Deutsche Bank is facing legal action for its involvement in a $20 billion Russian money-laundering scheme, known as the Global Laundromat. Upon the announcement of these allegations, Deutsche Bank expressed its deep concern of “significant disciplinary action” in a confidential report by The Guardian.
According to the report, Deutsche Bank was found to be involved in an extensive scheme which was linked to criminals formerly involved with the Kremlin, as well as the KGB and FSB. The money-laundering scheme took place between 2010 and 2014 when an estimated $80 million was moved into western-based accounts. In order for Russian funds to make their way into the US and Europe, shell companies were used to create and send falsified loans back and forth to each other. Eventually, the shell companies would purposely default on the loan, allowing judges involved in the scandal to authenticate the debt. The billions of dollars in illegal funds were then routed to the desired accounts using the Deutsche Bank network.
However, according to the report, Deutsche Bank was unaware of its part in the global money laundering scheme until 2017 when The Guardian published their initial report. Today, Deutsche Bank not only faces the embarrassment of its unknown involvement but also risks diminishing its overall market value as investors continue to drop their shares given the reports of the scandal.
While it was not aware of its involvement in this scandal, Deutsche bank could still face numerous penalties including hefty fines and even the prosecution of their management team.
The outcome of Deutsche Bank is uncertain. However, the high profits generated from this massive money laundering scheme which were hidden for numerous years demonstrates the complexity and extent of today’s corporate fraud. As cases like these seem to be on the rise, it is more important than ever for those with inside knowledge of these schemes to come forward with information.
To learn more about similar cases, visit the Jeffrey Newman Law Whistleblower Help Center and blog!