By Pam Martens and Russ Martens: April 13, 2023
Jamie Dimon, the Chairman and CEO of JPMorgan Chase, is desperately attempting to redirect the media’s focus to anything other than two federal lawsuits that name his bank as a knowing facilitator and cash conduit for Jeffrey Epstein’s child sex trafficking ring. One lawsuit has been filed by the government of the U.S. Virgin Islands where Epstein owned an island-compound and air-lifted young girls in and out. The other lawsuit has been filed by an alleged underage victim of Epstein’s, Jane Doe 1.
Dimon’s high-powered p.r. machine has been churning out headlines on his role as “rescuer” of the teetering bank, First Republic, (never mind that there are few signs that the bank has actually been rescued). And one would think that Dimon has written a new Magna Carta for all the press attention going to his unremarkable annual letter to shareholders.
The latest shiny object misdirection rolled out by Dimon’s p.r. flacks was a wide- ranging interview last Thursday between Dimon and CNN’s Poppy Harlow, where the breadth of her questions hinted that Dimon was on a par with a head of state, rather than the head of a bank with an unprecedented five criminal felony counts.
After allowing Dimon to opine on everything from Russia’s war on Ukraine to the Fed’s interest rate policy to affordable housing and inner-city schools, Harlow finally got around to the topic of Epstein. The exchange went as follows:
HARLOW: OK. We have to go pretty soon but I — I do want to ask you a few more things. I want to ask you about something that is in the news — that JPMorgan is in the news about a former client of yours and that is Jeffery Epstein. JPMorgan is being sued now by the U.S. Virgin Islands. They’re alleging that your bank helped facilitate payments to Epstein’s victims and benefited from human trafficking while ignoring warnings. Do those allegations have merit?
DIMON: Well, I cannot talk about current litigation except to say that whenever these things come up, we have some of the best lawyers in the world — compliance, out of the DOJ, out of SEC, important divisions who review all of these things and make decisions at the time based on what they know, as best as they know.
HARLOW: You’re going to be deposed we’ve learned now in this case in the spring. In retrospect, Jamie, do you think JPMorgan should have acted more quickly after Epstein pleaded guilty to one of these charges in 2008 — because he was your client for five more years?
DIMON: Hindsight is a fabulous gift.
It now appears that this exclusive interview airing on an international news outlet might have been motivated by the fact that the U.S. Virgin Islands was planning to drop major new bombshells in court in the Epstein/JPMorgan case – which it did yesterday.
The overall thrust of the U.S. Virgin Islands case against the bank is presented in the second amended complaint as follows:
“…based on documents reviewed and interviews conducted by the Government, JP Morgan knowingly facilitated, sustained, and concealed the human trafficking network operated by Jeffrey Epstein from his home and base in the Virgin Islands, and financially benefitted from this participation, directly or indirectly, by failing to comply with federal banking regulations, [redacted]. JP Morgan facilitated and concealed wire and cash transactions that raised suspicion of—and were in fact part of—a criminal enterprise whose currency was the sexual servitude of dozens of women and girls in and beyond the Virgin Islands. Human trafficking was the principal business of the accounts Epstein maintained at JP Morgan.
“Upon information and belief, JP Morgan turned a blind eye to evidence of human trafficking over more than a decade because of Epstein’s own financial footprint, and because of the deals and clients that Epstein brought and promised to bring to the bank. These decisions were advocated and approved at the senior levels of JP Morgan, including by the former chief executive of its asset management division and investment bank, whose inappropriate relationship with Epstein should have been evident to the bank.”
The second amended complaint by the U.S. Virgin Islands also adds a Fifth Count, charging JPMorgan Chase with obstruction. It reads in part:
“By providing financing for Epstein’s sex trafficking organization from at least 2000 through about August 2013, and concealing its actions thereafter, JP Morgan obstructed, interfered with, and prevented the federal government’s enforcement of the TVPA [Trafficking Victims Protection Act] against Epstein. To the extent that the federal government was able to ultimately charge Epstein with TVPA violations, the filing of these charges was delayed by JP Morgan’s actions. Because of that delay, women and girls in the Virgin Islands were coercively caused to engage in commercial sex acts.”
The newly filed second amended complaint also incorporates information obtained from a deposition of Mary Erdoes, the Chief Executive Officer of JPMorgan Chase’s Asset & Wealth Management division and one of the bank’s highest ranking women. Much of the new information is stunning in terms of just how much it alleges that the bank knew about Epstein’s sex trafficking while it displayed a callous disregard for the underage girls being impacted by its failing to take action. It reads in part:
“In 2006, a JP Morgan Rapid Response Team noted that Epstein ‘routinely’ made cash withdrawals in amounts from $40,000 to $80,000 several times per month, totaling over $750,000 per year. In addition, Mary Erdoes admitted in her deposition that JP Morgan was aware by 2006 that Epstein was accused of paying cash to have underage girls and young women brought to his home. In the years that followed, JP Morgan employees, including senior executives, emailed internally that Epstein was under investigation or had been sued for trafficking or sexual abuse. This includes an email in 2010 between Mary Erdoes and Jes Staley regarding a federal investigation of Epstein for child trafficking; a 2011 email summarizing a few 2010 news stories connecting Epstein to human trafficking and promising to ‘monitor the accounts and cash usage closely going forward;’ and a 2011 compliance memo noting that ‘[n]umerous articles detail various law enforcement agencies investigating Jeffrey Epstein for allegedly participating in child trafficking and molesting underage girls’ and that ‘Epstein had settled a dozen civil lawsuits out of court from his victims regarding solicitation for an undisclosed amount.’ Internal emails also questioned who Epstein’s clients were, circulating an article regarding whether Epstein was running a Ponzi scheme.
“Indeed, Epstein’s behavior was so widely known at JPMorgan that senior executives joked about Epstein’s interest in young girls. In 2008, for example, Mary Erdoes received an email asking her whether Epstein was at an event ‘with miley cyrus.’ In her deposition, Mary Erdoes testified that JP Morgan terminated Epstein as a customer in 2013 after she became aware that the withdrawals were ‘actual cash.’ However, Epstein had made substantial cash withdrawals every year he banked with JP Morgan, including more than $800,000 per year in 2004 and 2005.”
There is also this:
“One internal document [obtained from JPMorgan Chase] describes the account of Epstein’s ‘assistant or young lady he brought over from Prague (or some place like that),’ clearly referring to Jane Doe 1. The document describes charges in New York, Palm Beach, and St. Thomas for lingerie and other sexually explicit material. Elsewhere, JP Morgan describes media reports referring to the fact that Epstein purchased her at age 14. She remained a customer of JP Morgan, and Epstein paid her more than $600,000, from his accounts at JP Morgan, including more than $165,000 after Epstein’s plea.”
All of this raises the critical question as to why this case has been left to the Attorney General of the U.S. Virgin Islands to bring to the federal court in Manhattan. Where is the highest law enforcement agency in the U.S. – the criminal division of the U.S. Department of Justice. For the insidious failings of the Department of Justice in the Epstein matter, see our 2019 report here.
For another outrageous case where JPMorgan Chase was wearing blinders for years as one of its largest customers perpetrated one of the largest frauds in U.S. history, see our report: JPMorgan and Madoff Were Facilitating Nesting Dolls-Style Frauds Within Frauds. Two of the bank’s five felony counts under the tenure of Dimon stemmed from the Madoff matter.