Fed fines Deutsche Bank $41M over money laundering controls

By MARCY GORDON Markets Associated Press

The Federal Reserve has fined Germany's largest bank $41 million for failure to maintain controls against money laundering in its U.S. operations.

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The U.S. regulators announced the penalty against Deutsche Bank on Tuesday, citing "unsafe and unsound practices." The global bank also agreed to an order requiring it to improve oversight by senior management in complying with anti-money-laundering laws in the U.S. operations.

The action follows $629 million in penalties levied against Deutsche Bank in January by New York state and British regulators for lapses in controls that allowed wealthy Russians to allegedly launder about $10 billion in illicit funds through the bank.

"We are committed to implementing every remediation measure referenced in the Fed's order and to meeting their expectations," Deutsche Bank said in a statement Tuesday.

According to the New York state regulators, the bank's oversight lapses allowed some clients in Russia to engage in a sham securities-trading scheme that moved money out of that country and into offshore accounts.

With the FBI and two congressional committees investigating Russian interference in the 2016 election, the enforcement actions against Deutsche Bank have spurred Democrats in Congress to ask for more extensive investigations of the bank. A group of senior House Democrats, led by Rep. Maxine Waters of California, have asked the Republican-led House Financial Services Committee to examine the alleged Russian money-laundering operation. Waters is the senior Democrat on the committee.

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Waters also said an investigation of the operation by the Justice Department raises questions of integrity because Attorney General Jeff Sessions had two encounters, last summer and fall, with the Russian ambassador. Sessions previously recused himself from a Justice Department investigation into potential ties between Russia and Donald Trump's presidential campaign.

In a letter last week, Waters and her colleagues asked Deutsche Bank CEO John Cryan for information on the Russian money-laundering scheme and on the bank's reported review of the personal accounts of Trump and his family members.

Deutsche Bank is one of Trump's biggest lenders. He owes the bank about $300 million related to his real estate holdings.

Bank spokesmen declined to comment Tuesday on Waters' request.