The US Department of Justice has launched a probe against German lender Deutsche Bank to examine the latter’s role in the 1MDB Malaysian state fund scandal, reported the Wall Street Journal.
Through the investigation, the US agency aims to assess whether the bank breached foreign corruption or anti-money laundering laws during its dealings with 1MDB.
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According to the report, the probe is being aided by ex-Goldman Sachs banker Tim Leissner, who has been charged by the US and Malaysian authorities over the 1MDB scandal and later pleaded guilty.
Earlier this month, Leissner was banned for life from the financial services sector by the Securities and Futures Commission in Hong Kong over the scandal.
The Justice Department is focusing on the role of Tan Boon-Kee, who previously worked with Leissner on 1MDB dealings.
After quitting Goldman Sachs, Boon-Kee joined Deutsche Bank as Asia Pacific head of banking for financial institutions clients. At Deutsche Bank she was responsible for handling 1MDB-related matters.
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By GlobalDataShe eventually departed from Deutsche Bank after revelations of her connection with Malaysian financier Jho Low, who is said to have played a central role in the 1MDB case.
“Deutsche Bank has cooperated fully with all regulatory and law-enforcement agencies that have made inquiries relating to 1MDB,” a bank spokesperson stated.
The spokesperson further said that 1MDB made “material misrepresentations and omissions to Deutsche Bank officials” that is consistent with the bank’s own findings.
The investigation adds to the recent list of woes at Deutsche Bank, which has been struggling to improve its profitability after consecutive losses.
Following several failed turnaround attempts, the bank entered into negotiations with local rival Commerzbank for a merger of their businesses.
However, the talks soon collapsed.
Currently, Deutsche Bank is looking to set up a €50bn bad bank a move that has drawn attention from US regulators.
On Monday Deutsche Bank unveiled plans to slash around 18,000 jobs as part of a massive restructuring.
Instead, the bank now intends to focus on its wealth management business.
