By Pam Martens and Russ Martens: June 13, 2023 ~
Yesterday, at 9:33 a.m. ET, JPMorgan Chase and the law firm Boies Schiller Flexner, issued a terse joint statement indicating that they had informed Judge Jed Rakoff’s federal court in Manhattan that claims against the bank for aiding and abetting Jeffrey Epstein’s sex-trafficking of underage girls had been settled by the two sides. The settlement will require court approval.
Law partner David Boies later confirmed to the press that the dollar figure for that settlement was an astonishing $290 million, despite the fact that the lawsuit was brought by just one women, Jane Doe 1.
After Jamie Dimon, the Chairman and CEO of JPMorgan Chase, had argued for months that the bank was not responsible for Epstein’s sex crimes and trafficking of young girls, why would the bank flip on a dime on June 12 and decide to effectively admit its guilt by agreeing to pay $290 million to settle the case?
The answer to that question is what else was happening in Judge Jed Rakoff’s court yesterday – which is actually quite a lot.
For starters, Jane Doe 1 became a lot of Jane Does, all potentially willing to bring more horrific stories and headlines implicating the bank for functioning as a cash conduit for Epstein’s crimes. (The bank had allowed tens of thousands of dollars in cash to be paid out monthly to Epstein from his accounts at the bank despite years of warnings from its own compliance staff that Epstein was a registered sex offender and under investigation for sex trafficking of underage girls, according to internal bank documents submitted to the court.)
Jane Doe 1 was able to become a multiple threat to JPMorgan Chase because yesterday Judge Rakoff entered an Opinion and Order certifying the case as a Class Action. Rakoff’s order explained the broad scope of the class being certified as follows:
“All women who were sexually abused or trafficked by Jeffrey Epstein during the time when JP Morgan maintained [accounts] for Epstein and/or Epstein-related entities, which included January 1, 1998, through on or about August 19, 2013, both dates inclusive, and continuing to the time of Epstein’s death on August 10, 2019.”
To put it bluntly, JPMorgan Chase was now facing the prospect of women from around the globe who had been trafficked or sexually assaulted by Jeffrey Epstein over the span of 21 years coming forward with potentially new and more incriminating evidence implicating the bank.
The second pivotal thing that happened in the court yesterday were filings made by the U.S. Virgin Islands (USVI) in the separate case it has brought against JPMorgan Chase, also over the bank aiding and abetting Epstein’s sex trafficking by functioning as a cash conduit for Epstein. That case is also being heard by Judge Rakoff.
USVI entered a Reply Memorandum that contained the following devastating charges against the bank:
“Plaintiff, the Government of the United States Virgin Islands (‘Government’), claims and will prove that Defendant JPMorgan Chase Bank, N.A. (‘JPMorgan’) violated the Trafficking Victims Protection Act, 18 U.S.C. §§ 1581-1597 (‘TVPA’), by knowingly participating in and benefitting from Jeffrey Epstein’s sex-trafficking and by obstructing investigation through its concealment of Epstein’s suspicious transactions from law enforcement. Discovery confirms that JPMorgan knowingly, recklessly, and unlawfully provided and pulled the levers through which Epstein’s recruiters and victims were paid and was indispensable to the operation and concealment of Epstein’s trafficking. JPMorgan had real-time information on Epstein’s payments that the Government did not and had specific legal duties to report this information to law enforcement authorities, which it intentionally decided not to do.”
The USVI then attached dozens of internal emails as Exhibits, showing the contempt that high level compliance staff held toward Epstein; that they wanted him fired as a client of the bank but were overruled by higher ups for years.
One JPMorgan Chase internal email from December 2010 from a compliance staffer to the Vice President of Anti-Money Laundering Operations referred to Epstein as a “known child sleaze.”
Another devastating email involving the depth of what the bank knew about Epstein was dated January 10, 2011. It came from Maryanne Ryan, the Vice President for Anti-Money Laundering (AML) Operations at JPMorgan Chase. The email was sent to William Langford, the Global Head of Compliance, as well as others.
