FILE PHOTO: A statue is pictured next to the logo of Germany's Deutsche Bank in Frankfurt, Germany September 30, 2016. REUTERS/Kai Pfaffenbach/File Photo

BERLIN (Reuters) - Frankfurt prosecutors have dropped an investigation into two Deutsche Bank DBKGn.DE employees accused of aiding tax evasion through a former Virgin Islands unit, although they have fined the lender for compliance lapses.

In a two-day raid a year ago, 170 police officers searched Deutsche Bank’s headquarters in Frankfurt, hitting its share price just as management was battling with losses and a string of other financial and regulatory scandals.

Sources close to the investigation said as recently as July that prosecutors were set to escalate the investigation, planning raids on wealthy former clients after searching the homes of eight people in May.

Deutsche Bank said on Friday, however, that the Frankfurt prosecutor’s office had now closed the case due to a lack of suspicion. It was hit with 15 million euros ($16.5 million) in fines and forfeits to make amends for the shortcomings in its compliance setup.

“With the closure of these proceedings it is clear that the prosecutors have not found any instances of criminal misconduct on the part of Deutsche Bank employees following the raid of our Frankfurt office in November 2018,” Deutsche Bank spokesman Joerg Eigendorf said in a statement.

“The investigation that has now been closed due to lack of sufficient suspicion had a heavy impact on Deutsche Bank last year,” he added. “It is true that the bank had weaknesses in its control environment in the past. We identified these weaknesses and we have addressed them in a disciplined manner.”

The proceedings were linked to German client interactions with offshore entities set up by the bank’s Virgin Islands subsidiary Regula Ltd. The subsidiary was sold by Deutsche Bank in March 2018.

In a separate statement, the prosecutor’s office said the fines were imposed over the failure to promptly report suspected money laundering related to Regula; inadequate high-level oversight and understaffing of the bank’s anti-money-laundering team from 2015 until early 2018.

Even though it dropped its investigation into the two Deutsche Bank staffers, the prosecutor’s office said it would continue to investigate German customers of Regula that it suspects of tax evasion.