Deutsche Bank faces probe over allegations of money laundering

Jermaine Castillo
December 2, 2018

German authorities raided Deutsche Bank - including its Frankfurt headquarters - in a money-laundering probe.

A spokesman for Deutsche Bank declined to comment.

It focuses on the years from 2013 to 2018, a spokeswoman for the prosecutor's office said.

Police in Germany have raided the offices of Deutsche Bank in connection with the Panama Papers revelations and as part of an investigation into alleged money laundering.

This is an issue related to Panama Papers.

Scandinavian lenders Nordea and Handelsbanken have already been fined by regulators for violating money laundering rules.

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Prosecutors said they were investigating allegations that Germany's biggest lender helped clients set up offshore companies in tax havens to "transfer money from criminal activities" to Deutsche Bank accounts.

According to USA and British regulators, Deutsche Bank's anti-money laundering control mechanisms failed to spot sham trades with a value of up to $10 billion, not knowing who the customers involved in the trades were and where their money came from.

They said Deutsche Bank employees were alleged to have breached their duties by neglecting to report money laundering suspicions about clients and offshore companies involved in tax evasion schemes. Finally, Barclays set a $8.00 price objective on Deutsche Bank and gave the stock a "sell" rating in a report on Tuesday, November 20th. Deutsche Bank shares last traded at $9.42, with a volume of 11464800 shares traded.

In 2017, Deutsche already had to pay a fine of nearly $630 million after an investigation by British and American authorities into laundering of money originating in Russian Federation.

The Papers revealed the financial secrets of the world's financial and criminal elite, detailing years of tax avoidance and money laundering in the hundreds of millions - including millions of pounds from the Queen's private estate.

A Deutsche Bank executive director has said the lender played only a secondary role as a so-called correspondent bank to Danske Bank.

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Deutsche Bank shares have lost around half of their value this year, after the bank endured three years of losses and a series of financial and regulatory scandals.

The raids are the latest embarrassment for embattled Deutsche Bank, which has repeatedly been rapped by regulators for lax money laundering controls.

Christian Sewing, appointed chief executive in April to help the bank rebuild, has trimmed its USA operations and reshuffled its management board, but revenue has continued to slip.

Soon afterwards, the US Federal Reserve ordered a further fine of $41 million over gaps in the bank's money laundering surveillance.

Earlier this month, Deutsche said that it was involved in processing payments for the Danish bank in Estonia.

Several other institutions besides Deutsche Bank have been fined by authorities in the USA and Europe for not properly checking up on the beneficial owners of shell companies that send money through their accounts.

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