Jeffrey Epstein may (not) have killed himself but the questions surrounding his life (and death) continue to swirl and on Friday, none other than billionaire JPM CEO Jamie “That’s why i’m richer than you” Dimon was questioned under oath for hours by lawyers in two lawsuits in which the largest US bank was accused of knowingly benefiting from Epstein’s sex-trafficking; Dimon, of course, denied any involvement with the financier’s accounts. According to Bloomberg, Dimon finished his deposition Friday and the deposition will not continue into a second day.
JPM spokeswoman Patricia Wexler said Dimon repeatedly confirmed that he never met or emailed Epstein and was not involved in decisions about his account.
“There are millions and millions of emails and other documents that have been produced in this case and not one comes close to even suggesting that he had any role in decisions about Epstein’s accounts,” Wexler said.
Despite the bank downplaying Dimon’s involvement, JPMorgan had insisted that details of the deposition not be made public, Doe’s lawyer Brad Edwards said. Since the bank commented, he challenged it to release the full transcript of the testimony “rather than mislead anyone.”
“Then, the world can put their comment in context and decide for themselves what they thought of Mr. Dimon’s testimony as a whole,” he said.
While the bank’s lawyers had previously fought efforts to have Dimon questionedd, arguing he had no involvement in Epstein’s 15-year relationship with JPMorgan, the failed. Lawyers for Jane Doe and the US Virgin Islands, who are suing the bank separately for aiding Epstein’s sex trafficking, had the option of asking a federal court judge to extend Dimon’s deposition into Saturday.
JPMorgan has denied claims it knew of Epstein’s sex trafficking but decided to keep him on as a client anyway between 1998 and 2013. It has filed its own lawsuit against former executive Jes Staley, claiming he should be held liable for any damages awarded against the bank as he vouched for Epstein.
The nearly nine-hour deposition of JPMorgan’s Mary Erdoes which took place two months ago, and whose details were finally revealed, delivered more fireworks.
When Erdoes, who leads the bank’s asset and wealth management division, learned a court had affirmed Jeffrey Epstein’s status as a sex offender likely to harm more victims, she had a terse response.
“Oh boy,” Mary Erdoes wrote in a 2011 email to a fellow executive at JPMorgan Chase, where Epstein was a client for 15 years.
It was at least the sixth time Erdoes had been alerted to Epstein’s criminal or civil legal trouble for sex crimes, according to the WaPo. She had also been informed as early as 2006 that JPMorgan flagged suspicious activity on his accounts.
Erdoes’s statements shed new light on the actions of JPMorgan’s highest-ranking officials while Epstein’s conduct faced legal and public scrutiny.
The Washington Post obtained the transcript of the deposition, much of which has been unreported until now.
Officials from the U.S. Virgin Islands, where Epstein owned a private island and gaudy mansion, and attorneys for his victims claim the bank was complicit in funding Epstein’s long history of abuse and child sex trafficking. A complaint filed last month by the U.S. Virgin Islands cites Erdoes’s deposition as evidence that JPMorgan knew of accusations against Epstein years before the bank severed ties with him.
Not until 2013 did the bank end its business relationship with Epstein, identifying the financier’s routine and massive cash withdrawals as the reason for terminating the relationship.
JPMorgan has rejected the allegations in the lawsuit and expressed regret for its past association with Epstein.
“We all now understand that Epstein’s behavior was monstrous, and his victims deserve justice — but these suits are misplaced as we did not help him commit his heinous crimes,” JPMorgan spokeswoman Patricia Wexler said in a statement.
He is, of course, a monster now that he is dead and can’t reveal who else may be a monster. Previously he was just a well-paying client.
The deposition transcript shows Erdoes said she had been made aware of Epstein’s convictions for sexual offenses, his status as a high-risk sex offender, and public allegations of abuse of minors and human trafficking. But she said she didn’t think it was her responsibility to remove him as a client, launch an inquiry into his accounts or refer them to compliance officials. JPMorgan has a separate process for dealing with client-related legal issues, she said.
Jes Staley, Erdoes’s supervisor and one of Epstein’s close friends, did investigate the allegations against Epstein by asking the financier about them, according to records read during the deposition. JPMorgan in a statement said it was “unfair for The Post to draw these kinds of conclusions without context for the relevant processes at JPMorgan, the tens of millions of clients, and the many professionals involved.”
U.S. Virgin Islands Gov. Albert Bryan Jr. is set to give a deposition on June 6. JPMorgan in a filing Thursday accused government officials on the islands of shielding Epstein from law enforcement officials in exchange for political donations. Attorneys for the U.S. Virgin Islands called the claim “an obvious attempt to shift blame away from JPMorgan Chase.”
Deutsche Bank, where Epstein took much of his wealth after leaving JPMorgan in 2013, recently agreed to pay $75 million to settle a similar suit.
The lawsuits against the investment banks concern the extent to which various people in Epstein’s orbit are accused of enabling the sprawling sex trafficking operation that led to his arrest in 2019, or at least looking the other way — and profiting — when they should have intervened (although how would they when Epstein had sexual dirt on everyone). U.S. Virgin Islands attorneys say JPMorgan “knowingly facilitated, sustained, and concealed” Epstein’s human trafficking network, while profiting from deals and clients Epstein brought into the bank.
Of course, JPMorgan has denied any wrongdoing and said the claims in the U.S. Virgin Islands complaint are meritless. The company has also sued Staley, accusing him of acting on his own to advance Epstein’s interests.
