Deutsche Bank settles over ignored red flags on Epstein

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 Epstein, a convicted sex offender, had engaged in suspicious transactions for years, even though Deutsche Bank deemed him a “high risk” client from the moment he became a customer in summer 2013.

A year and a day after Epstein was arrested on federal sex-trafficking charges, the settlement described how bank employees had 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 taking Epstein on as a client and that its processes had been weak.

The settlement provides a glimpse into the mysterious finances of the self-described tax guru and financial adviser.

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.