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New York regulators fine Deutsche Bank $150 million for relationship with Epstein, others

New York regulators fine Deutsche Bank $150 million for relationship with Epstein, others
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New York’s state Department of Financial Services has fined Deutsche Bank $150 million for what it says is negligence in its dealings with the late financier and registered sex offender Jeffrey Epstein.

The bank, which has agreed to the penalty, “failed to properly monitor account activity conducted on behalf of the registered sex offender despite ample information that was publicly available concerning the circumstances surrounding Mr. Epstein’s earlier criminal misconduct.”

The department said Deutsche Bank processed millions of dollars in transactions that “at the very least, should have prompted additional scrutiny in light of Mr. Epstein’s history,” including payments to people alleged to have sexually abused minors with Epstein, as well as millions in settlements and payments to law firms “for what appear to have been the legal expenses of Mr. Epstein and his co-conspirators.”

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The bank also failed to flag regular cash withdrawals that totaled over $800,000 over a four-year period, according to the department.

In addition to the penalty for these dealings, which the department said was the first agency enforcement action against a bank for a relationship with Epstein, the department determined the bank did not properly monitor its relationships with Danske Bank Estonia and FBME Bank.

“Banks are the first line of defense with respect to preventing the facilitation of crime through the financial system, and it is fundamental that banks tailor the monitoring of their customers’ activity based upon the types of risk that are posed by a particular customer,” Superintendent of Financial Services Linda Lacewell said in a statement.

“In each of the cases that are being resolved today, Deutsche Bank failed to adequately monitor the activity of customers that the Bank itself deemed to be high risk. In the case of Jeffrey Epstein in particular, despite knowing Mr. Epstein’s terrible criminal history, the Bank inexcusably failed to detect or prevent millions of dollars of suspicious transactions.”