The U.S. Justice Department has settled a multi-billion-dollar civil lawsuit against Deutsche Bank, which ethics experts have cited as a potential conflict of interest for President-elect Donald Trump.
As VOA reported earlier this month, Germany’s largest bank is a major lender to Trump’s real estate empire, providing at least $364 million for Trump hotel and golf course developments in the last four years.
The Justice Department took Deutsche Bank to court, alleging it had defrauded investors into buying risky mortgage securities before the U.S. housing market collapse in 2008.
Deutsche Bank and the department have been in settlement talks for months. The case is one of two involving the bank that ethics experts say pose a dilemma for the incoming administration. The other is an ongoing inquiry into the bank’s role in enabling Russian investors to move billions of dollars out of that country using stock transactions called “mirror trades.”
In a statement released Friday, Deutsche Bank said it agreed to pay $7.2 billion, including a $3.1 billion penalty, or half the $14 billion the department had demanded to settle the mortgage security allegations. The agency has settled similar cases with other banks and filed a new one Thursday against Britain's Barclays Bank.
The agreement with Deutsche Bank is expected to be finalized before Trump is sworn in on January 20, the Reuters news agency reported, citing a source close to the bank. A Justice Department spokesman did not respond to a request for comment.
Deutsche Bank has long served as a dependable lender to the Trump Organization, the umbrella company for President-elect Trump’s myriad commercial real estate and other businesses.
According to a 2016 financial disclosure Trump filed with government ethics authorities in connection with his presidential run, his organization owes Deutsche Bank at least $364 million, including a $170 million loan to redevelop Washington’s Old Post Office Building for his line of Trump-branded luxury hotels.
Trump has said he'll hand over control of his company to his two adult sons, Eric and Donald Trump, Jr., but has resisted growing calls to put his assets in a blind trust while he serves in the White House. A press conference that had been scheduled for December 15 to address the conflicts was postponed until next month.