11 Jan 2021
The German lender will enter a deferred prosecution agreement to resolve charges stemming from its attempts to win business in several countries.
For nearly seven years it seemed like a good way to drum up business for Deutsche Bank: pay millions of dollars to consultants in countries like Saudi Arabia, the United Arab Emirates, Italy and China.
But federal authorities in the United States said those payments — often listed as “referral fees” in the bank’s records — were actually bribes to politically connected fixers that gave the scandal-marred German bank access to foreign officials. And on Friday, Deutsche Bank agreed to pay more than $125 million to resolve criminal and civil investigations into those and other practices.
The investigation by the Justice Department and the Securities and Exchange Commission found that Deutsche Bank had made about $7 million in improper payments to foreign fixers between 2009 and 2016, earning about $35 million from the deals that resulted.
The bank avoided having to plead guilty in the criminal component of the investigation by entering into a deferred prosecution agreement with the Justice Department at a hearing in Brooklyn federal court. The fine also resolved the civil component of the investigation by the S.E.C.
“We take responsibility for these past actions, which took place between 2008 and 2017,” said Dan Hunter, a Deutsche Bank spokesman. “Our thorough internal investigations, and full cooperation with the D.O.J. and S.E.C. investigations of these matters, reflect our transparency and determination to put these matters firmly in the past.”
Authorities said the bank failed to closely monitor the arrangements it had made with the consultants to determine if they had close ties to foreign officials, even though the bank had identified problems with its use of consultants in 2009.
Prosecutors said that, for example, in an effort to win business from the family office of an unidentified Saudi official, Deutsche Bank had entered into a contract with a corporate entity owned by the wife of the person who made investment decisions for the family office. The bank then paid fees to that company — describing them in the bank’s records as “referral fees.” Describing the bribes that way was a violation of the accounting provisions of the federal Foreign Corrupt Practices Act, prosecutors said.
In Italy, the bank struck up a business development relationship with a judge, according federal authorities. And in China, where Deutsche Bank wanted to set up an energy fund with a government entity, the bank found a consultant who was a close friend of a government official, according to the S.E.C.
By Matthew Goldstein and David Enrich, The New York Times, 8 January 2021
Read more at The New York Times
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