Federal prosecutors are investigating Deutsche Bank’s role in a scheme that looted a Malaysian government fund, drawing the troubled German bank into a scandal that has already ensnared an American competitor, Goldman Sachs.
Deutsche Bank released a statement on Wednesday saying it had cooperated fully with all inquiries related to the fund, 1Malaysia Development Berhad, or 1MDB.
According to a person with knowledge of the matter who was not authorized to speak publicly, the inquiry is focused on a former Deutsche Bank employee who worked with Tim Leissner, a former Goldman partner who pleaded guilty to bribery and money-laundering charges. Those charges stem from Mr. Leissner’s role in funneling money out of 1MDB, a state infrastructure fund that Malaysia’s former prime minister and some of his associates raided for personal use.
The investigation into Deutsche, first reported by The Wall Street Journal, adds to the bank’s many problems; it is under scrutiny for its links to a money-laundering scheme in Denmark, and for potentially failing to report suspicious transactions by President Trump’s son-in-law, Jared Kushner. The bank announced on Monday that it would lay off 18,000 people around the world as part of a huge restructuring that will sharply shrink its Wall Street presence.
The bank’s statement on Wednesday noted that in a civil filing seeking to recover assets taken from 1MDB, the Justice Department said the fund had made “material misrepresentations and omissions to Deutsche Bank officials” — meaning the bank was also a victim in the scandal.
According to the person with knowledge of the inquiry, federal prosecutors have asked for information about Tan Boon-Kee, a banker who left Goldman after working with Mr. Leissner on 1MDB deals and joined Deutsche Bank in Hong Kong. Deutsche helped 1MDB raise $1.2 billion in 2014. By then, Goldman had decided that working with the fund was too risky.
Ms. Tan has since left the bank. She could not be reached for comment.
Some of Mr. Leissner’s other former colleagues have already been drawn into the 1MDB case. His deputy at Goldman, Roger Ng, pleaded not guilty this year to charges related to his role in the scheme. Prosecutors have also described — but not named or charged — Mr. Leissner’s boss, Andrea Vella, as a co-conspirator.
Goldman is also a subject of the inquiry. The bank, which did three fund-raising deals with 1MDB worth more than $1 billion each, is expected to begin settlement negotiations with the Justice Department soon over its role.