German prosecutors raided several Deutsche Bank offices in the Frankfurt area Thursday over suspicions of money laundering based on revelations from the 2016 "Panama Papers" data leak. Some 170 prosecutors, state police, national police and tax investigators were involved in the morning searches of six buildings in Frankfurt, and in nearby Eschborn and Gross-Umstadt, Niesen said.
Deutsche Bank shares fell as much as 3% on the news and were down 2.6% as of 11:20 a.m.in Frankfurt (5:20 a.m. ET).
Citing prosecutors, Bloomberg added Deutsche "may have helped clients in setting up offshore companies in tax havens". The raids were conducted on the suspicion bank employees helped clients set up offshore companies in tax havens to launder hundreds of millions of euros, in an investigation brought about from an analysis of online document leaks.
Deutsche Bank's Frankfurt offices were searched Thursday as part of a probe linked to the Panama Papers.
In 2016 alone, over 900 customers were served by a Deutsche Bank subsidiary registered on the British Virgin Islands, generating a volume of 311million euros, the prosecutors said. A Deutsche Bank executive director has said the lender played only a secondary role as a so-called correspondent bank to Danske Bank, limiting what it needed to know about the people behind the transactions. Authorities seized documents and electronic files and said they were also looking at whether others might have been involved.
Prior to that, other bank sources had delivered more dismissive comments, chief strategist Ulrich Stephan in November past year saying he "would simply not recommend (Bitcoin) to the everyday investor".
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Analysts say that because these transactions can be lucrative, banks have few incentives to do more than the minimum required by law to check on the identity of a bank.
An internal investigation by Danske found that about €200bn (£177bn) of payments were funnelled through its Estonian branch.
In September, Germany's financial watchdog - BaFin - ordered Deutsche Bank to do more to prevent money laundering and "terrorist financing", and appointed KPMG as third party to assess progress.
Under the scheme, clients illegally moved $10bn out of Russian Federation via shares bought and sold through the bank's Moscow, London and NY offices.
Pre-tax profits for the three months to September fell 45% to €506m compared with the same period a year ago.
However, investors have yet to be been won over by his efforts and Deutsche shares have halved this year.