Deutsche Bank is under criminal investigation in the US in connection with alleged failures to comply with anti-money laundering laws, a person familiar with the situation has confirmed.
The investigation, first reported by The New York Times, is linked to a whistleblower, Tammy McFadden, a former compliance officer in the bank’s Jacksonville, Florida, office. She alleged that in 2016 and 2017 she flagged as potentially suspicious a series of transactions involving entities controlled by President Donald Trump and by his son-in-law Jared Kushner, but her concerns were ignored by the bank, the Times has reported. She was subsequently sacked, and has lodged a complaint with the Securities and Exchange Commission.
One person with knowledge of the investigations said they were triggered after Steven Mnuchin, the Treasury secretary, referred the whistleblower’s complaints to the Financial Crimes Enforcement Network, which then referred the case to the Department of Justice.
The DoJ and Deutsche Bank declined to comment.
A spokesperson for the Kushner Companies said: “Any allegations regarding Deutsche Bank’s relationship with Kushner Companies which involved money laundering is completely made up and totally false.”
News of the investigation is one in a series of blows, regulatory and financial, that Deutsche Bank has suffered in recent months.
In June the bank disclosed that failings in its anti-money laundering and sanctions controls had allowed cheques and high-value electronic payments to be processed without proper screening. That followed news, in May, that a software glitch had also allowed suspicious transactions to slip though over a period of many years.
Also this month, prosecutors in Germany launched a criminal investigation of the former head of Deutsche’s investment bank and other employees over involvement in allegedly illegal tax transactions, and a former executive has been tried in a London court, accused of manipulating Euribor.
At the same time, Christian Sewing, Deutsche’s chief executive, is struggling to improve the bank’s financial profile by making cuts to its investment banking arm and setting up a “bad bank” to house non-core assets.
Deutsche Bank’s shares are hovering near an all-time low and are down 12.6 per cent this year.
Last month, soon after the whistleblower’s allegations were made public, Amit Mehta, a US federal judge, declined to block Democrats in the House of Representatives from subpoenaing Mr Trump’s financial records from his accounting firm, Mazars USA. The judge said the House had “facially valid legislative purposes, and it is not for the court to question whether the committee’s actions are truly motivated by political considerations”.
Mr Trump’s lawyers have appealed against the decision, which the president described as “totally the wrong decision by, obviously, an Obama-appointed judge”.
Additional reporting by Joshua Chaffin in New York