New York state financial regulators fined Deutsche Bank $150 million Tuesday for “significant compliance failures” in its dealings with accused pedophile sex-trafficker Jeffrey Epstein.
It is the first penalty levied against a financial institution for ties to the billionaire, a registered sex offender who died in jail last summer but whose lecherous legacy continues to unravel.
The New York State Department of Financial Services said that “mistakes and sloppiness” allowed Epstein to conduct hundreds of transactions totaling millions of dollars that should have triggered extra scrutiny.
Regulators described Epstein’s transactions as “suspicious” and accused Deutsche Bank of failing to properly monitor account activity by a registered sex offender “despite ample information that was publicly available” about his earlier wrongdoing.
Epstein became a Deutsche Bank client in 2013, five years after he pleaded guilty in Florida to soliciting a prostitute who was a minor and registering as a sex offender.
Authorities last week arrested Epstein confidante Ghislaine Maxwell, who is accused of recruiting girls to be sex slaves for Epstein and his wealthy friends.
She is currently locked up in a New York jail awaiting her first court appearance, scheduled for Friday.
Christopher Mason, a British television star and journalist who has known Ms. Maxwell since the 1980s, told The Daily Mail that she likely has videotapes of Epstein’s friends having sexual relations with the girls and will use those tapes to cut a deal.
“If Ghislaine goes down, she’s going to take the whole damn lot of them with her,” he said.
Some of the people who came forward with claims against Epstein say they were trafficked to high-profile political and business leaders. Virginia Giuffre, who has an accusation against Epstein, said in an unsealed deposition that she was trafficked to Britain’s Prince Andrew, former Senate Majority Leader George Mitchell, former New Mexico Gov. Bill Richardson and others.
All have denied wrongdoing.
Sen. Ben Sasse, Nebraska Republican, hailed the Deutsche Bank fine as an important step in the investigation.
“Deutsche Bank turned a blind eye to blatant misdealing and suspicious transactions from a known sexual predator,” he said in a statement. “Those who aided Epstein and ignored his disgusting history must pay the price. It’s important that officials continue digging into Epstein’s dark past to make sure his accomplices are brought to justice.”
The suspicious Deutsche Bank transactions included payments to individuals who have been accused of having facilitated Epstein’s alleged trafficking of girls and victim settlements totaling $7 million. Other payments to Russian models, school tuition for multiple women and hotel expenses to numerous women with Eastern European last names also should have been flagged, New York regulators said.
Additional “suspicious” cash withdrawals by Epstein totaling more than $800,000 should have raised concerns among bank officials, regulators said.
“Despite knowing Mr. Epstein’s terrible criminal history, the bank inexcusably failed to detect or prevent millions of dollars of suspicious transactions,” Linda Lacewell, superintendent of New York State Department of Financial Services, said in a statement.
Deutsche Bank, Germany’s largest financial institution, said in a statement that it immediately contacted law enforcement to offer assistance after Epstein’s arrest.
But it also acknowledged it made an “error” by opening a business relationship with him.
“Our reputation is our most valuable asset and we deeply regret our association with Epstein,” the bank said.
Deutsche Bank said since Epstein’s arrest it has invested nearly $1 billion in training, controls and operational processes and added more than 1,500 employees to its financial crimes team.
Epstein died in August 2019 in a federal jail in Manhattan while awaiting trial on federal sex-trafficking charges. His death was ruled a suicide by hanging.
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