Deutsche Bank is one of dozens of western financial institutions that processed at least $20 bn and possibly more in money of criminal origin from Russia.
Law enforcement agencies are analyse how a group of politically well-connected Russians were able to use UK-registered companies to launder billions of dollars in money. The companies induced fictitious loans to one another, underwritten by Russian businesses.
The companies would default on these indebtedness. Judges in Moldova then constructed court rulings enforcing judgments against the firms. This allowed Russian bank account to transfer huge sums to Moldova legally. From there, the money went to accounts in Latvia with Trasta Komercbanka.
Deutsche, Germanys biggest lender, acted as a correspondent bank for Trasta until 2015. This entail Deutsche provided dollar-denominated services to Trastas non-resident Russian clients. This service was used to move fund from Latvia to banks across the world.
During this period many Wall Street banks get out of Latvia, citing concerns that the smaller Baltic country had become a centre for international fund laundering, especially from neighbouring Russia.
In 2013, and under US regulatory pressure, JP Morgan Chase ceased dollar clearing services to the country.
From 2014, merely two western lenders were willing to accept international dollar transfers from Latvian banks. They were Deutsche and Germanys Commerzbank. Deutsche eventually receded correspondent services to Trasta Bank in September 2015.
Six months later, Latvian regulators shut down the bank. They quoth repeated violations, and said the bank had failed to deal with its money laundering risk.
