EP’S SLEAZE COSTS BANK
$150M fine for looking other way
Deutsche Bank was slapped with a $150 million penalty Tuesday for failing to monitor Jeffrey Epstein’s accounts despite widespread sex trafficking allegations against him and blatant shady conduct.
The troubled German bank did not scrutinize hundreds of transactions totaling millions of dollars by Epstein using more than 40 accounts between 2013 and 2018, the New York State Financial Services Department said. The bank gave only a cursory look to a steady stream of suspicious movements of money from the multimillionaire financier to Russian models, lawyers and accused enablers, among other people.
The registered sex offender, the agency determined, was spending on average more than $200,000 in cash a year.
A Deutsche Bank executive even visited Epstein at his Upper East Side mansion in January 2015 to inquire about recent allegations that he’d abused around 40 underage girls. The executive “appeared to be satisfied by Mr. Epstein’s response,” state investigators wrote, noting that no contemporaneous records on the meeting existed.
In another outrageously shady move, an attorney for Epstein made 97 withdrawals at a Park Ave. branch of Deutsche Bank of $7,500 each — the bank’s limit for third-party withdrawals. When asked what the money was for, the attorney replied, “Epstein used it for travel, tipping and expenses,” according to a 38-page agreement between New York and the bank.
In May 2014 the attorney even asked “how often he could withdraw cash on behalf of Mr. Epstein without triggering an alert,” according to the report. Deutsche Bank had no record of a response.
“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 legal settlements and $6 million to law firms. Money went to Russian models and women with Eastern European surnames for school tuition and hotel and rent expenses, the agency said.
Epstein also made “periodic suspicious cash withdrawals” totaling more than $800,000 over four years, according to the Financial Services Department.
The state probe found that Deutsche Bank failed to follow proper protocols for monitoring the accounts belonging to Epstein, who was a “high-risk client.” 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. 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 was worth about $630 million when he 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.
“We acknowledge our error of onboarding Epstein in 2013 and the weaknesses in our processes. We have learnt from our mistakes and deeply regret our association with Epstein,” Deutsche Bank said. “Immediately following Epstein’s arrest, we contacted law enforcement and offered our full assistance with their investigation. The settlement reflects our unreserved and transparent cooperation with our regulator.”