Guest Column
Go after employees, not just banks, who laundered al-Qaida and the Taliban’s dirty money | Column
A former undercover agent writes that dirty bankers will stop only when they find themselves in prison, not just paying fines.
Ryan Timoney and his then-fiancee Kelby Sims (now his wife) at Walter Reed Medical Center in Bethesda, Md., after his cranioplasty in 2012. He was severely injured by a suicide bomber in Afghanistan and is part of a civil suit seeing damages from banks the plaintiffs allege laundered terrorists' money.
Ryan Timoney and his then-fiancee Kelby Sims (now his wife) at Walter Reed Medical Center in Bethesda, Md., after his cranioplasty in 2012. He was severely injured by a suicide bomber in Afghanistan and is part of a civil suit seeing damages from banks the plaintiffs allege laundered terrorists' money.
Published Jan. 26

While serving in Afghanistan, Army Capt. Ryan Timoney was severely wounded by Taliban and al-Qaida suicide bombers. He lost his left leg and suffered severe shrapnel injuries to his left arm, chest, abdomen and skull. Today, he suffers from spinal pain and seizures, as well as physical, speech and reading difficulties.

Robert Mazur stands in front of the private jet he used during the operation when he worked undercover inside the Medellin Cartel.
Robert Mazur stands in front of the private jet he used during the operation when he worked undercover inside the Medellin Cartel. [ Courtesy of Robert Mazur ]

The Taliban and al-Qaida are two of many groups designated by the U.S. government as terrorist organizations. Under the Anti-Terrorism Act, anyone who knowingly provides substantial assistance to such a group can be sued and forced to pay significant damages. Capt. Timoney is one of hundreds of U.S. personnel who were either severely wounded or killed in Afghanistan and are seeking financial damages from Danske Bank, two other banks and two currency exchange businesses.

In federal district court last month, Danske Bank admitted defrauding banks in the U.S. when, from 2007 through 2016, it transferred at least $160 billion to the U.S. it falsely claimed was confirmed to have originated from legitimate sources. As part of the deal, Danske Bank agreed to pay fines totaling $2 billion. Those fines are seen by many as a victimless corporate traffic ticket — the cost of doing business.

If the Department of Justice does the right thing, last month’s guilty plea by Danske Bank will be only the start. A thorough investigation would detail the acts of specific Danske Bank employees. And if the department finds enough evidence to charge them, it should do so. Otherwise, the department’s investigation will be nothing more than another in a long list of “bank scandals” that mysteriously occurred without one bank employee being found to have committed a crime. It will mirror the earlier “prosecutions” of banks like HSBC and Wachovia that laundered mountains of drug proceeds by some means other than intentional acts of corrupt employees. According to Department of Justice officials, HSBC and Wachovia met “justice” because they respectively paid fines of $1.9 billion and $160 million. They didn’t meet justice, not as I know it.

This isn’t complicated. While working as a U.S. federal agent, I had the pleasure of working closely with the Department of Justice to collect the evidence that led to the indictment, prosecution and imprisonment of a room full of corrupt bankers. It was the first prosecution under a 1986 money laundering statute of an entire financial institution. If actual people committed crimes, those people should be charged — not just the banks.

There are some glimmers of hope in the Danske Bank criminal charging documents that suggest there is more to the story than Danske simply being liable for lying to correspondent banks about maintaining appropriate anti-money laundering policies and procedures. In those pleadings, Danske Bank admitted that:

