmudov and his cronies also played a central role in the history of Kalashnikov and the sanctions.
Mark Galeotti: There was a point in which the Kalashnikov concern …… .was actually in financial crisis. The fact that with the sanctions regime, it was harder and harder for them to sell their weapons abroad. And so for a while Mahmudov invested money in Kalashnikov. He was in many ways one of the key angels keeping Kalashnikov afloat.
Reporter: Was this a well-known fact in the business world that he was an investor in this company?
Mark Gaelloti: Yeah, absolutely, I mean ... Something that wasn't known, it was trumpeted at the time, because everyone knew about Kalashnikov's troubles.
Only one and a half months before the sanctions against the arms industry strike - so the Russian state sells 49 percent of Kalashnikov - and the oligarch's closest partner becomes a co-owner.
A year later, Makhmudov himself becomes major owner and it is after that secret payments to the US are implemented.
The largest transfer takes place through the mailbox company Gillsburg Limited as Swedbank in an internal report described as the customer's own “wallet account”.
The money is put into GP Florida Investments group, LLC, which is owned by one of the Russian men behind Kalashnikov USA.
In this way, large owners of the Russian arms company, with Swedbank's help, have sent about SEK 10 million in loans to their American counterpart.
Completely beyond the control of the authorities.
Daniel Fried: The pattern you're describing, because I don't know the details, is certainly one that is generally familiar to me. It is certainly the case that the Russians use complicated systems of shell companies, offshore accounts, LLCs…… All the time. This can be used for sanctions evasion. It can be used for laundering dirty money. These are standard Russian operating procedures.
Reporter: What is at stake for Swedbank if it turns out that they have violated these sanctions rules?
Birgitta Forsberg: Yes, but you can see now, it is a Turkish bank here that last month, in October then, was prosecuted for violating sanctions. There is a lot at stake. One of ... The Deputy Chief of that bank was first sentenced to 32 months imprisonment last year, The second penalty is very high fines then, which can happen, and it has happened in several cases. You have ... The French bank BMP Pariba may have received the highest fines ever of SEK 60 billion they received in 2014.
Reporter: And why does the United States consider that precisely the sanction violation can be the most serious rule violation a bank can go?
Birgitta Forsberg: Yes, but it is US security policy, and it is very sensitive to the US. It can be a big policy of all to say if you break such sanctions. Much more than money laundering becomes, because maybe it would be more ... "Ordinary", so to speak, criminal activity, we're talking about ... Yes, but it is like a little chopping the US in the back if you were to do this.
Kalashnikov USA never answers about its role in the deal. Nor is the Russian arms company.
But in an email from the oligarch's representative, it says that our information is so vague and absurd that they are difficult to address and that the questions to his client are not relevant because Makhmudov and his partner have never been majority owners in Kalashnikov Russia and thus are not considered to be covered by the US sanctions.
But the regulations on sanctions are not just about formal ownership but also about who actually controls a company and whether new owners are used to circumvent the sanctions.
In the end, this will be decided by US financial authorities, who are now investigating the case since the Assignment Review drew attention to the transactions.
And US questions to Swedbank will be tough.
Daniel Fried: Banks have no business claiming ignorance. They need to know their customer. Due diligence by banks is part of the system. A banker claiming he had no idea that his customer was… You know… A mafioso, a criminal, a dirty Russian oligarch. You know, that won't wash. You want to take advantage of the international financial system Then play by the rules.
Reporter: We have then continued to map Swedbank's operations in the Baltic ...
Jens Henriksson Swedbank: Mmm, and can I just say one thing? I think it's good that you review this. I think it's good that you're on and going through this story, so I'll start by saying that I appreciate it. Thanks.
Reporter: What good! You ... In the last quarterly report, you said that you have not found any sanction violations so far.
Jens Henriksson Swedbank: Mmm ...
Reporter: Is it still true?
Jens Henriksson Swedbank: yes, that's right.
Reporter: We can now show that Swedbank approved transactions from one of the most controversial oligarchs who have been a customer of the bank. Who is then co-owner of the sanctioned Russian Kalashnikov and who has sent money to owners of the US Kalashnikov. In between there should be no transactions.
Reporter: Take a minute and read the document ... It is a very short summary.
Jens Henriksson Swedbank: Then, and thanks for that,
Reporter: Do you know this?
Jens Henriksson Swedbank: I'm not going to go in and answer exactly what I ... Like ... Know. Because I can not confirm like who are customers, but I intend to say like this: I ... Was ... Disappointed and distressed. I take this information, I make sure it comes to our investigation and they get to look at names, to ... So thank you so much, thank you.
Reporter: But no one has called you about this?
