US money laundering probe into Deutsche Moscow unit widens
US regulators are expanding their probe into Deutsche Bank AG as a money laundering investigation of a Moscow unit has widened into possible sanctions violations, the Financial Times reported, citing sources.
The US Justice Department and New York State's Department of Financial Services (DFS) are increasing the scope of their investigation into the bank because a few transactions allegedly involved US dollars and a former banker who is a US citizen, the newspaper reported on Sunday.
The regulatory investigation involving trades worth $6 billon would be one of the first by the US authorities regarding a potential breach of Western sanctions against Russia after its 2014 annexation of Crimea, the business daily said.
Citing sources, Reuters reported in July that the DFS has asked the bank for detailed information on possible money laundering transactions by some clients in Russia that could exceed a total of $6 billion.
The investigation focuses on so-called "mirror trades," which could allow the movement of funds from one country to another without passing through normal procedures for cross-border money transfers, the paper reported.
Tim Wiswell, an ex-Deutsche Bank trader, lost his job earlier this year amid an investigation by European and US regulators into "mirror trades."
Wiswell sued the bank in October for wrongful dismissal.
US authorities are now examining whether his alleged involvement reflected a broader scheme that had been approved by bank executives, the newspaper said.
The bank, which launched an internal investigation into Russian securities trades in June, is also being examined to see if it had compliance programmes ready for Russian sanctions and provided accurate information to regulators, the newspaper said.
"Deutsche Bank has taken disciplinary measures with regards to certain individuals in this matter and will continue to do so with respect to others, as warranted," the FT quoted the bank saying.
The bank's Russian clients subject to US sanctions include brothers Arkady and Boris Rotenberg, who are close associates of Russian president Vladimir Putin, the FT reported.
The Justice Department and DFS could not be reached for comments outside regular business hours.
Reuters could not reach Deutsche Bank and Tim Wiswell immediately.