Underground banks move billions in drug money out of Denmark

Billions of kroner from drug trafficking and other criminal activity have been moved out of Denmark through underground banks that leave no paper trail, DR reports.

People involved in drug trafficking and other crimes are increasingly using these informal banking networks to move money beyond the reach of police, according to Denmark’s National Special Crime Unit, NSK.

“In our assessment, underground banks play a very, very decisive role in running drug networks in Denmark,” said Torben Svarrer, a chief police inspector at NSK.

A new DR documentary shows how the networks have transferred billions of kroner generated by crime out of the country. Organised criminals have become almost dependent on them, Svarrer said.

Rather than smuggling Danish cash abroad, criminals can hand over the money in Denmark and collect the equivalent in euros elsewhere. Smuggling and exchanging Danish cash abroad has become too expensive, he said.

Underground banks operate as international networks of people who arrange cash deposits and withdrawals across borders without creating a digital money trail. The system is also known as a hawala network. It can operate from almost any business, including a kiosk run as a side operation, according to Svarrer.

Police have increased efforts in recent years to target the flow of money from organised crime, following the decryption of specially encrypted messaging services used by criminals. The messages showed investigators that underground banking was a billion-kroner business.

Investigations often involve cooperation between police forces in several European countries. Lucy Myles, head of Europol’s Financial Crime Department, said the networks posed a major threat to security in the European Union and undermined its banking and financial systems.

“If you hit these networks, you paralyse organised crime,” Myles said. “You hit them in a way that really hurts. And that is our ultimate goal.”

Police investigations become more difficult when money leaves Denmark, particularly when it goes to a country outside the European Union. Different national laws can create barriers despite international cooperation, Svarrer said.

The documentary Undergrundsbanken follows the money trail in several cases, leading to Turkey, Spain, Belgium, the Netherlands and Syria. Both episodes are available on DRTV.