Anti-money laundering specialists at Deutsche Bank flagged multiple transactions involving Donald Trump and his son-in-law, Jared Kushner, from 2016 and 2017. Those specialists recommended the activity be reported to the federal government's financial crimes unit, The New York Times reported Sunday.
But top executives at the global financial giant rejected that advice, current and former employees told The Times.
The transactions that came under review "set off alerts in a computer system designed to detect illicit activity," five current and former Deutsche Bank employees told The Times. Those transactions were then reviewed by the bank's compliance staff, who prepared suspicious activity reports that they felt should be sent to the U.S. Treasury Department.
Those reports were never filed, The Times reported, adding that the nature of the transactions was unclear, though at least some of them involved foreign entities or individuals, which raised red flags with bank employees. The Times noted that those red flags "did not necessarily mean the transactions were improper."
Over the past few years, Deutsche Bank has been punished by both U.S. and European authorities for its role in money laundering schemes, paying hundreds of millions in fines as a result. The bank has a substantial relationship with Trump, as it was the only major financial institution to continue lending to Trump after he went through a financial downturn in the 1990s. Deutsche Bank lent Trump and his businesses more than $2.5 billion and, when he became president, the bank held more than $300 million in Trump's debt.
“We have increased our anti-financial crime staff and enhanced our controls in recent years and take compliance with the (anti-money laundering) laws very seriously," Kerrie McHugh, a Deutsche Bank spokeswoman, said in a statement. "An effective (anti-money laundering) program requires sophisticated transaction screening technology as well as a trained group of individuals who can analyze the alerts generated by that technology both thoroughly and efficiently."
"At no time was an investigator prevented from escalating activity identified as potentially suspicious," she said. "Furthermore, the suggestion that anyone was reassigned or fired in an effort to quash concerns relating to any client is categorically false."
Tammy McFadden, a former anti-money laundering specialist at Deutsche Bank who reviewed some of the transactions, told The Times that she was moved to a different department at the bank after she raised the concerns before she was fired last year.
"You present them with everything, and you give them a recommendation, and nothing happens," McFadden told The Times. "It’s the D.B. way. They are prone to discounting everything."
In 2016, McFadden reviewed a series of transactions involving Kushner's real estate company, Kushner Companies, that were flagged by the bank's software system. McFadden told The Times that she found that money had moved from the real estate company to Russians and felt the transactions needed to be reported to the Treasury Department — particularly as Deutsche Bank had come under intense scrutiny for its involvement in Russian money laundering schemes.
But bank managers in New York felt McFadden's concerns were unwarranted and did not send a report to the federal government, employees told The Times.
Then, after Trump became president, an internal anti-financial crime team reviewed the president's transactions and "produced multiple suspicious activity reports involving different entities that Mr. Trump owned or controlled," three former bank employees who saw the reports told The Times.
The reports involved Trump's LLC's and the now-defunct Trump Foundation. But, as The Times reported, the bank chose not to file those reports as well.
Trump responded to the story in a lengthy series of Monday tweets. The president accused news outlets of "writing phony stories about how I didn't use many banks because they didn't want to do business with me."
"WRONG!" Trump continued. "It is because I didn't need money. Very old fashioned, but true. When you don't need or want money, you don't need or want banks. Banks have always been available to me, they want to make money."
Trump added, "Now the new big story is that Trump made a lot of money and buys everything for cash, he doesn’t need banks."
"But where did he get all of that cash?" Trump wrote. "Could it be Russia? No, I built a great business and don’t need banks, but if I did they would be there...and Deutsche Bank.....was very good and highly professional to deal with — and if for any reason I didn't like them, I would have gone elsewhere....there was always plenty of money around and banks to choose from. They would be very happy to take my money. Fake News!"
Congress and the New York attorney general are investigating Trump's relationship with the bank and have subpoenaed the financial institution for records related to the president, his family, and their businesses. Deutsche Bank has begun turning over documents to the New York attorney general, while Trump and his family last month sued Deutsche Bank to block it from producing records to House Democrats.
A spokesperson for the Trump Organization told NBC News, "We have no knowledge of any ‘flagged’ transactions with Deutsche Bank," adding that the company has "no operating accounts with Deutsche Bank."
Emily Wolf, general counsel for Kushner Companies, said, "Any allegations regarding Deutsche Bank’s relationship with Kushner Companies which involved money laundering is completely made up and totally false."
House Democrats quickly highlighted the report.
"As more and more damning evidence against @realDonaldTrump comes into public view, it becomes clear why he is hiding information from the American people and blowing off Congress," Rep. Ted Lieu, D-Calif., tweeted. "If Congress cannot gather evidence, we need to seriously consider an impeachment inquiry."
"This report makes Congress’s investigations of Trump’s shadowy finances more pressing," Rep. Bill Pascrell, D-N.J., tweeted. "The bank has even more questions to answer and Congress needs to hear from this whistleblower."