Deutsche Bank agreed to a settlement of over $130 million to resolve The United States government’s charges against them. The $130 million in settlement fees can be broken down into victim compensation, criminal penalties, criminal disgorgement, and payment to the US Securities and Exchange Commission (SEC).
The German bank, Deutsche Bank, was exposed with a foreign corrupt practices act and a fraud case for their scheme to conceal corrupt payments and outright bribes. These bribes were hidden through the bank’s official records as they funneled money to supposed business development consultants.
In addition, as the Justice Department began investigations, the bank headquartered in Frankfurt, Germany, was also charged with a separate scheme to manipulate metal futures contracts. These two serious offenses took place sometime between 2008 and 2016. Read a similar story where US Bank was forced to pay fines for knowingly exploiting sensitive customer information.
Details of The FCPA Case
The foreign corrupt practices act (FCPA) case resulted from the corruption that took place between 2009 and 2016. During these years, the Deutsch Bank was said to have an elaborate scheme where employees, high-level executives, and managing directors took part in hiding bribes.
Those who were involved proceeded to create fake records, bookkeeping, and accounts to hide the illegal activity. They also made fake payments to a business development consultant (BDC), who was a front for foreign officials.
The payments to the business development consultant were actually paid to a decision maker by a client who was highly profitable to the bank.
The bank supported these bribes by creating fake justifications for the payments, but some of the payments were not as well hidden, and they did not have any evidence of an exchange of services.
Deutsche Bank also admitted to allowing corrupt payments in exchange for a large company’s business. In this case, employees openly discussed facilitating bribe payments between a Saudi business development consultant and a decision maker. They also paid an Abu Dhabi BDC who lacked qualifications but had a family relationship with the client decision maker more than $3 million without any real invoices.
These instances of falsification of records and bribery were in violation of the FCPA. Deutsche Bank admitted to these charges and has agreed to pay $79,561,206 for crimes related to this case and $43,329,622 for disgorgement and prejudgment interest.
Details of The Commodities Fraud Case
Between 2008 and 2013, Deutsche Bank’s precious metals traders ran schemes to scam other traders in the New York Mercantile Exchange Inc. This scheme involved having their traders in countries around the world, including New York, Singapore, and London, place orders with the intention of canceling them before they were fulfilled.
This would cause disingenuous supply and demand for the precious metal future contracts. Deutsche Bank’s precious metal traders in the United Kingdom, France, and the UAE were found guilty of wire fraud and spoofing on September 25th, 2020, by a Chicago federal jury.
As these schemes were exposed, it resulted in the Deutsch Bank agreeing to pay a total amount of about $7.5 million. See similar story where Deutsche Bank was raided by authorities due to massive fraud. Or, see Deetsche Bank’s history with corruption and their entanglement with the US Department of Justice.