Deutsche Bank to pay $150M penalty for suspicious handling of Epstein accounts

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A flag for Deutsche Bank flies outside the German bank’s New York offices on Wall Street, Oct. 7, 2016. (AP / Mark Lennihan)

ALBANY, N.Y. (NEWS10) — Deutsche Bank will pay a $150 million penalty for mishandling the accounts of Jeffrey Epstein. Imposed by New York’s Department of Financial Services, this is the first enforcement by a regulator against a financial institution for dealings with Epstein, the notorious sex trafficker who reportedly died by suicide while under police surveillance in August 2019.

Superintendent of Financial Services Linda A. Lacewell made the announcement Tuesday morning.

“Deutsche Bank failed to adequately monitor the activity of customers that the Bank itself deemed to be high risk. 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.”

Linda A. Lacewell
Superintendent of Financial Services

Deutsche Bank did not properly monitor the registered sex offender’s account despite widely-known public information about Epstein’s criminal misconduct. The bank specifically processing millions of dollars that should have triggered additional scrutiny, including:

  • Payments to individuals publicly alleged to be Epstein’s co-conspirators in sexual abuse
  • Over $13 million in settlements and legal expenses
  • Payments to Russian models
  • Payments for women’s school tuition, hotel, and rent expenses
  • Payments directly to women with Eastern European surnames (consistent with public allegations of prior wrongdoing)
  • Periodic suspicious cash withdrawals totaling over $800,000 in about four years

According to the Department of Financial Services, very few problematic transactions were questioned, and those that were usually were dismissed without clear justification. Procedural failures, mistakes, and sloppiness characterized the way the bank managed Epstein’s accounts, and conditions that could have detected or prevented suspicious transactions from Epstein were misinterpreted, side-stepped, or ignored.

Gov. Andrew Cuomo released a statement responding to the news:

“No matter how rich, how big or how powerful an institution you are, predatory behavior of any type will not be tolerated in New York. For years, Mr. Epstein’s criminal, abusive behavior was widely known, yet big institutions continued to excuse that history and lend their credibility or services for financial gain.”

Andrew Cuomo
Governor of New York

Deutsche Bank and its New York branch agreed to pay the penalties for “significant compliance failures,” not only in overseeing Epstein’s accounts, but those of Danske Bank Estonia and FBME Bank as well. In massive financial scandals, those international financial institutions laundered billions, with Danske Bank Estonia doing so for Russian oligarchs.

According to the Associated Press, Deutsche Bank revealed in court papers in Aug 2019 that it has tax records Congress is seeking in an investigation into President Donald Trump’s finances.

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