The head office of Deustche Bank and five of its locations in Frankfurt, Germany were searched by police on Thursday as part of a wide-ranging investigation into alleged money-laundering.
Two employees of the bank, which is Germany’s largest, as well as other “unidentified people in positions of authority,” are suspected of allowing dubious transactions worth more than $350 million to pass through the bank without being reported.
The raid was a direct result of the Panama Papers investigation by the International Consortium of Investigative Journalists, which in 2016 exposed a web of international corruption and money laundering connected to the Panamanian law firm Mossack Fonesca.
As far as we are concerned, we have already provided the authorities with all the relevant information regarding Panama Papers. Of course, we will cooperate closely with the public prosecutor's office in Frankfurt, as it is in our interest as well to clarify the facts.
— Deutsche Bank (@DeutscheBank) November 29, 2018
“After an evaluation of the so-called ‘Offshore Leaks’ and ‘Panama Papers’ the suspicion arose that Deutsche Bank AG was helping clients set up so-called ‘offshore companies’ in tax havens,” Frankfurt public prosecutor representative Nadja Niesen said in a statement. “[There was further suspicion] that money connected to crimes was transferred to the accounts of Deutsche Bank AG.”
The investigation focused around the cash flow to a Deutsche Bank subsidiary in the British Virgin Islands, a known tax haven. According to the Washington Post, more than 900 customers were served by the subsidiary in 2016 alone.
The raid is the latest in a line of legal troubles for Deustche Bank. Earlier this year it was revealed that Deutsche Bank, along with several other U.S. banks including Citigroup, allegedly helped funnel suspect funds into the banking system which had originated from Danske Bank in Denmark, which in turn is suspected of funneling $230 billion of suspiciously originated cash into the banking system. Much of the suspect money originated from Russian and Eastern European clients.
In January 2017, Deustche Bank was also fined $630 million over a scheme which enabled some clients, also Russians, to improperly move millions out of regulated banking zones and into offshore havens.
“Deutsche Bank and several of its senior managers missed key opportunities to detect, intercept and investigate a long-running mirror-trading scheme facilitated by its Moscow branch and involving New York and London branches,” the New York Department of Financial Services said in a statement at the time. “The trades were routinely cleared through the bank’s Deutsche Bank Trust Company of the Americas (DBTCA) unit.”
Deutsche Bank has a long-running relationship with President Donald Trump. As Business Insider noted last year, the relationship began in 1998 when Deutsche Bank gave Trump a $125 million loan for property renovations. He received another $640 million loan to help build the Trump International Hotel and Tower in Chicago. Trump currently holds around $360 million worth of debt to the bank.
Trump is not the only figure within the administration with shady connections to offshore finance. In the November 2017 Paradise Papers leak, which focused on the Bermuda law firm Appleby, it was revealed that Commerce Secretary Wilbur Ross held a stake in a shipping firm which has a significant relationship with a Russian energy firm partly owned by Vladimir Putin’s son-in-law — in effect allowing him to profit from the same cash that had enriched Putin.