Police raid Deutsche Bank headquarters in money laundering investigation

According to the authorities, the activities of Deutsche Bank AG, originally from a police raid in its headquarters, took place recently.

While suspicions of money laundering stem from the revelations of 2016 known as the Panama Papers, the investigation covers a five-year period from 2013 to 2018, said a spokeswoman for state prosecutors. Frankfurt.

The main suspects of the investigation concerned a unit of the British Virgin Islands that had treated 311 million euros (517 million NZD) in 2016 alone: ​​two bank employees identified by their age – 50 and 46 years old. One of them was working at the office of anti-financial crime.

For the beleaguered German lender, the raid adds a host of headaches – commercial, regulatory and legal – to executive chairman Christian Sewing, who took office in April, and Paul Achleitner, chairman of the board of directors since 2012.

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The title has lost nearly half of its value this year, after sliding more than 3% Thursday.

"This must be associated with criminal behavior and not with a minor offense," said Stefan Mueller, Managing Director of DGWA, an investment advisory firm based in Furankfurt. He thinks the bank will be paralyzed for months until it is clear how it will be affected by potential new fines.

"Maybe this time, Achleitner will fall in. The bank needs fresh blood to make a drastic reduction in its management."

The Panama Papers refer to a collection of documents leaked in 2016 by Mossack Fonseca, a Panama-based law firm that has created screen companies to facilitate tax evasion. At the time, Deutsche Bank severed its links with a Cyprus lender partly belonging to the VTB group, identified in the report.

Subsequent investigations revealed that Deutsche Bank had helped clients establish accounts abroad, prosecutors said. Officials said Thursday 's raid was not related to its correspondent banking role for money laundering at Danish bank Danske.

Authorities seized documents and electronic files after more than six police vehicles, flashing blue lights, which stopped at Deutsche Bank headquarters shortly before 9 am, as part of an operation involving about 170 officers. The home of one of the suspects was also raided.

The German lender may have helped clients set up offshore companies in tax havens. The money obtained illegally may have been transferred to Deutsche Bank accounts, which did not report suspicions that the accounts could have been used to launder money, prosecutors said. from Frankfurt.

"As far as we are concerned, we have already provided the authorities with all the relevant information regarding the Panama Papers," Deutsche Bank spokesman Joerg Eigendorf told reporters.

The timing of the raid inflicts further suffering on Deutsche Bank after a series of setbacks and repeated failures in dealing with misconduct pushed equities to historic lows.

Investors are worried about his role as a correspondent in Danske 's multi – billion – dollar money – laundering scandal, and the German market regulator has taken the unprecedented step of appointing a controller to oversee the company's efforts to improve money laundering and terrorism. funding controls.

Deutsche Bank has spent more than US $ 18 billion to pay fines and settle legal disputes since the beginning of 2008, according to information provided by Bloomberg News. According to Bloomberg calculations, Royal Bank of Scotland is the only lender to have faced a higher cost, at $ 18.1 billion.

"Just when you thought Deutsche Bank had left its legal problems behind, there are more," said Markus Riesselmann, an analyst at Independent Research, who recommended investors sell shares of Deutsche Bank. "Investors really want to be able to focus on the operational activities of the bank, so this sound around them does not help much in the mood."

Sewing, who held the most prestigious position in April, replaces senior executives as part of a reshuffle of management as he strives to bring the biggest German lender back on track . Sylvie Matherat, a member of the bank's chief regulator, and Tom Patrick, head of operations in the Americas, are among the leaders likely to leave, said this week some people familiar with the issue. topic.

In an interview in June 2017, Matherat described the monumental task of modernizing the company's compliance methods. After years of acquisitions and expansion abroad, the lender found itself with a mosaic of computer programs to monitor transactions. The bank did not have a complete picture of compliance checks in companies and regions of the organization, she said.

"I hate surprises, but you do not know what you do not know," said Matherat, a lawyer and former deputy general manager of the French central bank.