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Swedbank / Baltic Laundromat 2019 : Compliance Saw It. Management Overrode It. €200 Billion Later, the CEO Was Gone — EP28 T1
Description
A Swedish retail bank branch in Tallinn with fewer than 200 employees processed €200 billion in suspicious transactions over eight years. The compliance function flagged it. Escalated it. Documented management's response. The accounts stayed open because closing them would have created a revenue gap the branch manager would have had to explain to Stockholm.
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We dissect the correspondent banking mechanism — how fee income captures a compliance function without corrupting it, how the calculation to keep the accounts open is always wrong and always made anyway, and why the CEO learned the board had endorsed her performance two hours before she was fired. Between 2007 and 2015, approximately €200 billion in suspicious transactions passed through Swedbank's Baltic branches. The compliance function wrote the internal reports. Management overrode the escalations. The CEO was terminated the same day a documentary about the scheme aired on Swedish television. The mechanism was not that compliance failed to see the risk. It was that compliance had no authority to stop the revenue. This episode dissects the Swedbank Baltic money laundering case, the compliance capture through revenue dependence mechanism, and the correspondent banking incentive failure that made €200 billion in suspicious flows invisible to the institutions that were supposed to stop them. Swedbank. Baltic money laundering. Estonia. AML failure. Correspondent banking. Money laundering scandal. CEO fired. Financial Forensics Labs — Every collapse has a pattern. We dissect it. Layer by layer.