- Ex-Promsberbank shareholder Alexei Kulikov suspected of fraud
- Deutsche Bank facing investigations over $10 billion in trades
A former shareholder of Promsberbank, a Russian lender whose license was revoked last year, was arrested in Moscow earlier this month as regulators probe trades handled by Deutsche Bank AG that may have been used to launder money, according to two people with knowledge of the investigation.
Alexei Kulikov was detained on March 3 for two months at the request of the Interior Ministry under suspicion of large-scale fraud, said Anastasia Dzyurko, a spokeswoman for Moscow’s regional Tverskoy court, declining to comment on the details of the case. His arrest is linked to transactions that involved the German lender, said the people, who asked not to be identified because they’re not authorized to speak with journalists.
Kulikov’s lawyer Dmitry Chesnov confirmed his client’s arrest and declined to comment further. Officials for the central bank and Interior Ministry declined to comment.
The arrest underscores a widening of the probe as regulators in the U.K. scrutinize the Deutsche Bank transactions and a criminal investigation in the U.S. explores whether the trades violated U.S. anti-money laundering rules, people familiar with the case have said. The transactions under scrutiny are for as much as $10 billion and include those in which trading in an account went consistently in one direction as well as so-called mirror trades, the people have said.
Trades under investigation involved an account at Promsberbank, according to people familiar with Deutsche Bank’s investigation.
A Deutsche Bank spokesman in Moscow declined to comment on Kulikov and reiterated that the lender continues to investigate trades that offset each other. The total volume of the transactions under review is significant and the bank has advised regulators and law enforcement authorities in several jurisdictions, including Germany, Russia, the U.K. and U.S. of this investigation, the spokesman said.
The bank has been examining several years of mirror trades -- in which clients bought shares in Russia and simultaneously sold similar shares abroad in foreign currency -- beginning in 2012, people with knowledge of the matter have said.
Russia’s central bank last year levied a small fine on Deutsche Bank after looking into some of the company’s trading in the country. The central bank found that Deutsche Bank was the victim of an illegal scheme, people with knowledge of the case said in December.
Promsberbank had its license revoked by the central bank last April for failing to follow federal banking laws and not maintaining enough capital.
Kulikov’s connection to the Deutsche Bank investigation was earlier reported by business daily RBC.