Risk & Compliance

Deutsche Bank Fined $132M Over Bribery Schemes

U.S. authorities say the scandal-plagued bank made improper payments to politically-connected intermediaries to secure business overseas.
Matthew HellerJanuary 11, 2021

Deutsche Bank has agreed to pay more than $130 million to settle U.S. allegations that it made improper payments, including bribes, to politically-connected intermediaries to secure business overseas.

The allegations announced Friday by the Department of Justice and Securities and Exchange Commission focus on Deutsche Bank’s activities between 2009 and 2016 in countries including Saudi Arabia, the United Arab Emirates, Italy, and China.

According to the government, the scandal-plagued bank engaged intermediaries in those countries to give it access to officials while failing to take sufficient steps to mitigate the “bribery risks posed by such engagements.”

As a result, Deutsche Bank allegedly made about $7 million in improper payments to foreign fixers, earning about $35 million in ill-gotten gains.

To settle the alleged violations of the Foreign Corrupt Practices Act, the bank agreed to pay a criminal penalty of $79.5 million to the DoJ and $43.3 million in disgorgement and prejudgment interest to the SEC.

“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,” Acting U.S. Attorney Seth DuCharme of the Eastern District of New York said in a news release.

As The New York Times reports, “The settlements are the latest black eye for Deutsche Bank, which has been repeatedly penalized in recent years by federal prosecutors and regulators for its involvement with money laundering and for violating international sanctions.”

According to an SEC administrative order, the bank engaged consultants who had “no demonstrated expertise or qualifications,” worked simultaneously for a government entity from which it sought business, and were paid at “rates that were unreasonably high as compared to the work allegedly being performed.”

In Saudi Arabia, the SEC said, Deutsche Bank paid bribes to an individual who managed hundreds of millions of dollars in investments on behalf of a senior member of the country’s royal family. About $1.1 million in payments were allegedly made to a shell company owned by the investment manager’s wife.