The offices of the Deutsche Bank in Berlin, Germany were raided by Police in a money laundering case. Two employees of the bank aged 46 and 50 are suspected of helping clients set up offshore companies in tax havens to launder hundreds of millions of euros.
About 170 police officers, prosecutors, and investigators participated in the raid. The investigation was held as a result of the analysis of documents that leaked from various tax havens over the years. The Panama Papers was among such.
There were other suspects apart from the two aforementioned employees. At 10 am., officers raided 6 buildings in Frankfurt where the headquarters of the Deutsche bank was located. Other premises in Gross-Umstadt and Eschborn were raided as well. The home of at least one of the suspects was among the places that were raided.
The analysis of the Panama Papers and other papers arouses the suspicion of the police that Deutsche Bank was helping its clients to set up offshore companies in tax havens around the world, and the proceeds were then transferred to the accounts of the Deutsche Bank without the bank reporting it.
In 2016, over 900 people transferred about $351 million to one of the companies that were set up in the British Virgin Islands. The two suspects did not report the suspicious transactions even when they had enough evidence about the transactions.
The search was confirmed by the Deutsche Bank who said that the investigation had to do with the Panama Papers. The bank said that more details would be communicated as soon as they became known. The bank mentioned that they were cooperating with the authorities.
Money laundering is a growing problem in Europe, and various scandals have exposed the slack regulation. The Deutsche Bank had previously been under investigation for similar offenses.
In January 2017, the Deutsche Bank was fined more than $600 million by authorities in the UK and the US for allowing its customers to transfer about $10 billion from Russia. The money was highly suggestive of financial crime.
The Panama Papers are a selection of documents from a law firm that handled shell companies for thousands of powerful and rich people all over the world. It is not illegal to own a shell company. But a lot of people fraudulently use them to hide the beneficial owner of a company or transfer making it important for handling and laundering dirty money.
Apart from the Deutsche Bank, several other financial institutions have been fined by authorities in Europe and the US for not checking up on the owners of shell companies that send money through their accounts.
Danske Bank which is the largest bank in Denmark saw about $235 billion inflow from 2007 to 2015 through its branch in Estonia. A former employee admitted that bank management knew what was going on. Family members of Vladimir Putin, the Russian President, and Russia’s spy agency used the bank for money laundering.
Latvia is also a major hub for money laundering. A leak from 2014 shows that tens of billions of dollars were funneled through Latvia from Russia from 2010 to 2014. Some of this money went through the Deutsche Bank, and others ended up in major capitals like London.
Thursday’s raid may not be linked to the scandal as the Deutsche Bank says that it has stopped providing dollar transactions in countries like Latvia.