Deutsche Bank will pay $150 million in penalties for its failure to properly monitor Jeffrey Epstein's account activity, despite "ample" evidence of suspicious transactions from the registered sex offender, New York regulators announced on Tuesday.
In the settlement, the New York Department of Financial Services said that the multinational investment bank had processed hundreds of transactions from Epstein that should have garnered additional scrutiny.
Those included payments to individuals who had been publicly accused as Epstein's co-conspirators in sexually abusing young women; payments for women's tuition, hotel and rent expenses; and suspicious cash withdrawals totaling more than $800,000.
Much of that money was sent through "The Butterfly Trust," which was set up for Epstein by Deutsche Bank, and which distributed $2.65 million through 120 wire transfers, including to known co-conspirators between 2014 and 2018, according to the consent order.
"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 state's superintendent of financial services, said in a statement.
This settlement marks the first major enforcement action against a financial institution for its dealings with Jeffrey Epstein, who was found dead in his jail cell while awaiting in trial in Manhattan last summer. It comes just days after federal prosecutors announced the indictment of Ghislaine Maxwell, Epstein's longtime companion and alleged facilitator in abusing underage girls.
On Tuesday, Governor Andrew Cuomo said that Deutsche Bank had been aware of Epstein's predatory conduct, but "continued to excuse that history and lend their credibility or services for financial gain."
When the bank did eventually drop Epstein in 2018, his "relationship manager" at the bank wrote glowing reference letters to other financial institutions, indicating he was "unaware of any problems relating to the operation or use of [the] accounts."
In a memo to staff on Tuesday, Deutsche CEO Christian Sewing acknowledged that taking Epstein on as a client in 2013 was "a critical mistake and should never have happened."
"It is our duty and our social responsibility to ensure that our banking services are used only for legitimate purposes," he added.
The Frankfort-based bank has been the subject of a string of regulatory scandals in recent years, including for its role in a sprawling Russian money-laundering scheme said to have moved close to $80 billion between the Kremlin and western financial system in recent years.
Deutsche is also Donald Trump's biggest creditor, lending him more than $2 billion prior to his election as president. Congressional Democrats have subpoenaed those financial records from the bank — believed to include tax returns of Trump's family — which the president has sought to block.
The U.S. Supreme Court is expected to rule on that case this week.
