Lender viewed convicted sex offender as “high risk” client, yet still overlooked his many questionable transactions.
Deutsche Bank for years overlooked suspicious transactions by convicted sex offender Jeffrey Epstein —including wire transfers to Russian models —despite classifying him as “high risk” when taking on the well known financier as a banking customer in 2013.
That’s according to the New York Department of Financial Services, which on Tuesday announced a $150 million settlement with the Germany-based lender.
The bank’s New York offices for years let Epstein’s questionable account activity go largely unchecked, setting aside due diligence basics in favor of focusing on the potential revenue that Epstein might generate for the bank, as well as his ties to possibly lucrative future clients, according to the regulator.
“Despite knowing Mr. Epstein’s terrible criminal history, the bank inexcusably failed to detect or prevent millions of dollars of suspicious transactions,” Linda Lacewell, the department’s superintendent, said in a statement.
“Banks are the first line of defense with respect to preventing the facilitation of crime through the financial system,” Lacewell noted, “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.
