Deutsche Bank to Pay Over $130 Million to Resolve U.S. Bribery Probe
Deutsche Bank agreed to pay more than US$130 million to resolve an U.S. investigation involving overseas bribery schemes and a conspiracy to manipulate and defraud precious metals markets, the U.S. Justice Department announced on Friday.
Germany’s top lender entered into a three-year deferred prosecution agreement with the Justice Department, for violating the Foreign Corrupt Practices Act (FCPA).
The resolution includes payouts of $85.2 million for criminal penalties, $681,480 for criminal disgorgement, $1.2 million for victim compensation, and $43.2 million to be paid to the U.S. Securities and Exchange Commission (SEC) in a coordinated settlement.
Based on the SEC charges, prosecutors accused the bank of engaging in a foreign scheme to conceal corrupt payments and bribes made to third-party intermediaries by falsely recording them on the institution’s books and records.
According to the SEC’s order, Deutsche Bank “engaged foreign officials, their relatives, and their associates as third-party intermediaries, business development consultants, and finders to obtain and retain global business.”
Acting U.S. Attorney, Seth D. DuCharme, of the Eastern District of New York, confirmed that stressing that: “Deutsche Bank engaged in a criminal scheme to conceal payments to so-called consultants worldwide who served as conduits for bribes to foreign officials and others so that they could unfairly obtain and retain lucrative business projects.”
Court documents show that the German bank, acting through its employees, agents and even regional high-executives, willfully conspired to maintain false documents, accounts, and justifications for payments to conceal the bribery scheme.
The bank also allegedly conspired to fail to implement internal accounting controls for seven years, violating the FCPA.
A separate investigation showed Deutsche Bank traders from three continents engaged in a scheme to defraud and manipulate commodities trading practices involving precious metals between 2008 and 2013, according to court documents.
“On numerous occasions, traders on Deutsche Bank’s precious metals desk in New York, Singapore and London placed orders to buy and sell precious metals futures contracts with the intent to cancel those orders before execution, including in an attempt to profit by deceiving other market participants through injecting false and misleading information concerning the existence of genuine supply and demand for precious metals futures contracts,” the Department of Justice said.
The bank has agreed to pay a total criminal amount of $7.5 million in relation to the commodities scheme.