NEW YORK — Deutsche Bank agreed to pay US$202 million to settle civil fraud charges brought by the federal government over the practices of a subsidiary it acquired five years ago, authorities announced Thursday.
A federal judge in Manhattan approved the deal reached by representatives of the Frankfurt, Germany-based bank and the government. Under the agreement, Deutsche Bank AG admitted that it didn’t follow all federal housing regulations when it made substantial profits between 2007 and 2009 from the resale of risky mortgages through its subsidiary MortgageIT.
According to the agreement, Deutsche Bank admitted that it was in a position to know that MortgageIT’s operations did not conform fully to all of the government’s regulations, policies and handbooks. The subsidiary employed more than 2,000 people at branches in all 50 states. The bank agreed to pay US$202.3 million to the U.S. Department of Justice within a month.