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NY state penalizes Deutsche Bank $150M for Epstein dealings

NY state penalizes Deutsche Bank $150M for Epstein dealings
Posted at 12:59 PM, Jul 07, 2020

NEW YORK (AP) — New York state says Deutsche Bank has agreed to pay $150 million to settle claims that it broke compliance rules in its dealings with the late sex offender Jeffrey Epstein.

The penalty was announced in an agreement Tuesday by Superintendent of Financial Services Linda A. Lacewell.

“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 Lacewell said in the press release. “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. 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 release said the agreement marked the first enforcement action by a regulator against a financial institution for dealings with the financier.

Epstein killed himself last August in a Manhattan federal jail while awaiting trial on sex trafficking charges.

In a statement, the German bank said the settlement reflected its cooperation.

Deutsche Bank CEO Christian Sewing addressed the bank's staff in a press release stating that taking Epstein on as a client in 2013 "was a critical mistake and should never have happened."

"I would like to thank our colleagues involved for their determined handling of these cases and the internal investigations, which the DFS acknowledged as 'exemplary,'" Sewing said in a press release. "At the same time, we all have to help ensure that this kind of thing does not happen again. It is our duty and our social responsibility to ensure that our banking services are used only for legitimate purposes. That's exactly why we should always examine things critically, ask questions, and speak up. I also recommend that you read the DFS consent order and the client Q&A so that we are aware of our mistakes and learn the appropriate lessons from the past."

It said it has significantly boosted its anti-financial crime capabilities.

The state also found that other payments went to Russian models and for women’s school tuition, hotel, and rent expenses, as well as suspicious cash withdrawals — in total, more than $800,000 over approximately four years.