Deutsche Bank was slapped with a $150 million penalty Tuesday for failing to monitor Jeffrey Epstein’s accounts even though he faced widespread sex trafficking allegations.
The troubled German bank did not scrutinize hundreds of transactions totaling millions of dollars by Epstein between 2013 and 2018 despite clear warning signs they could be linked to crimes, New York state’s Department of Financial Services said.
“Banks are the first line of defense with respect to preventing the facilitation of crime through the financial system, and it is fundamental that banks tailor the monitoring of their customers’ activity based upon the types of risk that are posed by a particular customer,” Financial Services Superintendent Linda Lacewell said.
“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.”
The shady transactions included payments to Epstein’s alleged enablers, more than $7 million in settlement payments and $6 million payments to law firms along with payments to Russian models, for women’s school tuition, hotel and rent expenses, and payments to “numerous women with Eastern European surnames,” the agency said.
Epstein also made “periodic suspicious cash withdrawals” totaling more than $800,000 over four years, according to the Department of Financial Services.
The state probe found that Deutsche Bank failed to follow proper protocols for monitoring the Epstein account. In general, the problems were exacerbated by a “series of procedural failures, mistakes, and sloppiness” the state agency said.
“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,” Gov. Andrew Cuomo said.
“While Washington has routinely looked the other way when it comes to punishing financial institutions, New York and the Department of Financial Services will continue to take its role as a strong regulator seriously and will use every possible tool to protect New Yorkers from predatory behavior in all its forms.”
Epstein, a financier worth around $630 million, hanged himself last year in a Lower Manhattan jail cell while awaiting trial for sex trafficking. Epstein’s alleged chief enabler, Ghislaine Maxwell, was charged last week with enticing underage girls to travel for sex.
The penalty is the latest sign of trouble at Deutsche Bank. It has faced scrutiny during President Donald Trump’s administration for serving as his primary lender for development projects when no other bank would touch him. The bank agreed to pay a $2.5 billion fine in 2015 for a conspiracy to rig a benchmark interest rate.
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