Deutsche Bank Raided In Connection To Money Laundering

 

Offices of Germany’s Largest bank, Deutsche Bank, have been raided by German Police and financial investigators earlier this week as part of an investigation by German authorities around information supplied from the Panama Papers, released in late 2017.

170 police officers and investigators searched 6 of the bank’s buildings in the city of Frankfurt on Thursday, in connection to information which suggests that the bank has been involved in money laundering as far back as 2013 to present day.

A spokesperson for Deutsche Bank stated that they are fully cooperating with the authorities and that the information being investigated is related to information gathered from the Panama Papers.

German Police have said they are specifically investigating two employees of the bank who are believed to be connected with helping clients set up offshore companies to commit tax evasion, where it has been found that in the year of 2016 alone, 900 customers were served by a subsidiary of the bank registered in the British Virgin Islands, a known tax-haven, generating an estimated 311 million euros. Additionally, the German Police accuse the bank itself of neglecting to report laundering suspicions about their clients in tax evasion schemes.

 

 

The Panama Papers were a leaked cache of financial information from the law firm Appleby, that was involved in hundreds of tax evasion and tax avoidance schemes for hundreds of clients across the world.

The cache contained around 11.5 million financial documents relating to offshore tax havens, and was sent anonymously to the German newspaper Süddeutsche Zeitung in 2016, before being analysed over the course of the next two years by a consortium of over 100 independent journalist organisations, followed shortly after by a leak of a further 13.4 million documents in the Paradise Papers leak in 2017.

The papers made international headlines in 2016, and many high-profile figures were implicated, including 12 current and former world leaders, and an illicit money laundering trade associated with the Russian President Vladimir Putin that allegedly involved over $2 billion travelling through international banks and companies.

Other people involved in the papers were the King of Saudi Arabia, and the now former Prime Minister of Pakistan, Nawaz Sharif, who was ousted from his position on corruption charges and has since been sentenced to 10 years in prison over information resulting from the Panama Papers.

The papers also led to the United States government blacklisting 33 individuals and companies from trading within the country due to evidence from the papers that they have been involved in money laundering with and financing of terrorist organisations, the drugs trade, and countries such as North Korea and Iran.

This is not the first time Deutsche Bank has been involved with the Panama Papers, where it was found that Deutsche Bank helped to process the majority of over 200 billion euros in suspicious payments from 2007 to 2017 through Danske Bank’s Estonian branch.

In 2016, Deutsche Bank was also fined a collective $630 million for failing to prevent $10 billion of Laundered Russian money from entering the United Kingdom and the United States.

The United Kingdom’s Financial Conduct Authority imposed the largest fine it had ever imposed on Deutsche Bank, to a total of £163 million, and the New York Department of Financial Services, an independent auditor organisation, fined the Bank $425 million.

The New York Department of Financial Services even found that one senior compliance officer in the Bank remarked to investigators that he had to “beg, borrow and steal” in order to get the finances and resources to deal with money laundering investigations within Deutsche Bank.

Deutsche Bank’s history with money laundering stretches even further back into 2016, when they were forced to pay a $7.2 billion settlement to the United States Department of Justice after intentionally complex and misleading packaging of home loans were ruled unlawful, which was common practice among banks in the United States before the 2008 financial crash.

In 2017, a German investment watchdog, BaFin, called for Deutsche Bank to do more to prevent the possibility of terrorist financing and money-laundering by clients within the Bank.

The regulator also called for more European regulators to step up their scrutiny of banks and their clients, and appointed an independent auditor, KPMG, to assess Deutsche Bank’s progress in improving their investigation of money laundering.

BaFin clarified that these developments were not in response to any recent events but was instead the advice of an investigation into the Bank by the regulator

While the long-term implications of the Panama Papers in the United Kingdom have been relatively minor, in other countries- especially those who have very strict laws on tax evasion such as Germany- the implications have seen drastic changes in politics and commerce. In Germany, negligent tax evasion, the act of evading the payment of taxes by individuals or organisations, is highly illegal.

While the outsourcing of finances to offshore companies and banks in tax havens isn’t inherently illegal, hiding the transfers is illegal and seen as tax evasion under German tax laws. In the past, there has been a stereotype developed around the “Swiss bank account” that can make tax evaders completely anonymous to auditing organisations. Switzerland has had privacy laws around financial accounts that nearly entirely prevented auditors from identifying recipients of Swiss accounts, but in recent years Switzerland has agreed to cooperate with foreign governments in identifying account holders, leading to a rise in other tax havens, that fill in the role of the anonymous tax haven such as Panama and countries within the Caribbean.

The Panama Papers was a distinct revelation across the world on the methods many international organisations and individuals employ to evade paying their taxes, and in a more sinister way, the methods employed to transfer illegitimate money to and from terrorist groups, and the international black market.

It is not currently known whether the raid is due to alleged illegality before or after the independent regulator KPMG began advising the Bank on regulating its own clients. If it is found that the money laundering had occurred after KPMG became involved with Deutsche Bank, it could suggest a decisive failing in effectively equipping the Banks investigation process.

For Deutsche Bank itself, this represents another damaging development from a history of money laundering issues.

