From Jeffrey Epstein to Sam Bankman-Fried to Madoff – JPMorgan Banks the Creepy Crooks

By Pam Martens and Russ Martens: February 16, 2023 ~

Jamie Dimon, Chairman and CEO of JPMorgan Chase

Jamie Dimon, Chairman and CEO of JPMorgan Chase Throughout a Period of Five Criminal Felony Counts Brought by the U.S. Department of Justice

If yesterday had been National Creepy Crooks Day, JPMorgan Chase would have taken top honors. Bloomberg News reported on the creepy emails that former JPMorgan Chase executive Jes Staley was sending back and forth from his email account at the bank to child sex trafficker Jeffrey Epstein, as the bank was only too happy to handle 55 accounts worth hundreds of millions of dollars for Epstein. One set of emails suggested Staley was having kinky or sexual relationships with individuals dressed up as Disney characters. (Leave it to JPMorgan to take down not only its own brand but taint Disney’s brand as well.)

Anyone who has ever worked at a major Wall Street brokerage firm or investment bank knows full well that emails are monitored by the company. This suggests that Staley knew he had nothing to fear from the bank’s email monitors.

A 2019 investigation conducted by Wall Street On Parade indicated that Epstein’s ties to JPMorgan Chase date back to at least 2001, when Epstein presided as Chairman over an offshore company incorporated in Bermuda called Liquid Funding Ltd. That company grew to at least $6.7 billion in outstanding liabilities. JPMorgan Chase was one of three banks providing a $250 million liquidity facility to Liquid Funding Ltd. JPMorgan Chase was also listed as its “Security Trustee.” Liquid Funding appeared to be propping up dodgy subprime mortgage dealers by giving them loans. Bear Stearns, where Epstein had worked from 1976 to 1981, owned 40 percent of the equity in the company.

If the Bloomberg News article wasn’t enough repulsion for one day, the New York Times reported yesterday that “JPMorgan holds $400 million that FTX’s founder, Sam Bankman-Fried, invested in an obscure hedge fund, Modulo Capital….” Since federal regulators allege that all of Bankman-Fried’s wealth comes from equity investors he defrauded or the looted accounts of his crypto customers, it appears that, once again, JPMorgan Chase has failed miserably in conducting proper due diligence on its customers, or has simply chosen to look the other way as it did during Bernie Madoff’s decades at the bank. (Bankman-Fried has pleaded innocent to an eight-count indictment. Two of his former top executives, however, Caroline Ellison and Gary Wang, have pleaded guilty to similar charges and are cooperating with federal prosecutors.)

One would think that the two criminal felony counts that JPMorgan Chase was hit with by the U.S. Department of Justice in 2014 in the Madoff Ponzi scheme matter might have changed its jaded ways. (It didn’t.) The layers of fraud taking place between the bank and Madoff resembled Russian Nesting Dolls – frauds within frauds – as we detailed in our investigation in 2014. The bank even loaned Madoff’s “business” $145 million in 2005 and 2006, which helped to prop up his Ponzi scheme when it was on the verge of collapsing. When the revolting details of the relationship between the bank and Madoff surfaced, the Los Angeles Times made an astute query in a photo caption of a smirking Madoff, asking: “Bernie Madoff: Was he part of the JPMorgan ring, or was JPMorgan part of his ring?”

Two trial lawyers literally wrote the book in answering that question. In JPMadoff: The Unholy Alliance Between America’s Biggest Bank and America’s Biggest Crook, Helen Davis Chaitman and Lance Gotthoffer argue that RICO, the Racketeer Influenced and Corrupt Organizations Act, is “the perfect tool” to bring JPMorgan to heel. The lawyers explain:

“In enacting RICO, Congress meant business. This powerful law enforcement weapon requires proof that the defendant committed ‘at least two acts of racketeering activity’ within a ten year period, that are related to financial gain. The predicate acts are drawn from a list of 27 federal and eight state law crimes. They include the typical mob crimes like murder, kidnapping, gambling, arson, robbery, extortion, and drug dealing. But the predicate acts also include a lot of the crimes committed by Wall Street banksters in order to enrich themselves at the expense of others, such as bribery, mail and wire fraud, fraud in the sale of securities, embezzlement, financial institution fraud, obstruction of justice, tampering with or retaliating against a witness, victim or informant, and money laundering.”

