The beginning of the newly restructured Deutsche Bank may end up like every other iteration of the old struggling Deutsche Bank.
That’s because the giant German lender and would-be Master of the Universe, sometimes known simply as DB, who just announced 18,000 more layoffs as it downsizes, again, may be charged criminally for its involvement in the global 1MDB scandal.
Depending on what charges the U.S. Justice Department may file, and how big a fine Deutsche Bank may have to pay, the European Central Bank (ECB) may have to lend DB more money to not end up where it really belongs, in the history books.
With the biggest number of bank layoffs since the bankruptcy of Lehman, and a 10-year $17 billion tab in fines for regulatory failures and technically criminal activity, DB’s woes are anything but over.
ECB May Have to Save Deutsche Bank Again
According to the Wall Street Journal, DB’s looking cross-eyed down the barrel of the Justice Department’s bazooka for possibly violating foreign corruption and anti-money laundering laws in its work for the 1Malaysia Development Berhad fund, better known as 1MDB.
1MDB, a supposed sovereign wealth fund, had Goldman Sachs, Deutsche Bank, and others raise more than $6.5 billion for the fund, $4.5 billion of which the Justice Department says was maneuvered out of the fund, illegally, of course.
The stolen billions were used to pay bribes, line a slush fund for former Malaysian prime minister Najib Razak, as well as pay for hundreds of millions of dollars’ worth of art, jewelry, yachts, real estate, and the financing of a big Hollywood movie, The Wolf of Wall Street, ironically.
Tim Leissner, a former Managing Director at Goldman Sachs who worked raising money for 1MDB and apparently helped siphon off billions, has already pled guilty to criminal charges for his part in the scandal. He’s now cooperating with authorities, in order to get a reduced sentence.
For its part Goldman is facing criminal charges in Malaysia and has a hearing there on September 30th.
The Justice Department is looking into Goldman’s total involvement in the scheme and may face criminal charges and fines possibly as high as $10 billion.
Mr. Leissner, towards his sentencing goals, appears to have implicated DB in the scandal.
He might know where some bodies are buried at DB since his charge at Goldman Sachs, Tan Boon-Kee, left Goldman to become Asia-Pacific head of banking for financial institution clients at Deutsche Bank, where Ms. Tan worked on 1MDB business.
She’s since been let go by DB when they announced they’d discovered communications between Tan and Malaysian fake financier Jho Low, who the Justice Department describes as the central figure in the scandal.
How DB wouldn’t know that Jho Low and Tan weren’t in communication, when they had worked closely when Tan was at Goldman, and DB wanted a bigger piece of that business, which is why they hired Tan, is extraordinary.
But no more so than everything else going on at DB.
One indication DB may be in big trouble is how many times Deutsche Bank is mentioned in the Justice Department’s civil asset-forfeiture complaint detailing the 1MDB scheme, 167 times. Goldman Sachs is mentioned 56 times.
If Goldman faces possibly $10 billion in fines and has to plead guilty to criminal charges, Deutsche Bank may not be far behind.
Any fine amount close to that would force the ECB to flood DB with free money to keep the doors open.
That’s how important the European Central Bank is to the corrupt and inept banks it shepherds.
I bring all this up since we’ve heard this kind of story before but on our own shores just over 10 years ago.
In 2008, American taxpayers were forced to bail out incompetent businessmen responsible for the housing crisis.
Most American’s simply don’t know about the $72 billion being distributed across America right now.
Which means they’re missing out on $1,000 monthly average paydays.