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BACKGROUND
In 2015, Deutsche Bank performed an investigation of its own
internal policies, meant to combat money laundering and
financial crime.
It found ‘Systemic Failures’ in this regard.
Between 2011 and 2015, these ‘systemic failures’ allowed over $10
billion dollars to leave Russia, through Deutsche Bank.
This was done through MIRROR TRADING
MIRROR TRADING
IGOR VOLKOV,
BROKER AT
DEUTSCHE BANK
TRANSFER OWNERSHIP
OF STOCK FROM
COMPANY A TO
COMPANY B
BUY $10M WORTH OF
STOCK IN RUBLES, FOR
RUSSIAN COMPANY A
REPEAT EVERY SINGLE
DAY.
SELL THE STOCK FOR $,£,
OR € FROM OFFSHORE
COMPANY B
COMPANY A AND B HAVE THE SAME OWNER!
WHY?
TO GET MONEY OUT
OF RUSSIA
Roubles
Stock
WHO CARES?
Dollars
Sterling
Euros
Lots of the money is suspected to belong to wealthy Russians who are under
sanction from the US government for financial crimes, and crimes relating to
the Ukraine.
ED CAESAR
Studied English at
Edinburgh University.
Started in work
experience at The
Independent newspaper,
moved onto features
writing for The Sunday
Times.
Now full-time freelance,
on the back of a book
deal.
HOW DID THE INVESTIGATION BEGIN?
Ed spoke with a source at Deutsche Bank who he already knew.
The story was already known, it had been revealed in an Deutsche Bank internal
investigation into their own practices.
Wanted to tell ‘A deeper story, in a more granular way’
Pitched it as ‘a process story’. A way of making an internal banking report more
accessible to non-financial audience.
Asking HOW is the money getting here? Everyone knows (or believes) that there is
shady money flowing into London, but HOW is it actually getting there?
TIME AND COST
A SEVEN MONTH INVESTIGATION
Reporting from three countries:
Moscow
Atlanta, New York
London
Company Record Searches in the British Virgin islands and Cyprus, to identify the
companies that were buying and selling the stock
SOURCES
Started with one previously known source.
Start ‘like a child. You don’t know anything and you just build up a picture’.
Drew a diagram on a piece of paper of the make-up of the Moscow desk and then
used LinkedIn, email, phone, WhatsApp to fill in the gaps
NO PGP/PRIVACY – WhatsApp recommended.
Common sense – flattery – soft approach – don’t talk about on/off the record.
‘Make it easy to say yes’
A two pronged approach – ask one source to introduce you to another before making
contact.
Print outs, delivered in person
Finished with 14 ex-DB employees, most of them anonymous
DANIEL ZALEWSKI,
FEATURES EDITOR AT THE NEW YORKER
Good working relationship already established.
Kept in regular contact, mainly through email
and phone, looking at potential trips to be made,
directions to explore.
‘One of the best, if not the best, story editors in
the world.’
‘Such a good sense of how stories should flow,
what should follow what’
GAPS/DIFFICULTIES IN THE INVESTIGATION
Tim Wiswell, American head of the DB
Moscow desk
Fired from DB, whereabouts currently
unknown, last seen in Indonesia.
Multiple emails, phone calls,
contact through friends, paid a
local journalist to look for him.
Wiswell knew that Caesar was looking
for him, but avoided any contact.
A colleague in the article refers to him
as ‘finance’s Edward Snowden’
(unfair on Snowden perhaps!)
GAPS/DIFFICULTIES IN THE INVESTIGATION
What else would have benefited the story?
Information of how high the practice went
Corruption at higher levels
The piece was criticised in Bloomberg for not explaining how the ownership of
the stocks was transferred between companies.
Caesar defended this on the grounds that it was technical, boring and unproblematic (and was in fact briefly addressed in the piece)
IMPACT OF THE STORY
Got a lot of interest in Russia. Recirculated and reported on a lot in the
Russian press.
Bloomberg wrote a
very similar story,
released on Monday
October 3, as more of
a profile piece on Tim
Wiswell – with no new
information offered!
Written by a threeperson team, they
also failed to track
Wiswell down.
ED CAESAR’S PROCESS + TIPS
Has no specific topics that he covers – other people think he’s crazy
Reads and speaks to a lot of people
Get up to speed as quickly as possible on your subject
Flatter your sources – ‘you know everything, I know nothing’
Found this investigation relatively straightforward but has encountered
difficulties in others (Witanhurst) – keep looking, keep persevering
THANK YOU
ANY QUESTIONS?