Published: Sun, December 02, 2018
Finance | By Loren Pratt

Deutsche Bank searched for second day in money-laundering probe

Deutsche Bank searched for second day in money-laundering probe

The search comes amid an ongoing investigation into allegations that some employees helped set up offshore companies used to launder huge sums.

Around 170 police officers, prosecutors and tax inspectors took part in the searches which saw written and electronic documents seized, the Frankfurt prosecutor's office said.

The Panama Papers scandal that erupted in 2016 with a massive data leak from Panamaian legal firm Mossack Fonseca exposed large-scale tax evasion, laying bare how the world's wealthy and powerful stashed their assets in offshore businesses.

Two employees, aged 50 and 46, are now under investigation for allegedly failing to report suspicious transactions but prosecutors say the investigation could broaden. At least one site raided was a suspect's home.

Analysis of the Panama Papers and other documents "gave rise to suspicion that Deutsche Bank was helping clients set up so-called offshore companies in tax havens and the proceeds of crimes were transferred there from Deutsche Bank accounts" without the bank reporting it, Niesen said.

In 2016 alone, over 900 customers were served by a Deutsche Bank subsidiary registered on the British Virgin Islands, generating a volume of 311 million euros.


The suspects, both German citizens, are accused of failing to report the suspicious transactions even though there was "sufficient evidence" to have been aware of it.

The latest raids were said to have included the offices of its board members, a sign the investigation about the bank's role in the Panama Papers global money-laundering scandal is widening.

Last year Deutsche agreed a $7.2bn (£5.6bn) settlement with USA authorities over the sale of toxic mortgage securities in the run-up to the 2008 financial crisis.

Why do you think regulators are going after crypto when there is so much money laundering in the banking system?

It's been a rough few weeks for Deutsche Bank. The market capitalization of the once-mighty bank is about $19 billion, not a significant amount more than the bank has had to pay in fines since the financial crisis. While owning a shell company is not illegal, it is used to hide the beneficial owner of a company or transfer, making it important for the handling and laundering of dirty money. "Moreover, the Federal Reserve has fined the bank "$41 million for failing to have an effective system for complying with bank secrecy laws and laws to prevent money laundering", The New York Times wrote. Reuters noted that the raid that began on Thursday is unrelated to the Danske Bank money laundering case.

Last year, Deutsche Bank was fined almost $700 million for allowing money laundering through artificial trades between Moscow, London and NY. The raid of Germany's biggest bank with assets worth approximately 1.48 trillion euros ($1.68 trillion) continued for a second day on Friday, according to Reuters.

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