How Deutsche Bank Was Connected To Jeffrey Epstein—And What Its $75 Million Payout To Survivors Could Mean For Other Banks
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Topline
Deutsche Bank has paid at least $225 million to victims of the late, disgraced financier Jeffrey Epstein in an ongoing legal battle to settle claims it was in charge of more than 40 accounts allegedly used to fund Epstein’s alleged sex trafficking ring—a legal snarl that could also cost JPMorgan Chase.
The German-based bank on Monday paid $75 million to settle a class-action lawsuit brought by a woman identified in court documents as Jane Doe, who alleges Epstein sexually abused and trafficked her from 2003 to 2018 and says Deutsche Bank ignored warning signs, including payments from the Deutsche accounts to multiple young women.
Doe claims Deutsche Bank played an “essential role” and “knowingly participated” in Epstein’s abuse of underage women by enabling him to pay the women from 2013 to 2018.
Epstein was a member of Deutsche Bank’s Key Client Partners group and kept an account at Deutsche for his nonprofit charity foundation, Gratitude America, which was used to accrue tax benefits and divert funds, and did not donate to all the charities it said it did, the Wall Street Journal found.
Deutsche was also fined $150 million by New York regulators in 2020 for its failure “to detect or prevent millions of dollars of suspicious transactions,” as it gave scrutiny to “very few” of Epstein’s suspicious transactions, including $13 million in payments to possible victims and legal expenses for Epstein and his alleged co-conspirators.
A spokesperson for Deutsche declined to comment on Wednesday’s settlement, but told Forbes it “acknowledges the error of onboarding” Epstein in 2013.
The bank has also invested more than $4 billion to bolster controls and training dedicated to fighting financial crime, it told the Journal.
What To Watch For
Jane Doe has also filed a lawsuit against JPMorgan, alleging it ignored Epstein’s alleged sex trafficking between 1998 and 2013, keeping the financier as a client after he pleaded guilty to soliciting a minor for prostitution in 2008. The New York-based bank closed Epstein’s accounts in 2013, after which he turned to Deutsche. U.S. Virgin Islands, where Epstein owned two islands, has filed several charges against JPMorgan, including that it obstructed federal law enforcement pursuing Epstein, and that CEO Jamie Dimon and a former bank executive Jes Staley—who left the firm in 2013—knew about Epstein’s sex trafficking as early as 2008. The Virgin Islands’ lawsuit also alleges JPMorgan received referrals for high-value business opportunities, including Tesla CEO Elon Musk, from Epstein. The bank has said its relationship with Epstein was a “mistake” which it “regrets,” but claims it didn’t know about the extent of Epstein’s alleged crimes and cannot be held responsible. CEO Dimon is set to be deposed later this month about the bank’s connection with Epstein. Paul Morris, who managed Epstein’s money at both JPMorgan and Deutsche and now works as Bank of America’s wealth management executive, was deposed about his relationship with Epstein last week.
Key Background
Epstein, who died by suicide in jail while awaiting a sex-trafficking trial in 2019, was accused of trafficking numerous underage women for sex with himself and a slew of high-profile figures. He had roughly $120 million in assets with JPMorgan in 2008, according to court filings and moved in 2013 to Deutsche Bank, where he had more than 40 accounts, according to the New York State Department of Financial Services.
Further Reading
JPMorgan, Deutsche Bank Sued Over Jeffrey Epstein Links (Forbes)
Lawsuits Over JPMorgan And Deutsche Bank’s Epstein Ties Can Move Forward—But Judge Dismisses Some Counts (Forbes)
Jeffrey Epstein Lawsuit: Musk Subpoenaed As Case Embroils Another Billionaire (Forbes)
Jeffrey Epstein Moved Money For Noam Chomsky, Paid Bard President Botstein $150,000, Report Says (Forbes)
Deutsche Bank Owes $150 Million Fine For ‘Suspicious’ Jeffrey Epstein Transactions (Forbes)
Deutsche Bank to Pay $75 Million to Settle Jeffrey Epstein Accusers’ Suit (Wall Street Journal)
Jeffrey Epstein Used Opaque Charity Account at Deutsche Bank for Own Benefit (Wall Street Journal)