Financial regulators in New York on Tuesday confirmed that Deutsche Bank had agreed to pay $150 million for failing to properly monitor and regulate suspicious activity of infamous sex offender Jeffrey Epstein.
A consent order detailing the settlement agreement between the German-based bank and New York’s Department of Financial Services revealed that Deutsche Bank executives were well aware of Epstein’s prior conviction and “well-publicized reputation related to the trafficking and abuse of young women” when they began doing business with him in 2013.
According to the agreement, the bank properly classified Epstein as a “high-risk” client, but didn’t take necessary precautions and didn’t examine suspicious transactions associated with exorbitant cash spending.
“The Bank was well aware not only that Mr. Epstein had pled guilty and served prison time for engaging in sex with a minor but also that there were public allegations that his conduct was facilitated by several named coconspirators. Despite this knowledge, the Bank did little or nothing to inquire into or block numerous payments to named co-conspirators, and to or on behalf of numerous young women, or to inquire how Mr. Epstein was using, on average, more than $200,000 per year in cash,” the agreement stated.
The department said it was unsure to what extent “those payments or that cash was used by Mr. Epstein to cover up old crimes, to facilitate new ones, or for some other purpose are questions that must be left to the criminal authorities, but the fact that they were suspicious should have been obvious to Bank personnel at various levels,” calling the oversight a “major compliance failure.”
Tuesday’s settlement is the first financial regulatory action taken against an institution over its relationship with Epstein, an ultra-wealthy financier whose fortune remains shrouded in mystery to this day.
“Despite knowing Mr. Epstein’s terrible criminal history, the bank inexcusably failed to detect or prevent millions of dollars of suspicious transactions,” Linda Lacewell, the department’s superintendent, said in a statement to the New York Times.
Epstein died in Aug. 2019 while in federal custody at the Metropolitan Correctional Center in Manhattan. Authorities said that the 66-year-old’s death was the result of suicide by hanging. Epstein’s death occurred not long after a federal judge denied bail in his criminal case. Epstein was facing charges of child sex trafficking and conspiracy to commit child sex trafficking.
Ghislaine Maxwell, Epstein’s alleged madam and former girlfriend, was arrested last week in New Hampshire and is now facing federal charges related to her alleged role in Epstein’s crimes. Maxwell is 58.
Read the full consent agreement below:
[image via Stephanie Keith/Getty Images]
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