Jens Henriksson Swedbank…. I ... No, no one has called ... Here ... I do not want to confirm or deny whether these are customers. I don't get that, so is the regulations,
Reporter: What does it mean if Swedbank should have participated in the sanction violation? Or possibly helped to circumvent the sanctions rules?
Jens Henriksson Swedbank: That ... Would probably mean that we get a fine, and reprimands.
Reporter: You've been to the United States quite recently.
Jens Henriksson Swedbank: That's right.
Reporter: Did they raise any possible sanctions violations during that meeting?
Jens Henriksson Swedbank: No, I'm not going to go into what we were talking about in the US, but it was a good meeting we had there. And ... What we wanted to highlight from our side was that we work in three phases. One: We should be as open and transparent as we can only be about the story from 2007 to March 2019 ... And two, it is that we and I have launched a 130-point program to make sure to cover the holes and gaps that is on Swedbank, and three ... To make sure that we become an industry leader in this area in the long term, because I do not want Swedbank to be exploited by criminal types.
Reporter: You, how did Swedbank, the people's bank, end up in this situation?
Jens Henriksson Swedbank: It is a good question that I also think about quite a lot. And then I think we've been too naive. The whole Swedish system has been, I think, too naive. In Sweden, these money laundering problems have not really been taken seriously, and we have been exploited here.
It is early morning in Tallinn, We are looking for a former employee of Swedbank. He will sit on some of the most important answers - the question of how the bank ended up at the center of what has been called the world's largest money laundering scandal.
The man we are looking for is a banker - and was responsible for the richest and most important Russian customers Swedbank had here.
Reporter: Holger! Good to see you!
Holger Roonemaa: Good to see you!
Reporter: How are you?
Holger Roonemaa: Good! How are you?
Reporter: Fine, thank you!
This is not the banker, but Holger Roonemaa, our partner in the history of Swedbank. He works at Postimees, the most read daily newspaper in Estonia.
Holger Roonemaa: That's the news team. These are my bosses.
He is the head of their burgeoning reporters and for several years has been watching the money laundering scandals in the Baltics.
Reporter: Good morning. Now ... Bank man A. What do we know about him?
Holger Roonemaa: We actually don't know much about him. We know that he worked for many years at Swedbank Estonia as an account manager for non-resident customers, which included some of rich ... Russian businessman and tycoons such as Iskander Mahmudov. And there were some others as well. And we know he's quit working 2017.
Reporter: Would it be possible to call him?
Holger Roonemaa: Sure. I have his direct phone number, so we can give it a try.
Holger Roonemaa: My name is Holger Roonemaa. I'm calling from Postimees. We are working together with colleagues from Swedish Television on Swedbank related topics. We would like to meet with you as well because of that.
Bankers: Excuse me but what is my connection to this?
Holger Roonemaa: It has to do with a client who's account manager you were.
Bankers: I haven't heard anything about it.
Holger Roonemaa: It's not exactly a conversation to have over the phone. Could we agree on a time to meet?
Reporter: He answered!
Holger Roonemaa: He answered! He says that, sorry, he says he is outside, out of country. At least he acted like he was very surprised that we called him, but he said he was not rejecting a comment. So that's the situation.
Reporter: Did he say whereabouts he was?
Holger Roonemaa: No.
Reporter: No.
On location in Tallinn, it is obvious that we are not alone in investigating the banker. We have gained access to several confidential reports from Swedbank where they have mapped the former top official's life in detail.
There is information about the family, how much money has been received in private accounts and his relationship with the customers he is responsible for.
The bank suspects that he has played double.
That he is a risk of corruption.
His Russian customers are allowed to transfer billions to tax havens.
And in a chat with a colleague, he describes some of the transactions as:
“Not the whitest of deals”
And one as a "fairy tale" transaction
But the reports we have now received also reveal something else.
A very controversial customer that the banker took care of.
A minister from the Russian government.
Mark Galeotti: Until recently, Mikhail Abisov was one of the rising stars of Russian business. Young, a dynamic entrepreneur, he had been minister of open government. So, he very much seemed to be part of a whole new generation of younger Russian business people who understood global business and were genuinely trying to make their way ..
2012 Mikhail Abyzov is at the top of her career.
He is a billionaire and minister responsible for issues of transparency and transparency.
At the same time, he has secrets.
Hidden in Swedbank in Estonia.
According to the bank's own reports, he checks a total of 70 accounts written on companies in the British Virgin Islands, Belize, Singapore and Cyprus tax havens.
Mark Galeotti:
The reason for having so many different accounts and so forth ... Is essentially hiding where your money is. From the West and from the Russian government, to give you maximum capacity to move your money as fluidly as possible so that you can move it into different jurisdictions.
One of the Swedbank accounts leads to this luxury villa that the Russian opposition has pointed out as part of a corrupt scheme to steal money from the people.
