Deutsche Bank fully complies with its obligations under DPA with DOJ, Court rules
The New York Eastern District Court has dismissed the criminal information against Deutsche Bank AG in proceedings brought by the Department of Justice (DOJ) back in January 2021.
The relevant order was signed by Judge Rachel P. Kovner on July 5, 2024.
On January 7, 2021, the Government filed a two-count Information charging Deutsche Bank with conspiracy to commit offenses against the United States in violation of 18 U.S.C. § 371. In Count One, Deutsche Bank was charged with conspiring to violate the accounting provisions of the Foreign Corrupt Practices Act, as amended, 15 U.S.C. §§ 78m(b)(2)(A), 78m(b)(5), 78ff(a), 78m(b)(2)(B) and 78m(b)(5). In Count Two, Deutsche Bank was charged with conspiring to commit wire fraud affecting a financial institution in violation of 18 U.S.C. § 1349.
Among other obligations, the deferred prosecution agreement (DPA) required Deutsche Bank to cooperate with the government’s investigation and to implement an enhanced compliance program for a period of at least three years. Deutsche Bank was also required to pay a criminal monetary penalty of $87,091,424, of which $5,625,000 was fully credited against the $30,000,000 civil monetary penalty imposed on Deutsche Bank by the U.S. Commodity Future Trading Commission (CFTC) in connection with the CFTC’s January 29, 2018 proceeding and order and $20,000,000 was paid to the United States Inspection Service Consumer Fraud Fund.
The DPA provided that the government would not continue the criminal prosecution against Deutsche Bank and would move to dismiss the Information within six months of the expiration of the DPA if Deutsche Bank fully complied with all of its obligations under the DPA. The DPA expired on or about January 7, 2024.
On or about January 8, 2024, the Chief Executive Officer and Chief Financial Officer of Deutsche Bank certified to the government that Deutsche Bank had met is disclosure obligations pursuant to paragraph 6 of the DPA.
Based on the information known to the Government, Deutsche Bank has fully met is disclosure obligations under the DPA, including full cooperation with the Government, implementation of an enhanced compliance program and procedures, and satisfaction of the terms of the provisions regarding self-reporting.
In addition, on or about and between January 15, 2021 and February 15, 2022, Duetsche Bank made timely payment of the criminal monetary penalty remaining after crediting.
Because Deutsche Bank has fully complied with all of its obligations under the DPA, the government has determined that dismissal of the Information with prejudice is appropriate.
Upon due consideration and review of the unopposed motion, the Court ordered that the government’s motion is granted and the criminal Information filed in this action was dismissed with prejudice.
In January 2021, Deutsche Bank entered into a three-year deferred prosecution agreement (DPA) with United States Attorney’s Office for the Eastern District of New York and the Department of Justice Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section (MLARS). The criminal information was filed in U.S. District Court for 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.
According to admissions and court documents, between 2009 and 2016, Deutsche Bank, acting through its employees and agents, including managing directors and high-level regional executives, knowingly and willfully conspired to maintain false books, records, and accounts to conceal, among other things, payments to a business development consultant (BDC) who was acting as a proxy for a foreign official and payments to a BDC that were actually bribes paid to a decisionmaker for a client in order to obtain lucrative business for the bank. In some instances, Deutsche Bank made payments to BDCs that were not supported by invoices or evidence of any services provided. In other cases, Deutsche Bank employees created or helped BDC’s create false justifications for payments.
In relation to a Saudi BDC, Deutsche Bank admitted that its employees conspired to contract with a company owned by the wife of a client decision maker to facilitate bribe payments of over $1 million to the decision maker. Deutsche Bank approved the BDC relationship despite Deutsche Bank employees knowing about the relationship between the Saudi BDC and the decision maker, and approved the corrupt payments despite Deutsche Bank employees openly discussing the need to pay the Saudi BDC in order to incentivize her husband to continue to do business with Deutsche Bank. In requesting approval of one payment, Deutsche Bank employees cautioned that the “client and [the Saudi BDC] are intimately linked and . . . any cessation of payment to the [the Saudi BDC] will certainly prompt a significant outflow of [business]” from the client.
Deutsche Bank also contracted with an Abu Dhabi BDC to obtain a lucrative transaction, despite Deutsche Bank employees knowing that the Abu Dhabi BDC lacked qualifications as a BDC, other than his family relationship with the client decision maker, and that the Abu Dhabi BDC was in fact acting as proxy for the client decision maker. Deutsche Bank paid the Abu Dhabi BDC over $3 million without invoices.
By agreeing to misrepresent the purpose of payments to BDCs and falsely characterizing payments to others as payments to BDCs, Deutsche Bank employees conspired to falsify Deutsche Bank’s books, records, and accounts, in violation of the FCPA. Additionally, Deutsche Bank employees knowingly and willfully conspired to fail to implement internal accounting controls in violation of the FCPA by, among other things, failing to conduct meaningful due diligence regarding BDCs, making payments to certain BDCs who were not under contract with Deutsche Bank at the time, and making payments to certain BDCs without invoices or adequate documentation of the services purportedly performed.
Regarding the commodities fraud case, the DOJ notes that, between 2008 and 2013, Deutsche Bank precious metals traders engaged in a scheme to defraud other traders on the New York Mercantile Exchange Inc. and Commodity Exchange Inc., which are commodities exchanges operated by the CME Group Inc. On numerous occasions, traders on Deutsche Bank’s precious metals desk in New York, Singapore, and London placed orders to buy and sell precious metals futures contracts with the intent to cancel those orders before execution, including in an attempt to profit by deceiving other market participants through injecting false and misleading information concerning the existence of genuine supply and demand for precious metals futures contracts.