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  • Danske attracted accountholders to move money through Danske by assuring those accountholders they would be able to transfer large sums through Danske Bank Estonia with very little, if any, oversight, or scrutiny.
  • Employees conspired with their customers to shield the true nature of their transactions and assisted them to conceal the beneficial ownership of the accounts.
  • Danske compliance and relationship managers made statements that there were no Danske Bank Estonia representative offices in Moscow, that face-to-face client meetings in Estonia were required for customers to open accounts, that operations of clients were documented, and that Danske Bank Estonia prohibited clients from using dormant United Kingdom companies. None of these claims were true. In fact, Danske Bank Estonia secretly had employees working from a customer’s Moscow office to develop and facilitate their work with clients based in Russia.
  • Danske Bank Estonia executives discussed the need to design a strategy to camouflage their business with foreign clients. They had done this before, and they would do it again. At least one Danske executive proclaimed, the “main thing is how we look in this case, not how it really is.”
  • Nine years before closing accounts that facilitated the movement of hundreds of billions of dollars from Russia through their Estonia branch, the Central Bank of Russia sent a letter to Danske Bank, reporting that Danske Bank Estonia was conducting transactions of “doubtful origin” for clients based in Russia. The Central Bank of Russia alerted Danske Bank that these transactions looked like payments for goods, but those goods never crossed borders, and it was obvious that neither the goods, nor securities, nor services existed. The Central Bank of Russia emphasized that these transactions could be connected to criminal activity, including money laundering.
  • Three years before closing accounts that facilitated the movement of hundreds of billions of dollars from Russia through their Estonia branch, Howard Wilkinson, a senior Danske Bank Estonia whistleblower, brought serious concerns to Danske Bank senior management about suspicious transactions that were conducted by shell companies that provided false account documentation and were potentially engaged in money laundering.

The acts outlined above were conducted by bank employees who appear to have had knowledge that their customers were engaged in criminal activity, and that the funds they were moving through the bank were proceeds of criminal activity. If those acts and that knowledge can be attributed to specific employees, each such employee could be guilty of money laundering every time they knowingly moved dirty money. Each such act carries a maximum 20-year prison sentence.

The Danske Bank investigations by U.S. and other authorities were conducted for four years before the bank admitted to what, on its face, seems like a technical crime, defrauding their correspondent banks by falsely purporting that Danske Bank maintained a vigorous anti-money laundering protocol. During those four years of investigations, did the Department of Justice uncover details about which employees laundered billions of dollars through Danske Bank, and how much they knew about the criminal conduct of their customers? If they did, they’ve yet to make those findings public.

Although the Department of Justice hasn’t revealed answers to those questions, it appears we can get insight about those questions from claims made in a 608-page civil lawsuit brought in 2022 on behalf of hundreds of U.S. military personnel who were maimed or killed in Afghanistan. That civil complaint alleges that:

  • Danske Bank, in concert with two other international banks and two money service businesses, knowingly facilitated transfers of hundreds of millions in U.S. dollars on behalf of a terrorist syndicate led by al-Qaida and the Haqqani Network, the most extreme faction of the Taliban.
  • Danske Bank operated a laundromat out of its Estonia branch, and knowingly laundered substantial sums for Altaf Khanani and a series of companies through which he and members of his family operated the “Khanani Money Laundering Organization” (Khanani MLO).
  • Khanani is a Pakistani national widely known to have been charged in 2008 by Pakistani authorities for money laundering. He then fled to Dubai, where he set up a worldwide money laundering operation servicing terrorist groups, organized crime outfits, and drug cartels. While moving funds for Khanani and the Khanani MLO, Danske Bank and the other defendants knew Khanani was a wanted man who was notorious around the world for laundering massive amounts of U.S. dollars for the world’s worst terrorist groups.
  • With help from Danske Bank and others, from 2008 until 2016, the Khanani MLO laundered between $13 billion and $16 billion per year.
  • Khanani and the Khanani MLO served as a global economic intelligence arm for terrorists, identifying corrupt banks, remitters, corporations, service providers, and politicians who were willing to transact business with terrorists.

As claimed in the civil suit, in addition to Khanani, Danske Bank and the other defendants assisted multiple criminal organizations that were known to play a role in terrorist activities. These included members of the Russian Mafia, which had a symbiotic relationship with terrorist syndicates originally developed through their selling syndicate opium and laundering the proceeds into U.S. dollars. These members of other criminal organizations are identified in the civil complaint.

