Deutsche Bank of­fices searched as part of money-laun­der­ing in­ves­ti­ga­tion

The Irish Times - Business - - BUSINESS / NEWS - DEREK SCALLY

A Ger­man pros­e­cu­tor in­ves­ti­ga­tion of Deutsche Bank is set to con­tinue into a sec­ond day to­day after a money-laun­der­ing raid on its Frank­furt head­quar­ters.

More than 170 of­fi­cials were in­volved in five sep­a­rate raids at bank of­fices in Frank­furt and nearby Eschborn, as well as a pri­vate apart­ment. The most high-pro­file raid saw at least a dozen po­lice ve­hi­cles pull up out­side the main sky­scraper in Ger­many’s fi­nan­cial cap­i­tal, start­ing a steady share slide on Frank­furt’s Dax ex­change.

In­ves­ti­ga­tors said they had se­cured files in pa­per and elec­tronic form in a raid linked to the Panama Pa­pers rev­e­la­tions of 2016 by the Con­sor­tium of In­ves­tiga­tive Jour­nal­ists, of which The Ir­ish Times is a mem­ber.

In par­tic­u­lar the lo­cal state pros­e­cu­tor said the in­ves­ti­ga­tion was ex­am­in­ing whether two – and pos­si­bly more – Deutsche Bank em­ploy­ees helped clients set up off­shore ac­counts to “trans­fer money from crim­i­nal ac­tiv­i­ties”.

In­ves­ti­ga­tors are ex­am­in­ing whether a 50-year-old em­ployee and a 46-year-old em­ployee failed to regis­ter with the reg­u­la­tor ac­tiv­ity that raises sus­pi­cion of money laun­der­ing.

The in­quiry cov­ers the years 2013 to 2018 dur­ing which, in 2016 alone, about 900 cus­tomers and €318 mil­lion re­port­edly passed through a Deutsche Bank sub­sidiary reg­is­tered in the Bri­tish Vir­gin Is­lands.

Off­shore leaks

Nadja Niessen, spokes­woman for the Frank­furt state pros­e­cu­tor, said it had re­ceived the in­for­ma­tion be­hind the raid from fed­eral crim­i­nal po­lice from the off­shore leaks.

“Through this the sus­pi­cion grew that Deutsche Bank helped cus­tomers found off­shore com­pa­nies in the in­ter­ests of tax avoid­ance,” she said.

The raid took Deutsche Bank by sur­prise, a spokesman said yes­ter­day af­ter­noon, as the company be­lieved it had al­ready turned over all rel­e­vant off­shore doc­u­men­ta­tion to author­i­ties. “In the last years we have al­ways shown that we . . . are ready to work closely with the author­i­ties,” said Mr Jörg Eichen­dorf, “and we will show this readi­ness again”.

Yes­ter­day’s raid is the lat­est in a long string of scan­dals to hit the strug­gling bank, once Ger­many’s blue-chip fi­nan­cial call­ing card around the world.

The 2016 Panama Pa­pers scan­dal ex­posed its ties to huge money-laun­der­ing by mil­lion­aires and bil­lion­aires via the now de­funct law firm Mos­sack Fon­seca, based in Panama City. Before those off­shore links were ex­posed, Deutsche Bank was linked to ag­gres­sive subprime lend­ing in the US, sell­ing cus­tomers prod­ucts de­scribed by its own traders as “shit”. A US Se­nate in­ves­ti­ga­tion ruled Deutsche Bank’s reck­less busi­ness prac­tices had con­trib­uted to the 2008 bank­ing cri­sis.

In a telling mea­sure of how far the bank’s for­tunes have fallen, news of the raid was not even the top story in main Ger­man news.

Mean­while, company shares worth €82 a decade ago and €30 four years ago were strug­gling to find buy­ers yes­ter­day for €8.27, down about 3 per cent in one day.

Long-term Deutsche watch­ers said they were sur­prised – if not al­to­gether shocked – by re­newed pros­e­cu­tor at­ten­tion in the bank’s ac­tiv­i­ties.

“It’s shock­ing how much money has been burned be­cause of wrong­ful be­hav­iour and du­bi­ous busi­ness with cus­tomers,” said Mr Wolf­gang Gerke, pres­i­dent of the Bavar­ian Bank­ing Cen­tre.

“Rep­u­ta­tion suf­fers when large fines are due and one can only hope Deutsche Bank isn’t headed again to­wards large fines.”

The lat­est raid is a par­tic­u­lar blow for Mr Chris­tian Sew­ing, the bank’s fourth chair­man in six years. Un­til his ap­point­ment last April, he was was re­spon­si­ble for Deutsche’s pri­vate bank­ing di­vi­sion at the cen­tre of the raid. – Ad­di­tional re­port­ing: Fi­nan­cial Times

‘‘ Before those off­shore links were ex­posed, Deutsche Bank was linked to ag­gres­sive subprime lend­ing


Po­lice at the cor­po­rate head­quar­ters of Deutsche Bank in Frank­furt.

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