The U.S. Department of Justice said on Friday that Deutsche Bank has agreed to pay more than $130 million to resolve the US government’s investigation into violations of the Foreign Corrupt Practices Act (FCPA) and a separate investigation into a commodities fraud scheme.
The DoJ said Deutsche Bank has entered into a three-year deferred prosecution agreement (DPA) with the Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section (MLARS) and with the US Attorney’s Office for the Eastern District of New York.
“The resolution includes criminal penalties of $85,186,206, criminal disgorgement of $681,480, victim compensation payments of $1,223,738, and $43,329,622 to be paid to the U.S. Securities & Exchange Commission in a coordinated resolution,” said the Department of Justice.
The DoJ said the charges arose out of a “scheme to conceal corrupt payments and bribes made to third-party intermediaries by falsely recording them on Deutsche Bank’s books and records, as well as related internal accounting control violations, and a separate scheme to engage in fraudulent and manipulative commodities trading practices involving publicly-traded precious metals futures contracts.”
The criminal information was filed in the Eastern District of New York charging Deutsche Bank “with one count of conspiracy to violate the books and records and internal accounting controls provisions of the FCPA and one count of conspiracy to commit wire fraud affecting a financial institution in relation to the commodities conduct.”
Deutsche Bank said in a statement: “While we cannot comment on the specifics of the resolutions, we take responsibility for these past actions, which took place between 2008 and 2017.
“Our thorough internal investigations, and full cooperation with the DOJ and SEC investigations of these matters, reflect our transparency and determination to put these matters firmly in the past.
“As recognized in the resolutions, we have taken significant remedial actions in response to these issues.
“As a broader matter, in the years since these issues occurred, we have invested more than EUR 1 billion in data, technology, and controls, as well as improved our training and operational processes.
“We have increased our anti-financial crime team to more than 1,600 people globally, and we’ll continue to invest significantly in technology this year and in the future, particularly as it relates to anti-financial crime compliance.”
Acting Deputy Assistant Attorney General Robert Zink of the Justice Department’s Criminal Division said: “Deutsche Bank engaged in a seven-year course of conduct, during which it failed to implement a system of internal accounting controls regarding the use of company funds and falsified its books and records to conceal corrupt and improper payments.
“Separately, Deutsche Bank traders on three continents sought to manipulate our public financial markets through fraud for five years.
“This resolution exemplifies the department’s commitment to help ensure that publicly traded companies devise and implement appropriate and proper systems of internal accounting controls and maintain accurate and truthful corporate documentation.
“It also stands as an example of the department’s efforts to police the public U.S. markets so that all may continue to trust, and rely upon, the integrity of our public financial systems.”
Acting U.S. Attorney Seth D. DuCharme of the Eastern District of New York said: “Deutsche Bank engaged in a criminal scheme to conceal payments to so-called consultants worldwide who served as conduits for bribes to foreign officials and others so that they could unfairly obtain and retain lucrative business projects.
“This office will continue to hold responsible financial institutions that operate in the United States and engage in practices to facilitate criminal activity in order to increase their bottom line.”
Inspector in Charge Delany De Léon-Colón of the U.S. Postal Inspection Service’s Criminal Investigations Group said: “The U.S. Postal Inspection Service takes pride in investigating complex fraud and corruption cases that impact American investors.
“This type of deceptive activity can cause immeasurable economic losses to competitive markets around the world.
“The combined efforts of our partners at the FBI and Department of Justice helped to bring today’s significant action which illustrates our efforts to protect the United States and the international marketplace.”