Deutsche Bank internal investigation finds 175 million euros in dirty Russian money
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Deutsche Bank estimated it processed at least € 175 million in dirty money for Russian criminals between 2011 and 2014 and braced for possible fines, litigation and lawsuits against individual executives in response.
The alleged money laundering was part of a $ 20 billion scheme dubbed the “Russian Laundromat” which was exposed by the Organized Crime and Corruption Reporting Project, a network of investigative journalists, in March 2017.
A year later, two senior executives at Deutsche Bank in the fight against financial crime informed the lender’s supervisory board of an internal investigation into its role in the scandal, according to a “strictly confidential” presentation on April 24 from last year who was first reported by Le Gardien.
Deutsche Bank confirmed the authenticity of the presentation but declined to comment further. The internal assessment reveals another area of money laundering failures at Germany’s largest lender, which is in talks about a merger with domestic rival Commerzbank.
The bank is already facing close scrutiny from US and German regulators for its role in the Danske Bank scandal, in which it processed up to € 160 billion in potentially suspicious transactions, many from Russia.
He is also the subject of a criminal investigation by prosecutors in Frankfurt who suspect Deutsche of supporting the money laundering activities of clients in offshore tax havens.
These activities were exposed by the Panama Papers, a mine of documents leaked in 2016, which triggered a two-day raid late last year by 170 police and criminal prosecutors raiding Deutsche headquarters.
In January 2017, Deutsche agreed to pay $ 630 million to settle US and UK investigations into suspected mirror operations used to launder $ 10 billion outside of Russia.
The “Russian laundromat” case, which was the subject of the leaked presentation to the supervisory board, is unrelated to these cases, according to people briefed on the matter.
According to the slideshow, the audit committee of the supervisory board of Deutsche Bank was warned that the lender may have violated “legal, regulatory and other obligations relating to financial crime” as part of the money laundering program. silver.
Financial crime officials have also signaled that the bank could face “significant disciplinary action” from regulators.
Deutsche Bank is involved in the program due to old business relationships with two regional banks in Eastern Europe, a Moldovan bank and the late Trasta Komercbanka in Latvia.
Lenders in Moldova and Latvia were used by Russian criminals in a complex fraud scheme involving bogus loans between shell companies based in the UK, which allowed Russian companies to launder money from Russia to the euro zone.
Similar to its role in the Danske scandal, Deutsche acted as a correspondent bank for Moldovan and Latvian banks and processed cross-border payments for them.
According to the presentation, the Frankfurt-based bank severed ties with the two business partners in 2012 and 2015, respectively, for reasons unrelated to the Russian laundromat scandal.
Supervisory board members learned that Deutsche Bank only got wind of the fraud scheme in March 2017, when it was approached by journalists who reported that “assets had been transferred illegally via [Deutsche Bank’s] correspondent banking network ”.
“It is only with this information received that it is now possible for Deutsche Bank to launch global investigations,” the presentation said.
The Financial Crime Unit discovered that as part of the “Russian Laundromat”, the bank was dealing with 2,581 “high-risk entities”, of which 30 were direct customers of Deutsche Bank.
The total volume of cleared transactions for these “high risk entities” in four currencies amounted to € 175 million at current exchange rates, including $ 47.4 million in US related payments.
Deutsche Bank declined to say on Wednesday whether the investigation was completed as planned in the fourth quarter of 2018.
“We cannot comment on any potential or ongoing investigation and we cannot comment on any matter regarding our regulators,” a spokesperson said, adding that the lender “remains committed to providing appropriate information to all authorized investigations.”