The US Department of Justice is investigating Deutsche Bank in connection with its work for 1MDB, the Malaysian state investment fund at the centre of a multibillion-dollar money-laundering scandal, according to a person familiar with the matter.
The US probe is centred on Tan Boon-Kee, a former employee of the German lender and Goldman Sachs who worked on 1MDB-related matters at both banks, the person said.
Both lenders helped 1MDB raise billions of dollars, much of which US and Malaysian prosecutors allege was stolen by Jho Low, a Malaysian financier who has denied wrongdoing.
The justice department’s interest in Deutsche Bank was first reported by The Wall Street Journal. It adds to a mounting pile of regulatory and legal issues for the German bank, which recently announced a dramatic restructuring.
Among the recent American probes is a separate justice department inquiry into whether Deutsche failed to comply with US anti-money laundering laws — an investigation that has been linked to its dealings with Donald Trump, who received multiple loans from the bank for real estate developments.
Mr Trump lashed out at criticism of his work with Deutsche on Thursday, disputing accounts that the German lender was one of the only creditors who would deal with him because of his record of defaults.
“[A] bank that I did use years ago, the now badly written about and maligned Deutsche Bank, was then one of the largest and most prestigious banks in the world!” Mr Trump wrote on Twitter. “They wanted my business, and so did many others!”
Prosecutors in the 1MDB case are trying to determine whether Deutsche Bank violated US money laundering or foreign bribery laws in the course of raising money for the Malaysian government development fund, including $1.2bn in 2014, the person familiar with the matter said.
The extent of the legal risk for Deutsche Bank was not immediately clear. Goldman Sachs, which helped 1MDB raise $6.5bn in 2012 and 2013, has long appeared to be the primary focus for US prosecutors.
Last year, Tim Leissner, a former partner at Goldman, admitted conspiracy charges linked to money laundering and foreign bribery. Another former Goldman banker, Roger Ng, has pleaded not guilty to similar charges.
In April, the Financial Times reported that career prosecutors in the justice department had recommended to senior officials that Goldman plead guilty to a criminal charge as part of any settlement of its investigation into the bank’s role.
Deutsche Bank said it had “co-operated fully with all regulatory and law enforcement agencies that have made inquiries relating to 1MDB” and pointed to civil forfeiture filings by the justice department that suggested the bank had been misled by the fund.
“As stated in asset forfeiture complaints filed by the US Department of Justice, 1MDB made ‘material misrepresentations and omissions to Deutsche Bank officials’ in connection with 1MDB’s transactions with the bank. This is consistent with the bank’s own findings in this matter,” it said.
A justice department spokesman declined to comment. Goldman had no comment.
Ms Tan joined Deutsche Bank from Goldman in 2013. She left the German lender last year and currently works at FWD Group, the Hong Kong-based insurance company. She could not be immediately reached for comment.
Singapore police declined to say whether Ms Tan was interviewed as part of their own 1MDB investigation. “As investigations into 1MDB-related matters are still ongoing, it is inappropriate to comment further on this matter,” said a police spokesperson. FWD did not immediately respond to an email seeking comment.
Additional reporting by Stefania Palma in Singapore