DB Deutsche Bank Aktiengesellschaft

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)

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