JPMorgan Chase & Co. compliance staff urged the bank to cut ties with Jeffrey Epstein not just over sex-trafficking allegations but also over money-laundering suspicions, according to a new court filing.
In an amended complaint filed Wednesday in federal court in Manhattan, the US Virgin Islands revealed new details of how JPMorgan handled allegations about Epstein up until 2013, the year the bank broke off its relationship with him.
A protester holds up a sign of Jeffrey Epstein in front of the federal courthouse in New York on July 8, 2019. Photographer: Stephanie Keith/Getty Images
The bank’s asset and wealth management chief executive Mary Erdoes admitted in a recent deposition that the bank was aware by “2006 that Epstein was accused of paying cash to have underage girls and young women brought to his home,” the territory alleges.
According to the revised suit, Epstein’s use of his accounts at the same time that allegations of sex-trafficking were emerging in the media raised red flags among JPMorgan’s anti-money laundering (AML) staff. USVI claims Epstein used JPMorgan accounts to pay millions of dollars to his victims as well as other people and organizations who facilitated his conduct.
“AML Operations went to a [Private Bank] risk meeting late last week requesting that we exit this relationship,” a senior JPMorgan compliance official allegedly wrote in 2011. But the same person also noted that Epstein was “an alleged personal associate of the CEO of the Investment Bank (Jes Staley).”
A JPMorgan spokeswoman declined to comment on the latest filing.
Staley, who worked at JPMorgan for more than 30 years, was also formerly its private banking head, and his relationship with Epstein is at the center of allegations that the bank knew about the latter’s crimes.
According to the complaint, Staley discussed the topic of “human trafficking” with Epstein in 2011 and was told “there was no truth to the allegations.” Staley allegedly reassured bank staff that Epstein said there was no evidence against him and that he “was not expecting any problems.”
Federal prosecutors charged Epstein with sex-trafficking in 2019. He was found dead in his jail cell a month after his arrest. His death was later ruled a suicide.
Since the USVI and a Jane Doe victim of Epstein filed separate lawsuits against JPMorgan late last year, the bank has accused Staley of “misleadingly vouching” for the late sex offender when it was deciding whether to retain him as a client. JPMorgan has filed its own lawsuit against Staley, alleging he should be held responsible for any damages awarded against the bank in these suits.
USVI is suing JPMorgan for knowingly benefitting from Epstein’s sex trafficking venture for years. The bank denies the allegation and claims it had no knowledge of or involvement in Epstein’s crimes.
The territory, where Epstein owned a palatial villa on a private island and registered several businesses, alleges his sex trafficking operation could not have survived without the financial support of JPMorgan.
According to the USVI’s updated complaint, concerns about the “risks that Epstein posed were well known enough” that Erdoes, Staley, then-general counsel Stephen Cutler and other senior executives held several meetings to discuss the topic in 2008, 2011 and 2013.
In 2010, JPMorgan compliance officials suggested that Epstein “should go,” with one staff member saying that there was “lots of smoke. Lots of questions”, the complaint outlines. Lawyers for the USVI detail the contents of emails and memos sent between staff at the bank over several years in a bid to cast light on what decision makers knew and when.
In its Wednesday filing, the USVI re-alleged a number of claims that had previously been dismissed by the judge in the case. The territory also added a new claim — that JPMorgan obstructed enforcement of human trafficking laws by failing to act on red flags.
The USVI claims that Epstein’s behavior was so widely known at JPMorgan that senior executives joked about his interest in young girls. For example, in 2008 Erdoes received an email jokingly asking whether Epstein was at an event with then-teenage pop star Miley Cyrus. The filing does not identify who sent the email.
Compliance staff also sometimes expressed amusement over Epstein’s activities. One person flagged “Epstein-sponsored” bank accounts and credit cards for two 18-year-old girls, who appeared to be part of his entourage. Judging by their debit charges, the staff member wrote, both girls could be placed in Palm Beach in 2004, around the time Epstein was accused of molesting young women.
“He did pay other girls, many models no huge amounts,” the staffer allegedly wrote. “Sugar Daddy!”
In 2011, JPMorgan’s AML compliance director requested re-approval of the bank’s relationship with Epstein “in light of new allegations of human trafficking.” By that stage, Epstein had pleaded guilty to soliciting a minor for prostitution in Florida and served a little over a year in prison.
Another JPMorgan employee allegedly responded to the request, stating: “I thought we did that in approving a $50 million new line of credit last month?”
The revised complaint says JPMorgan’s AML director also raised concern about doing business with Epstein’s former companion Ghislaine Maxwell, who was convicted in December 2021 of luring and grooming girls for abuse by Epstein. Maxwell sought to set up an account for a “personal recruitment consulting business,” according to the suit.
“What does she mean by personal recruitment??” the AML director allegedly asked in an internal email “Are you sure this will have nothing to do with Jeffrey? If you want to proceed, I suggest that we flag this as a High Risk Client.”
At Maxwell’s trial, a JPMorgan banker testified that Epstein transferred around $31 million to the British socialite from 1999 to 2007.
The cases are USVI v. JPMorgan Chase Bank, 22-cv-10904-UA, US District Court, Southern District of New York (Manhattan) and Jane Doe 1 v. JPMorgan Chase Bank, 22-cv-10019, US District Court, Southern District of New York (Manhattan)
This article was provided by Bloomberg News.
