Thread by @karolcummins

Deutsche Bank faces action over $20bn Russian money-laundering scheme

Exclusive: in confidential internal report seen by the Guardian, bank says scandal has hurt global brand

H/T ⁦@DrDenaGrayson⁩ theguardian.com/business/2019/…

💰Global Laundromat💰

Deutsche Bank was embroiled in a vast money-laundering operation, dubbed the Global Laundromat.
theguardian.com/business/2019/…

📌Russian criminals with links to the Kremlin and the KGB used the scheme between 2010 and 2014 to move money into the western financial system.

📌The cash involved could total $80bn, detectives believe.
theguardian.com/business/2019/…

Shell companies typically based in the UK “loaned” money to each other.

Companies then defaulted on this large fictitious debt.

📌Corrupt judges in Moldova authenticated the debt – with billions transferred to Moldova & the Baltics via a bank in Latvia.
theguardian.com/business/2019/…

📌📌Deutsche Bank was used to launder the money via its corresponding banking network – effectively allowing illegal Russian payments to be funnelled to the US, the European Union and Asia.
theguardian.com/business/2019/…

📌The bank asked two in-house financial crime investigators – Philippe Vollot and Hinrich Völcker – to find out what had gone wrong.
theguardian.com/business/2019/…

📌Vollot & Völcker identified numerous “high-risk entities”. They included 1,244 in the US, 329 in the UK and 950 in Germany. These entities were responsible for nearly 700,000 transactions, involving £62m in the UK, $47m in the US, and €55m in Germany.
theguardian.com/business/2019/…

📌Deutsche Bank sent 149 “suspicious activity reports” to the NCA in London.

📌Similar disclosures of potential money-laundering transactions were made to authorities in the US and elsewhere – with 30 private & corporate Deutsche Bank clients reported.
theguardian.com/business/2019/…

📌The affair is a further blow to Deutsche Banks’s ailing reputation. It comes amid police raids on its Frankfurt HQ over the Panama Papers, a plunging share price and talks over a possible merger with Germany’s Commerzbank.
theguardian.com/business/2019/…

📌📌The raid last November came after German prosecutors alleged two bank employees helped clients launder money via offshore firms.
theguardian.com/business/2019/…

📌Deutsche is also under scrutiny in Washington over its financial dealings with TRUMP.

📌On 15 April, Democrats from the House intel & financial services committees issued a subpoena, demanding the bank provide documents about its lending to TRUMP.
theguardian.com/business/2019/…

Deutsche Bank ♥️ Trump

https://twitter.com/karolcummins/status/1108143652725907456?s=21

‼️Over two decades, Trump borrowed more than $2 Billion from Deutsche.
theguardian.com/business/2019/…

📌In 2008, he defaulted on a $45m loan repayment and sued the bank. Its private wealth division in New York subsequently loaned Trump a further $300m – a move that bemused insiders and which has yet to be fully explained.
theguardian.com/business/2019/…

📌In recent years, the bank has had a series of bruising encounters with international regulators. Between 2011 and 2018, it paid $14.5bn in fines, with exposure to dubious Russian money a regular theme.
theguardian.com/business/2019/…

📌In 2017, the UK’s FCA imposed its largest fine – £163m – after Deutsche carried out a $10bn “mirror trade” scheme run out of its branch in Moscow.
theguardian.com/business/2019/…

📌The New York Department of Financial Services (DFS) fined the bank $425m over the same case, in which roubles were converted into dollars via fake trades on behalf of VIP Russian clients.
theguardian.com/business/2019/…

📌Deutsche carried out an internal investigation into the “mirror trades” affair, “Project Square”.

