Published: Fri, November 30, 2018
Money | By Arnold Ball

German police raid Deutsche Bank in Panama Papers probe

German police raid Deutsche Bank in Panama Papers probe

"The case is related to the Panama Papers", it added.

In 2017, the bank was landed with a £506m fine by the Financial Conduct Authority for failing to prevent $10 billion of Russian money-laundering.

British banking authorities said at least 29 Deutsche Bank employees were involved in the scam, while United States regulators ordered the bank to fire seven employees, including directors and vice-presidents.

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

The investigation revolves around multiple Deutsche Bank employees, including two believed to still be working at the financial institution.

Deutsche Bank said it was fully cooperating with authorities.

The investigation emerged from an analysis of documents leaked from tax havens in recent years, including the 2016 Panama Papers, said Nadja Niesen, Frankfurt prosecutors' spokesperson.

"As far as we are concerned, we had already provided the authorities with all the relevant information regarding the Panama Papers", Deutsche Bank spokesman Joerg Eigendorf told reporters in Frankfurt.

The revelations reportedly began with the 2016 Panama Papers, which detailed the then-secret, shady money dealings of worldwide financiers.

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

Law firm Mossack Fonseca which specialised in setting up offshore companies was at the centre of an international scandal
JOE RAEDLE GETTY IMAGESLaw firm Mossack Fonseca which specialised in setting up offshore companies was at the centre of an international scandal

Christian Sewing was appointed as chief executive in April to help the bank to rebuild.

Money laundering has become a growing problem in Europe, where a series of scandals has exposed lax regulation. A Deutsche Bank executive director has said the lender played only a secondary role as a so-called correspondent bank to Danske Bank, limiting what it needed to know about the people behind the transactions.

"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", it reported.

And it's not the first time Deutsche Bank has run into trouble over the flow of dirty money.

Analysts say that because these transactions can be lucrative and punishments are lax, banks have few incentives to do more than the minimum required by law to check on the identity of a bank.

The bank has publicly admitted it needs to do more to improve its processes record after months of negative attention.

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

Deutsche Bank employees had devised strategies to get around the sanctions and carry out transactions worth roughly $10.9 billion. An investigation by the U.S. Department of Justice is still ongoing.

The bank has already recorded annual loses after agreeing to pay a $7.2 billion settlement with USA authorities after it sold toxic mortgage agreements prior to the 2008 financial crash.

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