Deutsche Bank premises raided in Germany amid money laundering probe (Lead)
Berlin : Deutsche Bank premises in and around Frankfurt were raided by the police and tax investigators on Thursday in relation to suspicions that the bank helped clients set up offshore entities in tax havens and failed to alert authorities to possible money laundering.
Prosecutors said the raids targeted two Deutsche Bank employees as well as other unidentified company officials. Over 170 police officers and tax investigators participated in the operation, CNN reported.
Both the lender and prosecutors said the probe was related to the Panama Papers, a 2016 investigation into money laundering networks and shell companies set up by Panama-based law firm Mossack Fonseca.
The bank said it was fully cooperating with authorities and would release more details in due course.
The prosecutors' office said that after the police analyzed the so-called "Offshore Leaks" and "Panama Papers" reports of the International Consortium of Investigative Journalists, "the suspicion arose that Deutsche Bank helped clients with the establishment of so-called offshore entities in tax havens".
Deutsche Bank was also suspected of helping clients transfer funds from illegal activities to German accounts and failed to notify authorities of the suspected money laundering.
According to the Guardian, several banks including the Swedish lenders Nordea and Handelsbanken had already been fined for violating money laundering rules as a result of the Panama Papers.
Prosecutors said that a subsidiary of Deutsche Bank in the British Virgin Islands had served over 900 customers, generating 311 million euros ($353 million) worth of business in 2016 alone.
Deutsche Bank shares fell 3 per cent following the news of the raid. Paperwork and electronic documents were seized by officials during the raids on the bank's properties.
The bank has been connected with another huge money laundering scandal surrounding Denmark's Danske Bank.
Earlier this month, Deutsche said that it was involved in processing payments for the Danish bank in Estonia. An internal investigation by Danske found that about 200 billion euros in payments were funnelled through its Estonian branch.
After that Deutsche said it had terminated its relationship with Danske in 2015 after "identifying suspicious activity".
Deutsche Bank has been sanctioned earlier also for failing to tackle money laundering.
In September, Germany's financial regulator ordered the bank to take action to prevent money laundering and terrorism financing. It also appointed an independent auditor to monitor Deutsche Bank's efforts over three years.
In 2017, Deutsche Bank was fined $630 million by US and UK regulators in connection with a Russian money laundering plan.