Jeffrey Epstein was many things: a sexual predator, a friend to the rich and powerful and, for many years, a lucrative customer of the nation’s largest bank.
Now the bank, JPMorgan Chase, faces a reckoning for its nearly 15-year relationship with the disgraced financier, one that could cost it a big payout in two civil lawsuits that claim the bank ignored warnings that he was trafficking teenage girls for sex because it was profiting from its relationship with him.
New disclosures resulting from the cases suggest that employees of the bank flagged Mr. Epstein’s activity as suspicious on a number of occasions, while other documents show Mr. Epstein’s familiarity with top executives at the bank, and his easy access to them, even after his 2008 guilty plea in Florida to soliciting prostitution from a teenage girl.
Filed late last year in federal court in Manhattan, the lawsuits — one brought by lawyers representing Mr. Epstein’s victims and the other by the government of the U.S. Virgin Islands — are proceeding on a fast track, with dozens of depositions taken of victims, Virgin Islands officials and people who worked for the bank and Mr. Epstein.
The proceedings will take on a new urgency on Friday, when Jamie Dimon, JPMorgan’s chief executive, is scheduled to be deposed at the bank’s headquarters in Manhattan.
Mr. Epstein died in an apparent suicide three years ago while being held in federal custody on sex-trafficking charges. JPMorgan dropped him as a client a decade ago. Many of the documents and exhibits filed in the litigation are under seal.
One document prepared by the bank, an exhibit in a court filing last week, suggests employees of JPMorgan filed numerous suspicious activity reports, or SARs, about some of Mr. Epstein’s transactions. The names of some four dozen employees who the bank said were “involved in reporting SARs relating to Epstein Accounts between 2000 and 2019” are redacted.
Banks must file a SAR with federal regulators when they suspect that a transaction may involve money laundering or fraud. The reports are kept confidential because the transactions could prove to be legitimate, though they can provide investigative leads to the authorities.
A JPMorgan spokeswoman said the bank had not known of anything that indicated Mr. Epstein was involved in sex trafficking. In filings related to the case, the bank has also disclosed that it asked federal prosecutors in Florida in 2011 if there was any active investigation of Mr. Epstein. The bank said the prosecutors had not disclosed any investigation.
A separate cache of emails and partial calendar entries reviewed by The New York Times shows that top executives at the bank had a level of familiarity with Mr. Epstein.
“Still waiting for your call,” Mr. Epstein wrote in October 2011 to Mary C. Erdoes, the current head of the bank’s big asset and wealth management division.
Ms. Erdoes replied: “Seriously. It is 1 a.m. your time. I would say get a life … but you are at the Ritz and we aren’t.” Ms. Erdoes added that she had just landed in California and would talk to Mr. Epstein the next day.
The emails, and calender entries for Mr. Epstein while he was staying at his Manhattan mansion, were obtained through a public records request to the attorney general for the U.S. Virgin Islands. JPMorgan’s spokeswoman has said contact between wealthy 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 with the closest ties to him.
A few are of a personal nature: In one conversation from 2015, Mr. Staley asked Mr. Epstein if he would meet with his daughter to discuss her post-college plans. In a 2011 email exchange, there was a discussion about arranging a dinner with Mr. Epstein and Mr. Staley’s family.
Other emails between Mr. Epstein, Ms. Erdoes and Mr. Staley involved potential business deals. A series of exchanges focused on Mr. Epstein’s effort to establish a charitable partnership between the bank, the Bill & Melinda Gates Foundation and others. He also inquired about meeting with Mr. Dimon to discuss the plan.
The bank’s spokeswoman said Mr. Epstein had never met with Mr. Dimon. Mr. Epstein’s proposed charitable fund with the Gates Foundation and JPMorgan never advanced much beyond the talking stage in 2011 when Mr. Gates first met Mr. Epstein.
JPMorgan cut ties with Mr. Epstein in 2013, though that was years after some members of the bank’s compliance department had raised alarms about doing business with him. And it dropped him only after Mr. Staley had left for another job.
Mr. Staley and Ms. Erdoes, The Times previously reported, favored keeping Mr. Epstein as a client after his 2008 guilty plea, in part because he helped bring wealthy clients to JPMorgan’s private-banking division.
The relationship between Mr. Epstein and Mr. Staley, who is known as Jes, is a central question in the litigation. Lawyers for the Virgin Islands have claimed that the two men shared sexually suggestive emails about young women and that sometimes Mr. Epstein sent Mr. Staley “photos 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 in 2015 became the chief executive of Barclays. He resigned that position in 2021 because of the fallout from an investigation by British regulators into how he had characterized his relationship with Mr. Epstein.
JPMorgan has said it was not aware of any inappropriate conduct involving Mr. Staley. But the bank has named him as a defendant in a third-party lawsuit, so that if it is determined that Mr. Staley engaged in improper activity, he can be held liable for any damages it may have to pay. A federal judge this week rejected Mr. Staley’s attempt to be dismissed from the litigation.
Neither Mr. Staley nor his lawyers responded to requests for comment, but in court papers, he has denied any wrongdoing and has said he was unaware of any sex trafficking operation.
The lawyers for Mr. Epstein’s victims scored a big win in a similar case last week, when Deutsche Bank, which succeeded JPMorgan as Mr. Epstein’s primary banker, agreed to pay $75 million to settle a proposed class-action suit filed in federal court last year. The German bank previously paid a $150 million penalty to New York regulators.
The proposed settlement with Deutsche Bank could become a template for any deal with JP Morgan. JPMorgan had managed 40 accounts for Mr. Epstein and handled most of his wire transfers, which included 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 the victims of Mr. Epstein 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 over $150 million in settlements to more than 125 victims. Those victims could be eligible to get some of the money from the proposed deal with Deutsche Bank.
The Virgin Islands lawsuit against JPMorgan arose from information the territory had gathered during litigation with Mr. Epstein’s estate. The Virgin Islands had sued to recoup tens of millions in tax benefits it had awarded to Mr. Epstein’s businesses that were based in St. Thomas, reaching a $105 million settlement in November.
The Virgin Islands’ own dealings with Mr. Epstein also have raised controversy over the years. Not only did it award lucrative tax breaks to his businesses but in 2012, the government eased travel restrictions for Mr. Epstein after a request from his lawyers, according to documents that The Times obtained through a public records request.
Because of his status as a sex offender, Mr. Epstein was required to notify authorities of any travel plans, but that advance notice was cut to one day from roughly three weeks by the Virgin Islands’ attorney general at the time, the documents show.
JPMorgan has seized on some of these criticisms of the Virgin Islands government to argue the territory is in no position to sue for damages. The bank, in a court filing on Tuesday, said officials in the U.S. territory had a long history of cozying up to Mr. Epstein and looked “the other way when he walked through U.S.V.I. airports accompanied by girls and young women.”
The bank also noted Mr. Epstein made frequent campaign donations to local politicians, and it has sought information about Cecile de Jongh, the wife of a former governor of the Virgin Islands, who was a longtime office manager for Mr. Epstein’s companies. It is also set to depose Albert Bryan Jr., the current governor, who was the chairman of the agency that awarded Mr. Epstein’s businesses the big tax breaks.
https://www.nytimes.com/2023/05/25/business/jpmorgan-jeffrey-epstein.html