The US Federal Reserve has fined Deutsche Bank and its US subsidiaries $186 million for failing to take appropriate anti-money laundering measures. The Fed said the bank had not yet addressed deficiencies identified in 2015 and 2017 and had insufficient controls over its previous business relationship with Danske Bank’s Estonian subsidiary.
Deutsche Bank said it has taken a number of steps on the matter and the Fed acknowledged the progress made over the past few years. Much of the penalty imposed was covered by judgments passed in previous quarters.
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Money laundering scandal
Danske Bank was fined billions in one of the largest money laundering scandals in the history of the American economy. The Danish bank admitted defrauding US banks between 2008 and 2016.
According to prosecutors, Danske’s office in Estonia lured, among other things, Russian clients with the prospect of transferring large sums of money without much oversight. About $212 billion from those customers flowed through the US financial system via the branch in Estonia, which has since been closed. According to US authorities, Danske employees used shell companies to disguise ownership of the funds.
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