NY fines Deutsche Bank for dealings with Epstein

Firm to pay $150M settlement over suspicious transactions

Payments to his alleged co-conspirators. Money wired to Russian models. A cash withdrawal of $100,000 for “tips and household expenses.”

When Jeffrey Epstein moved his money, Deutsche Bank did not ask many questions.

In a $150 million settlement announced Tuesday, the New York Department of Financial Services said that Epstein, a convicted sex offender, engaged in suspicious transactions for years, even though Deutsche Bank had deemed him a “high risk” client from the moment he became a customer in the summer of 2013.

According to the release, the agreement marked the first enforcement action by a regulator against a financial institution for dealings with the financier.

A year and a day after Epstein was arrested on federal sex-trafficking charges, the settlement described how bank employees relied on informal meetings and institutional momentum to allow suspicious activity to proceed largely unchecked. Instead of performing appropriate due diligence on Epstein and the activity in his accounts, regulators wrote, the bank was focused on his potential to “generate millions of dollars of revenue as well as leads for other lucrative clients.”

Deutsche Bank acknowledged that it had erred in bringing Epstein on as a client and that its processes had been weak.

“Our reputation is our most valuable asset and we deeply regret our association with Epstein,” a bank spokesman, Daniel Hunter, said in a statement.

According to regulators, Epstein, who killed himself in a jail cell in New York last year while awaiting trial, sent $2.65 million in 120 wire transfers through accounts established in the name of an entity called the Butterfly Trust. Some of those payments — as well as money from other accounts — went to three people who had been named as co-conspirators in suits by Epstein’s accusers that were related to his 2008 guilty plea to prostitution charges in Florida.

Regulators did not name the co-conspirators in the settlement document. The settlement, citing published reports, describes the first two as having invoked their Fifth Amendment rights and the third as having been accused of recruiting girls for Epstein.

Four women were named as potential co-conspirators in the nonprosecution agreement Epstein reached with federal prosecutors that led to his plea to state charges in 2008. Another woman — Ghislaine Maxwell, a confidante and business associate of Epstein — was charged last week by federal prosecutors with helping him recruit and groom teenage girls he abused at his residences in Florida, New Mexico and New York.

Epstein left behind an estate valued at over $600 million that is the subject of litigation by Denise George, the attorney general of the U.S. Virgin Islands, where Epstein had lived and worked for nearly two decades. George has sued the estate, alleging that a company Epstein established there was a sham operation that Epstein used to mislead the territory and receive a lucrative tax break.