From navalny.com: We start our flight from Abyzovs gate and move along a classic Italian cypress alley
In total, the Russian minister is equivalent to over SEK 6 billion to tax havens via Swedbank's accounts. Despite the fact that the regulations governing banks and politicians - so-called PEPs - are tough.
Louise Brown: A PEP is a politically exposed person. The banks have an obligation to carry out audits of particularly risk-exposed persons. This means that if they are involved in corrupt behavior, they have to spend their money somewhere. And there, the bank has a mission to prevent money laundering.
But the internal investigation shows that Swedbank staff did not report or stop obviously suspicious transactions. Instead, investigators write that they find a bank box at the banker belonging to Minister Abyzov. And right after the banker leaves Swedbank, he starts working in a company in Cyprus with his old customer.
Mark Galeotti: Doing business with these guys brings you and your bank a lot of money, and everyone's happy, and you get promotions, and you get sort of slapped on the back because of your successes, and you want to keep that going. So, I think what is happening is exactly that there is almost a parasitic process whereby individuals become seduced by the prospects of working with these very high net worth customers. And in a way become their personal banker.
We want to show the internal investigations to the banker.
We email and offer him to read the documents on site in Tallinn.
Now we hope that he will come home and respond to the accusations that he was affiliated with the Russian minister.
Mark Galeotti: If you have a friend in the bank ... Lots of other opportunities open up. So it may well be that you will actively cultivate this person, and therefore hope to win them over to your site.
Suspected corrupt bank officials have been a major problem in the Baltic money laundering business.
We are now on our way to the Tallinn Court to meet a prosecutor who is currently investigating 11 former employees at Danske Bank. We want to know if the prosecutor is also investigating Swedbank's staff.
Reporter: Hello Holger.
Holger Roonemaa: I think I received an answer from our banker, yesterday evening.
Reporter: Really? Hang on, we're just gonna stop. We're just gonna stop the car, so we can listen to you: What did he say?
Holger Roonemaa: Okay. He says he is willing to read the documents, and after that to comment .. But, he has several conditions. First of all ... he says he will not meet with any journalist at that time. He suggests that I leave the documents in a sealed envelope in the hands of our Postimees secretary. And when he comes here, he meets the secretary, he shows his ID, and when it matches, the secretary opens the envelope in front of him. He will read the document here. Today after 3 o'clock in the afternoon.
Reporter: And he didn't say anything about the filming or anything? So, because we need to make sure he doesn't copy the documents or take photos in secret, so we should have ... We should have some kind of camera in the ... In the lobby when he reads, just from a distance.
Holger Roonemaa: Yes. Yeah, I agree with that… Yeah.
Reporter: Okay, so we have ... We have 7 hours up until 3 o'clock.
Holger Roonemaa: Yeah, yeah, yeah…
Reporter: Now we're going to meet the prosecutor who is investigating the corrupt bankers here in Estonia.
Holger Roonemaa: Okay. Bye.
Reporter J: Talk later. Bye: Yeah yeah.
Reporter A: He's back.
Reporter J: Yes, he is.
Reporter A: Thanks for taking time.
Reporter J: How are you this morning?
Marek Vahing, Prosecutor: A little bit exhausted.
Reporter J: Oh yeah, are you going to court?
Marek Vahing, Prosecutor: Yes!
Reporter: So ... What kind of crimes are the people involved in the Danske Bank case investigated for?
Marek Vahing, prosecutor: They are investigating for money-laundering, and we are suspecting that when they were working in Danske as customs managers their role was to follow Anti-money-laundering rules, but they did not. The main ... Objective ... To commit a crime was money. So the fee for the money laundering services. So basically the customs managers offered money-laundering services.
Reporter: Are you familiar with this kind of modus operandi, were the oligarchs kind of infiltrating the banks to get access to key account managers that would make it easier for them to launder suspicious money?
Marek Vahing: Yes I am. I have seen it.
But it was not only the oligarchs who made big money on the business.
Mark Galeotti: When it comes down to it, banks make their money by flowing resources into and through their accounts. A bank is not a charity, so from their point of view they want to bring in as much money as possible,
In the internal reports we can read that Swedbank's foreign high-risk customers for a total of 10 years spent around EUR 140 billion - equivalent to around SEK 1400 billion in today's monetary value - only through Estonia.
And the bank management receives sharp criticism from the investigators for failing to monitor the transactions - and for having approved a significant portion of the high-risk customers in the bank at all.
It is also stated in the internal reports that the banker in Tallinn knew that some of the transactions were dirty.
Reporter: In this report we have one of the managers texting with a colleague he's saying ... "This is not the whitest of deals", in detail then ... Admitting that he knows this is suspicious money. As a prosecutor does this come across to you as something suspicious?
