German police raid Deutsche Bank in 'Panama Papers' graft probe

Andrew Cummings
November 29, 2018

A total of 170 officials from the Frankfurt prosecutors office, the Federal Criminal Police Office (BKA), the tax investigation office were on the scene at the Deutsche Bank headquarters.

Police and the public prosecutor's office raided Deutsche Bank's offices in Germany, including the head office at Taunusanlage in Frankfurt, the bank said.

Shares in Deutsche Bank fell 2.75 to €8.36 by 1000 GMT, against a DAX blue-chip index up 0.6%.

The prosecutors said they are looking at whether Deutsche Bank may have assisted clients to set up "Offshore-Companies" in tax havens so that funds transferred to accounts at Deutsche Bank could skirt anti-money laundering safeguards.

They also said Deutsche Bank employees are alleged to have breached their duties by neglecting to report money laundering suspicions about clients and offshore companies involved in tax evasion schemes.

Some 170 police officers and investigators from the prosecutor's office were searching for six of the bank's premises in and around the city, it added in a statement. The Panama Papers revelations in 2016 spotlighted the flow of illicit money across the globe hidden in offshore holding companies. The German authorities began looking into the potentially illegal actions of the country's largest bank as a result of those document leaks.

What do you think about Deutsche Bank's new scandal? FWIW: Deutsche has been rocked by problems and was the only major global bank to do business with Trump in recent years.

Deutsche Bank has been sanctioned in the past for failing to tackle money laundering.

In September, Germany's financial watchdog - BaFin - ordered Deutsche Bank to do more to prevent money laundering and 'terrorist financing, ' and appointed KPMG as third party to assess progress.

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

Most recently, Denmark's biggest bank, Danske Bank, admitted that some 200 billion euros ($302 billion) in suspicious money had flown through its Estonian branch from 2007 to 2015.

Scandinavian lenders Nordea and Handelsbanken have already been fined by regulators for violating money laundering rules. US and British regulators fined the bank $630 million past year for allowing wealthy Russians to launder $10 billion in cash between 2012 and 2015.

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.

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