The New York State Department of Financial Services (DFS) imposed $150 million in penalties on Deutsche Bank due to “significant compliance failures” related to its dealings with the late billionaire and sex offender Jeffrey Epstein.
The penalty is also in connection with Deutsche Bank’s relationships with Danske Bank Estonia and FBME Bank.
Deutsche Bank knows about Epstein’s “terrible criminal history”
According to DFS Superintendent Linda Lacewell, the German investment bank and financial services company agreed to pay the $150 million in penalties under a Consent Order.
In a statement, Lacewell said Deutsche Bank “failed to adequately monitor” the activities of its customer,s including Epstein, whom it considers to be high risk.
In Epstein’s case, the DFS determined that Deutsche Bank failed to properly monitor transactions that were conducted on his behalf despite its knowledge of his “terrible criminal history.”
According to the New York State regulator, Deutsche Bank “processed hundreds of transactions totaling millions of dollars that should have prompted additional scrutiny” since Epstein is a registered sex offender. Such transactions include:
- 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.
- Periodic suspicious cash withdrawals — in total, more than $800,000 over approximately four years.
Deutsche Bank’s failures related to its foreign bank clients
The DFS also determined that “Deutsche Bank failed to monitor the activities of its foreign bank clients, Danske Estonia and FBME, with respect to their correspondent and dollar clearing business.”