HomeBusinessJPMorgan tries to deflect blame for long relationship with Jeffrey Epstein

JPMorgan tries to deflect blame for long relationship with Jeffrey Epstein

JPMorgan Chase’s decision to stop doing business with Jeffrey Epstein was made easier after there was no one at the bank to defend him, a senior executive at the country’s largest lender said in a statement taken in connection with two spinoff lawsuits. of the nearly 15-year relationship with the disgraced financier.

Mary Erdoes, head of JPMorgan’s wealth and asset management division, said in a March statement reviewed by The New York Times that she decided to fire Epstein as a client in the summer of 2013 due to concerns about large and repeated cash withdrawals. of his many accounts with the Bank.

She said an annual review of Mr. Epstein’s accounts took place several months after James E. Staley, who had been a top private official banks at JPMorgan and Epstein’s main supporter, left the bank in January 2013.

Ms Erdoes said Mr Epstein, who became a registered sex offender after a 2008 Florida guilty plea to soliciting prostitution from a teenage girl, was considered a “high-risk client”. Ms Erdoes said she did not know when Mr Epstein was labeled as such.

“Mr. Staley was Mr. Epstein’s lawyer at the bank and he was Mr. Epstein’s senior relationship manager,” Ms. Erdoes said. “And without someone there advocating for Mr. Epstein and the situation that I saw , was coming out of Mr. Epstein.”

A decade after JPMorgan ended its dealings with Mr. Epstein, and nearly four years after his death by suicide while awaiting trial on federal sex trafficking charges, the question of what executives at the nation’s largest bank knew about Mr. Epstein’s abuse of dozens of teenage girls and young women is central to the lawsuits facing the bank.

The two lawsuits, one filed by lawyers representing Mr. Epstein’s victims and the other by the US Virgin Islands government, claim that JPMorgan ignored multiple warnings that Mr. Epstein was using money in their dozens of bank accounts to finance illicit sexual relations. activities at their residences in New York, Florida and the Virgin Islands. The lawsuits allege that JPMorgan chose to keep Epstein as a client after he became a registered sex offender because he was bringing business to the bank.

There is also a blame game going on at JPMorgan, with some suggesting that Staley should have known about Epstein’s sex trafficking at the time, and had a duty to inform others. The bank named Mr. Staley as a third-party defendant in the lawsuits in an attempt to hold him liable for any damages that JPMorgan may have to pay.

Mr. Staley, whose deposition is scheduled for next week, has argued in court documents that he did nothing wrong or inappropriate. His lawyers did not respond to requests for comment.

Better known as “Jes” on Wall Street, Staley had to step down as CEO of Barclays in 2021 after a British regulators investigation about how she had characterized her previous relationship with Mr. Epstein.

JPMorgan has repeatedly denied any knowledge of Epstein’s sex crimes. In a statement, the bank said of Epstein that “in hindsight, any association with him was a mistake and we regret it, but we did not help him commit his heinous crimes.”

David Boies, a lawyer for the victims who sued the bank, said Ms Erdoes and others at JPMorgan, for some time, “were fully aware of Epstein’s large cash withdrawals and Epstein’s sex trafficking.”

So far, dozens of depositions have been taken in the litigation, and Judge Jed S. Rakoff of the United States District Court in Manhattan put them on fast track. On Friday, Jamie Dimon, the chief executive of JPMorgan, testified for several hours during a statement at the bank’s Manhattan headquarters.

Lawyers have been debating how much of Mr Dimon’s statement can be made public. The bank issued a statement on Friday saying that Mr. Dimon never met or emailed Mr. Epstein and “has no recollection of discussing his accounts internally, and was not involved in any decisions regarding his account.” .

Dimon’s testimony could be crucial because Staley, when he ran the bank’s private equity group and later its investment bank, reported directly to him.

In Ms Erdoes’ statement, parts of which were previously published by The Washington Post, she said she believed Mr Staley had reported directly to Mr Dimon from 2006 up to the time he left the bank. Ms Erdoes has reported directly to Mr Dimon since 2009, she said, and before that to Mr Staley.

In her statement, Ms Erdoes said she did not know why Mr Staley left the bank, but understood that “it was a mutual decision”.

Ms. Erodes said in her statement that she personally informed Epstein that she would be firing him as a client in the summer of 2013, during a visit to his home in Manhattan. She said it was only the second time she had met him in person.

Ms Erdoes said she was not satisfied with Mr Epstein’s explanation that the large cash withdrawals were solely associated with his air travel. But when asked by lawyers for the victims whether the withdrawals could have been for payments to “women and girls,” Erdoes said she wasn’t sure what Epstein did with the funds.

Asked why similar cash withdrawals by Epstein had not led to his dismissal sooner, Erdoes said he was “not aware of those discussions.”

A court document filed in the lawsuit suggests Epstein’s transactions had raised red flags within the bank for years. In the court document, initially publicly filed but now sealed, JPMorgan said dozens of bank employees had been involved in determining whether to file suspicious activity reports, or SARs, on some of Epstein’s transactions between 2000 and 2019.

The document does not offer details about those transactions. Banks file SARs with US regulators to alert them to possible money laundering, fraud, or other illegal activity.

The same document also reported that in the fall of 2019, the bank’s board held two meetings to discuss “Epstein-related issues.” The document did not provide any information about those meetings, which occurred shortly after Mr. Epstein’s death. The document noted that during the 15 years the bank did business with Mr. Epstein, the board never met to discuss the bank’s dealings with him.

The board meetings came as various news organizations, including The Times, were reporting on the bank’s relationship with Epstein and its close ties to Staley.

Judge Rakoff, who is presiding over both lawsuits, is considering granting class action status to the lawsuit filed on behalf of Mr. Epstein’s victims. That status could allow more than 100 women to participate in any deal with the bank.

The lawyers for the victims have already reached an attempt $75 million class action settlement with Deutsche Bankwhich became Epstein’s primary bank after JPMorgan fired it as a client in 2013. Deutsche Bank ended its relationship with Epstein at the end of 2018.

In her statement, Ms Erdoes said she “did not recall any conversations with anyone at Deutsche Bank about Mr Epstein” or JPMorgan’s decision to stop doing business with him.

Source link

- Advertisment -