It read as follows:
“I will dig more on the modeling agency and his personal accounts for potentially interesting activity in 05-08. Seems JPMC never was served a subpoena, which I find odd since we were his #1 bank and actually Bear [Stearns] got one in 07. Rich is getting me the AUSA [Assistant U.S. Attorney for the Justice Department] correspondence and we will compare their ask of Bear (something about $1000 and $100,000 transactions were of interest to them)
“How it came up again was his account alerted in Fortent [a money laundering detection program] for cash activity which it does for [sic] time to time and we went to Jim and he again said PB [Private Bank at JPMorgan Chase] is comfortable with him and that Steve Cutler approved him to stay. I spoke to Phil and given the HT [Human Trafficking] project thought that Steve Cutler may feel differently about Epstein, given the exposure the bank has received on the HT project. I circled back with PB and that was the reason for the RR [Rapid Response] meeting on Friday. Seems PB was not so thrilled with retaining him, it was all due to Jes [Jes Staley, a JPMorgan Chase executive and Senior Relationship Manager to Epstein with an office a few hundred feet from Dimon’s].
“Digging will take a few days, I’ll get back to you when I am done. The guy likes cash so the paper trail could be hard.
“Maryanne Ryan, Vice President, AML Operations”
There is so much to unpack in this email that it deserves its own plaintiff’s brief. First of all, it strongly suggests that the Anti-Money Laundering people at the bank are powerless to root out money laundering because they have to say “May I” to the Private Bank at JPMorgan Chase.
Second, exactly how does one get private subpoena information from the Assistant U.S. Attorney’s Office of the U.S. Department of Justice. Typically, until a case is brought, that information is confidential. Conveniently for JPMorgan Chase, it had purchased Bear Stearns when it collapsed in 2008 so it may have obtained its legal files as part of that transaction.
Third, sirens are going off in an anti-money laundering program called Fortent, about the cold cash Epstein is repeatedly taking from his accounts at the bank, but this is producing no meaningful action against Epstein or reports to law enforcement.
Fourth, Stephen Cutler, the former Director of the Division of Enforcement at the Securities and Exchange Commission, who became General Counsel at JPMorgan Chase in February of 2007, “had approved” Epstein to stay at the bank, according to this email.
In Jamie Dimon’s recent deposition in the case, he stated that Cutler worked in the office next door to Dimon and that Cutler reported to Dimon. But Dimon also stated that he didn’t know Epstein even had accounts at the bank or anything about him until 2019 when Epstein was arrested and charged with sex-trafficking.
For the General Counsel to be aware of huge cash withdrawals from the accounts of a man under investigation for sex trafficking of children and not get the permission of the Chairman and CEO of the bank to keep that man as a client – when he works next door to Dimon every day – might be hard for a jury to swallow.
Jamie Dimon has survived an endless torrent of charges against his bank from the U.S. Department of Justice and other regulators for more than a decade. Dimon is, in fact, the only CEO of a major Wall Street firm to have four separate criminal matters listed on his personal BrokerCheck record at the Wall Street self-regulator, FINRA.
FINRA provides the following explanation as to why those criminal matters against the bank are listed on Dimon’s personal BrokerCheck record:
“Mr. Dimon is disclosing this matter because, in certain respects unrelated to the underlying conduct, he may be deemed to have exercised control over JPMC [JPMorgan Chase] which entered into a deferred prosecution agreement with the Dept. of Justice….”
Indeed, Dimon has to be exercising extraordinary control over JPMorgan Chase – because that’s the only logical explanation as to why the Board of Directors hasn’t sacked him as felony count after felony count was racked up on his watch.
For a more granular understanding of the serial criminal conduct – to which the bank pled guilty – see our report: JPMorgan’s Board Made Jamie Dimon a Billionaire as the Bank Rigged Markets, Laundered Money, and Admitted to Five Felony Counts.
As for the claim that the $290 million settlement represents a great day of justice for Epstein’s victims, we’ll wait until the terms of the settlement are actually filed with the court. If the settlement involves protecting the clients that Epstein referred to JPMorgan Chase by imposing stringent non-disclosure agreements on the victims, or gagging victims on their ability to ever reveal what happened to them, or providing immunity to Epstein’s enablers and co-conspirators, then it will be yet another tragic chapter in the Epstein/JPMorgan saga.