Deutsche Bank fined $150m for failure to detect suspicious Jeffrey Epstein transactions

Deutsche Bank let Jeffrey Epstein set up more than 40 accounts, then failed to detect millions in suspect transactions.

Ghislaine Maxwell. left was arrested last week and charged with six counts of sexual abuse in the Jeffrey Epstein case. She is accused of finding, grooming and maintained a network of girls to perform sexual favours for Epstein, right, a registered sex offender. Picture: AFP

Germany’s biggest bank has agreed to pay a $US150 million ($AU216m) fine after admitting that it failed to detect millions of dollars in suspect transactions by Jeffrey Epstein, the sex offender at the centre of a grooming scandal.

Deutsche Bank is the first scalp for American regulators trying to unravel Epstein’s estimated $AU861 million fortune.

Last week Ghislaine Maxwell, his former girlfriend, was arrested in the United States and was accused of helping him to “recruit, groom and ultimately abuse” at least three girls, one as young as 14.

American authorities allude to concerns about his friendship with a “member of a European royal family”, a possible reference to the Duke of York, who has always denied any wrongdoing.

Bank failed to challenge cash withdrawals

Epstein died last year in a New York prison at the age of 66 and US authorities are pursuing “anyone complicit” in his alleged crimes, including institutions that handled his money.

Deutsche Bank allowed Epstein to set up more than 40 accounts, which he used to transfer at least $US180,000 to women accused of procuring him under-age girls, even though it knew he had been jailed for sex offences, according to New York’s department of financial services.

Regarding Epstein as a cash cow “who could generate millions of dollars of revenue as well as leads for other lucrative clients to the bank”, Deutsche was found to have repeatedly failed to carry out due diligence on its client or to challenge vaguely justified cash withdrawals amounting to more than $US800,000 over four years.

Linda Lacewell, the city’s superintendent of financial services, said: “Despite knowing Mr Epstein’s terrible criminal history, the bank inexcusably failed to detect or prevent millions of dollars of suspicious transactions.”

The $US150 million fine, which also takes account of Deutsche’s misconduct in its dealings with two “high-risk” foreign banks, will compound its struggles as it seeks to scrap its investment banking division and cut 18,000 jobs.

Epstein set up his first account at the bank in August 2013, despite an internal memorandum that noted he had spent 13 months in prison on charges including soliciting an under-age prostitute.

The relationship manager who brought Epstein to Deutsche estimated at the time that he could yield the bank as much as $US300 million over time. It classified Epstein as a “high-risk” client, but within months he and his agents began sending funds to three of his alleged co-conspirators.

Five months later Deutsche opened an account for Epstein’s Butterfly Trust, which named all three women among its beneficiaries. The settlement said this “created the very real risk that payments through the trust could be used … perhaps to endanger more young women.” Epstein used the trust’s account to transfer a total of nearly $US2.7 million to its beneficiaries, including his alleged accomplices and a lot of women with “eastern European surnames”.

Epstein’s accounts were shut in December 2018 but one relationship manager still drafted reference letters on his behalf to two banks.

The Times