Marek Vahing: Yes, it has. Overpriced.
Reporter: And this could be a crime in Estonia?
Marek Vahing: Yes.
It is time for the meeting with the banker.
We have fulfilled his requirements.
The documents are in a sealed envelope with the receptionist at Postimees magazine.
We will not be present in the room - but cameras are set up in the ceiling to make sure he also completes his part of the deal. He is allowed to read and record but not to photograph or take with him the secret documents.
It is a delicate situation.
He probably knows that he can be picked up at any time by police.
The tour has turned for the banker. And even more so for his rich partner in Russia
Mark Galeotti: This year, what we saw is Abyzov who for so long seemed to be one of the great rising stars of the system. He is now in prison on corruption charges. Let's be perfectly honest, it's very rare that if you are impressed on these charges, especially at that level ... It's very rare that you're not going to jail.
The investigation in Russia focuses, among other things, on several transactions with suspected money laundering done through Swedbank. And the question now is whether the banker will be included in the case.
Secretary: Tere,
Bankers: Nice to meet you. Can you open it for me?
Secretary: I would have your ID as well. That was agreed.
Secretary: I will put them back in the envelope.
Bankers: It's similar to belletristics… But time will show what is true.
He reads the documents for less than 8 minutes and walks.
This should prove to be the last we see of the banker.
Reporter: It's not him ...
We try to follow - but lose him quickly.
That is why we go to the address where his company is written, on the way to the exclusive residential neighborhood just outside Tallinn.
It's his home address - and he's there with his family - so we choose not to tap.
Reporter:
- Is it busy?
- Yes, or he pushes us away
He's not answering.
Instead, we get an email.
The banker confirms that after a couple of years he worked for the designated company in Cyprus after Swedbank.
But writes that the bank's investigators have no evidence of all their other charges. With reference to banking secrecy, he is also unable to comment on the customers he had in the bank.
He also writes that he never used any client's bank box and that the quotes suggesting he knew the business was dirty did not match.
Main question: How Swedbank could allow a Russian minister to have 70 accounts in the bank - and billions of billions - remains unanswered.
Mark Galeotti: The interesting thing about Swedbank ... is that there is still a sense that Sweden and the other Nordic countries are actually that much more honest and upright than most. And I remember talking to a Russian who would never admit that he was a money launderer, but ... He had "friends". And he said "That's exactly the kind of place where you want to spend your money, because basically people won't think about it ... Well, actually that means Sweden now has to live up to its own reputation and above all the bank has to.
A few days after we left Tallinn, it becomes public that the Estonian prosecutor is now also investigating Swedbank's money laundering staff.
But no suspect has been identified yet.
Reporter: A Russian minister with 70 anonymous accounts in the bank, which spends billions of Swedish kronor. How on earth did he end up in Swedbank?
Jens Henriksson Swedbank: I do not intend to go into individual customers, but ... The information I get from you, this and the one you give ... It will go into the investigation, and then the investigation will then provide its answer below first quarter. I'll be so open I can only be about this.
Reporter: According to the investigations you have already done, this type of high-risk customers had sales ... 140 billion euros. SEK 1400 billion, only in Estonia. What do you think about the volumes with these types of customers?
Jens Henriksson Swedbank: There is no figure I recognize, we have come to about a billion SEK in profit has come from the three Baltic countries during this seven-year period, on this type of customers and I have to say that ... is probably Swedbank's worst deal ever. I mean, you stand here, the brand is damaged ... This internal investigation I will take your material to ... Just this year it costs a billion SEK ... So that, I get upset and embarrassed, and ... This ... Yes ... The worst deal Swedbank has done.
Reporter: Do you have any suspicions that your Baltic staff has been corrupt?
Jens Henriksson Swedbank: Here it is… ..Can I here and now stand and promise that we do not have someone who has acted corrupt or not? Obviously not. If we find that someone has acted in a bad way then we will suspend them, and if there has been anything criminal then the police report this.
Reporter: You, what do you say in closing ... To the customers in Swedbank who as the business ... Or, after the business is rolled up ... What do you say to the customers who are getting tired of the dark branches in Swedbank -eken?
Jens Henriksson Swedbank: Then I say I understand the anger that exists, huh. I get pissed myself when you give me this kind of information. Then I say that, what we should do is ... I have a clear mission, and that is to clean up the bank, and develop the bank so that we can meet customers in a sustainable way. I do this by being clear with the story. We should be a bank that is sustainable, not being used for money laundering, it is not sustainable.
After the interview with Swedbank, we received an email from the bank.
They write that the document that Assignment Review has submitted about suspected sanction violation has now been reviewed by the Clifford Chance law firm and the information was known before but is still under investigation.
All conclusions will be communicated at the beginning of next year.