SINGAPORE (July 12): The US Department of Justice is investigating Deutsche Bank AG as part of a broadened probe of Malaysia’s scandal-plagued 1MDB investment fund, according to a person with knowledge of the matter.
Investigators, who have spent years examining Goldman Sachs Group’s lucrative dealings with the fund, are now taking a closer look at a former Goldman executive who later worked at the German bank, said the person, who asked not to be identified discussing the confidential inquiry. US authorities haven’t accused Deutsche Bank or the former employee of wrongdoing.
The inquiry aims to determine whether Deutsche Bank might have violated foreign-corruption or anti-money-laundering laws as it helped 1MDB raise US$1.2 billion in 2014, the Wall Street Journal said in an earlier report Wednesday. Tim Leissner, another ex-Goldman executive who pleaded guilty last year for his role in the scandal, has been helping with the Deutsche Bank examination, the paper said, citing unidentified people with knowledge of the matter.
Tan Boon-Kee is a former Goldman Sachs banker who later worked at Deutsche Bank as Asia Pacific head of the financial institutions group. The Journal identified her as the banker being looked at by the Justice Department. Tan, who left Deutsche Bank last year, was interviewed by Singapore authorities in connection with 1MDB, people with knowledge of the matter said last year. She hasn’t been contacted by the Justice Department for more than a year, a person with knowledge of her situation said. Tan, now at Hong Kong-based insurer FWD Group, declined to comment.
“Deutsche Bank has cooperated fully with all regulatory and law enforcement agencies that have made inquiries relating to 1MDB,” the Frankfurt-based company said in an emailed statement. It pointed to asset-forfeiture documents previously filed by the Justice Department indicating 1MDB misled Deutsche Bank during transactions. “This is consistent with the bank’s own findings in this matter,” the firm said in the statement.
Justice Department spokesman Peter Carr declined to comment.
Probes into 1MDB have mainly focused on more than US$6 billion the fund raised in 2012 and 2013 with help from Goldman Sachs, which reaped almost US$600 million in fees. The New York-based bank, which has said it’s cooperating with related investigations, has portrayed Leissner as a rogue employee who circumvented its internal controls. The Justice Department now expects to start negotiating with Goldman Sachs soon to potentially resolve a criminal probe, the Journal wrote.
“We do anticipate getting into active discussions with Goldman, at this point, in the near future,” it cited Assistant Attorney General Brian Benczkowski as saying in an interview. He declined to comment on other aspects of the 1MDB case.
Overhaul Effort
The investigation of Deutsche Bank is emerging just as the lender makes its most dramatic effort yet to overhaul its business after a decade in which it paid more than US$18 billion in fines and other legal costs.
In recent years, regulators and prosecutors have raided the bank’s headquarters, subpoenaed documents and grilled executives in dozens of probes on three continents. This week, the company said it will cut a fifth of its 91,000-person workforce and exit some business lines as it seeks to improve profitability.
Leissner, Goldman’s former head of Southeast Asia, pleaded guilty last year to US charges that he conspired to launder money and violated the Foreign Corrupt Practices Act. As part of the deal, he agreed to forfeit US$43.7 million and admitted to bribing officials in Malaysia and the United Arab Emirates to get bond deals for Goldman Sachs.
