Deutsche Bank offices raided in money laundering probe linked to Panama Papers

The investigation was triggered after investigators reviewed so-called “Offshore-Leaks” and “Panama Papers,” the prosecutor said.The “Panama Papers,” which consist of millions of documents from Panamanian law firm Mossack Fonseca, were leaked to the media in April 2016.Several banks, including Scandinavian lenders Nordea and Handelsbanken have already been fined by regulators for violating money laundering rules as a result of the papers.The prosecutors said they are looking at whether Deutsche Bank may have assisted clients to set up offshore companies in tax havens so that funds transferred to accounts at Deutsche Bank could skirt anti-money laundering safeguards.WATCH BELOW: Charges stayed in Canada’s biggest drug money laundering investigation In 2016 alone, over 900 customers were served by a Deutsche Bank subsidiary registered on the British Virgin Islands, generating a volume of 311 million euros, the prosecutors said.They also said Deutsche Bank employees are alleged to have breached their duties by neglecting to report money laundering suspicions about clients and offshore companies involved in tax evasion schemes.The investigation is separate from another money laundering scandal surrounding Danish lender Danske Bank, where Deutsche Bank is involved.Danske is under investigation for suspicious payments totaling 200 billion euros from 2007 onwards and a source with direct knowledge of the case has told Reuters Deutsche Bank helped to process the bulk of the payments.A Deutsche Bank executive director has said the lender played only a secondary role as a so-called correspondent bank to Danske Bank, limiting what it needed to know about the people behind the transactions.

Under scrutiny

Weaknesses in Deutsche Bank’s controls that aim to prevent money laundering have caught the attention of regulators on both sides of the Atlantic. The bank has publicly said that it agreed it needed to improve its processes to properly identify clients.In September, Germany’s financial watchdog – BaFin – ordered Deutsche Bank to do more to prevent money laundering and “terrorist financing,” and appointed KPMG as third party to assess progress.In August, Reuters reported that Deutsche Bank had uncovered further shortcomings in its ability to fully identify clients and the source of their wealth.Last year, Deutsche Bank was fined nearly $700 million for allowing money laundering through artificial trades between Moscow, London and New York. An investigation by the U.S. Department of Justice is still ongoing.Deutsche Bank has been under pressure after annual losses, and it agreed to pay a $7.2 billion settlement with U.S. authorities last year over its sale of toxic mortgage securities in the run-up to the 2008 financial crisis.