New York's Department of Financial Services announced it.
July 7, 2020, 1:34 PM
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Deutsche Bank has agreed to pay $150 million in penalties over its relationship with Jeffrey Epstein as part of a consent order with regulators in New York, the state’s Department of Financial Services said Tuesday.
The multinational investment bank headquartered in Frankfurt, Germany, "failed to properly monitor account activity conducted on behalf of the registered sex offender despite ample information that was publicly available concerning the circumstances surrounding Mr. Epstein’s earlier criminal misconduct," the New York State Department of Financial Services said.
Handout provided by the Florida Department of Law Enforcement of Jeffrey Epstein posing for a sex offender mugshot after being charged with procuring a minor for prostitution on July 25, 2013.Handout provided by the Florida Department of Law Enforcement of Jeffrey Epstein posing for a sex offender mugshot after being charged with procuring a minor for prostitution on July 25, 2013.Florida Department of Law Enforcement via Getty Images
Deutsche Bank reportedly processed millions of dollars worth of transactions that should have prompted additional scrutiny in light of Epstein's history, regulators allege.
Some red flags that should have been looked into include payments to individuals who were publicly alleged to have been conspirators in Epstein's abuse of young women, settlement payments totalling over $7 million, and payments to law firms in excess of $6 million for what appears to be legal expenses, the agency added. Moreover, his account included suspicious cash withdrawals totaling more than $800,000 over approximately four years.
The department alleges the "substantive failure" was compounded by a series of "procedural failures, mistakes, and sloppiness" in how the bank oversaw and managed Epstein's accounts.
"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,” Superintendent Linda Lacewell said in a statement.
"In each of the cases that are being resolved today, Deutsche Bank failed to adequately monitor the activity of customers that the Bank itself deemed to be high risk," Lacewell added. "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."
A branch of the German bank Deutsche Bank pictured with a sculpture of the 'Gutenberg' monument, Feb. 1, 2018, in Frankfurt, Germany.A branch of the German bank Deutsche Bank pictured with a sculpture of the 'Gutenberg' monument, Feb. 1, 2018, in Frankfurt, Germany.Thomas Lohnes/Getty Images
New York Governor Andrew Cuomo said in a separate statement that, "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," Cuomo said. He pledged that New York 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."
The move from New York financial regulators comes less than a week after Ghislaine Maxwell, the former companion of Jeffrey Epstein, was arrested by the FBI in New Hampshire.
This is a developing story. Please check back for updates.