Deutsche Bank Raided in Money-Laundering Scandal

Two unnamed suspects, clients funneled more than $350 million in unreported cash through shell companies in the British Virgin Islands.

German police officers and other officials swarmed Deutsche Bank’s Frankfurt offices on Thursday regarding money-laundering transactions dating back to 2013.

Officers seized documents from the bank’s headquarters and five other properties, one of which was a worker’s home.

German prosecutors based their action on an investigation revolving around a money-laundering scandal in documents dubbed the “Panama Papers,” and “Offshore Leaks,” a collaborative investigation between the International Consortium of Investigative Journalists and other media companies. This exposed massive global money-laundering practices.

The Panama Papers and other documents charged that Deutsche Bank had set up shell companies in tax havens for clients, and money generated from crimes valued at more than $350 million, was not reported.

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“As far as we are concerned, we have already provided the authorities with all the relevant information regarding Panama Papers,” Deutsche Bank said in a statement via Twitter, acknowledging the raid. “Of course, we will cooperate closely with the public prosecutor’s office in Frankfurt, as it is in our interest as well to clarify the facts.”

The scheme’s suspects are two Deutsche Bank employees aged 50 and 46, and other unnamed individuals. The money was transported to shells in the British Virgin Islands.

The Panama Papers are a collection of documents from a law firm that specialized in shell companies for extremely wealthy individuals. Owning a shell company, which is a fictitious business that only exists on paper for the means to hold assets anonymously, is not illegal. In fact, almost anyone can set up an offshore shell company for about $1,000. Due to their secretive nature, shells have been used as vehicles for crooked financial activities.

“More details will be communicated as soon as these become known,” Deutsche Bank said.

In Frankfurt, the bank’s shares were down 3.4% by close of trading Thursday.

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CDPQ, Colombia to Launch Private Equity Infrastructure Fund

Platform will invest up to $1 billion in Colombian infrastructure projects and companies.

Canada’s C$308.3 billion ($232.7 billion) pension fund Caisse de dépôt et placement du Québec (CDPQ) and Colombia’s finance ministry are collaborating with local pension fund companies to create a 3 trillion peso ($926 million) private equity fund to invest in domestic infrastructure, with a focus on energy.

CDPQ said the objective of the joint investment platform is to make long-term equity investments in infrastructure projects and companies. The investments will be made in the energy and renewable energy sectors, transportation, social infrastructure, telecommunications, water, and basic sanitation.

“This partnership combines our partners’ market knowledge with our expertise in infrastructure,” said CDPQ CEO Michael Sabia in a release. “We believe that together, we can find the best investment opportunities in a variety of sectors, generate returns for our respective pensioners and at the same time contribute to economic growth in Colombia.”

Investments in the private capital fund will come from Colombian financial firm the Financiera de Desarrollo Nacional (FDN) and local pension fund administrators, and will be managed by an FDN affiliate.  FDN is an independent private company tasked with arranging the investors and resources necessary to help develop the country’s infrastructure.

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The FDN and Colombian pension fund administrators have created a new private capital fund of $490 million, which will invest with CDPQ through a platform to make capital investments of up to $1 billion in infrastructure projects and companies. CDPQ will contribute up to $510 million, with the minimum size of each investment set at $50 million divided between the fund and CDPQ.

“With this private fund, capital will be invested in infrastructure, with the support of all Colombian pension fund administrators, who will be able to make long-term equity investments in projects and companies,” said FDN President Clemente del Valle in a release. “This is a leap for the country in the field of infrastructure financing.”

The investment processes of the private investment capital fund will be conducted by a wholly-owned FDN subsidiary. Investors in the private capital fund will include the FDN, with up to 20% of the total, and the remaining 80% will come from Colombian pension fund manager Colfondos, insurance firm Old Mutual, Grupo Aval-owned pension fund administrator Porvenir, and Protección.

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