Deutsche Bank

Deutsche Bank AG is a global financial institution headquartered in Frankfurt, Germany, which operates a New York branch and a trust company, Deutsche Bank Trust Company of the Americas, licensed by the New York Department of Financial Services. The bank maintained a relationship with Jeffrey Epstein and his related entities from August 2013 until December 2018, taking him on after JPMorgan Chase dropped him and ending the relationship after renewed press attention to his 2008 plea deal. In July 2020 the New York Department of Financial Services imposed a 150 million dollar penalty for compliance failures centered on the Epstein relationship, and in 2023 the bank agreed to pay 75 million dollars to settle a lawsuit by his victims.¹²

Onboarding Epstein in 2013

In early 2013 Epstein began moving his assets to Deutsche Bank, brought in by a relationship manager who had previously serviced his accounts at a competitor bank and had joined Deutsche Bank's private wealth department in November 2012.¹ The relationship manager told senior management that Epstein could generate millions of dollars in revenue and leads for other clients, with one internal email estimating flows of 100 to 300 million dollars over time and revenue of 2 to 4 million dollars annually.¹ A May 5, 2013 "approval email" from a senior executive reported that the head of anti-money-laundering compliance and the general counsel for the Americas did not think the relationship required reputational-risk review, and the bank's Americas Reputational Risk Committee did not meet on the initial onboarding.¹

The relationship officially began on August 19, 2013, when Deutsche Bank opened brokerage accounts for Southern Trust Company Inc. and Southern Financial LLC, Epstein entities founded in the U.S. Virgin Islands.¹ Over the course of the relationship, Epstein, his entities, and his associates opened and funded more than 40 accounts at the bank.¹ The bank classified Epstein as "high-risk" and informally designated him an "Honorary PEP," or politically exposed person, because of his connections to prominent political figures.¹

The relationship had been publicly preceded by allegations against Epstein dating to 2005 and by his 2008 guilty plea to a state prostitution charge, after which press reports identified several alleged co-conspirators and described a modeling operation that brought young women, often from Eastern Europe, to the United States.¹

Suspicious Transactions and Overridden Warnings

As early as November 1, 2013, Epstein and his representatives used Deutsche Bank accounts to send wires to people who had been alleged to be co-conspirators in his past offenses, including at least 18 wires of 10,000 dollars or more to alleged co-conspirators identified in the consent order as Co-Conspirators 1, 2, and 3.¹ On January 24, 2014 the bank opened accounts for an Epstein trust named "The Butterfly Trust," whose beneficiaries included those alleged co-conspirators and a number of women with Eastern European surnames; Epstein described the beneficiaries to bank personnel as employees or friends.¹ Epstein used the Butterfly Trust and other accounts to send more than 120 wires totaling 2.65 million dollars to beneficiaries, for stated purposes such as hotel expenses, tuition, and rent, and made settlement payments to law firms exceeding 7 million dollars and additional legal-expense payments exceeding 6 million dollars.¹

Epstein's personal attorney made a total of 97 cash withdrawals from the bank's Park Avenue branch from 2013 to 2017, typically two to three times a month and each in the amount of 7,500 dollars, the bank's limit for third-party withdrawals, withdrawing in total more than 800,000 dollars on Epstein's behalf.¹ In May 2014 the attorney asked the bank how often cash could be withdrawn without triggering an alert, and in July 2017 he broke a withdrawal exceeding 10,000 dollars over two days; bank personnel found him credible and let him continue.¹ In a March 2017 exchange, a member of the transaction-monitoring team responded to an alert about payments to a Russian model and a Russian publicity agent by writing that "since this type of activity is normal for this client it is not deemed suspicious."¹

When the Americas Reputational Risk Committee considered the Epstein relationship at meetings in January 2015, it kept the relationship while imposing conditions, but those conditions were never communicated to all members of the Epstein relationship team or to the transaction-monitoring team, and a compliance officer narrowed the monitoring standard so that little changed.¹ The consent order found the bank's fundamental failure was that, although it properly classified Epstein as high-risk, it did little to scrutinize, inquire into, or block payments to named co-conspirators and to or on behalf of young women, or to ask why Epstein used on average more than 200,000 dollars per year in cash.¹

The DFS Penalty and Victim Settlement

The New York Department of Financial Services issued its consent order on July 6, 2020, finding that Deutsche Bank conducted business in an unsafe and unsound manner in violation of New York Banking Law section 44 and failed to maintain an effective anti-money-laundering program in violation of 3 NYCRR section 116.2.¹ The order, brought under sections 39 and 44 of the Banking Law, also addressed the bank's correspondent relationships with FBME Bank and Danske Bank Estonia, through which it cleared more than 267 billion dollars in transactions and identified hundreds of suspicious transactions.¹ The order required Deutsche Bank to pay a penalty of 150 million dollars and credited the bank's cooperation and remediation.¹

The bank terminated the Epstein relationship after the Miami Herald published its November 2018 reporting on his 2008 plea deal, informing Epstein by letter on December 21, 2018 that it would no longer service his accounts.¹ After the bank decided to offboard the accounts, a relationship manager nonetheless drafted reference letters to two other financial institutions stating that he was "unaware of any problems relating to the operation or use" of the accounts.¹

In May 2023 Deutsche Bank agreed to pay 75 million dollars to settle a federal lawsuit in New York brought by a survivor identified as Jane Doe, who sought class-action status on behalf of other victims and alleged that the bank knowingly benefited from Epstein's sex trafficking and chose profit over compliance with the law.² The plaintiffs were represented by Edwards Pottinger and Boies Schiller Flexner, and one firm characterized the deal as among the largest sex-trafficking settlements with a bank in U.S. history; a federal judge approved it in October 2023.²³