Deutsche Bank to pay $630M for Russian money-laundering scheme

The bank inadequately monitored a scheme by which money was moved from Russia to offshore accounts, regulators said.
By Ed Adamczyk  |  Jan. 31, 2017 at 7:11 AM
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Jan. 31 (UPI) -- Deutsche Bank will pay $630 million in penalties for its involvement in a $10 billion Russian money-laundering scheme, U.S. banking officials said.

Maria Vullo, superintendent of the New York State Department of Financial Services, said Monday that Deutsche Bank's New York City branch will pay a $425 million fine and hire an independent monitor as part of a consent order regarding the bank's failure to stop a stock-trading program that enabled some Russian clients to illegally move money from Russia and into offshore accounts. The procedure is known as mirror trading, and involved Deutsche Bank's New York, Moscow and London branches. The bank was fined an additional $204 million by Britain's Financial Conduct Authority.

"The bank missed numerous opportunities to detect, investigate and stop the scheme due to extensive compliance failures, allowing the scheme to continue for years," the state agency, which worked closely with the British agency, said in a statement.

The U.S. settlement demands that the bank must hire an independent monitor to review its banking secrecy and anti-money-laundering procedures.

"The failings of Deutsche Bank are simply unacceptable," said Mark Steward, the Financial Conduct Authority's enforcement director, adding Deutsche Bank's money-transfer procedures were "highly suggestive of financial crime."

The rulings come after a $7.2 billion settlement Deutsche Bank reached with the U.S. Department of Justice in December over toxic mortgage assets. The bank also agreed to pay $2.5 billion in 2015 over manipulation of interest rates.

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