Germany’s Deutsche Bank, told media on Wednesday that a number of regulators and law enforcement agencies had contacted it for information pertaining to the ongoing investigation by the U.S. Federal Reserve over alleged links for aiding money laundering operations for the Estonian Branch of Denmark’s Danske Bank.
Monitoring By Deutsche Bank Under Scrutiny
The Federal Reserve is probing whether the German lender carried out it’s task of monitoring transfer of funds it performed at the behest of Danske Bank in a thorough manner , sources familiar with the development said.
The Deutsche Bank, however, told a leading media outlet that they were cooperating with the Feds and no investigations were taking place.
This news comes at a time when Danske Bank is under investigation for suspicious payments totaling to a near astronomical figure of nearly $230 billion, from 2007 to 2015, admitting that the most of the cash outflow from its Estonian branch was tainted.
Deutsche Bank was reportedly the correspondent bank for these transactions from Danske’s Estonian branch.
Christian Sewing, Deutsche Banks’s Chief Executive, said last week that there was an ongoing internal investigation taking place in the Danske scandal and there was no evidence that could peg this as Deutsche’s fault.
Deutsche Bank: A Repeated Offender?
Despite current unproven charges, the German Bank may find itself in a repeat of the 2017 investigation that saw it pay a fine of $700 million, issued by the Feds, for an inefficient anti-money laundering (AML) system that allowed Russian individuals to launder money through the bank.
Deutsche Bank’s Frankfurt offices were raided by police officers, tax inspectors and prosecutors in November last year on account of alleged money laundering schemes that came out during the Panama Papers leak in 2015-16.
The raid came after BaFin, Germany’s financial regulatory authority, had urged Deutsche Bank to put in place more stringent anti-money laundering measures. KPMG, a professional service company that provides financial audit, tax, and advisory, was appointed by BaFin to oversee absolute implementation of the bank’s AML measures.
The stock of Deutsche Bank was slightly affected, down by 1% in this morning, but recovered from its morning blues as Frankfurt reported that Deutsche’s share was trading 0.1% up than the previous day’s close.