An internal investigation at Deutsche Bank has found that it processed at least €175 million (nearly $197 million USD) in dirty money for Russian criminals between 2011 and 2014.
According to Financial Times, the money was part of a $20 billion scheme known as the “Russian Laundromat,” which was leaked from a supervisory board presentation. As a result of the findings, the financial institution (FI) is reportedly preparing for potential fines, litigation and prosecution of individual managers. In fact, the audit committee of Deutsche Bank’s supervisory board warned that the lender possibly violated “legal, regulatory and other financial crime-related obligations.”
The bank is involved in the illegal activity because of former business relationships with two regional eastern European banks, one in Moldova and the other in Latvia. Both were used by Russian criminals and, like its role in the Danske Bank money laundering scandal, Deutsche acted as a correspondent bank, and processed cross-border payments for the two banks.
According to the presentation, which Deutsche confirmed was authentic, the supervisory board members were first informed of the scheme in March 2017 after journalists inquired about assets that "were transferred illegally via [Deutsche Bank’s] correspondent banking network.”
“Only with this intelligence received is it now possible for Deutsche Bank to start global investigations,” according to the presentation.
The anti-financial crime unit found that the bank conducted business with 2,581 “high-risk entities," with 30 being direct Deutsche Bank clients. The total transaction volume of €175 million cleared for these “high-risk entities” in four currencies at current exchange rates, including $47.4 million of U.S.-related payments.
Though Deutsche Bank confirmed the presentation, it declined to comment further, including verifying whether or not the investigation had been completed as expected in the fourth quarter of 2018.
“We can't comment on any potential or ongoing investigations, and we can't comment on any matters regarding our regulators,” a spokesman said, adding that the lender “remains committed to providing appropriate information to all authorized investigations."