Deutsche Bank signed a consent order with the NY Department of Financial Services, agreeing to pay a 150m$ fine, and, as you'd expect, it's a fascinating read. It deals with #Epstein, #Cypriot bank #FBME and #Danske Bank's AML issues in Estonia. A few snippets.
First, Epstein. It's a disgusting read, tbh, where 1 can imagine what's going on behind the scenes (all after Epstein came out of jail.) "Tuition fees" paid to young (adult) women, 800k$ of cash withdrawn, lawyers asking how to withdraw cash wo creating alerts, etc.
trusts being created to continue paying Epstein's co-conspirators from his previous convictions (yes, it does read like a Breaking Bad episode) - wtf was is still paying them, that's what I'd like to know.
But at the end of the day, the NY DFS doesn't have much against DB. As they say, they don't know -and neither did DB- if any of this was criminal and DB has to pay mostly because of procedural errors - sloppiness in risk assessment, minutes of meetings, transmission of info etc.
So I'll just ask one question: is DB has to pay 150m (partly) because of how sloppy it was in monitoring Epstein's dubious lifestyle, what about law enforcement agencies? Is DB really supposed to do their job? Are they not more responsible?
FBME, now. That's a simpler situation: a dubious bank in Cyprus, incorporated in the Caymans and then moving to Tanzania when USA Patriot Act imposed constraints on banking in the Caymans (I mean, how can anything be more dodgy than that!!!)
DB continued its business with FBME - for the life of me I can't understand why, I even doubt it was that profitable, because of the size - wait, scrap that : that minuscule bank cleared 618nb$ with DB !! 😳
But DB has one excuse, and it's a very embarrassing one - not for them. In 2005, the *Central Bank of Cyprus* (for real) represented to DB that it regarded FBMC as excellent from a KYC and AML perspective. This is really quite the revelation - and I would love to know who said it
That was one big reason DB kept FBME as a client. A few years later, FBME was named a financial institution of primary money laundering concern, and all hell broke lose, obviously.
Then we have Danske Bank. This was discussed many times in the press, and it's all well known by now. But the order does reveals a few interesting things.
The shocker, for me, was this : in 2010, Danske Bank Estonia's AML risk was rated 10 by DB, the MAXIMUM.
The shocker, for me, was this : in 2010, Danske Bank Estonia's AML risk was rated 10 by DB, the MAXIMUM.
10 years ago, DB was totally aware that the situation in Estonia was out of control. 8 years later the CEO of Danske was telling me with a big smile on his face that everything was going smoothly in Estonia and AML/KYC process was top notch. WTF! This is going to end badly
And if DB was aware, I'm pretty the whole situation was a secret to no one. DB isn't exactly tight lip about everything, simply because they have so much turnover in staff.
Unless the US is unable to actually hit Danske for jurisdiction issues (see here for example spglobal.com/marketintellig…) what I'm reading in the order of DB (just the correspondent bank) does not smell good at all.
A final word: 150m is the combined sanction for the three cases - no split is given so it's impossible to say how much they paid for each case
really typing too quickly : FMBE, not FBMC of course
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