 

 

CrimeStoppers providing safe haven for tax dodging Tory

Crimestoppers is an ‘independent’ crime-fighting charity. They operate largely on anonymous tips from the public and have genuinely been a force for good in tracking down and raising awareness of crime and terrorism. Despite this however, it is alarmingly apparent that they do not chase down financial crimes with the same veracity. This needs to change.

On first inspection of the board of directors, it is no surprise that the charity does not consider financial crimes to be worthy of public attention or criminal condemnation. This is because the board of trustees is packed with Lords and people who have won OBEs/CVOs/QPMs/CBEs/BEMs (i.e. not exactly representative of the country).

 

I have no doubt that the majority of those listed have genuinely good intentions, but I also know that they likely represent the upper echelons of the social classes. This results in an implicit bias towards not investigating ethically dubious financial behaviour such as those committed by the incorrigibly corrupt Lord Ashcroft.

We at The People’s News reported the various tax avoidance schemes employed by Ashcroft in great detail, and the BBC Panorama documentary exposed his activity to the nation. I, like many others, assumed this to be a turning point and that change was imminent. I was wrong, nothing has, or will change, because those who have the means to pursue such contemptible behaviour are also those most likely to be guilty of it. This, in part, is because they do not see what they are doing as criminal, which is technically correct as they are operating within the law. However, the reason this activity is still legal is because figures like Ashcroft donate (legally bribe) millions to the Conservatives, and his polling data is instrumental during election campaigning (e.g. if polls indicate a labour seat is vulnerable, they can channel efforts to the constituency in an effort to flip the seat to Conservatives).

Additionally, the reason the rich don’t feel like they are behaving criminally is because the consequences of their actions are deferred, making it easy for the wealthy to dissociate themselves from any wrongdoing. Alternatively, for example, if violent behaviour results in the death of another person, causation is clear (i.e. the actions of the aggressor were unambiguously the cause of death).

We are all somewhat guilty of overlooking the serious consequences of financial crimes, but I argue that they are far more pervasive than any physically violent crime. To illustrate this more clearly, let us reconsider the hypothetical example of violent behaviour resulting in the death of another person. It is painfully clear that the person who died, died as a consequence of the violent behaviour of the aggressor, and the aggressor will likely be criminally charged.

However, it is important that we clarify the criminal element of this hypothetical. For instance, violence itself is not illegal, and there are situations in which you can be violent such as in boxing and various other contact sports. Therefore, whether a person has committed a crime is predicated upon the consequences of the violence (injury or death), and not the violence itself. This is how the rich and the Conservatives are able to dissociate themselves from the devastating impact of their greed. For instance, it is difficult to argue that the consequences of a psychically violent crime were not the consequence of the violent behaviour by the aggressor because of the temporal proximity of the act and the consequence, whereas the consequences of tax avoidance are more nuanced and deferred, thereby allowing the aggressor (i.e. tax-avoider) to almost entirely dissociate themselves from any wrongdoing. Instead of tax avoidance immediately resulting in the death of another, it manifests slowly due to reduced funding for government support such as that provided by the NHS, and results in countless more deaths. Support for this loosely abstract comparison can be found in recent research published by the British Medical Journal that correlated this cruel application of a proven to be ineffective economic policy to over 120,000 avoidable deaths under during Conservative rule.

It is perhaps a tad inflammatory and hyperbolic to attribute these deaths to the Tories, but it is getting more and more difficult to resist this assertion when educated, non-political, people such as those being published in the British Medical Journal are correlating these deaths to the elite greed and contempt for the working classes. People like Ashcroft can no longer claim blissful ignorance. As of right now, given what we know about the impacts of this draconian understanding of economics, the elite can no longer dissociate themselves from the consequences of their actions.

I feel like this article has been crystal clear, but then again, I think we as a people are often blindsided into downplaying this type of behaviour. Therefore, the rest of this article will focus on trying to contextualise this in a way that I feel it warrants. To do this, consider the definition of the word ‘terrorist’.

We are accustomed to othering terrorists as predominantly Muslim, ISIS related scourges on democracy that use violence to push their agenda. However, no terrorist organisation of any affiliation can boast of killing 120,000 English people. We need to reconceptualise our understanding of the word violence. We all too readily recognise the physically violent behaviour that ISIS use in pursuit of political aims, but because of the deferred relationship between elite greed and the deaths of the most vulnerable in our country, it is difficult to inspire the same emotional response as that from death as a result of another’s violent behaviour. For instance, the 120,000 avoidable deaths reported by the British Medical Journal are not evenly distributed among the social classes, but instead, with almost surgical precision, they are heavily biased towards poor, working class people.  It is important to note that I am not suggesting this is an overarching conspiracy to suppress the working class vote by culling the population, but rather, an unintended, yet convenient, consequence of the greed of the elites.

If we want change in our politics we need to take a more active role in the politics of our country. Whether that be holding to account those that pursue criminal and societally pervasive behaviour such as Crimestoppers, or collectively condemning the legal bribes taken by the government from the likes of Ashcroft.

Finally, as I am sure many of you reading are deeply concerned about the criminal behaviour of those governing our country and those claiming to be upholding the law of the land, I encourage you all to call CrimeStoppers on 0800 555 111 and air your grievances.

Alternatively, you can anonymously report the behaviour by filling in this online form.