The New York-based branch of German Deutsche Bank Trust Company Americas (DBTCA), had a significant relationship with PrivatBank during the time when the bank was owned by Ukrainian oligarchs who were allegedly embezzling and laundering depositors’ money into the U.S., according to Forensic News media outlet.
Igor Kolomoisky and Gennadiy Boholyubov, the former major stakeholders of PrivatBank, allegedly stole $5.5 billion and parked the vast sum overseas. According to now state-owned PrivatBank, $746 million of stolen money ended up in the U.S. In August, the Justice Department filed two civil forfeiture complaints that could allow it to seize $70 million worth of real estate.
Forensic News says that it obtained exclusive documents that prove extensive relationships between DBTCA and PrivatBank as of 2013, three years before the state discovered the fraud and nationalized the bank to save it from collapse.
2013 internal banking records show that PrivatBank maintained accounts at four bank-to-bank accounts at the DBTCA from four different jurisdictions – Ukraine, Cyprus, Latvia, and Switzerland.
PrivatBank had over $198 million in cash at these accounts. It was a “cash management” relationship wherein PrivatBank could convert their cash to the U.S. dollar in order to disburse in jurisdictions where the dollar is the primary currency, Forensic News writes.
The entry for PrivatBank’s Cyprus branch alone was DBTCA’s 12th largest foreign cash deposit amounting over $152 million, according to the estimations by Forensic News. The Cyprus branch played a central role in the money laundering scheme, according to the civil forfeiture complaints filed by the DOJ for real estate in Kentucky and Ohio.
PrivatBank’s Latvia branch used to hold a deposit amounting $39 million, the bank’s Switzerland branch – $6 million, and Ukraine branch – nearly $92,000.
DBTCA has a long history of facing fines for their lax money laundering systems, with a particular penchant to Russian and Ukrainian clients.
It has recently settled for over $580,000 with the Treasury Department for violating sanctions imposed on Russia for its aggression against Ukraine. DBTCA processed the purchase of fuel from a Cypriot company on a sanctions list. It was separately fined for processing payments from a Russian bank on the sanctions list after Russia annexed Crimea.
DBTCA rejected Forensic News’ request for comment.
In December 2019, PrivatBank filed a lawsuit against Israel’s Discount Bank accusing it of aiding Kolomoisky and Boholyubov in stealing at least $600 million from PrivatBank.
These millions were allegedly transferred into accounts that a shell company called St. John held at Discount Bank, according to Israeli court documents.
According to the PrivatBank’s lawsuit, Discount Bank had to understand that the transferred funds were of “toxic” origin.
The Kyiv Post asked PrivatBank whether it will sue DBTCA as it did with Israeli Discount Bank, but was told that the bank’s legal team cannot reveal their strategy.
