Exclusive Exclusive: German Banks Entangled in Malaysia Money Laundering Scandal

Deutsche Bank and Frankfurt-based BHF Bank are entangled in a money laundering scandal involving the Malaysia state investment fund 1MDB, Handelsblatt has learned. Acting on false information, Deutsche Bank executed a transaction of $700 million (€636 million) that was misappropriated from 1MDB, according to the U.S. Justice Department. The U.S. Justice Department also found $55 million in a BHF account that originated from 1MDB. Mohamed Badawy Al Husseiny, former head of the Gulf investment fund Aabar, was the beneficiary. Mr. Al Husseiny led a shell company in the British Virgin islands used by 1MDB to divert transactions, according to U.S. authorities. Malaysian Prime Minister Najib Razak founded the investment fund in 2009. U.S. authorities allege that $3.5 billion in 1MDB funds were misappropriated and laundered through accounts in Singapore, Switzerland and the United States. Although the U.S. authorities named both Deutsche Bank and BHF in the investigations, they have made no allegations of wrongdoing against the two financial institutions. Read the full story in Handelsblatt Global Edition on Friday. Picture source: Reuters