Deutsche Bank fined $150m for ignoring suspicious Epstein payments
Deutsche Bank allowed billionaire paedophile Jeffrey Epstein to make a string of suspicious payments to women without proper checks, a damning investigation has found.
The German lender failed to step in when Mr Epstein was wiring money to co-conspirators, Russian models and women "with Eastern European surnames", the New York Department of Financial Services (DFS) said. He also paid for women's school tuition, hotels and rent.
Rather than carrying out detailed scrutiny, the DFS said that compliance workers used internet searches to check that the women paid by Epstein were over 18.
Deutsche has agreed to pay a $150m (£120m) penalty over its dealings with Epstein, as well as compliance failures related to Danske Bank Estonia and FBME Bank. Mr Epstein killed himself in a New York jail cell last year while awaiting trial for sex crimes.
The DFS also said that Epstein's lawyer withdrew $800,000 in cash on his behalf in just four years, taking out about $7,500 two or three times a month including $100,000 for "tipping and household expenses" that were never properly explained.
Investigators accused Deutsche of a string of serious failings, including "mistakes and sloppiness" in the way it handled the late financier's accounts.
The regulator said: "Throughout the relationship, very few problematic transactions were ever questioned, and even when they were, they were usually cleared without satisfactory explanation".
Deutsche's penalty – which comes days after Mr Epstein's close friend Ghislaine Maxwell was arrested – is a further blow to the bank's reputation following repeated fines for previous wrongdoing and a long-running furore over its relationship with US President Donald Trump.
It is also the second major scandal to hit German finance in weeks after Wirecard, casting fresh doubt on Frankfurt's competence as it vies to replace London as Europe's financial hub.
Deutsche chief executive Christian Sewing told staff on Tuesday that the bank has increased its anti-financial crime team to more than 1,500 people and will spend more than $1bn on training in this area.
In a memo, he said: "We acknowledge our error of onboarding Epstein in 2013 and the weaknesses in our processes, and have learnt from our mistakes and shortcomings.
"Immediately following Epstein’s arrest, we contacted law enforcement and offered our full assistance with their investigation."
The settlement marks the first enforcement action by a regulator against a financial institution for dealings with Epstein.
The UK's financial regulator is investigating Barclays chief executive Jes Staley over his ties with Epstein, who was a key client when Mr Staley worked at JP Morgan before 2013.
