JPMorgan faces reckoning for long ties to Jeffrey Epstein
Jeffrey Epstein was many things: a sexual predator, a friend of the rich and powerful, and for many years a lucrative client of the nation’s largest bank.
Now the bank, JPMorgan Chase, is facing a reckoning for his nearly 15-year relationship with the disgraced financier, one that could cost him a large payout in two civil lawsuits that allege the bank ignored warnings that he trafficked teenage girls for sex because it benefited his relationship with him.
New revelations emerging from the cases suggest that bank employees marked Mr Epstein’s activities as suspicious on a number of occasions, while other documents demonstrate Mr Epstein’s prominence and easy access to top executives at the bank, even after his 2008 guilty plea in Florida for soliciting prostitution from a teenage girl.
Filed late last year in federal court in Manhattan, the lawsuits — one filed by attorneys representing Mr Epstein’s victims and the other by the U.S. Virgin Islands government — are gaining momentum, with dozens of statements from victims, Virgin Island officials and people who had worked for the bank and Mr. Epstein.
The proceedings take on a new urgency on Friday with JPMorgan CEO Jamie Dimon expected to be dropped off at the bank’s Manhattan headquarters.
Mr Epstein died of an apparent suicide three years ago while in federal custody on sex trafficking charges. JPMorgan dropped him as a client ten years ago. Many of the documents and evidence submitted in the trial have been sealed.
A document prepared by the bank, a piece of evidence in a lawsuit last week, suggests that JPMorgan employees had filed numerous suspicious activity reports, or SARs, about some of Mr. Epstein’s dealings. The names of some four dozen employees whom the bank said were “involved in reporting SARs related to Epstein Accounts between 2000 and 2019” have been redacted.
Banks must file a SAR with federal regulators when they suspect a transaction may involve money laundering or fraud. The reports are kept confidential as the transactions may turn out to be legitimate, although they may provide investigative clues to authorities.
A JPMorgan spokeswoman said the bank knew nothing to indicate that Epstein was involved in sex trafficking. In documents related to the case, the bank also disclosed that in 2011 it asked federal prosecutors in Florida whether there was an active investigation into Mr. Epstein. The bank said prosecutors did not investigate.
A separate cache of emails and partial calendar entries reviewed by The New York Times shows that top executives at the bank had some degree of familiarity with Mr. Epstein.
“I’m still waiting for your call,” Mr. Epstein wrote in October 2011 to Mary C. Erdoes, the current head of the bank’s major wealth and wealth management division.
Mrs. Erdoes replied: “Seriously. It’s 1 AM your time. I’d say get a life…but you’re at the Ritz and we’re not. Ms Erdoes added that she had just landed in California and would talk to Mr Epstein the next day.
The emails and calendar entries for Mr. Epstein while he was staying at his Manhattan townhouse were obtained through a public records request to the Attorney General of the US Virgin Islands. A spokeswoman for JPMorgan has said contact between high net worth clients and bank executives is not uncommon.
The emails provided to The Times by the Virgin Islands also include exchanges between Mr. Epstein and James E. Staley, the JPMorgan executive closest to him.
A few are of a personal nature: In a 2015 conversation, Mr. Staley asked Mr. Epstein if he wanted to meet his daughter to discuss her post-college plans. In an email exchange in 2011, there was a discussion about arranging dinner with Mr. Epstein and Mr. Staley’s family.
Other emails between Mr. Epstein, Ms. Erdoes and Mr. Staley concerned possible business deals. A series of exchanges focused on Mr. Epstein’s attempt to establish a charitable partnership between the bank, the Bill & Melinda Gates Foundation and others. He also inquired about meeting Mr. Dimon to discuss the plan.
The bank’s spokeswoman said Mr Epstein never met Mr Dimon. Mr. Epstein’s proposed charitable fund with the Gates Foundation and JPMorgan didn’t get much beyond the talk stage in 2011 when Mr. Gates first met Mr. Epstein.
JPMorgan cut ties with Mr Epstein in 2013, although that was years after some members of the bank’s compliance department raised the alarm about doing business with him. And he only dropped it after Mr. Staley left for another job.
Mr. Staley and Ms. Erdoes, The Times previously reported, preferred to keep Mr. Epstein as a client following his 2008 IOU, in part because he helped bring wealthy clients to JPMorgan’s private banking division.
The relationship between Mr. Epstein and Mr. Staley, known as Jes, is a central issue in the lawsuit. Virgin Islands lawyers have alleged that the two men shared sexually suggestive emails about young women and that Mr Epstein sometimes sent Mr Staley “pictures of young women in seductive poses”.
The Virgin Islands has said the bank should have been aware of the emails. Mr. Staley left JPMorgan in 2013 and became CEO of Barclays in 2015. He stepped down from that position in 2021 due to the fallout from an investigation by UK regulators into how he had characterized his relationship with Mr Epstein.
JPMorgan has said it was not aware of any improper conduct involving Mr. Staley was involved. But the bank has named him as a defendant in a third-party lawsuit, so that if Mr. Staley is found guilty of improper activity, he could be held liable for any damages he is required to pay. A federal judge this week turned down Mr. Staley’s attempt to be dismissed from the trial.
Neither Mr. Staley nor his lawyers responded to requests for comment, but in court documents he has denied any wrongdoing and has said he was unaware of any sex trafficking operation.
The lawyers for Mr Epstein’s victims won a major victory in a similar case last week, when Deutsche Bank, which succeeded JPMorgan as Mr Epstein’s primary banker, agreed to pay $75 million to pay a proposed class action lawsuit filed in federal court last year. The German bank previously paid a $150 million fine to New York regulators.
The proposed settlement with Deutsche Bank could become a model for any deal with JPMorgan. JPMorgan had managed 40 accounts for Mr Epstein and handled most of his wire transfers, including payments to women believed to be victims, people briefed on the matter said.
“JPM was his true partner,” said Bradley Edwards, who along with David Boies is part of the legal team representing Mr. Epstein’s victims in the lawsuit. “There is no real comparison between the two cases.”
To date, Mr. Epstein’s estate — once valued at $600 million — has paid out more than $150 million in settlements to more than 125 victims. Those victims could be eligible for a portion of the money from the proposed deal with Deutsche Bank.
The Virgin Islands lawsuit against JPMorgan arose from information the territory gathered during a lawsuit involving Mr. Epstein’s estate. The Islands filed a lawsuit to recover tens of millions in tax breaks it had awarded to Mr. Epstein’s businesses based in St. Thomas, reaching a $105 million settlement in November.
The Virgin Islands’ own dealings with Mr. Epstein have also generated controversy over the years. Not only did it award lucrative tax breaks to its businesses, but in 2012 the government eased travel restrictions on Mr Epstein at the request of his lawyers, according to documents obtained by The Times through a request for public records.
Due to his status as a sex offender, Mr Epstein was required to notify authorities of any travel plans, but that advance notice was reduced to one day of about three weeks by the Attorney General of the Virgin Islands at the time, the documents show .
JPMorgan has used some of these criticisms of the Virgin Islands government to argue that the territory is unable to sue for damages. The bench said in a lawsuit Tuesday that U.S. territory officials had a long history of hugging Mr. Epstein and “looking the other way as he walked through USVI airports accompanied by girls and young women.”
The bank also noted that Mr. Epstein regularly made campaign donations to local politicians, and that it has sought information on Cecile de Jongh, the wife of a former governor of the Virgin Islands, who was a long-time office manager for Mr. Epstein’s companies. It also plans to transfer Albert Bryan Jr. impeach the current governor, who was the chairman of the agency that grants Mr. Epstein’s companies the big tax breaks.