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Deutsche Bank offices raided in Panama Papers money laundering probe

30 November 2018
Deutsche Bank offices raided in Panama Papers money laundering probe

Howard Wilkinson, the man who blew the whistle on a massive money laundering scheme through the Estonian branch of Denmark's Danske Bank, speaks during a hearing at the Danish parliament building Christiansborg Castle on Monday Nov. 19.

Other Deutsche offices in the city were searched in an operation involving about 170 police and officials.

As part of Sewing's restructuring effort, Deutsche Bank said it would cut up to 10,000 jobs - a full 10% of its staff, the Wall Street Journal reported in May.

FRANKFURT-Around 170 police officers, prosecutors, and tax inspectors searched six Deutsche Bank offices in and around Frankfurt on November 29 over money laundering allegations, the Frankfurt public prosecutor's office said in a statement.

In April, John Cryan was replaced by Christian Sewing as CEO.

There was no indication that Thursday's raid was linked to that scandal, though Deutsche Bank says that it has since stopped providing dollar transactions in some countries, including Latvia.

Law firm Mossack Fonseca which specialised in setting up offshore companies was at the centre of an international scandal
JOE RAEDLE GETTY IMAGESLaw firm Mossack Fonseca which specialised in setting up offshore companies was at the centre of an international scandal

Deutsche Bank has been under pressure after annual losses, and it agreed to pay a US$7.2 billion settlement with USA authorities a year ago over its sale of toxic mortgage securities in the run-up to the 2008 financial crisis. He trimmed USA operations and reshuffled the management board but revenue has continued to slip.

According to prosecutors, Deutsche Bank is suspected of aiding some 900 customers in setting up offshore companies in tax havens.

The investigation was triggered after investigators reviewed so-called Offshore Leaks and Panama Papers disclosures - caches of documents obtained by investigative journalists. Numerous police vehicles could be seen parked up outside the giant investment bank's entrances as written and electronic documents were seized from the premises.

Several banks, including the Swedish lenders Nordea and Handelsbanken have already been fined by financial regulators for violating money laundering rules as a result of the Panama Papers.

Analysts say that because these transactions can be lucrative, banks have few incentives to do more than the minimum required by law to check on the identity of a bank.

Shares in Deutsche Bank were down 3.4 percent at 8.30 euros in the early afternoon, making them the worst performing stock on the DAX blue-chip index. Two employees and several "unidentified people in positions of authority" are suspected of failing to report the laundering of more than $350 million which were kept by the bank in accounts located in the British Virgin Islands.