Deutsche Bank has been hit with $150 million in penalties for its longtime financial relationship with now-deceased convicted sex offender and financier Jeffrey Epstein, New York state regulators announced Tuesday.
The New York Department of Financial Services said the multinational investment bank based in Germany agreed to the massive settlement due to its “compliance failures in connection with the Bank’s relationship” with Epstein and “correspondent banking relationships” with Danske Bank Estonia and FBME Bank. The regulatory body said that this agreement “marks the first enforcement action by a regulator against a financial institution for dealings” with Epstein.
“Banks are the first line of defense with respect to preventing the facilitation of crime through the financial system,” Superintendent of Financial Services Linda Lacewell said Tuesday. ”In the case of Jeffrey Epstein in particular, despite knowing Mr. Epstein’s terrible criminal history, the Bank inexcusably failed to detect or prevent millions of dollars of suspicious transactions.”
Epstein, a registered sex offender, was arrested in July 2019 on federal sex trafficking and conspiracy charges for allegedly abusing girls as young as 14. The 66-year-old was found dead in his Manhattan prison cell in August, which the New York City medical examiner determined to be a suicide. The 14-page indictment against Epstein alleged that he sexually exploited dozens of minors at his homes in Manhattan and Palm Beach, Florida, among other locations, between 2002 and 2005 and perhaps beyond. Some of the victims were allegedly as young as 14 at the time the crimes occurred. Epstein allegedly “created a vast network of underage victims for him to sexually exploit” and “maintained a steady supply of new victims.”
The New York financial regulators’ press release noted that Deutsche Bank “failed to properly monitor account activity conducted on behalf of the registered sex offender despite ample information that was publicly available concerning the circumstances surrounding Mr. Epstein’s earlier criminal misconduct.” The regulators said that “the result was that the Bank processed hundreds of transactions totaling millions of dollars that, at the very least, should have prompted additional scrutiny in light of Mr. Epstein’s history.”
Among the suspicious actions taken by Epstein and ignored by the bank were: “payments to individuals who were publicly alleged to have been Mr. Epstein’s co-conspirators in sexually abusing young women”; “settlement payments totaling over $7 million, as well as dozens of payments to law firms totaling over $6 million for what appear to have been the legal expenses of Mr. Epstein and his co-conspirators”; “payments to Russian models, payments for women’s school tuition, hotel and rent expenses, and (consistent with public allegations of prior wrongdoing) payments directly to numerous women with Eastern European surnames”; and “periodic suspicious cash withdrawals — in total, more than $800,000 over approximately four years.”
Ghislaine Maxwell, a 58-year-old British socialite who was Epstein’s on-again, off-again girlfriend and longtime associate, was arrested by the FBI on Thursday on charges that she conspired with Epstein in the sexual abuse of minors. The charging document said that “as a part and in furtherance of their scheme to abuse minor victims,” Maxwell and Epstein “enticed and caused minor victims to travel to Epstein’s residences in different states,” including Epstein’s New York City mansion, his Palm Beach estate, his New Mexico ranch, and Maxwell’s London apartment, which Maxwell “knew and intended would result in their grooming for and subjection to sexual abuse” by Epstein,” the document added.
The 38-page consenting order signed by the State of New York and Deutsche Bank on Tuesday provided more detail about Epstein’s financial activities.
“The Bank’s fundamental failure was that, although the Bank properly classified Mr. Epstein as high-risk, the Bank failed to scrutinize the activity in the accounts for the kinds of activity that were obviously implicated by Mr. Epstein’s past,” the agreement said. “The Bank was well aware not only that Mr. Epstein had pled guilty and served prison time for engaging in sex with a minor but also that there were public allegations that his conduct was facilitated by several named co-conspirators. Despite this knowledge, the Bank did little or nothing to inquire into or block numerous payments to named co-conspirators, and to or on behalf of numerous young women, or to inquire how Mr. Epstein was using, on average, more than $200,000 per year in cash.”
The New York financial regulators said that “whether or to what extent those payments or that cash was used by Mr. Epstein to cover up old crimes, to facilitate new ones, or for some other purpose are questions that must be left to the criminal authorities, but the fact that they were suspicious should have been obvious to Bank personnel at various levels.” They concluded that “the Bank’s failure to recognize this risk constitutes a major compliance failure.”
The New York Attorney general’s Office, led by Letitia James, opened an investigation into President Trump’s relationship with Deutsche Bank in 2019 following testimony from former Trump lawyer and now convicted felon Michael Cohen. Democratic-led House committees and a New York district attorney are also seeking Trump’s financial information from Deutsche Bank. The Supreme Court will rule on whether to grant any of them access in the coming days.
