One New York executive recalled visiting Waugh’s 46th-floor office to tell him about bonus-hungry co-workers who ignored danger signs to chase risky accounts. Waugh seemed sympathetic but said he wasn’t sure what he could do, the executive recalled.

Waugh declined to be interviewed, but said in a statement that during his tenure, Deutsche made it a priority to be “best in class” in regulatory compliance. He also said he led the bank from “relative obscurity to a top position in the market.”

He pursued attention-getting projects. The bank installed the world’s highest solar panel on its headquarters in 2012. It sponsored a professional golf tournament from 2003 to 2016. (Waugh was appointed chief executive officer of the Professional Golfers Association of America in August.) And he advocated for a program to recruit military veterans into Wall Street jobs.

That’s how a retired general wound up overseeing the Jacksonville office.

Outsourced Compliance
In 2010, Brigadier General Michael Fleming of the Florida Army National Guard began talking to Deutsche about a new career, running its veteran-recruitment program. He got a bigger job instead: running its new outpost in North Florida.

“I really didn’t have any corporate investment banking experience at that point,” the one-star general told Fox Business Network in 2013. Fleming, who left Deutsche Bank in 2014, didn’t respond to requests for comment.

Former employees said he wasn’t a hands-on leader. Before his arrival, Deutsche executives had transferred some bank functions, including anti-money-laundering efforts, to the main Jacksonville site, several low-slung concrete buildings that surround a man-made pond in a suburban office park. It grew to become the bank’s second-largest office in the U.S., with approximately 2,000 employees working in various operations. Former compliance workers there describe a disregard for their work that emanated from New York.

Throughout Deutsche Bank, compliance staff members were considered to be “one step above the janitors,” an unnamed former executive told lawyers who filed a 2016 lawsuit against the bank. The suit, in which investors claimed Deutsche Bank misled them about the effectiveness of its anti-money-laundering efforts, was later dismissed.

Know Your Customer
Banks’ efforts to prevent money laundering revolve around three words: “Know your customer.” U.S. rules under the Bank Secrecy Act require bankers to keep tabs on who they’re doing business with. The goal is to keep criminals and terrorists from plowing illicit cash into legitimate investments.

In Jacksonville, that task fell to an office that was understaffed and overly permissive, insiders recall. It was akin to assembly-line work with little review of potential clients and transactions, said a former employee who added that the organization’s willingness to bank just about anybody was a running joke.