Deutsche Bank, in an attempt to continue working with Donald Trump after lending his organization hundreds of millions of dollars when no other bank would, allegedly failed to heed warnings from its own anti-money laundering experts about certain transactions, according to news reports.
The New York Attorney General’s office opened an investigation in March into the Trump Organization’s dealings with the bank, whose wealth management division allegedly continued doing business with the firm despite Deutsche Bank’s investment banking arm stepping away from it, the New York Times reported at the time. The U.S.-based unit that caters to ultra-wealthy clients allegedly lent the organization over $270 million from 2012 to 2015 for several real estate projects.
Deutsche Bank’s policy is to have suspicious activity reports reviewed by experts in anti-money laundering who are independent of the business unit where the transactions originated, Tammy McFadden, a former Deutsche Bank anti-money laundering specialist, and two former Deutsche Bank managers who asked to remain anonymous tell the Times. In 2016 and 2017, McFadden and other anti-money laundering specialists at the bank recommended that several transactions involving entities controlled by Donald Trump and his son-in-law, Jared Kushner, be referred to a unit of the Treasury Department tasked with policing financial crimes, according to the paper.
In one case in 2016, McFadden reviewed several transactions flagged by the bank’s software and identified money moving from Kushner Companies to Russian individuals, the Times writes. She recommended that the transactions be reported to federal regulators, according to the paper. But McFadden’s report, instead of getting reviewed by experts outside the banking unit, was instead allegedly diverted to New York managers in the private bank, where the transactions had originated, the Times writes. And the managers decided that the issues raised by McFadden’s report were unfounded and didn’t merit passing along to the government, former employees tell the paper. McFadden and some of her colleagues tell the Times that the report was killed to ensure a continuing relationship of the private-banking unit with Kushner.
“You present them with everything, and you give them a recommendation, and nothing happens,” McFadden tells the paper. “It’s the D.B. way. They are prone to discounting everything.”
McFadden tells the Times that Deutsche Bank terminated her last year following her complaints about its practices. She’s filed complaints about the anti-money laundering issues at the bank with the SEC and other regulators, according to the paper.
Deutsche Bank’s anti-financial crime team also reviewed several transactions involving Trump and his companies after he became president and filed several suspicious activity reports, according to three former Deutsche Bank employees who tell the Times that they saw the reports in an internal computer system. Again, the bank opted not to file the SARs with with Treasury Department, the former employees tell the paper.
A Deutsche Bank spokeswoman tells the Times that it has never prevented an investigator from “from escalating activity identified as potentially suspicious and that “the suggestion that anyone was reassigned or fired in an effort to quash concerns relating to any client is categorically false.”
A spokeswoman for the Trump Organization tells the paper that it has “no knowledge of any ‘flagged’ transactions with Deutsche Bank” and that the organization no longer has any “operating accounts” with the bank. A spokeswoman for Kushner Companies also denies any wrongdoing to the Times.
“Any allegations regarding Deutsche Bank’s relationship with Kushner Companies which involved money laundering is completely made up and totally false,” Karen Zabarsky tells the paper. “The New York Times continues to create dots that just don’t connect.”