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JACKSONVILLE, Florida – Deutsche Bank anti-money laundering specialists recommended in 2016 and 2017 that multiple transactions involving legal entities controlled by Donald J. Trump and his son-in-law, Jared Kushner , be reported to a federal financial crime watchdog.
The transactions, some of which involved Trump's now defunct foundation, triggered alerts in a computer system designed to detect illicit activity, according to five bank employees and former bank employees. The compliance staff, who then reviewed the transactions, prepared alleged suspicious activity reports that they believe should be sent to a Treasury Department unit that is handling the crimes. financial.
The leaders of Deutsche Bank, which has already lent billions of dollars to Trump and Kushner, have rejected the recommendations of their employees. Reports have never been filed with the government.
The nature of the transactions was not clear. At least some of them involved money exchanges with entities or people abroad, which bank employees considered suspicious.
Real estate developers such as Mr. Trump and Mr. Kushner sometimes enter into large all-cash contracts, including with people outside the United States. Each of them can give rise to controls in the fight against money laundering. Red flags raised by employees do not necessarily mean that transactions were irregular. Banks sometimes choose not to file suspicious activity reports if they feel the concerns of their employees are unfounded.
But former Deutsche Bank employees said the decision not to report the Trump and Kushner transactions reflected the bank's generally lax approach to money laundering legislation. Employees – most of whom spoke on condition of anonymity to preserve their ability to work in the industry – said it was part of a trend by bank executives to reject valid reports in order to protect their privacy. relationships with lucrative customers.
"You show them everything, you make a recommendation to them and nothing happens," said Tammy McFadden, a former anti-money laundering specialist at Deutsche Bank, who reviewed some of the deals. "It's the D.B. way. They are inclined to update everything. "
Ms. McFadden stated that she was fired last year after expressing concerns about the bank's practices. Since then, she has filed complaints with the Securities and Exchange Commission and other regulators about the bank's anti-money laundering measures.
Kerrie McHugh, a spokeswoman for Deutsche Bank, said the company has stepped up efforts to fight financial crime. An effective anti-money-laundering program, she said, "requires sophisticated transaction-filtering technology, as well as a group of skilled people, able to analyze the alerts generated by this technology thoroughly and efficiently. "
"At no time was an investigator prevented from escalating a potentially suspicious activity," she added. "In addition, the suggestion that anyone who has been reassigned or fired for the purpose of eliminating concerns about a customer is totally false."
Amanda Miller, spokeswoman for the Trump Organization, a company that brings together the many business interests of the Trump family, said: "We are not aware of any transactions" reported "with Deutsche Bank." She does not have an operating account at the present time. "with Deutsche Bank." She did not answer the question of whether other Trump entities had accounts.
Karen Zabarsky, spokesperson for the Kushner companies, said: "Any allegation about the relationship between Deutsche Bank and the Kushner companies involving money laundering is completely false and misleading. The New York Times continues to create points that simply do not connect. "
Deutsche Bank's decision not to report transactions is the last change Mr. Trump's long and complicated relationship with the German bank – the only traditional financial institution willing to do business with the real estate developer.
The congressional and state authorities are investigating this relationship and asking that the bank hold documents relating to the president, his family and their companies. Subpoenas from two House committees include requests for documents relating to any suspicious activity detected in Trump's personal and professional bank accounts since 2010, according to a copy of a subpoena included in a court file. Federal Court.
Mr. Trump and his family sued Deutsche Bank in April, seeking to prevent him from complying with Congressional summonses. The president's lawyers described the subpoenas as politically motivated.
Reports of suspicious activity are at the heart of the federal government's efforts to identify criminal activities such as money laundering and sanctions violations. However, government regulation gives banks leeway in choosing which transactions to report to the Treasury Department's Financial Crime Network.
Lenders generally use a layered approach to detect inappropriate activities. The first step is to filter thousands of transactions using computer programs, which send potentially suspicious ones to mid-level employees for a detailed review. These employees may decide to write or not a suspicious activity report, but the final decision to submit it or not to the Treasury Department is often made by senior executives.
In the summer of 2016, Deutsche Bank's software highlighted a series of transactions involving the real estate company of Mr. Kushner, now a senior adviser to the White House.
Ms. McFadden, a long-time anti-money laundering specialist at the Deutsche Bank office in Jacksonville, said she reviewed the transactions and found that the money had been transferred from the Kushner companies to Russian individuals. She concluded that the transactions should be reported to the government – in part because federal regulators had ordered Deutsche Bank, accused of laundering billions of dollars for the Russians, to strengthen its control of potentially illegal deals.
