New York state financial regulators announced on Tuesday that it would be hitting Deutsche Bank with a $150 million penalty for what it described as “significant compliance failures” in the bank’s relationship with late financier and convicted pedophile Jeffrey Epstein.
Essentially, the major German bank gave Epstein the freedom to move large amounts of money as he pleased while they turned a blind eye to the obviously criminal nature of his transactions.
The New York State Department of Financial Services stressed that the move was totally unprecedented and marked the first time regulators had imposed such penalties on a financial institution for dealing with the accused child sex trafficker.
The notorious registered sex offender committed suicide in dubious conditions last August while in a Manhattan jail just one month after he was arrested for sexually exploiting dozens of women and under-aged girls. The disgraced 66-year-old financier was intensely well-connected with elite political and business figures across the globe.
Deutsche Bank failed to properly monitor Epstein’s account, allowing millions of dollars to be transferred in suspicious transactions despite Epstein’s monstrous criminal record requiring such additional scrutiny, reports NBC.
“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,” state Governor Andrew Cuomo said in a statement. “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.”
Despite Deutsche Bank's knowledge of Epstein's criminal history, they failed to prevent millions of dollars in suspicious transactions.
No matter how rich, how big or how powerful an institution you are, predatory behavior of any kind will not be tolerated in New York. https://t.co/Rd8HJHb60K
— Andrew Cuomo (@NYGovCuomo) July 7, 2020
Numerous red flags were ignored by Deutsche Bank when dealing with Epstein, whom the bank itself saw as a “high-risk client” due to their full knowledge of his sex trafficking and abuse charges, including his 2007 guilty plea to state prostitution charges. Regardless, the financial institution continued to process hundreds of transactions that were “obviously implicated” by Epstein’s past from August 2013 to December 2018, when the relationship ended amid a storm of negative press regarding his crimes.
According to the New York financial regulator, Epstein was able to pay of his alleged co-conspirators in the sexual abuse of young women. He was also able to pay off Russian models and directly pay likely victims with Eastern European surnames, pay settlements totaling over $7 million, and pay over $6 million in legal expenses to law firms connected with Epstein and his co-conspirators. Payments were also made for women’s school tuition, hotel, and housing expenses.
Additionally, Epstein made a number of “suspicious” cash withdrawals totaling approximately $200,000 per year.
Emails also showed that Deutsche Bank had weighed the risks of retaining Epstein as a client but ultimately shrugged them off due to his potential ability to generate millions of dollars in annual revenue, reports Reuters.
When the bank noticed suspicious payments to a Russian model and Russian publicity agent in 2017, the bank chose not to scrutinize the transactions. In one email, a compliance monitor said that “since this type of activity is normal for this client it is not deemed suspicious.”
#NEWS: #NYDFS Supt. @LindaLacewell announces #NYDFS imposes $150M penalty on Deutsche Bank in connection with the bank's relationship with Jeffrey Epstein & correspondent relationships with Danske Estonia & FBME Bank. Read more —> https://t.co/bRN1ZM6G5w
— NYDFS (@NYDFS) July 7, 2020
According to the New York financial agency, Epstein had over 40 accounts with the German institution including some that were specifically for his “Butterfly Trust,” which benefited his co-conspirators and facilitated payments to “further or coverup criminal activity and perhaps even to endanger more young women.”
In a memo, Deutsche Bank Chief Executive Christian Sewing admitted that retaining Epstein “was a critical mistake and should never have happened.”
“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,” a spokesperson for Deutsche Bank said in a statement.
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