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Deutsche Bank fined $150 million for failing to properly monitor Epstein's accounts and transactions

"Our reputation is out most valuable asset and we deeply regret our association with Epstein," said a statement from the bank

Published: July 7, 2020 1:53pm

Updated: July 7, 2020 4:08pm

Deutsche Bank was fined $150 million Tuesday for allowed accused child-sex offender Jeffrey Epstein to conduct millions of dollars in business that should have been met with higher levels of scrutiny and told that its "mistakes and sloppiness" led the situation.

Officials say the bank's "significant compliance failures" led to Epstein, an investor who died last year behind bars, to being able to execute hundreds of transactions worth millions of dollars that should have been watched much more closely.

The fine makes Deutsche Bank the first financial institution to meet consequences pertaining to its dealings with Epstein. 

The late multi-millionaire, who died in prison in August 2019 while awaiting trial on federal charges of sex-trafficking, reportedly used Deutsche Bank to send payments to people who were known Epstein co-conspirators. Regulators say Deutsche Bank failed to monitor Epstein's account activity "despite ample information that was publicly available" pertaining to his criminal record. 

"Our reputation is out most valuable asset and we deeply regret our association with Epstein," said a statement from the bank.

The bank reportedly handled about 40 accounts related to Epstein and associates from August 2013 through December 2018. Deutsche purportedly stopped transaction upon learning through news accounts about a federal non-prosecution deal to which agreed in 2008 in Florida, related to sexually abused underage girls at his homes in Manhattan and Florida. Epstein served 13 months in a Florida state prison in connection with the agreement. 

In 2013, despite his criminal history, Deutsche Bank onboarded Epstein and then proceeded to "detect or prevent millions of dollars of suspicious transactions," said Linda Lacewell, New York State DFS superintendent. 

The Epstein situation is just the latest regulatory trouble of Deutsche Bank's. In 2017, Germany's largest bank was slapped with $630 million in penalties from New York over a $10 billion Russian money-laundering debacle, in which the state alleged the bank did not properly handle a stock-trading plot that allowed Russian clients to shift huge amounts of money into offshore accounts.

In 2016, the bank settled with the Justice Department for $7.2 billion, following an investigation in to no-good mortgage assets. One year before that, Deutsche agreed to pay over $2.5 billion because it was manipulating the interest rate. 

Additionally, according to reports in the New York Times, the bank was the largest lender to President Trump at the time of his election in 2016. The bank is presently embroiled in a Supreme Court case to determine whether it will be forced to respond to subpoenas compelling the institution to disclose the president's financial records. 

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