DEUTSCHE BANK — $150 MILLION FINE NY Department of Financial Services — July 7, 2020
The New York State Department of Financial Services (DFS) fined Deutsche Bank $150 million for "significant compliance failures" in connection with its relationship with Jeffrey Epstein and two other clients.
BANKING RELATIONSHIP: Deutsche Bank maintained a banking relationship with Epstein from 2013 to 2018 — notably, this entire period was AFTER his 2008 conviction for soliciting a minor and his registration as a sex offender. JPMorgan Chase had dropped Epstein as a client in 2013, after which Deutsche Bank took over his accounts.
COMPLIANCE FAILURES: DFS found that Deutsche Bank processed hundreds of transactions totaling millions of dollars that should have triggered enhanced scrutiny under anti-money laundering and know-your-customer regulations. Suspicious transactions included: — Payments to individuals who were publicly alleged to have been Epstein's co-conspirators — Regular payments to numerous women with Eastern European surnames — Payments to law firms and private investigators, some of whom were reportedly used to intimidate victims — Cash withdrawals aggregating over $800,000 over approximately four years
INSTITUTIONAL KNOWLEDGE: DFS found that despite knowing Epstein was a convicted sex offender, Deutsche Bank opened his accounts without adequate due diligence. Senior bank officials approved the relationship based on expected revenue generation rather than appropriate risk assessment.
The fine represented the first major regulatory action against a financial institution for its role in facilitating Epstein's activities and established a precedent that banks could face consequences for ignoring red flags associated with sex trafficking.