Last week’s raids on Deutsche Bank’s headquarters in Frankfurt and key bank branches by approximately 170 German law enforcement officials have sent shock waves throughout the financial services world. This must have been especially nerve-wracking news for those firms working so hard to stay within the difficult lines of compliance.
Essentially, the German authorities say they have been targeting at least two, as yet unidentified male bank employees, and possibly others, according to media reports and bank officials. The German law enforcement authorities are also alleging that the raids are related to the Panama Papers scandal.
To recap, the Panama Papers reference is to “an unprecedented leak of 11.5 million files from the database of the world’s fourth biggest offshore law firm, Mossack Fonseca,” according to The Guardian, a U.K. newspaper that published much from those files in 2016. “The records were obtained from an anonymous source by the German newspaper Süddeutsche Zeitung, which shared them with the International Consortium of Investigative Journalists (ICIJ). The ICIJ then shared them with a large network of international partners, including the Guardian and the BBC,” the newspaper explained.
One result of the Panama Papers is that the New York Department of Financial Services (NY DFS) in 2016 focused on Deutsche Bank and other banks, and compelled them to provide information about links to Mossack Fonseca. The NY DFS did not subsequently issue any charges against any of the banks.
Amid the media attention about the raids, the German institution issued a “Fact Sheet: Investigations by public prosecutors at Deutsche Bank premises,” dated Nov. 30, that delineates the latest developments and acknowledges the charges related to the Panama Papers:
- “On Thursday [Nov. 29] and Friday [Nov. 30], the Frankfurt public prosecutor’s office and the Federal Criminal Police Office searched several Deutsche Bank offices and questioned employees. The investigations of the public prosecutor are directed against two named and further unnamed employees of the bank on suspicion of aiding and abetting money laundering.”
- “They are related to the so-called ‘offshore leaks’ and Panama Papers. According to the public prosecutor’s office, the accusation against the accused is that they did not report money laundering in time, but only after the publication of the so-called Panama Papers in the media.”
- “The preliminary proceedings concern the period from 2013 to 2018.”
- “The search included several board member offices.”
- “There were no formal interrogations of board members.”
- “There are no current and former board members of Deutsche Bank AG among the accused employees.”
- “According to the public prosecutor’s office, the evaluation of the papers by the Federal Criminal Police Office is said to have revealed that a company in the group headquartered on the British Virgin Islands had provided customers with a structure that made money laundering possible. This company was sold in March 2018.”
- “The investigations are not related to Danske Bank Estonia.”
The current allegations via the German authorities are that over the past five years or so tax havens were set up for clients and that these accounts were then used for illegal transfers of funds.
In addition, in a media release, dated Nov. 29, dubbed “Raids at Deutsche Bank head office and other bank premises,” bank officials acknowledged the searches of offices “including the head office at Taunusanlage in Frankfurt.”
The bank also included an initial statement at 1pm CET on Nov. 29: “As far as we are concerned, we have already provided the authorities with all the relevant information regarding [the] 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. In recent years, we have proven that we fully cooperate with the authorities — and we will continue to do so.”
While there have been no additional developments about the raids and the overall case today, it’s definitely a space that we will continue to watch with great interest.