The leaked Global Laundromat report says there is “no systematic link” between the 2 Russian money-laundering schemes. However, it suggests some overlap.
theguardian.com/business/2019/…

💰’Global Laundromat’💰

Background:

👉🏼British banks handled vast sums of laundered Russian money

👉🏼Exclusive: Billions of dollars were moved out of Russia in ‘Global Laundromat’
theguardian.com/world/2017/mar…

‼️The Global Laundromat: how did it work and who benefited?
theguardian.com/world/2017/mar…

📌📌Britain’s high street banks processed nearly $740m from a vast money-laundering operation run by Russian criminals with links to the Russian government and the KGB

#TOC
theguardian.com/world/2017/mar…

📌HSBC, the Royal Bank of Scotland, Lloyds, Barclays and Coutts are among 17 banks based in the UK, or with branches here, that are facing questions over what they knew about the international scheme & why they did not turn away suspicious money transfers.
theguardian.com/world/2017/mar…

📌📌At least $20bn appears to have been moved out of Russia during a four-year period between 2010 and 2014. The true figure could higher.
theguardian.com/world/2017/mar…

💰Mirror Trades💰

Two unnamed entities feature in both and 46 “mirror trade” entities “directly transacted” with 233 laundromat ones.
theguardian.com/business/2019/…

📌Deutsche Bank’s $10-Billion Scandal

📌How a scheme to help Russians secretly funnel money offshore unravelled.

#MirrorTrades
newyorker.com/magazine/2016/…

What is a mirror trade?

2 trades are placed simultaneously: the first: $10M in Rubles is placed to buy RU blue chip stock (ex) in Lukoil, then an off shore company would sell the same quantity of stock in London in exchange for dollars, pounds, or euros.
newyorker.com/magazine/2016/…

Deutsche Bank earned a small commission for executing the buy & sell orders. These transactions had nothing to do w/ pursuing profit. They were a way to expatriate money. In other words turn rubles that were stuck in RU into dollars stashed outside Russia.
newyorker.com/magazine/2016/…

📌Mirror trades suggest a sustained plot to shift & hide money of possibly dubious origin.

📌Deutsche Bank’s actions are now under investigation by the U.S. DoJ, the NYS Department of Financial Services, & financial regulators in the U.K. and in Germany.
newyorker.com/magazine/2016/…

📌Deutsche Bank has admitted that, until April, 2015, when three members of its Russian equities desk were suspended for their role in the mirror trades, about ten billion dollars was spirited out of Russia through the scheme.
newyorker.com/magazine/2016/…

‼️The lingering question is whose money was moved, and why.
newyorker.com/magazine/2016/…

📌Deutsche says it has stopped doing business w/ the two banks at the center of the Laundromat scandal – Moldova’s Moldindconbank & Latvia’s Trasta Komercbanka.

📌Regulators in Latvia closed down Trasta in 2016 b/c of serial money-laundering violations.
theguardian.com/business/2019/…

💰Moldovan LAUNDROMAT💰
zeppelin.md/eng/investigat…

💰Why The U.S. Treasury Killed A Latvian Bank
forbes.com/sites/francesc…

📌Deutsche Bank says it has “reduced its footprint” across the post-Soviet region.
theguardian.com/business/2019/…

📌DB no longer has relationships with any banks in Moldova, Latvia, Estonia and Cyprus, the report says. All are favourite destinations for illicit Moscow money.

📌The bank has scaled down its business activities in Russia and Ukraine, it says.
theguardian.com/business/2019/…

📌Deutsche Bank is under investigation for its role in Europe’s biggest banking scandal, involving Denmark’s Danske Bank.
theguardian.com/business/2019/…

📌Danske laundered €200bn (£178bn) of Russian money via its branch in Estonia.

📌Deutsche provided correspondent banking services via its US subsidiary.
theguardian.com/business/2019/…

💰Shady Deutsche Bank💰

Deutsche Bank's U.S. Unit Kept Danske's Shady Billions Flowing

https://twitter.com/karolcummins/status/1113581505010208768?s=21

💦💰Accounting Firms💰💦

#Estonia #DanskeBank #DeutscheBank #SwedeBank

https://twitter.com/karolcummins/status/1116755395043680256?s=21

💰💦Manafort linked to Swedbank Laundering Case

https://twitter.com/karolcummins/status/1110911745369890816?s=21

@threadreaderapp unroll please and thank you.

#DeutscheBank