Prosecutors in Dusseldorf have uncovered what is being called the largest money-laundering scheme in German history.
Investigators suspect an international trading company, Trans World Group (TWG), of laundering over DM15 billion (£6 billion) through western European banks. They have uncovered more than DM7 billion (£2.8 billion) which passed through at least three leading German banks.
TWG allegedly laundered over £1.5 billion through a German bank, WestLB, alone according to the newspaper Die Welt. The money was transferred over the last three years from the United Global Bank in Samoa.
A spokesman for TWG told The Irish Times last night that the company was not aware of any money-laundering investigation.
"Trans World is a properly run company with properly audited accounts and financial records. It has not been and is not involved in money-laundering," said the spokesman, who talked on condition of anonymity.
Germany's Association for Public Banking warned its members against dealing with TWG in a letter last November, citing money-laundering allegations in other countries.
After receiving this letter, representatives of WestLB bank shut down the suspect account and approached investigators, who assured the bank it is not at risk of prosecution.
"If anything, the bank is on the side of the abused," said the chief prosecutor, Mr Michael Schwarz.
He declined to name the other German banks in the money-laundering investigation, but said it involved sums of money "in the region of millions and billions".
Earlier investigations into the company revealed a complex network of holding companies in Bermuda, Cyprus and the Cayman Islands. Under German money-laundering legislation, banks are obliged to "treat suspected money-laundering activities with special attention" and have a legal obligation to report any such transactions.
A spokesman for the German government reacted with "complete surprise" to media reports yesterday that the government had known of the laundering scheme for months.
According to a report in Spiegel-online, the government "tried to hide the affair under the blankets because of foreign political implications."
Investigators believe that a large proportion of the money laundered through German banks came from a daughter firm of TWG in the Virgin Islands. The activities of TWG's two Russian representatives, Mr Mikhail Chernoy and his brother, Lev, are also being studied.
