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Deutsche Bank fined $150m over its Epstein 'compliance failures'

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Mistake: Deutsche Bank did business with Jeffrey Epstein despite knowing of his past

Mistake: Deutsche Bank did business with Jeffrey Epstein despite knowing of his past

Mistake: Deutsche Bank did business with Jeffrey Epstein despite knowing of his past

Deutsche Bank has admitted it made a "critical mistake" by taking on the registered sex offender Jeffrey Epstein as a client, and agreed to pay a $150m (€132.7m) fine to settle New York charges over its dealings with the late financier and two other banks.

Yesterday's settlement with the New York State Department of Financial Services is the first regulatory enforcement action against a bank related to Mr Epstein who committed suicide last August in a Manhattan jail, a month after his arrest for allegedly sexually exploiting dozens of girls and women.

"For years, Mr Epstein's criminal, abusive behaviour was widely known, yet big institutions continued to excuse that history and lend their credibility or services for financial gain," the governor of New York Andrew Cuomo said.

New York faulted Deutsche Bank's "significant compliance failures" in its dealings with Mr Epstein, as well as with Danske Bank's Estonia branch, which is embroiled in a money laundering scandal, and the Federal Bank of the Middle East (FBME).

It said Deutsche Bank considered Epstein "high-risk" and knew of his history of sex trafficking and abuse, including his 2007 guilty plea to state prostitution charges, yet still processed hundreds of transactions "obviously implicated" by his past.

These included payments to alleged accomplices, lawyers, victims, Russian models and women with Eastern European surnames. Also noted were Epstein's "periodic suspicious cash withdrawals - in total, more than $800,000 over approximately four years".

Epstein was a Deutsche Bank client from August 2013 to December 2018, when the relationship ended following additional negative press about his misconduct.

The New York settlement reflected Deutsche Bank's cooperation over several years.

"Onboarding [Mr Epstein] as a client in 2013 was a critical mistake and should never have happened," Deutsche Bank CEO Christian Sewing told staff in a memo yesterday.

The bank also acknowledged deficiencies in its monitoring of Danske Estonia and FBME.

"We all have to help ensure that this kind of thing does not happen again," Mr Sewing said.

Reuters

Irish Independent