Recently, the civil suit was dismissed, but lawyers representing the plaintiffs say that was based on technical issues that they believe will be overturned on appeal. They stand by their assertions that Danske Bank employees knew details about the illegal conduct of their customers while they helped them move dirty money. For its part, Danske Bank has denied some of the civil allegations. The bank claims that it wound up dealing with people who were unsavory and involved in illegal activity because, as it admitted in its guilty plea last month in the criminal case, it had poor anti-money laundering controls and didn’t know, over the nine years in question, that these were bad guys pumping hundreds of billions through their Estonia branch.

Long before they stopped doing business with these criminals, Danske Bank and others were provided numerous warnings about the nature of their business. In 2006, the U.K. government distributed a list of suspected terrorist operatives, agents, fronts and partners to the U.K. offices of Danske Bank and the other defendant banks. A substantial number of the terrorists identified in the civil law suit were included in this list, including Altaf Khanani.

In 2006, Andrei Kozlov, the first deputy chairman of the Central Bank of the Russian Federation, flew to Estonia and spoke with the man in charge of Estonia’s Financial Supervisory Authority. He warned Estonian authorities to stop hundreds of billions of rubles from being laundered from Russia. Kozlov warned that, if Estonia did not stop the massive laundering through their banks, he would reveal Estonia’s banking practices to the world. Three months after delivering this warning, Kozlov was gunned down on the streets of Moscow.

The civil suit also asserts that, when the Danske Bank laundromat was exposed, Aivar Rehe, the CEO of Danske Bank in Estonia, was interviewed by Estonian authorities. When asked if Danske Bank’s management in Denmark knew of the Estonia branch’s facilitation of crime and money laundering, Rehe said, “Of course they knew.” Unfortunately, Rehe can’t be asked to provide more detail about Danske Bank employees that may have been involved in the bank’s laundering. He died in 2019, apparently by suicide.

Whether the civil suit prevails or not, the ball is in the court of the U.S. Department of Justice. The department has a unique opportunity to quickly gather evidence and bring real criminal charges against any Danske Bank employees who committed money-laundering offenses. Who were the Danske Bank employees embedded in one of their client’s offices in Moscow to solicit business relationships with participants in Khanani’s money laundering network, members of the Russian Mob, and agents of al-Qaida and the Taliban? What exactly did those Danske Bank employees know about the acts that led to their customers pumping so much blood-stained money through the bank? After the money was received in the U.S., where did it go? Will that money be seized? The statute of limitations clock is ticking, will prosecutors get the answers to these questions before time runs out.

The Department of Justice should make it their practice to attack the Achilles heel of bank laundromats — the knowledge possessed by the account relationship managers, the sales force, that signed up the customers that laundered through “black holes of banking,” like Danske Bank in Estonia. Account Relationship Managers are the tip of the spear in money laundering. Whether Danske Bank’s anti-money laundering policies and procedures failed is irrelevant if their sales force intentionally marketed to the underworld. At best, it is a white-collar crime excuse.

This is a unique opportunity to send a resounding message to the current segment of the international banking and business community that launders roughly $2 trillion a year. You will never change their conduct with new regulations and bank fines. It is only when the jail cell door clanks and the dirty bankers find themselves in a real prison that you’ll ever get their attention. I know that’s true, because I saw it in the eyes and hearts of bankers who shared their dirty secrets while I visited them in their prison cells.

I am eager to see U.S. prosecutors do the right thing in this and similar cases, so the latest versions of bankers with deep secrets about drug kingpins, terrorists and dirty politicians can start talking. This should be a high priority for the Department of Justice. Shouldn’t it?

Robert Mazur, a federal agent for 27 years, is a court-certified expert in money laundering-related matters in both the U.S. and Canada. He is the New York Times bestselling author of “The Infiltrator,” a memoir about the first half of his life undercover as a money launderer within Pablo Escobar’s Medellin Cartel, and was an executive producer of the film by the same name. His new book, “The Betrayal,” is a memoir about his final undercover assignment, a deep dive into Colombia’s Cali Cartel and Panama’s underworld that nearly cost him his life. He is president of KYC Solutions, a company that provides speaking, training, consulting and expert witness services globally.