German financial giant Deutsche Bank heads into uncharted territory this week after prosecutors raided the bank's Frankfurt HQ and central German offices for its alleged complicity in the creation of offshore companies in tax havens.
Prosecutors said that, as a result of the leak, they are looking at whether Deutsche Bank assisted clients to set up offshore companies in tax havens so that funds transferred to their bank accounts could skirt anti-money laundering safeguards. Of course, we will cooperate closely with the public prosecutor's office in Frankfurt, as it is in our interest as well to clarify the facts.
Several other institutions besides Deutsche Bank have been fined by authorities in the USA and Europe for not properly checking up on the beneficial owners of shell companies that send money through their accounts.
Deutsche employees are said to have helped clients set up offshore companies to launder hundreds of millions of euros.
The revelations reportedly began with the 2016 Panama Papers, which detailed the then-secret, shady money dealings of worldwide financiers.
Shares in Deutsche Bank fell 2.75 to €8.36 by 1000 GMT, against a DAX blue-chip index up 0.6%.
A Deutsche spokesperson said: "We confirm that the police are now conducting an investigation at a number of our offices in Germany".
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The news comes as Deutsche Bank tries to fix its tattered reputation after three years of losses and a drumbeat of financial and regulatory scandals. As Deutsche Welle reports, "In August, it confirmed that even after it was fined for helping Russian clients wash some $10 billion, its mechanisms to stop such criminal activity were still inefficient".
The main suspects in the probe focused on a unit in the British Virgin Islands that processed €311 million (NZ$517 million) in 2016 alone were two bank employees identified by their ages - 50 and 46.
In September, Germany's financial supervisor BaFin took the unusual step of embedding auditors from KPMG at Deutsche to monitor the bank's progress in battling illegal transactions such as money laundering, terrorist financing and dealings with organised crime. "As far as we are concerned, we have already provided the authorities with all the relevant information regarding Panama Papers". The bank's CEO has since stepped down over the scandal.
Citing people familiar with the matter, Bloomberg News had reported that Deutsche was the unnamed bank a Danske whistleblower said had handled nearly $150 billion of suspect transactions originating in the Danish firm's Estonian branch.
According to the report, numerous bank records have been seized as part of this raid.