A U.S. lawsuit brought by more than 100 American military families against Danske Bank and two other major banks has been dismissed by multiple court levels, with the final deadline for appeal expiring in January 2026. The families had alleged the banks knowingly facilitated financial transactions supporting terrorist groups in Afghanistan, including Taliban and Al-Qaeda, through connections to a notorious Pakistani money launderer who used Danske Bank’s scandal-hit Estonian branch.
Lawsuit against Danske Bank Finally Dismissed After Five Years
Danske Bank announced in its newly released annual report that the legal case initiated in 2021 has reached its conclusion. The lawsuit, filed by families of American soldiers killed or wounded in Afghanistan, targeted Danske Bank along with Deutsche Bank and Britain’s Standard Chartered Bank.
The 606-page complaint accused the three financial institutions of helping to finance terrorist organizations operating in Afghanistan. According to the families, the banks knowingly processed millions of dollars in transfers that ultimately supported violent campaigns against American forces in the region.
However, U.S. appeals courts ruled against the plaintiffs. Judges determined that the families could not sufficiently prove the banks had adequate knowledge that their services were being used to support terrorism. The courts also concluded that the banks’ activities constituted legitimate financial transactions rather than deliberate support for terror operations.
With the January 14, 2026 deadline passing without an appeal to the U.S. Supreme Court, the case is now officially closed. All three banks consistently denied the allegations throughout the legal proceedings.
Connection to World’s Worst Money Launderer
At the heart of the lawsuit was Altaf Khanani, a Pakistani national described by multiple international authorities as one of the world’s most prolific money launderers. Over several decades, Khanani allegedly laundered billions through networks serving Mexican drug cartels, Chinese criminal organizations, and terrorist groups including Taliban and Al-Qaeda.
In 2020, Danish media revealed that an account at Danske Bank’s Estonian branch had transferred funds to one of Khanani’s companies, Mazaka General Trading. This discovery added concrete details to the already massive scandal surrounding the bank’s Estonian operations.
The lawsuit claimed that between 2007 and 2016, Danske Bank’s Estonian branch processed suspicious transactions totaling $233 billion as part of what became known as the bank’s money laundering operation. According to the complaint, the majority of these transactions facilitated money laundering for Khanani, Russian organized crime, Azerbaijan’s leadership, and various criminal syndicates.
Expert Reactions to the Danske Bank Scandal
When the connection to Khanani first emerged, anti-money laundering experts expressed shock at the implications. The revelations provided concrete examples of how suspicious billions flowed through the Estonian branch and illustrated the critical importance of robust banking safeguards against financial crime.
The case highlighted not just the volume of questionable transactions but also the human cost potentially linked to such failures. By connecting specific customer relationships to known criminal networks, it gave the abstract concept of money laundering a disturbing real-world dimension.
Khanani himself served three years in U.S. prison for money laundering until 2020 and is now free. His case remains one of the most significant examples of cross-border financial crime facilitated through major banking institutions.
Danske Bank’s Response and Regrets
In 2020, Danske Bank declined to comment on specific customer relationships but acknowledged systemic failures in managing foreign customers at its Estonian branch. Bank representatives admitted they should never have maintained the portfolio of non-resident customers and were too slow to recognize the full scope of the problems.
The institution acknowledged significant delays in shutting down the problematic portfolio once issues became apparent. When the soldier families filed their lawsuit in 2021, Danske Bank offered no public comment, maintaining that stance throughout the legal proceedings.
Broader Money Laundering Scandal Context
The dismissed lawsuit represents just one chapter in Danske Bank’s ongoing struggle with the fallout from its Estonian operations. The branch became infamous for processing an estimated 200 billion euros in suspicious transactions between 2007 and 2015, primarily from non-resident customers in Russia and former Soviet states.
Danish authorities ultimately imposed a record 3.5 billion Danish kroner fine on the bank for violating anti-money laundering laws. An additional 1.249 billion kroner in profits from suspicious transactions was confiscated. These penalties marked Denmark’s largest-ever financial sanctions related to money laundering violations.
The violations stemmed from Danske Bank’s Copenhagen headquarters failing to adequately monitor, investigate, or report suspicious transactions for non-resident customers. The bank also maintained inadequate oversight of the Estonian branch’s anti-money laundering measures and responded too slowly to a 2013 whistleblower alert along with other warning signs.
Ongoing Regulatory Scrutiny
Despite settling this particular lawsuit, Danske Bank continues facing regulatory pressure. Recent inspections by Denmark’s financial regulator identified ongoing high inherent risks for money laundering and terror financing. These risks stem from the bank’s size, diverse customer base, product offerings, and international exposure.
Authorities found that the bank’s risk assessment failed to properly identify and evaluate all relevant factors tied to its business model. As a result, regulators have mandated comprehensive overhauls of risk assessment procedures and anti-money laundering policies.
Meanwhile, a parallel money laundering investigation continues in France. Some investors view the scandal’s repercussions as ongoing rather than fully resolved, even as individual legal cases reach conclusion.
Danske Bank has invested heavily in upgrading its systems and controls through a group-wide program designed to combat economic crime. The bank now prioritizes enhanced transaction monitoring and secure international payment processing, with compliance staff growing from approximately 100 employees during the scandal’s peak to over 500 today.
Sources and References
The Danish Dream: Danish Bank Hit Hard by New EU-US Tariff
The Danish Dream: Banking in Denmark for Foreigners Updated 2025
DR: Soldaterfamilier sagsøgte Danske Bank hjælpe verdens værste hvidvasker nu er sagen afsluttet
