German police search Deutsche Bank offices in connection with Panama Papers case

A total of 170 officers from the Frankfurt public prosecutor's office were involved in the raid on Thursday

The investigation centres on allegations that Germany's biggest lender helped clients set up offshore companies in tax havens to "transfer money from criminal activities" to Deutsche Bank accounts, the Frankfurt prosecutor's office said.

German police raided Deutsche Bank offices on Thursday, seeking evidence in a money laundering investigation into the practice of hiding money offshore, to elude tax collectors and government regulators.

The Panama Papers were a leak of millions of financial documents obtained from Panamanian law firm Mossack Fonseca which were leaked to the press in 2016.

Deutsche Bank said it was "fully cooperating" with the authorities on the case which it said was "related to the Panama Papers".

They also said Deutsche Bank employees are alleged to have breached their duties by neglecting to report money laundering suspicions about clients and offshore companies involved in tax evasion schemes.

"We confirm that the police are now conducting an investigation at a number of our offices in Germany", Deutsche Bank said in a statement.

"Just when you thought Deutsche Bank had left it's legal troubles behind it, there's more", said Markus Riesselmann, an analyst at Independent Research who recommends investors sell Deutsche Bank shares.

In September, Germany's financial supervisor BaFin took the unusual step of embedding auditors from KPMG at Deutsche to monitor the bank's progress in battling illegal transactions such as money laundering, terrorist financing and dealings with organised crime.

The bank's shares dropped by 2.7 percent on news of the investigation.

In 2016 alone, more than 900 customers are alleged to have transferred some 311m euros to one such company set up in the British Virgin Islands, she said. A Deutsche Bank executive director has said the lender played only a secondary role as a so-called correspondent bank to Danske Bank, limiting what it needed to know about the people behind the transactions. "The investigation relates to the Panama Papers". In the past, Deutsche Bank has acknowledged that its anti-money laundering efforts have fallen short of financial rules.

Deutsche Bank has been under pressure after annual losses, and it agreed to pay a $7.2 billion settlement with US authorities a year ago over its sale of toxic mortgage securities in the run-up to the 2008 financial crisis.

In April, John Cryan was replaced by Christian Sewing as CEO.

Deutsche Bank has been under pressure after three consecutive years of losses.



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