Will their multi billion $$$ fraud schemes crash Deutsche Bank (DB) through the “too big to fail” myth?
Customer base is already in a steep decline.
The United Kingdom’s Financial Conduct Authority and the US Government recently declared (another) high penalty on the biggest money laundering scheme exposed so far in recent years. Deutsche Bank has agreed to pay over $600m in penalties for enabling an estimated $20 billion in this Russian money laundering scam. All down to a failure to engage in any security system which stops the bank and its members from being used for criminal activities. In other words, they did not even try to figure out who they were doing business with. The United States officials also imposed an additional penalty of $425 million due to this scam.
There is also a likelihood of a public investigation and hearings yet to come.
Investigators believe that nearly $80 billion cash might have been involved in the scheme. The scam was run between 2010 and 2014 to move money into the western financial system. The money-laundering operation is also nick-named “The Global Laundromat”. The fraud is connected to the Russian criminals with links to the Kremlin, the old KGB, and the FSB.
Here’s how the scheme was planned. A number of inactive companies from the UK gave fake loans to each other. All the companies involved then failed to pay these large fake debts. Apart from that, the judges in Moldova, who were corrupted, approved billions of dollars’ debt to be transferred to Moldova and the Baltic States via a bank in Latvia.
In effect, Deutsche Bank was used to launder the money on a grand scale. The senior bankers knowingly used its’ large banking network and permitted multiple illegal transactions. The criminals engaged these illegal transactions in the US, the European Union, and Asia.
The bank claims it did not know about the scam until March 2017. Further investigation was done by the much respected financial crime investigators, Philippe Vollot, and Hinrich Völcker. They identified many DB executives in the US, the UK, and Germany who were active in nearly 700,000 illegal transactions.
In recent years, the bank has been facing many into about 10,000 fraud related lawsuits and investigations. Between 2011 and 2018, this bank has paid an estimated $14.5bn in fines. Deutsche Bank now acknowledges that this scandal has severely damaged its global brand. They bank is losing clients, investors, and seeing a decline in its market value. It is becoming clearer now that such big banks as DB and the others will eventually destroy themselves from within. Meanwhile, it’s the customers, investors, and all taxpayers who will carry the cost.