Police raid Deutsche Bank headquarters in money laundering probe

Devin Lawrence
November 30, 2018

Police vehicles are parked in front of Deutsche Bank headquarters as roughly 170 criminal police officers, prosecutors and tax inspectors searched the bank's offices in and around Frankfurt, Germany, on Thursday. Some 170 officials are said to be in the building.

Money obtained illegally may have been transferred to accounts at Deutsche Bank, which failed to report the suspicions that the accounts may have been used to launder money, Frankfurt prosecutors said.

Citing prosecutors, Bloomberg added Deutsche "may have helped clients in setting up offshore companies in tax havens".

In 2016 alone, more than 900 customers are alleged to have transferred some 311 million euros (about $470 million Cdn) to one such company set up in the British Virgin Islands, she said.

The bank tweeted: "It is true that the police is now conducting an investigation at a number of our offices in Germany".

"Even in the most egregious cases, banks are often only required to pay a monetary penalty for engaging in criminal activity, which is merely the cost of doing business", said Jimmy Gurule, a former undersecretary for enforcement for the U.S. Treasury Department.

TRT World's Ira Spitzer has more details from Berlin.

The bank's share price fell 3.3 per cent in early morning trading.

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It is separate from another money laundering scandal surrounding Danske Bank, where Deutsche Bank is involved.

Denmark's state prosecutor on November 28 filed preliminary charges against Danske for alleged violations of the country's anti-money laundering act in relation to its Estonian branch.

"Just when you thought Deutsche Bank had left its legal troubles behind it, there's more", said Markus Riesselmann, an analyst at Independent Research who recommends investors sell Deutsche Bank shares.

At the time, Deutsche Bank severed ties with a Cypriot lender partly owned by VTB Group that was identified in the reporting.

It is suspected that bank employees helped customers set up offshore firms in tax havens.

In September, Germany's financial supervisor BaFin took the unusual step of embedding auditors from KPMG at Deutsche to monitor the bank's progress in battling illegal transactions such as money laundering, terrorist financing and dealings with organised crime. He has also alleged that family members of Russian President Vladimir Putin and Russia's spy agency were using the bank for money laundering. This year, the bank saw its credit rating downgraded, its CEO ousted and its stock price hit a record low.

The news comes as Deutsche Bank tries to fix its tattered reputation after three years of losses and a drumbeat of financial and regulatory scandals.

Deutsche Bank is in the throes of a major restructuring plan, with 7,000 jobs to go by the end of 2019.

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