Jeffrey Epstein's Financial Trail Goes Through Deutsche Bank
July 23 2019 - 4:15PM
Dow Jones News
By Jenny Strasburg and Nicole Hong
Deutsche Bank AG played a key role in Jeffrey Epstein's
financial dealings in recent years, helping the accused
sex-trafficker move millions of dollars in cash and securities
through dozens of private-banking accounts with the German bank,
according to people familiar with the matter.
Mr. Epstein, a wealthy American financier facing two counts in
New York related to alleged sex trafficking of minors, used
Deutsche Bank's private-wealth division to hold and manage assets
connected to him, clients or entities he was affiliated with for a
number of years, some of the people said.
Bank executives believe they severed the lender's relationship
fully with Mr. Epstein by the end of June, the people said.
"Deutsche Bank is closely examining any business relationship
with Jeffrey Epstein, and we are absolutely committed to
cooperating with all relevant authorities," a spokesman said.
A lawyer for Mr. Epstein declined to comment.
The New York charges come more than a decade after Mr. Epstein
had been under investigation for similar allegations in Florida.
That investigation ended with Mr. Epstein signing a nonprosecution
agreement in 2007 that immunized him from federal charges. In
exchange, he pleaded guilty to two Florida state counts related to
prostitution, served a 13-month sentence and registered as a sex
offender.
Germany's biggest bank faces a criminal money-laundering probe
in the U.S. In addition, Congress is scrutinizing its relationship
with President Trump and others in his circle.
It also launched earlier this month a painful overhaul,
including 18,000 job cuts to shrink the bank and stabilize its
financial situation. The bank has said it is cooperating with
investigations and working on improving its processes for detecting
and preventing illicit cash flows.
Deutsche Bank's relationship with Mr. Epstein appeared to pick
up the pace around the time another big bank, JPMorgan Chase &
Co., dropped Mr. Epstein as a client, people close to both banks
said. JPMorgan had a longstanding private-banking relationship with
Mr. Epstein from the 1990s through about 2013, when it cut ties in
part based on reputational concerns, people close to the bank said.
A JPMorgan spokesman declined to comment.
It couldn't be determined how much cash and other assets the
Deutsche Bank accounts held, or how much belonged to Mr. Epstein.
Some accounts weren't obviously linked to him by name, according to
one of the people briefed on the matter. People who have known Mr.
Epstein say that over the years he obtained authorization to trade
through accounts of associates, sometimes investing money for them
or otherwise directing transactions.
Deutsche Bank managers began to shut down some accounts tied to
Mr. Epstein in late 2018 after an employee raised concerns based in
part on articles about his Florida plea agreement in the Miami
Herald in November, the people familiar with the matter said. The
concerns were raised to supervisors involved in efforts to stem
client money flows that could fund illegal purposes and to protect
the lender against reputational issues, some of the people
said.
Employees had raised concerns in the past about some
transactions related to business affiliated with Mr. Epstein, but
the bank maintained relationships with numerous accounts, the
people said. They said the bank is still reviewing the scope of the
business in light of the charges against Mr. Epstein.
Federal prosecutors in Manhattan on July 8 unsealed charges
against Mr. Epstein alleging he recruited dozens of girls for sex
abuse, including in his Manhattan home, as part of a broader
sex-trafficking operation involving girls as young as 14. Mr.
Epstein has pleaded not guilty.
After his arrest, federal prosecutors said they obtained Mr.
Epstein's records from a financial institution, which they said
show Mr. Epstein late last year paying $350,000 to two of his
associates who might be called to testify against him. Prosecutors
haven't identified the financial institution. Deutsche Bank didn't
respond to questions about whether it was involved in those
specific transactions.
Prosecutors cited the alleged payments to argue that Mr. Epstein
engaged in possible witness-tampering and would pose a risk to the
government's ongoing investigation if released on bail. Last week,
a federal judge ordered that Mr. Epstein stay in detention pending
trial, a decision that Mr. Epstein's lawyers appealed on
Tuesday.
Mr. Epstein represented his net worth to be more than $500
million, according to the records obtained by investigators. Mr.
Epstein had more than $110 million in a single bank account with
the financial institution, prosecutors said.
Write to Jenny Strasburg at jenny.strasburg@wsj.com and Nicole
Hong at nicole.hong@wsj.com
(END) Dow Jones Newswires
July 23, 2019 16:00 ET (20:00 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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