Dhe deals that Deutsche Bank did for the convicted and now deceased sex offender Jeffrey Epstein are once again costing the institute dearly. In the legal dispute with investors, the largest German bank has now agreed to pay a settlement of 26.25 million dollars. The plaintiffs, who accused the institute, among other things, of being too lax in controlling their ultra-rich customers with regard to the Epstein case, submitted the preliminary agreement to a New York court on Friday, as the Reuters news agency reported on Monday. The competent judge still has to approve the agreement.
The plaintiffs, who traded in the bank’s shares between 2018 and 2020, accused the institute of artificially inflating the bank’s share price by misrepresenting their test procedures. After the customer relationships became known, the share price collapsed.
The so-called “Know Your Customer” processes were not handled as strictly as claimed by the bank. Credit institutions should use these procedures to check, above all before accepting new customers, from which transactions the money that they want to invest with them comes from. They are intended to prevent money from criminal transactions being laundered with the help of the banks or even criminal transactions being committed via the bank’s networks.
School fees paid for Russian models
In July 2020, the bank had to pay a $150 million fine to the New York financial regulator for serious omissions in the Epstein case and in the money laundering scandal with Danske Bank in Estonia. At that time it became known how extensive the business relationship was with Epstein, who had placed underage women with paying customers for decades, and how little the bank knew or wanted to know about it.
The New York supervisory authority, for example, listed hundreds of transactions that the bank should have checked in view of the known allegations against Epstein. The bank made payments to Russian models and other women with Eastern European names, which apparently were used to pay school fees, hotel costs and rent. In addition, the bank was not aware of payments to people who were publicly accused of having supported Epstein in the sexual abuse of young women. The bank also went through regular, conspicuous cash withdrawals totaling $800,000.
The lawsuit now settled by the investors was directed not only against the group but also against bank boss Christian Sewing and former CEO John Cryan. The money house continues to deny any wrongdoing. A spokesman for the bank declined to comment on the agreement that has now been reached.