Investigations by the United States Justice Department and the Securities and Exchange Commission found that Deutsche Bank made about $7 million in improper payments to foreign fixers between 2009 and 2016 earning about $35 million from the resulting deals.
According to the Justice Department, the charges arise 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. There was also a separate scheme to engage in fraudulent and manipulative commodities trading practices involving publicly-traded precious metals futures contracts.
This fraudulent practice by Deutsche Bank involved paying millions of dollars to consultants in countries like Saudi Arabia, the United Arab Emirates, Italy and China. The Justice Department said that 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. A statement by the S.E.C. revealed that Deutsche Bank paid consultants where no invoices were submitted and where invoices contained insufficient documentation to detail what services were performed. Others were paid more than what their contracts called for or were paid even though they had no agreement at the time.
The Justice Department says the fines were an exemplification of its commitment to ensuring that publicly traded companies devise and implement appropriate internal accounting controls as well as truthful corporate documentation.
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