BaFin to Deepen Deutsche Bank Money Laundering Investigation

Deutsche Bank released a statement on Friday saying that BaFin, the German financial regulator, has extended the remit of an independent auditor examining the lender's role in the Danske Bank Money Laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term scandal.

The case stems from an ongoing investigation into the Danish bank's Estonian division.

After a Whistleblower Whistleblower A whistleblower is an individual who manages to provide information or activity within a private or public organization that is deemed illegal, unethical, or not correct. In many countries, including the United States, whistleblowers are protected by law and in some cases can even recoup rewards if their information leads to successful prosecution.In the context of the financial services industry, whistleblowers play a large role in oversight, helping unmask several episodes of illicit behavior A whistleblower is an individual who manages to provide information or activity within a private or public organization that is deemed illegal, unethical, or not correct. In many countries, including the United States, whistleblowers are protected by law and in some cases can even recoup rewards if their information leads to successful prosecution.In the context of the financial services industry, whistleblowers play a large role in oversight, helping unmask several episodes of illicit behavior Read this Term sounded the alarm about the activity of certain customers, most of whom were from Russia and the former Soviet Union, in late 2018, it became apparent that Danske Bank's Tallinn-based operations were doing business with some less than scrupulous individuals.

It is alleged that the bank laundered around $225 billion from 2007 to 2014. If that is the case, it would potentially be the largest instance of money laundering ever uncovered.

Deutsche Bank falls into the mix as it acted as Danske Bank's main correspondent bank. According to the Financial Times, the German bank was responsible for facilitating $180 billion in suspicious transactions.

Nothing wrong

Deutsche Bank continues to maintain that it has done nothing wrong and that, as of yet, investigators haven't found anything untoward in its business relationship with Danske Bank.

But until now, the auditor that BaFin appointed to monitor the firm wasn't focusing specifically on the Danske Bank case.

Instead, the appointment, which is supposed to last three years, was a result of BaFin ordering the German bank to take steps to prevent money laundering and terrorism financing. The auditor was there to monitor the bank's efforts at preventing those things from occurring.

Now the auditor will be focused on uncovering anything untoward on the part of Deutsche Bank and its role in the Danske Bank scandal.

The news comes amidst a turbulent period for Deutsche Bank.

Earlier this month, rumors surfaced that the firm was going to be forced to merge with Commerzbank after it released another set of disappointing results for the fourth quarter of last year.