Deutsche Bank agreed to pay a $425 million penalty to settle allegations by NY’s Department of Financial Services that DB employees used a “mirror-trading scheme” to help wealthy Russians move $10 billion out of that country from 2011 through 2014. In addition to the financial penalty, the bank will have to hire an independent monitor, its 6th in the U.S.

Tuesday Update:  DB agreed to pay $204 million to settle with British regulators (the Financial Conduct Authority or FCA), relating to the illicit transactions. Both fines - by NYS and the U.K. - are the largest financial penalties levied by the respective regulators for AML violations.

DFS Superintendent Maria Vullo said in a written statement: “This Russian mirror-trading scheme occurred while the bank was on clear notice of serious and widespread compliance issues dating back a decade. The offsetting trades here lacked economic purpose and could have been used to facilitate money laundering or enable other illicit conduct, and today’s action sends a clear message that DFS will not tolerate such conduct.”

The New York regulator found that a close relative of a Deutsche Bank supervisor in Moscow received bribes worth a quarter million dollars so that the supervisor would clear the trades.

The bank is also expected to reach a similar agreement as soon as Monday evening with the U.K.’s Financial Conduct Authority that will include an additional penalty of several hundred million dollars, a person familiar with the matter said.

Meanwhile, federal prosecutors are still pursuing a criminal investigation into whether the German lender’s internal controls failed to pick up the scheme, people with knowledge of the matter have said.

MIRROR TRADES.    Regulatory probes determined that mirror trades allowed Deutsche Bank counterparties in Russia to buy local blue-chip shares for rubles, while the same stocks would be sold in London for dollars. Although such trades are legal in some cases, U.S. Justice Department prosecutors were examining whether Deutsche Bank broke AML protocols by not properly vetting them. An internal audit by Deutsche Bank found a “systemic” failure in internal controls meant to prevent money laundering and financial crime.

Since its internal audit, Deutsche Bank has cut much of its operation in Russia. It has also reorganized its regulation, compliance and anti-financial-crime operations into a new structure with a global overseer.