Deutsche Bank and Money Laundering ... Again
Earlier this year, Germany’s Deutsche Bank paid $130 million to settle allegations of bribery through the use of “consultants,” or middlemen, to gain advantages in business. These consultants allowed Deutsche Bank to strike deals with other banks around the world (such as those in Saudi Arabia, China, and Italy), opening up the possibility of funneling illicit cash to governments and corporate officials [1]. To cover up their tracks, the bank falsified records, concealed bribes from clients, and hid payments in nearby countries. The U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC) conducted investigations on Deutsche Bank, which later led to the allegations and prosecution by the U.S. government [1].
A Deutsche Bank spokesman noted that the “thorough internal investigations, and full cooperation with the DOJ and SEC investigations” reflect the bank’s “transparency and determination to put these matters firmly in the past” [2].
However, this isn’t the first time Deutsche Bank has settled charges for its corrupt practices and money laundering. In 2017, the bank held a major role in one of the biggest money laundering schemes of all time, often referred to as the Russian Laundromat [2]. In 2019, Deutsche Bank also paid $16 million to settle allegations from the SEC for violating the Foreign Corrupt Practices Act by “hiring relatives of foreign government officials in China and Russia” to engage in illicit concealment and transaction of money to other countries [1].
For banks such as Deutsche Bank that have had multiple occasions of money laundering and violations of proper practices, what can be done to ensure that there is no further engagement in similar activities? Keep in mind that simply “closing the bank” could cost thousands of innocent employees to lose their jobs, and the impact may also influence the economies of other countries.
Additional questions to consider:
What roles or actions should the UNODC take when one country charges another with money laundering allegations? How should it deal with banks in other countries that helped conceal money? Should those consequences be similar to the bank or government that conspired the money laundering scheme, and how should the length of time and amount of money concealed be factored into those consequences?
[3] photograph: https://www.bloomberg.com/news/articles/2019-02-01/how-deutsche-bank-drifted-into-its-whirlpool-of-woes-quicktake?utm_source=url_link
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