Published: Fri, November 30, 2018
Money | By Bruce West

Bank HQ raided amid fraud probe

Bank HQ raided amid fraud probe

"We are cooperating fully with the authorities", the bank said.

The Frankfurt headquarters of Deutsche Bank have been raided by prosecutors in a money laundering investigation.

The Frankfurt prosecutors said their probe was focussing on two Deutsche Bank employees aged 50 and 46, as well as "several" unnamed senior staff members. One works in the anti-financial crime office.

The German lender is under increasing pressure after three consecutive years of losses, several executive changes, and massive layoffs.

The stock has lost nearly half its value this year, after sliding more than 3 per cent on Thursday.

"This must be associated with criminal behavior and not just a trivial offence", said Stefan Mueller chief executive officer of DGWA, an investment advisory boutique based in Furankfurt.

The news comes as Deutsche Bank tries to fix its tattered reputation after three years of losses and a drumbeat of financial and regulatory scandals.

"Maybe this time, Achleitner will fall".

Deutsche Bank was today raided as part of investigations into money laundering associated with the Panama Papers.

Deutsche Bank retains an office in the Cayman Islands, which employs around 30 people, but there is no indication at this point that this investigation has any connection to those offices.

This investigation is separate to another Panama Papers probe which also involves Deutsche Bank.

Law firm Mossack Fonseca, which specialised in setting up offshore companies, was at the centre of an global scandal.

The Deutsche Bank employees are accused of having breached their duties by neglecting to report money laundering suspicions about clients and offshore companies involved in tax evasion schemes, the prosecutors said. At least one site raided was a suspect's home.

The Panama Papers, published by the Guardian and a consortium of worldwide journalists in April 2016, revealed how offshore tax havens including the British Virgin Islands were used to hide billions of dollars.

Deutsche Bank shares fell as much as 4.7% on Xetra.

Police cars stand in the backyard of Deutsche Bank headquarters during the raid in Frankfurt.

A number of banks including Swedish lenders Nordea and Handelsbanken have already been fined by financial regulators for violating money laundering rules as a result of the papers.

Deutsche Bank has been under pressure after annual losses, and it agreed to pay a $7.2 billion settlement with US authorities past year over its sale of toxic mortgage securities in the run-up to the 2008 financial crisis. In Europe, Royal Bank of Scotland is the only lender to have faced a bigger tab, at $US18.1b, the Bloomberg calculations show.

And now it seems more allegations have been put against the banks. About 170 law enforcement agents took part in the operation. Its head of the Americas, Tom Patrick, will reportedly leave the bank by year-end.

In a June 2017 interview, Matherat described the monumental task of modernising the company's compliance methods.

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