Deutsche Bank Fined for FCPA Violations
Germany-based Deutsche Bank will pay more than $130 million to settle its violations of the Foreign Corrupt Practices Act and separate investigation into a commodities fraud scheme, the Justice Department said Jan. 8. The violations stem from a scheme to hide bribes, which included internal accounting control violations, and another scheme involving “fraudulent and manipulative commodities trading practices” in publicly traded precious metals futures.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
Between 2009 and 2016, the bank’s employees, managing directors and “high-level” executives worked to maintain false books, records and accounts to hide payments to a “business development consultant” that were actually bribes, the Justice Department said. The bribes were paid to a bank client's “decisionmaker” to “obtain lucrative business for the bank.” The bribes included payments that were “not supported by invoices or evidence of any services provided,” but other times the bank created “false justifications” for the payments.
A bribery scheme involving a Saudi business development consultant included payments of more than $1 million, which involved a company “owned by the wife of a client decisionmaker.” Deutsche Bank also worked with a consultant in Abu Dhabi, United Arab Emirates, to secure a “lucrative transaction” despite employees knowing that the consultant “lacked qualifications'' aside from his “family relationship with the client decisionmaker.” The bank paid that consultant more than $3 million without invoices.
The Justice Department said bank employees “knowingly and willfully conspired to fail to implement internal accounting controls in violation of the FCPA,” including failing to conduct due diligence practices. The bank will pay nearly $80 million for the FCPA charges, and about $45 million to the U.S. Securities and Exchange Commission “in disgorgement and prejudgment interest” related to the separate trading fraud scheme. The remainder of the penalty includes other criminal fines and victim compensation payments. Deutsche Bank was fined nearly $600,000 in September 2020 for violating U.S. sanctions, which stemmed from poor due diligence and an incorrectly calibrated screening tool (see 2009090056).