Bank that lent $300m to Trump linked to Russian money laundering scam

Deutsche Bank among western institutions that processed billions of dollars in cash of criminal origin through Latvia

The German bank that loaned $300m (260m) to Donald Trump played a prominent role in a money laundering scandal run by Russian criminals with ties to the Kremlin, the Guardian can reveal.

Deutsche Bank is one of dozens of western financial institutions that processed at least $20bn and possibly more in money of criminal origin from Russia.

The scheme, dubbed the Global Laundromat, ran from 2010 to 2014.

Law enforcement agencies are investigating how a group of politically well-connected Russians were able to use UK-registered companies to launder billions of dollars in cash. The companies made fictitious loans to each other, underwritten by Russian businesses.

The companies would default on these debts. Judges in Moldova then made court rulings enforcing judgments against the firms. This allowed Russian bank accounts 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 meant Deutsche provided dollar-denominated services to Trastas non-resident Russian clients. This service was used to move money from Latvia to banks across the world.

During this period many Wall Street banks got out of Latvia, citing concerns that the small Baltic country had become a centre for international money laundering, especially from neighbouring Russia.

In 2013, and under US regulatory pressure, JP Morgan Chase ceased providing dollar clearing services to the country.

From 2014, only two western lenders were willing to accept international dollar transfers from Latvian banks. They were Deutsche and Germanys Commerzbank. Deutsche eventually withdrew correspondent services to Trasta Bank in September 2015.

Six months later, Latvian regulators shut down the bank. They cited repeated violations, and said the bank had failed to deal with its money laundering risk.

Source: http://www.theguardian.com/us

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