US congressional investigators have identified possible failures in Deutsche Bank AG’s money-laundering controls in its dealings with Russian oligarchs, after the lender handed over a trove of transaction records, e-mails and other documents, three people familiar with the matter said.
The inquiry found instances where Deutsche Bank staff in the US and elsewhere flagged concerns about new Russian clients and transactions involving existing ones, but were ignored by managers, two of the people said.
Lawmakers are also examining whether Deutsche Bank facilitated the funneling of illegal funds into the US as a correspondent bank, where it processes transactions for others, one of the sources said.
The probe, the initial findings of which have not been previously reported, is at an early stage and it is not yet clear whether it will lead to any action against the bank, the three sources said.
The bank cannot comment on the work of the congressional committees, but remains committed to cooperating with authorized investigations, Deutsche Bank spokesman Troy Gravitt said.
Referring to past deficiencies in the bank’s controls, he said: “We have worked to address them, taken disciplinary measures with regards to certain individuals and reviewed our client onboarding and monitoring processes.”
The US House of Representatives Committee on Financial Services declined to comment.
The House began examining possible money laundering in US property deals involving US President Donald Trump earlier this year.
The lawmakers are also looking into whether Trump’s dealings left him subject to the influence of foreign individuals or governments.
The White House and Trump Organization spokeswoman Amanda Miller did not respond to requests for comment.
Deutsche Bank has been drawn into the inquiry as Trump’s biggest lender and submitted documents to investigators in response to a subpoena.
The stakes are high for the German lender, which is trying to engineer a turnaround under chief executive officer Christian Sewing after a multi-year bet on building a global investment banking business unraveled.
Graham Barrow, a financial crime consultant, said that while the bank had since sought to reform, it had taken too many risks in countries such as Russia.
“The bank decided to go for becoming a global investment bank,” Barrow said. “They were compromised.”
Deutsche Bank declined to comment on Barrow’s view.
In 2017, Deutsche Bank agreed to pay regulators in the US and Britain US$630 million in fines for organizing US$10 billion in sham trades that could have been used to launder money out of Russia.
Two of the sources said that the preliminary findings of the congressional investigators could have some overlap with that case, but also include lapses unrelated to that matter.
New evidence thrown up by the probe could feed into further investigations by other authorities, regulatory experts said.
Earlier this year, the Committee on Financial Services served Deutsche Bank with a 12-page subpoena.
Reuters has seen a version with portions blacked out.
Lawmakers requested documents that identify “any financial relationship, transactions, or ties” between Trump, his family members and his companies and “any foreign individual, entity, or government,” the subpoena said.
It also asks for hundreds of documents relating to other bank clients, including Russian oligarchs, the three sources said.
Although Trump has challenged the release of his banking records in court, in April Deutsche started handing over information that is not directly related to the president and is continuing to do so, one of the people said.
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