Deutsche Bank fears prosecutions over money laundering
Leaked internal report shows German lender expects significant brand damage
Deutsche Bank fears it faces fines, legal action and the possible prosecution of “senior management” because of its role in a $20bn Russian money-laundering scheme, reports The Guardian.
In a confidential internal report, the troubled lender concedes that the scandal has hurt its “global brand” – and is likely to cause “client attrition”, loss of investor confidence and a decline in its market value.
It further admits there is a significant danger that regulators in both the US and UK will take “significant disciplinary action” against it over its involvement in a vast money-laundering operation, dubbed the Global Laundromat.
The episode saw Russian criminals with links to the Kremlin, the old KGB and the FSB, shift as much as $80bn into the western financial system. Shell companies in the UK “loaned” money to each other and defaulted on the fictional debt.
Deutsche Bank came into the frame when it was used to launder money through its corresponding banking network. This meant it was effectively funnelling illegal Russian payments to the European Union and Asia.
In a difficult time for the German bank, there have been police raids on its Frankfurt HQ over the Panama Papers, its share price has plunged and there has been talk of a possible merger with Germany’s Commerzbank.
Commenting on the latest news, Raw Story describes Deutsche Bank as “Donald Trump’s favourite” lender and says it fears it will be “hammered”.
Last month, the New York Times found that bosses at Deutsche Bank saw major “red flags” surrounding President Donald Trump’s financial affairs but kept funding him because the connection helped bring prestige to their institution.
It said Trump and the bank are “deeply entwined, their symbiotic bond born of necessity and ambition on both sides: a real estate mogul made toxic by polarising rhetoric and a pattern of defaults, and a bank with intractable financial problems and a history of misconduct”.