Deutsche Bank AG only alerted authorities in February about 1.1 million illicit transactions at Denmark's Danske Bank A/S, roughly five years after a whistleblower reported suspicious money transfers, source told Reuters.
The German lender flagged the suspicious transactions to the German money laundering data authority and local prosecutors, which are now investigating whether the bank's staff or management sanctioned the deals, according to the report.
Deutsche was reported to have processed the majority of the suspect transactions for Danske, prompting German authorities to raid the former's Frankfurt headquarters in September seeking information related to the Estonian money laundering scandal. In April, the German bank's U.S. unit was reported to have rebuffed employee warnings about some of the deals it was handling for Danske.
The German prosecutors have also met with their Estonian counterparts in recent weeks and are now investigating a small fraction of the money transfers that were flagged by Deutsche, the source said. Deutsche's bankers could be subject to potential criminal prosecution if found guilty in sanctioning and of covering up the deals.
However, gap taken to report the transactions is not likely to result in a fine for Deutsche, as its correspondent role was secondary to Danske, Reuters reported.
Deutsche said it ended its correspondent relationship with the Danish lender in 2015 and told Reuters that it has spent €700 million in strengthening its anti-money laundering systems since 2016.