1MDB Tanore

Facilitating money laundering

In a testimony in 2021 in the Tanore-1MDB trial, we were made aware of several moves that revealed how USD 1 billion was moved in 2 tranches to sham PetroSaudi beneficiaries back in 2009. These moves may be construed as underhand tactics.

The Central Bank of Malaysia was roped in to facilitate the approvals necessary for Deutsche Bank to effect the transfers.

The original approval, in writing, was to enable the transfer of monies to an account of 1MDB PetroSaudi in the Banca Della Svizerra Italiana SA (BSI).

The day when Deutsche Bank was to remit the funds to BSI, there came another instruction from 1MDB that the monies were to be remitted not to BSI, but to 2 separate accounts in 2 tranches.

Here's the clincher: There were no beneficiaries named by 1MDB in both the remittance advice to the 2 accounts in 2 different banks : USD 300 million to JP Morgan SA and USD 700 million to RBS Coutts Bank Ltd.

Deutsche Bank remitted the funds to the 2 banks, without the beneficiary names, as instructed. After being informed, verbally & by email, that the recipients were 1MDB PetroSaudi and PetroSaudi International Ltd, respectively.

And, miraculously, after a letter from the Central Bank of Malaysia approving the transfer to the 2 accounts, minus beneficiary names, was hand delivered to Deutsche Bank by a 1MDB officer.

But then the final recipient at RBS Coutts was Good Star - owned by the infamous Jho Low.

Admittedly, the AML/CFT regime has made some strides since 2009.

Here's a question (or questions) to ponder: In anti-money laundering compliance, how effective is the AML/CFT due diligence screening? If your institution just 'facilitates the transfer of money', could you be cavalier? If your financial institution receives the remittance instruction without the beneficiary's name, could you insist on blocking the remittance, regardless of where the instruction comes from?

It's a lot easier to pick the bones after the vultures have been at the carrion.

I was once told by a Chief Compliance Officer that he may not have a job tomorrow if he 'blocked things'. I didn't ask for 'further clarification'.

To bring things to the present with respect to Deutsche Bank (DB), in an Opinion And Order by the US District Court of New York in 2022, the following was stated regarding Compliance in DB:

"The Complaint alleges that eleven confidential witnesses (“CWs”) who worked in DB’s compliance functions have informed counsel that DB’s AML & KYC procedures did not work as described. They further allege that the Bank’s executives and management board routinely overruled compliance staff so that the Bank’s wealth management business could commence or continue relationships with high-risk, ultra-rich clients ..."