NEW YORK — Deutsche Bank has agreed to pay a $150 million penalty for "significant compliance failures" in their relationship with Jeffrey Epstein, according to the New York State Department of Financial Services.
According to a statement, the bank failed to properly monitor account activity given that Epstein was a registered sex offender, which was made public from earlier criminal misconduct.
Epstein killed himself in a Manhattan jail last August while he awaited trial on federal sex trafficking charges.
“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 of the New York State Department of Financial Services Linda A. Lacewell said in a statement. "Despite knowing Mr. Epstein’s terrible criminal history, the bank inexcusably failed to detect or prevent millions of dollars of suspicious transactions.”
Lacewell said that the bank processed "hundreds of transactions totaling millions of dollars" including payments to publicly alleged co-conspirators, for settlements totaling over $7 million, to law firms for over $6 million, to Russian models education and personal expenses and for "periodic suspicious cash withdrawals totaling more than $800,000 over four years."
The Department of Financial Services said the bank was sloppy and had a series of failures and mistakes in how it managed the Epstein accounts.
Tuesday's announcement marks the first enforcement action by a regulator against a financial institution for dealings with Epstein.
Part of the agreement also acknowledges Deutsche Bank's banking relationship with Danske Bank Estonia and FBME Bank.
In a statement, New York Gov. Andrew Cuomo praised the work of the state's Department of Financial Services.
"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," Cuomo said in a statement. "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."