Ms. McFadden wrote a suspicious activity report and compiled a small package of documents in support of her decision.
As a rule, such a report would be reviewed by a team of anti-money laundering experts, independent of the industry in which the transactions were initiated – in this case, the private banking division – according to Ms. McFadden and two former Deutsche Bank. managers.
This did not happen with this report. It has been awarded to New York executives belonging to the private bank, which addresses the larger ones. They felt that Ms. McFadden's concerns were unfounded and chose not to submit the report to the government, the employees said.
Ms. McFadden and some of her colleagues believed that the report had been killed in order to preserve the strong ties that unite the private banking division with Mr. Kushner.
Once Mr. Trump became president, the transactions involving him and his companies were reviewed by a bank's anti-money-laundering team called the Special Investigations Unit. The Jacksonville-based team produced several suspicious activity reports involving various entities that Mr. Trump owned or controlled, according to three former Deutsche Bank employees who saw the reports in an internal computer system.
Some of these reports concerned Mr. Trump's limited liability companies. At least one involved transactions involving Donald J. Trump Foundation, said two employees.
According to three former employees, Deutsche Bank has finally chosen not to file these suspicious activity reports with the Treasury Department. They said that it was unusual for the bank to reject a series of reports involving the same high-level client.
Mr. Trump's relationship with Deutsche Bank spans two decades. At a time when most Wall Street banks had stopped doing business with him after his repeated failures, Deutsche Bank lent Mr. Trump and his companies more than $ 2.5 billion. Projects funded by the private banking division include Trump's Doral Golf Course near Miami and the transformation of the former Washington Post Office into a luxury hotel.
When he became president, he owed to Deutsche Bank more than 300 million dollars. This is how the German institution, the most creditor of Mr. Trump, put the bank in a deadlock.
Senior executives feared that if they adopted a difficult attitude to Trump's accounts – for example, by demanding a late payment – they could provoke the president's anger. On the other hand, if they do nothing, the bank could be seen as a lucrative break for Mr. Trump, whose administration exercises regulatory and repressive power over the bank.
In recent years, US and European authorities have punished Deutsche Bank for helping clients, including wealthy Russians, to launder funds and transfer money into countries like Iran, in violation of US sanctions. The bank has paid fines of several hundred million dollars and is enforcing an order from the US Federal Reserve that requires it to do more to stop the illegal activities.
Deutsche Bank has thousands of employees who control customers and transactions on two palm-lined Jacksonville campuses. Six bank employees and former bank employees said the operations were deeply disrupted.
Anti-money laundering workers were forced to quickly review transactions to determine if they were suspicious, the employees said. As a result, they often made a mistake in not reporting transactions.
Two former employees said they raised concerns about transactions involving companies linked to prominent Russians, but that officials told them not to file reports of suspicious activity. The employees felt that the bank did not want to upset important customers.
Several employees said they complained to Joshua Blazer, head of the Financial Crimes Investigation Division of Deutsche Bank in Jacksonville, about anti-money laundering procedures, and then went on to say: been criticized for their negative attitude. An employee said she resigned last summer because of concerns about the bank's ethics.
Mr Blazer, hired by Deutsche Bank in 2017 to strengthen the bank's financial crime apparatus, declined to comment.
Ms. McFadden's job at Deutsche Bank was to inspect the clients and transactions of the company's private banking division – the unit that lent money to Mr. Trump. She joined the bank in 2008 after working for Bank of America, also in Jacksonville.
Ms. McFadden left Bank of America in 2005 and subsequently sued for racial discrimination and unfair dismissal. According to the court records, her lawsuit was settled on confidential terms the same year, she joined Deutsche Bank, where she won numerous performance awards.
According to Ms. McFadden, at about the same time she reported on the Kushner companies' transactions, she also complained about how the bank looked at the accounts of well-known clients, such as those who held public office. These clients – referred to as politically exposed persons – are considered to be at increased risk of corruption. As a result, their accounts are subject to additional verification.
Ms. McFadden told her superiors that dozens of politically exposed clients of the private banking division, including Mr. Trump and members of his family, did not receive this extra attention. Her superiors told her to stop asking questions, according to Ms. McFadden and the two former directors.
After filing her complaint with the Human Resources Department, Ms. McFadden was transferred to another division. She was fired in April 2018. The bank told her that she was not processing enough transactions.
Ms. McFadden challenged that. She said her superiors had reduced the number of transactions she had been charged with reviewing after voicing her concerns. She and the two former directors stated that she perceived her termination as an act of reprisal.
"They tried to shut me up," she said. "I'm at peace because I know I've made the right choice."
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