Deutsche Bank was fined $ 150 million (£ 120 million) for failing to properly monitor his relationship with convicted sex offender Jeffrey Epstein.
New York state regulators said the bank had suffered “major compliance failures”, processing hundreds of transactions for the deceased financier.
These included payments to Russian models and $ 800,000 in “suspicious” cash withdrawals.
Deutsche said it deeply “regrets” its relationship with Epstein.
He said he spent close to $ 1 billion to improve his training and testing and to expand his financial crime team to more than 1,500 people.
“We recognize our error in integrating Epstein in 2013 and the weaknesses in our processes, and we have learned from our mistakes and shortcomings,” the bank said in a statement. “Our reputation is our most precious asset and we deeply regret our association with Epstein. ”
The New York financial services department said the bank, which worked with Epstein from 2013 to 2018, helped it transfer millions of dollars, including more than $ 7 million to resolve legal issues and more. $ 2.6 million in payments to women, covering tuition, rent and other payments, among other transactions.
“Whether or to what extent these payments or money have been used by Mr. Epstein to cover up former crimes, facilitate new ones or for other purposes are questions which should be left to the criminal authorities, but the fact that they were suspicious should have been evident to bank staff at different levels, “said the regulator.
“The bank’s inability to recognize this risk constitutes a serious lack of conformity. ”
The settlement also cited Deutsche’s failures to monitor transactions with Danske Estonia and FBME Bank, although it identified risks related to money laundering in both institutions.
The fine is the regulator’s first action against a financial institution for its relations with Epstein, who died in prison on August 10 while awaiting, without possibility of bail, his trial for sex trafficking. His death was considered suicide.
But Deutsche has faced multiple sanctions for its non-compliance in recent years, including its failure to stop Russian money laundering. His relationship with U.S. President Donald Trump has also come under scrutiny.
In an internal memo, Deutsche Bank chief executive Christian Sewing said it was a “critical error” to accept Epstein as a client and acknowledged past weaknesses in lender supervision.
“We all have to make sure that this kind of thing does not happen again,” he said.