Deutsche Bank’s “referral fees,” China’s corruption death sentence and more

Deutsche Bank’s ‘referral fees’ actually bribes

For nearly seven years, Deutsche Bank paid millions of dollars to consultants in countries like Saudi Arabia, the United Arab Emirates, Italy and China in what authorities are calling bribes to politically connected fixers to gain access to foreign officials. Deutsche Bank often listed these bribes as “referral fees” in the bank’s records. (See Deutsche Bank Will Pay $125 Million Over Bribery Violations, by Matthew Goldstein and David Enrich, The New York Times, Jan. 8.)

According to the article, the U.S. Justice Department and the U.S. Securities Exchange Commission (SEC) found in an investigation that Deutsche Bank had made about $7 million in improper payments to foreign fixers between 2009 and 2016, earning about $35 million from the resulting deals.

The bank avoided having to plead guilty in the criminal component of the investigation by entering into a deferred prosecution agreement with the Justice Department and by agreeing to pay more than $125 million. (The fine also resolved the civil component of the SEC’s investigation.)

Corruption conviction becomes death sentence in China

Lai Xiaomin, previously chairman of one of China’s “big four” state-controlled asset management firms, China Huarong Asset Management Co, has been sentenced to death in a high-profile bribery, embezzlement and bigamy case. (See China sentences top banker to death for corruption and bigamy, by Helen Davidson and agencies in Taipei, The Guardian, Jan. 5.)

According to the article, Lai had been accused of soliciting nearly 1.79 billion yuan (US$276.7 million) in bribes over 10 years, when he was acting as a regulator. The Tianjin court said Lai had abused his position, including taking bribes to get people jobs, promotions or contracts. Lai also was found guilty of bigamy and of embezzling more than 25 million yuan in public funds.

The death sentence for Lai came without the commonly added two-year reprieve that allows death sentences to be commuted to 25 years, or life in prison after two years, according to the article.

New U.S. anti-money laundering law cracks down on antiquities trade

On Jan. 1, the U.S. Senate overrode former President Trump’s veto of the National Defense Authorization Act for 2021, a bill that includes a new law requiring antiquities dealers to comply with the requirements of the Bank Secrecy Act. (See Lawmakers Are Cracking Down on the ‘Unregulated’ US Art Market. Here’s How New Anti-Money Laundering Law Will Affect Dealers, by Eileen Kinsella, artnet news, Jan. 6.)

According to the article, one requirement involves identifying and registering the true owner of a limited liability company — the “ultimate beneficial owner.” This makes it harder for collectors and investors to use offshore entities and shell companies to conceal their true identities when executing art trades.

The new regulations also could extend beyond the antiquities market, according to the article. The Treasury Department is expected to complete a study this year on whether there’s evidence of money laundering in the broader art market.