Holy structuring, Batman!
Yesterday Deutsche Bank inked a $150 million settlement with New York’s Department of Financial Services (DFS) for the bank’s failure to comply with anti-money laundering laws in its dealings with Jeffrey Epstein and two small, foreign banks.
In the Consent Order, DFS describes Epstein’s attorney making 97 cash withdrawals on his client’s behalf, totaling $200,000 over just four years. When asked why he needed so much money, the unnamed attorney claimed Epstein needed it for “travel, tipping and expenses.”
But the attorney had questions of his own for Deutsche.
In May of 2014, the attorney “inquired into how often he could withdraw cash on behalf of Mr. Epstein without triggering an alert.”
RELATIONSHIP COORDINATOR-1 sent an email to the branch manager stating that ATTORNEY-1 “asked how often they could come in to withdraw cash without creating some sort of alert,” and asking “Is it once a week? Twice a week? Once every other week?” The Bank has represented that it has no record of any response.
DB claims to have understood this as a question about its own $7,500 limit on third-party withdrawals, not an attempt to evade triggering a mandatory report to the Treasury Department for a cash transaction of $10,000 or more.
UH HUH.
In 2017, Epstein’s lawyer asked again, but this time he specifically wanted to know “whether a withdrawal transaction in excess of $10,000 would require reporting and, upon being advised that it would, broke up the withdrawal transaction over two days.”
Why said attorney asked the bank teller instead of Mr. Google about Treasury reporting triggers is unclear. But if he had done a minimum of research, he’d probably have discovered that the government takes a rather dim view of structuring transactions to evade reporting requirements.
Faced with the attorney’s apparently unequivocal admission that his goal was to evade federal reporting, not the bank’s own rules, Deutsche’s compliance department sprung into action!
No, not really, but they definitely gestured in the direction of action.
[An anti-money laundering officer], among others, spoke with ATTORNEY-1 and advised that (a) his patterns gave the appearance of structuring, (b) this pattern was unacceptable, and (c) he would be provided with additional information about CTR reporting requirements. ATTORNEY-1 represented that he had not intended to structure cash withdrawals. Bank personnel found ATTORNEY-1 credible and permitted him to continue to withdraw cash from his own and Epstein’s accounts.
They asked him if he was committing a crime, and he said “no.” Case closed!
Then in 2018, just before Deutsche closed the branch nearest Epstein’s house, the same attorney made a $100,000 cash withdrawal. When asked, he explained that “Mr. Epstein needed the funds for tipping and household expenses.” Which seemed to satisfy the bank.
It did not, however, satisfy the New York State Department of Financial Services. And if it wants to lean on this attorney for cooperation against Epstein’s still-living co-conspirators, it appears to have ample leverage.
Great job, ATTORNEY-1!
Consent Order [In the Matter of Deutsche Bank AG]
Elizabeth Dye (@5DollarFeminist) lives in Baltimore where she writes about law and politics.