In her deposition, Erdoes said that it was the responsibility of the bank’s legal team to exert controls on Epstein’s accounts and that Staley communicated with him about the bank’s periodic concerns.
“The process by which those things work is that legal risk, compliance, including supervisory management … have a natural process they go to when they have things like this that get alerted to them,” she said, only in this case clearly every single process failed.
That is a fair description of how most major banks’ compliance systems should work, said Eric Chaffee, a professor at the University of Toledo College of Law. But he added that after repeated unexplained suspicious transactions and public reports of criminal behavior, bank officials have a legal responsibility to step in.
“When you have a lot of red flags come up, it’s one of those things where the senior executives certainly have some obligation to be talking to each other and figuring out what’s going on,” Chaffee said. “Ultimately, there does come a point where the bank, the financial institution, becomes outright complicit in regard to the crime.”
Especially when the “client” has dirt on the highest ranking people in said financial institution, and all others for that matter.
Going back to Erdoes deposition, on more than 100 occasions she said she did not recall details of her role helping supervise Epstein’s accounts, some of which date back two decades. She described Epstein’s crimes as “allegations” even though he pleaded guilty to procuring a child prostitute in 2008 and was declared a Level 3 sex offender — the most serious designation — by a New York state appeals court in 2011.
Asked in the March 15 deposition whether she believed Epstein, who died by suicide in 2019, was engaged in sex trafficking, Erdoes said, “I don’t know what to believe.”
Epstein first opened accounts at JPMorgan in 1998, and became one of the bank’s most important clients.
Through his own accounts and the ones he managed for former Victoria’s Secret CEO Leslie Wexner, Epstein “generate[d] one of the largest annual revenue flows of private clients in the private bank,” reads a JPMorgan due diligence report from 2003, when the private bank was considerably smaller, cited in the deposition. (Wexner severed ties with Epstein in 2008, and later said Epstein misappropriated $46 million of the Wexner family’s money.)
A 2006 internal bank report referenced Epstein’s routine cash withdrawals several times a month in amounts ranging from $40,000 to $80,000, adding up to more than $750,000 a year.
By 2008, Epstein had $121 million in accounts with JPMorgan, records read during the deposition show. But Epstein, a self-described money manager, sought to bring the bank more business, according to legal filings, and profit from fees associated with the work.
Throughout that period, according to filings, Epstein benefited from the friendship and internal advocacy of Staley, who preceded Erdoes as head of JPMorgan’s wealth management unit.
Staley, who became the head of British bank Barclays in 2015, described a “profound” friendship with Epstein, according to court records. He resigned from Barclays in 2021 after U.K. regulators launched an investigation into his relationship with Epstein.
Why was he “profoundly” friendly with Epstein? Simple: text messages and emails entered into evidence by the U.S. Virgin Islands suggest “albeit cryptically, that Mr. Staley had sexual encounters” with Epstein’s trafficking victims, Judge Jed S. Rakoff of the Southern District of New York wrote in a May order in the U.S. Virgin Islands case.
In a 2006 email exchange with Staley that was read during the deposition, Erdoes described a Palm Beach Post article about Epstein being accused of soliciting minors as “so painful to read.”
Staley responded: “I went and saw him last night. I’ve never seen him so shaken. He adamantly denies the ages.”
Not the charges… the ages. Because one can obviously confuse a 14-year-old with a 34-year-old.
Staley’s departure from JPMorgan in 2013 allowed Erdoes to end the bank’s relationship with Epstein, she said in the deposition. “There was no one there to vouch for Mr. Epstein,” Erdoes said.
Meanwhile, in a legal filing last month, Staley’s attorneys said JPMorgan’s claims amount to “provocative media fodder,” but “never explain how an employee [Staley] who is not alleged to have had decision-making authority over Epstein’s accounts — and who is not alleged to have seen any of the suspicious account activity that other JPMorgan employees ignored — caused the plaintiffs’ alleged injuries.”
Around that time, she said, she became aware that Epstein’s regular withdrawals were in cash. At the time, Erdoes said, she did not see Epstein’s criminal history and the withdrawals as related.
“Never at the time was that something that I was connecting in my mind with anything to do with any of the allegations of what he may or may not have done,” she said, because of course it wasn’t her – or anyone’s job – to connect the dots as long as the pedophile client kept paying millions in fees and being vouched for by the largest US bank .
Wexler said the firm “did not know that such transactions could have had anything to do with a sex trafficking operation.” And yet they did.
During the deposition, Erdoes also said that it was not her responsibility to initiate internal investigations or flag concerns about Epstein’s behavior that arose from legal developments or news reports about his convictions or suspected trafficking. Instead, she said repeatedly that it was the job of the bank’s legal and compliance officers to vet the information.
“My responsibility is not to do something with every piece of news media that comes out on our client base,” she said later.
Internal JPMorgan records referenced in the U.S. Virgin Islands complaint show that bank employees flagged Epstein’s copious cash withdrawals as early as 2006.
In a 2010 internal email also cited in the complaint, risk management officials surfaced “allegations of an investigation related to child trafficking.” In 2011, according to the filings, JPMorgan’s anti-money-laundering compliance director requested re-approval from JPMorgan’s general counsel of the bank’s relationship with Epstein “in light of the new allegations of human trafficking.”
Erdoes later in the deposition appeared to say the bank’s policies were hazy when encountering a client accused but not convicted of certain crimes. “I don’t know what the proper process is when it’s an allegation,” she said.
Only it wasn’t merely an “allegation”, as everyone knows by now.
Tyler Durden
Sun, 05/28/2023 – 14:30
