New York state financial regulators slapped Deutsche Bank with a $150 million penalty for the bank’s “significant compliance failures” in its dealings with late financier Jeffrey Epstein, the accused child sex trafficker.
Deutsche Bank failed to properly monitor Epstein’s account activity, regulators said Tuesday, including processing hundreds of transactions totaling millions of dollars that should have prompted additional scrutiny.
The New York State Department of Financial Services said its penalty was the first enforcement action by a regulator against a financial institution for dealings with Epstein.
According to the department, the bank’s failings included not scrutinizing payments to Epstein’s publicly alleged co-conspirators in sexually abusing young women; payments to Russian models; payments for women’s school tuition, hotel and rent expenses; direct payments to numerous women with Eastern European surnames (which were consistent with prior public allegations of wrongdoing); settlement payments totaling over $7 million, as well as dozens of payments to law firms totaling over $6 million for apparent legal expenses for Epstein and his co-conspirators.
There were also periodic suspicious cash withdrawals from Epstein’s account that failed to prompt scrutiny — in total, more than $800,000 over approximately four years.
Deutsche Bank agreed to the financial penalties as part of a consent order with the Department of Financial Services “for significant compliance failures in connection with the Bank’s relationship with Jeffrey Epstein and correspondent banking relationships with Danske Bank Estonia and FBME Bank,” according to Linda Lacewell, the state superintendent of financial services.
Epstein, 66, died last August in a federal jail in Manhattan from what authorities ruled was a suicide by hanging after being denied bail in his criminal case.
Last week, Epstein’s alleged procurer and former girlfriend, Ghislaine Maxwell, was arrested on federal charges while holed up at a $1 million getaway in New Hampshire. Maxwell, 58, was later transported by authorities to New York City. Her first court appearance in Manhattan federal court is set for July 14.
Deutsche Bank AG, its New York branch, and Deutsche Bank Trust Company America all agreed to the penalty, and the Department of Financial Services commended the bank for its “exemplary cooperation” over several years of investigation. That cooperation included “conducting comprehensive and thorough internal investigations of each of those former relationships [with Epstein, Danske Bank, and FBME] and sharing the results of those investigations with the Department in a detailed and transparent manner,” according to the consent order.
“We acknowledge our error of onboarding Epstein in 2013 and the weaknesses in our processes, and have learnt from our mistakes and shortcomings. Immediately following Epstein’s arrest, we contacted law enforcement and offered our full assistance with their investigation,” said a spokesperson for Deutsche Bank.
Adiel Kaplan contributed.