‘Accidental Whistleblower' Decries Corporate Irresponsibility

Howard Wilkinson, the recipient of the 2020 ACFE Cliff Robertson Sentinel Award, admits that he’s a bit of an accidental whistleblower. And if his employer had been more responsible, he wouldn’t have been a whistleblower at all.

“Back in summer 2012, I had to help someone in the Estonian branch of Danske Bank where I was working [as a trader] get some financial information on a client,” Wilkinson said, during the lunch general session. “The client was a British limited liability partnership (LLP), so I went to Companies House, which is the U.K.’s official government agency that collects all the company information and annual financial statements,” he said. “I paid one pound, and I downloaded this company's financial statements.”

The website said the company was dormant with no trading or assets. But Danske Bank records indicated it was still a client. “Something was wrong, so I reported it in the branch,” Wilkinson said. “I was told the [British] company had made a mistake, and they would just file some corrected financial statements. Nothing to worry about.”

Fast forward a year to September 2013. “The [British] company — together with a number of related companies and a few private individuals — all had their accounts in the branch closed for AML reasons,” Wilkinson said. He waited a few months, checked the Companies House site and found that the British company was still false. He thought some collusion could be going on in the local branch. “I made a whistleblowing report to top management in the bank's head office in Copenhagen, including to one executive board member.”

He then dug up financial statements of 15 large clients of the branch that were structured as LLPs. “They all had the same registered address, and they have the same signature in the accounts. … They all basically look the same. And none of the accounts had anything to do with the actual business levels we were seeing in the bank.”

Wilkinson then made two more internal whistleblower reports about these companies, and then a fourth and final one about a similar issue with Danish limited partnerships that had somehow ended up as clients of the Estonia branch.

Top management failed to step up to the plate
Meanwhile, the head office put the internal auditors on the job, he said. “They were investigating and actually seemed to be making some progress in getting somewhere, and, really that's where the story should have ended. …

“You should never really have heard of me. Something bad had happened in the branch, and we all know bad things happen. A whistleblower reported it, internal audit had investigated it, reported it to top management, and top management had taken the necessary action, made the necessary reports and did what needed to be done.” But that’s not what happened, he said. “Top management failed to step up to the plate even though, by now, two executive board members were involved.

“By April 2014, I had had enough, so I resigned, and I wrote to the four people who got my original whistleblowing report noting that there had been a lack of action,” he said. “I warned them I might report the bank to the authorities. I guess they thought I was bluffing.”

In September 2017, newspapers began to report about various money-laundering schemes, including one that centered around four clients of Danske Estonia. Under pressure from Denmark media, Danske Bank commissioned a firm of Danish lawyers to start an investigation, he said.

“In November 2017, the bank slipped out that there had been a warning from a whistleblower, and that really started things rolling,” he said. In early 2018, journalists tracked Wilkinson down and began to ask him questions, but they respected his confidentiality, he said.

 In September 2018, the Danish lawyers reported $230 billion had moved through Danske Estonia — the majority of which they said was suspicious, he said. “The [lawyers’] report described in detail the warnings I had given in 2014 and how they've been ignored. Later that month, unknown to me, an Estonian magazine chose to publish my name and start writing about me. They quoted four unnamed bank sources, and that really started a circus.”

In November 2018, Wilkinson testified before committees of the Danish Parliament and the European Parliament. By then, the U.S. Department of Justice, the Securities and Exchange Commission, and Danish and French prosecutors had begun investigations.

“Authorities arrested 12 former managers and employees of the Estonian branch, and the Danish prosecutor preliminarily charged the bank and also preliminarily charged the former CEO, the former CFO, the former chief risk officer, the former head of business banking … on top of that the former general counsel and a number of other top executives,” Wilkinson said. European and U.S. investigations are ongoing.

“Since my testimony in Brussels, a whistleblower directive has come into force in the European Union, and this will for the first time give whistleblowers in the EU a uniform minimum level of protection,” Wilkinson said.

Swept under the carpet
He said Danske Bank’s top management failed to quickly act on his 2013 whistleblower report. “It never ever occurred to me that they would just decide to sweep things under the carpet,” he said.

“There's no point in whistleblowing internally if the organization isn't actually going to do anything about it,” he said. “Society needs to tackle the issue of these top managers who ignore reports of wrongdoing in their organizations.” The U.S. has unique whistleblower award programs for external whistleblowers (via the Securities and Exchange Commission Office of the Whistleblower), which increases management’s risk for covering up wrongdoing, he said. “However, these programs don’t apply in all whistleblowing scenarios, and outside the U.S., they don’t exist at all. …

“Even if we don't see executives doing perp walks, seeing executives forced to sell their family homes to pay back the money that they earned while they were covering up wrongdoing, that's something that would really focus minds,” he said. “But it needs to be not just in the U.S. — it needs to be all over the world. …  

“I’m very honored to receive the ACFE Cliff Robertson Sentinel Award,” Wilkinson said. “It’s humbling to join such a distinguished group of recipients.”

For more information, see “The smoke detector,” Fraud Magazine, March/April 2020 .