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Bank settlement could provide prosecutors roadmap to punishing Epstein's collaborators

'Anyone connected to Jeffrey Epstein's sex trafficking and abuse activity should be extremely concerned by the New York State Department of Financial Services' investigation,' a sex crimes experts tells Just the News.

Published: July 7, 2020 10:11am

Updated: July 10, 2020 9:58am

If federal prosecutors are looking to punish more than the socialite Ghislaine Maxwell for the late Jeffrey Epstein's alleged underage sex ring, New York regulators' settlement this month with Epstein's former bank may provide an intriguing roadmap.

Buried in documents attached to Deutsche Bank's $150 million penalty agreement with the New York State Department of Financial Services is a long list of suspect activities, including withdrawals of money by lawyers, payments to Russian models and other women, and financial transactions with people previously identified by federal authorities as co-conspirators in Epstein's prior plea deal on charges of prostitution with a minor more than a decade ago.

The story still being unraveled now by federal and state prosecutors is how Epstein managed to allegedly keep his sex empire going after becoming one of America's most famous registered sex offenders.

Experts say the extensive documentation made public with the bank case, including a consent order, places a bullseye over transactions and players in Epstein's orbit now facing new legal exposure. And it could augment a list of names contained in Epstein's "black book" of contacts that investigators have possessed for years. 

"It seems as if anyone connected to Jeffrey Epstein's sex trafficking and abuse activity should be extremely concerned by the New York State Department of Financial Services investigation that was announced on Monday," said J. Robert Flores, a former federal prosecutor and assistant district attorney in Manhattan who specialized in sex crimes and reviewed the settlement documents at the request of Just the News.

The New York state case followed just days after federal prosecutors in the Southern District of New York unsealed an indictment against Maxwell, a longtime associate of Epstein who is now charged with aiding and abetting the late mogul's sexual escapades with underage girls. 

Epstein, the government contends, was the paymaster before he committed suicide after being jailed last year. Prosecutors portray Maxwell as one of the key recruiters of young victims. Deutsche Bank's admissions make it at the least an unwitting and negligent financial facilitator.

And now, the question that the world awaits to be answered is whether any powerful or mighty figures who were clients, facilitators or conspirators in Epstein's escapades will also be brought to justice.

Flores sees the outlines of a prosecutorial roadmap in the bank investigation, and expects some with exposure to possibly seek early deals with prosecutors.

"The investigation appears to be extremely thorough, resulted in the production and examination of hundreds of thousands of records, and identified many people in the United States and abroad," he told Just the News. "What those people know, what records they may have, and whether they believe it's in their interests to come forward before being arrested or investigated will unfold quickly."

The consent order was released in conjunction with the announcement of the first regulatory enforcement action taken against a bank associated with Epstein. 

Deutsche Bank was slammed with a $150 million penalty for "mistakes and sloppiness" with their former client, Epstein. 

When Epstein opened up his Deutsche Bank accounts in 2013, he was a Tier 3 registered sex offender.

That alone should have served as the most important red flag to any bank official.

In law enforcement and judicial circles, Tier 3 registered sex offenders translate into serial offenders, who usually repeat their crimes.

"Immediately following Epstein's arrest we contacted law enforcement and offered our full assistance with their investigation," Deutsche Bank explained in a statement.

But that was only after Deutsche Bank terminated its relationship with Epstein a few months earlier.

Epstein was arrested for sex trafficking charges on July 6, 2019 in New Jersey after he returned from Paris. Weeks later, he was found dead in his cell in the Manhattan Correctional Center. 

Following his death, Attorney General William Barr vowed to get to the bottom of the Epstein investigation and hold the perpetrators accountable. 

Deutsche Bank had accepted Epstein as a high-risk client on Aug. 19, 2013, but by December 21, 2018, the bank terminated its relationship with Epstein a month after the Miami Herald published a series on Epstein. 

In a statement released on Tuesday, Linda Lacewell, the superintendent of the New York State Department of Financial Services, said Epstein's accounts paid out "millions of dollars of suspicious transactions" that Deutsche Bank "inexcusably failed to detect or prevent." 

The investigation findings included:

  • payments to individuals publicly alleged to have been Epstein’s co-conspirators connected to his 2007 non-prosecution agreement; 
  • settlement payments to law firms totaling over $7 million, as well as dozens of payments to law firms totaling over $6 million for what appear to have been the legal expenses of Epstein and his co-conspirators; 
  • payments to Russian models, payments for women’s school tuition, hotel and rent expenses, and payments directly to numerous women with Eastern European surnames; 
  • periodic suspicious cash withdrawals by one of his agents, totaling more than $800,000 over approximately four years; 
  • "The Butterfly Trust" account that paid the co-conspirators and other parties; 
  • a Gratitude America account. 

Maxwell, whom many victims refer to as Epstein's madam, was arrested last week in New Hampshire, and now awaits a July 14 bail hearing in New York. The U.S. Marshals transported her from New Hampshire to a Brooklyn detention center on Monday. 

The consent order states, "Some articles reported that COCONSPIRATORS 1 and 2 had invoked their Fifth Amendment right against self-incrimination, and others reported that CO-CONSPIRATOR 3 had allegedly recruited underage girls to give Mr. Epstein 'massages.' The names of these women and several other alleged co-conspirators were publicly known by 2013."

Although Deutsche "properly classified" Epstein as a high-risk client, the consent order states, "The Bank failed to scrutinize the activity in the accounts for the kinds of activity that were obviously implicated by Mr. Epstein’s past." 

"Despite this knowledge, the Bank did little or nothing to inquire into or block numerous payments to named co-conspirators," who had been identified in the media, "or to inquire how Mr. Epstein was using, on average, more than $200,000 per year in cash," states the Order. 

One of Epstein's attorneys was withdrawing $7,500 two or three times a month, totaling almost $800,000 in cash over the four years that Epstein was a Deutsche Bank client, the records state. 

The current records call such transactions suspect. Now prosecutors must determine their true intent: hush money, continued trafficking, or some other reason yet to be discovered.

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