Deutsche Bank has been handed a $150m (£119m) penalty for “compliance failures” in the company’s dealings with now-dead alleged sex offender Jeffery Epstein.
According to the Financial Times, the bank has also been penalised for its corresponding relationship with Danske Bank Estonia and FBME Bank, the New York Department of Financial Services confirmed today (7 July).
The penalty follows accusations that the lender had previously processed millions of dollars of payments by the disgraced financier.
The payments included transactions with alleged co-conspirators, Russian models, and $800,000 (£636,000) in “suspicious cash withdrawals”, the FT said.
In a statement, Linda Lacewell, superintendent of financial services, said: “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.”
Governor Andrew Cuomo said: “No matter how rich, how big or how powerful an institution you are, predatory behavior of any type will not be tolerated in New York.
“For years, Mr. Epstein’s criminal, abusive behavior was widely known, yet big institutions continued to excuse that history and lend their credibility or services for financial gain.”
He added: “While Washington has routinely looked the other way when it comes to punishing financial institutions, New York and the Department of Financial Services will continue to take its role as a strong regulator seriously and will use every possible tool to protect New Yorkers from predatory behavior in all its forms.”
A statement released today by Deutsche Bank said: “Onboarding [Epstein] as a client in 2013 was a critical mistake and should never have happened.
“I would like to thank our colleagues involved for their determined handling of these cases and the internal investigations, which the DFS acknowledged as ‘exemplary’. At the same time, we all have to help ensure that this kind of thing does not happen again.”
It added: “It is our duty and our social responsibility to ensure that our banking services are used only for legitimate purposes. That’s exactly why we should always examine things critically, ask questions and speak up.”
Banking Sector has contacted Deutsche Bank for comment.