Yesterday’s Bloomberg News article about Jes Staley’s sick emails to Epstein are derived from a lawsuit brought against JPMorgan Chase by the government of the U.S. Virgin Islands, where Epstein owned a secluded island compound. The lawsuit alleges the following:

“For two decades, Defendant JPMorgan Chase Bank, N.A. (‘JPMorgan’) facilitated and sustained Jeffrey Epstein’s sex-trafficking by handling and [redacted] his payments to young women and girls who were his victims and recruiters. Sex-trafficking was the principal business of Epstein’s accounts held by JPMorgan, and JPMorgan profited handsomely from the hundreds of millions of dollars in assets in those accounts, in addition to Epstein’s connections and referrals of ultrawealthy and powerful clients.”

What’s curious about the above paragraph is that the redacted portion appears to be only a one-word redaction. Let’s face it, those two sentences are absolutely devastating to the largest bank in the United States, so what one word could be so much worse that it needs to be blacked out for public digestion? Try finding a word that fit’s in that phrase: “…by handling and [redacted] his payments to young women and girls who were his victims and recruiters.” The dangerous word can’t be “facilitating” because that word appears unredacted throughout the lawsuit in describing the role JPMorgan Chase played in payments to Epstein’s victims. The unredacted words “handling” and “facilitating” suggest an enabler but not a direct participant in the crime. Words like “making” or “processing” on the other hand, sound like direct participation in the crime.

As for those creepy references to Disney characters, the Virgin Islands’ lawsuit shares this:

“In July 2010, Staley emailed Epstein saying ‘That was fun. Say hi to Snow White[,]’ to which Epstein responded ‘[W]hat character would you like next?’ and Staley said ‘Beauty and the Beast.’ Epstein also emailed Staley photos of young women in seductive poses. Following the internal reports of additional law enforcement investigations into Epstein’s sex-trafficking in 2010 and 2011, JPMorgan’s response was to send Staley in 2011 to obtain Epstein’s denial, on which the bank hung its hat.”

And there is this:

“Throughout its relationship with Epstein, JPMorgan’s internal investigation teams identified evidence that he was engaged in criminal sex-trafficking. In 2006, JPMorgan’s Global Corporate Security Division reported that Epstein was indicted in Florida for felony solicitation of minors for prostitution. In 2008, Epstein pled guilty in Florida to solicitation or procurement of a minor for prostitution and became a registered sex offender. JPMorgan’s continued relationship with Epstein after his criminal plea was reviewed and approved at the highest levels of the bank. An August 2008 internal email states, ‘I would count Epstein’s assets as a probable outflow for ’08 ($120mm or so?) as I can’t imagine it will stay (pending Dimon review).’ Yet the assets did stay [redacted text]. In 2010, JPMorgan’s risk management division discussed new allegations of an investigation of Epstein involving child sex-trafficking. Throughout 2010 and 2011, JPMorgan’s compliance and security divisions reported evidence of Epstein’s engagement in sex-trafficking, including his settlement of a dozen civil lawsuits and his payments of $1 million to the MC2 modeling agency engaged with Epstein in child sex-trafficking, ‘luring’ girls on the pretext of providing modeling opportunities and careers.”

Given the five criminal felony counts that the U.S. Department of Justice has brought against JPMorgan Chase in the past nine years and its institutional knowledge of the crimes this bank is willing to tolerate in its search for profits, one has to ask this: why is the government of the U.S. Virgin Islands bringing these charges instead of the government of the United States?

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