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Deutsche Bank fined $41 mn for money laundering violations in US

The US Federal Reserve has imposed a penalty of $41 million on Deutsche Bank for failure to maintain controls against money laundering in its U.S. operations.

India TV Business Desk, Washington [Published on:31 May 2017, 8:21 AM IST]
Deutsche Bank fined $41 mn for money laundering violations
Deutsche Bank fined $41 mn for money laundering violations in US

The US Federal Reserve has imposed a penalty of $41 million (nearly Rs 265 crore) on Deutsche Bank for failure to maintain controls against money laundering in its U.S. operations.

The U.S. regulators announced the penalty against Germany's largest bank on Tuesday, citing "unsafe and unsound practices." The global bank also agreed to an order requiring it to improve oversight by senior management in complying with anti-money-laundering laws in the U.S. operations.

"The (Federal Reserve) Board identified failures by Deutsche Bank's US banking operations to maintain an effective program to comply with the Bank Secrecy Act and anti-money laundering laws," said the Fed in a statement on Tuesday.

The central bank also issued a cease and desist order against the bank, which requires the bank to improve its senior management oversight and controls related to its compliance with anti-money laundering laws.

"We are committed to implementing every remediation measure referenced in the Fed's order and to meeting their expectations," Deutsche Bank said in a statement Tuesday.

The German bank was fined a total of $156.6 million in April by the Fed for its deficiencies in its foreign exchange trading and its failure to keep a compliance program with the Volcker rule. 

Earlier in January, the Deutsche Bank was fined $629 million in penalties by New York state and British regulators for lapses in controls that allowed wealthy Russians to allegedly launder about $10 billion in illicit funds through the bank.

According to the New York state regulators, the bank's oversight lapses allowed some clients in Russia to engage in a sham securities-trading scheme that moved money out of that country and into offshore accounts.

With the FBI and two congressional committees investigating Russian interference in the 2016 election, the enforcement actions against Deutsche Bank have spurred Democrats in Congress to ask for more extensive investigations of the bank. A group of senior House Democrats, led by Rep. Maxine Waters of California, have asked the Republican-led House Financial Services Committee to examine the alleged Russian money-laundering operation. Waters is the senior Democrat on the committee.

Waters also said an investigation of the operation by the Justice Department raises questions of integrity because Attorney General Jeff Sessions had two encounters, last summer and fall, with the Russian ambassador. Sessions previously recused himself from a Justice Department investigation into potential ties between Russia and Donald Trump's presidential campaign.

In a letter last week, Waters and her colleagues asked Deutsche Bank CEO John Cryan for information on the Russian money-laundering scheme and on the bank's reported review of the personal accounts of Trump and his family members.

Deutsche Bank is one of Trump's biggest lenders. He owes the bank about $300 million related to his real estate holdings.

Bank spokesmen declined to comment Tuesday on Waters' request.

(With AP inputs)