Bloomberg publishes extensive report that appears to support Maxine Waters’ claim that Deutsche is “one of the biggest money laundering banks in the country, or maybe the world.”
Cross-posted from Zero Hedge
Christmas just came early for Maxine Waters and Adam Schiff.
As the leaders of the House Financial Services Committee and House Intelligence Committee ramp up an investigation into Deutsche Bank’s lending relationship with the Trump Organization (the first round of subpoenas has already been sent and Waters has said that DB is cooperating in the probe), Bloomberg has handed them a gift in the form of an extensive report chronicling a culture of chronic compliance failures at the bank’s US unit. At first glance, the story appears to support Waters’ claim that Deutsche is “one of the biggest money laundering banks in the country, or maybe the world.”
The report describes Deutsche’s US unit, which is headquartered inside a gleaming Wall Street tower, making it one of the few Wall Street banks still situated on Wall Street, as a “kind of legal mirage”. For years, the leaders of the US subsidiary were merely puppets, with little real power, influence or knowledge about the subsidiary’s operations. Even the distribution of bonuses was outsourced to the headquarters in Frankfurt, BBG said. Top executives couldn’t answer questions about the bank’s operations, and they had little influence over personnel decisions.
This lack of authority helped foster an atmosphere of lax compliance and AML controls, which endured even after US regulators demanded that changes be made.
After DB expanded its US presence by buying out the floundering Bankers Trust, which was mired in a scandal involving sales of shady derivatives products. But DB swiftly established a shady track record of its own:
From 1999 through 2006, it handled almost $11 billion in U.S. dollar transactions for customers in nations under sanctions: Iran, Syria, Libya, Burma and Sudan. Later, it helped rich Russians move $10 billion from their country using “mirror trades” – simultaneous stock trades in separate jurisdictions that bypassed customary hoops for transferring money.
And those were just the cases where the bank was accused of wrongdoing…