Deutsche Bank faces $150m fine for Jeffrey Epstein ties

Deutsche Bank chief executive Christian Sewing Image copyright Reuters
Image caption Deutsche Bank chief executive Christian Sewing admitted there had been lapses

Deutsche Bank has been hit with a $150m (£120m) fine for failing to properly monitor its relationship with convicted sex offender Jeffrey Epstein.

New York state regulators said the bank had suffered “significant compliance failures”, processing hundreds of transactions for the late financier.

Those included payments to Russian models and $800,000 in “suspicious” cash withdrawals.

Deutsche said it had co-operated with the regulator and was improving.

It said it had spent almost $1bn to improve its training and controls.

The bank said the settlement “reflects our unreserved and transparent co-operation with our regulator”, adding: “Our transformation continues.”

New York’s Department of Financial Services said the bank, which worked with Epstein from 2013 to 2018, helped him transfer millions of dollars, including more than $7m to resolve legal issues and more than $2.6m in payments to women, covering tuition, rent and other payments, among other transactions.

“Whether or to what extent those payments or that cash was used by Mr Epstein to cover up old crimes, to facilitate new ones, or for some other purpose are questions that must be left to the criminal authorities, but the fact that they were suspicious should have been obvious to bank personnel at various levels,” the regulator said.

“The bank’s failure to recognise this risk constitutes a major compliance failure.”

The settlement also cited Deutsche’s failures to monitor transactions with the Danske Estonia and FBME Bank.

The fine is the first regulator action against a financial institution for its dealings with Epstein, who died in prison on 10 August as he awaited, without chance of bail, his trial on sex trafficking charges. His death was determined to be a suicide.

But Deutsche has faced multiple penalties for its compliance failures in recent years, including over its failure to stop Russian money-laundering. Its relationship with US President Donald Trump has also brought scrutiny.

In an internal memo, cited by Reuters, Deutsche Bank chief executive Christian Sewing said it had been a “critical mistake” to accept Epstein as a client and admitted lapses regarding the two banks.

“We all have to help ensure that this kind of thing does not happen again,” he said.

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