Published: Sun, December 02, 2018
Markets | By Otis Pena

Deutsche Bank searched for second day in money-laundering probe

Deutsche Bank searched for second day in money-laundering probe

Investigators are looking into the activities of two unnamed Deutsche Bank employees alleged to have helped clients set up offshore firms to launder money, the prosecutor's office said.

On Thursday, about 170 police officers, prosecutors and others searched through the bank's headquarters in Frankfurt and buildings in nearby areas, seizing electronic and paper records.

The bank said on Thursday it was cooperating with investigators, and declined to make any further comment on Friday.

The Panama Papers consist of over 11.5 million leaked documents from Panamanian law firm Mossack Fonseca.

It's been a rough few weeks for Deutsche Bank.

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

The raid comes as Deutsche Bank tries to fix its tattered reputation after three years of losses and a list of financial and regulatory scandals. CEO Christian Sewing was appointed in April with the intention of improving performance at the lender.

In 2016 alone, over 900 customers were served by a Deutsche Bank subsidiary registered on the British Virgin Islands, generating a volume of 311 million euros, the prosecutors said.

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The investigation is separate from another money laundering scandal surrounding Danish lender Danske Bank (LSE: 0NVC.L - news), in which Deutsche Bank has a role.

In January, BaFin president Felix Hufeld said the agency had found no evidence of substantial breaches of money laundering rules by the banks named in the Panama Papers.

Danske is under investigation for suspicious payments totalling 200 billion euros from 2007 onwards and a source with direct knowledge of the case has told Reuters Deutsche Bank helped to process the bulk of the payments. At least one of them should work in the Compliance Department for the fight against transactions, such as money laundering and the financing of terrorism is responsible.

Stock losses at Deutsche Bank were also mirrored by declining stock prices at DB "correspondent bank" Danske Bank following news of the raid. Money from crime had been on the accounts in the German Bank transferred without the Bank due to money laundering suspicions reported.

"The failure to hold banks accountable for money laundering encourages such criminal activity, including laundering hundreds of millions of dollars in Panama and other money laundering havens", said Gurule, now a professor at Notre Dame Law School.

Deutsche Bank's tweet confirming the investigation.

As much as $150 billion dollars of that money allegedly moved through Deutsche Bank at some point, according to Financial Times.

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