Epstein costs bank $204M

NEW YORK — Deutsche Bank will pay a $204-million fine from a New York regulator for allowing disgraced financier Jeffrey Epstein to make payments to Russian models and withdraw suspicious amounts of cash during five years as a client.

Tuesday’s settlement with New York state’s Department of Financial Services is the first such action against a bank related to Epstein.

The registered sex offender died in a Manhattan jail in August, a month after his arrest for allegedly sexually exploiting dozens of girls and women.

The fine is also another blow to Deutsche Bank’s reputation as it goes through a major restructuring after five years of losses totalling more than 15 billion euros ($23 billion).

“For years, Mr. Epstein’s criminal, abusive behaviour was widely known, yet big institutions continued to excuse that history and lend their credibility or services for financial gain,” New York Gov. Andrew Cuomo said in a statement.

New York found “significant compliance failures” in Deutsche Bank’s dealings with Epstein, who the bank had considered “high-risk.” It also knew of Epstein’s history of sex trafficking and abuse, including his 2007 guilty plea to state prostitution charges, yet ignored these “red flags” and processed hundreds of transactions “obviously implicated” by his past.

Email traffic showed that Deutsche Bank weighed the risks of retaining Epstein as a client but put them aside, enticed by the millions of dollars in annual revenue he might generate.