Jamie Dimon to be fired as JPMorgan faces Epstein tie settlement

Jeffrey Epstein was many things: a sexual predator, a friend of the rich and powerful, and for many years a lucrative client of the nation’s biggest bank.

Now the bank, JPMorgan Chase, must deal with a nearly 15-year relationship with the disgraced financier, a relationship that could cost him a big payout in two civil lawsuits that claim the bank ignored warnings that he trafficked teenage girls for sex because he took advantage of her relationship with him.

New revelations stemming from the cases suggest that bank employees repeatedly flagged Mr. Epstein’s activity as suspicious, while other documents show Mr. Epstein’s familiarity with the bank’s top executives and his easy access to them, even after his 2008 guilty plea in Florida for soliciting prostitution from a teenage girl.

Filed late last year in federal court in Manhattan, the lawsuits – one brought by lawyers representing Mr Epstein’s victims and the other by the government of the US Virgin Islands – are proceeding apace, with dozens of statements from victims, Virgin Island officials and people who worked for the bank and Mr. Epstein.

The proceedings will take on new urgency on Friday, when Jamie Dimon, JPMorgan’s chief executive, is expected to be dropped off at the bank’s Manhattan headquarters.

Mr Epstein died in an apparent suicide three years ago while being held in federal custody on charges of sex trafficking. JPMorgan dropped him as a client ten years ago. Many documents and exhibits filed in the context of the litigation are under seal.

A document prepared by the bank, an exhibit filed in a court filing last week, suggests that JPMorgan employees filed numerous suspicious activity reports, or SARs, about some of Mr. Epstein’s transactions. The names of about four dozen employees who the bank said were “involved in reporting SARs relating to Epstein accounts between 2000 and 2019” are redacted.

Banks must file an SAR with federal regulators when they suspect a transaction may involve money laundering or fraud. Reports are kept confidential as the transactions may turn out to be legitimate, although they may provide investigative leads to authorities.

A JPMorgan spokeswoman said the bank was not aware of any evidence that Mr Epstein was involved in sex trafficking. In documents related to the case, the bank also revealed that it asked federal prosecutors in Florida in 2011 if there was an active investigation into Mr. Epstein. The bank said prosecutors did not disclose any investigation.

A separate cache of emails and partial calendar entries reviewed by The New York Times shows senior executives at the bank knew Mr Epstein well.

“I’m still waiting for your call,” Mr. Epstein wrote in October 2011 to Mary C. Erdoes, the current head of the bank’s large asset and wealth management division.

Mrs. Erdoes replied: “Seriously. It’s 1 o’clock in the morning. I would say have a life… but you’re at the Ritz and we’re not. Ms Erdoes added that she had just landed in California and would speak to Mr Epstein the following day.

Mr Epstein’s emails and calendar entries while staying at his Manhattan mansion were obtained through a public records request to the US Virgin Islands Attorney General. The JPMorgan spokeswoman said contacts between high net worth clients and bank executives were not uncommon.

The emails provided to The Times by the Virgin Islands also include exchanges between Mr. Epstein and James E. Staley, the JPMorgan executive with the closest ties to him.

A few are personal in nature: In a 2015 chat, Mr. Staley asked Mr. Epstein if he would meet with his daughter to discuss her post-college plans. In a 2011 email exchange, there was a discussion about arranging a dinner with Mr. Epstein and Mr. Staley’s family.

Other emails between Mr. Epstein, Ms. Erdoes and Mr. Staley concerned potential trade deals. A series of exchanges focused on Mr Epstein’s efforts to establish a charitable partnership between the bank, the Bill & Melinda Gates Foundation and others. He also asked to meet with Mr. Dimon to discuss the plan.

The bank’s spokeswoman said Mr. Epstein had never met Mr. Dimon. Mr. Epstein’s proposed charity fund with the Gates Foundation and JPMorgan never got past the discussion stage in 2011 when Mr. Gates first met Mr. Epstein.

JPMorgan severed ties with Mr Epstein in 2013, although that was years after some members of the bank’s compliance department raised the alarm about doing business with him. And that only let him down after Mr. Staley left for another job.

Mr. Staley and Ms. Erdoes, The Times previously reported, favored keeping Mr. Epstein as a client after his guilty plea in 2008, in part because he helped bring wealthy clients to the private banking division from JPMorgan.

The relationship between Mr. Epstein and Mr. Staley, known as Jes, is a central issue in the litigation. The Virgin Islands lawyers claimed the pair had shared sexually suggestive emails about young women and that at times Mr. Epstein sent Mr. Staley “pictures of young women in seductive poses”.

The Virgin Islands said the bank should have been aware of the emails. Mr Staley left JPMorgan in 2013 and in 2015 became chief executive of Barclays. He resigned from the post in 2021 due to fallout from an investigation by UK regulators into how he characterized his relationship with Mr Epstein.

JPMorgan said it was not aware of any improper conduct involving Mr Staley. But the bank has named him as a defendant in a third-party lawsuit, so if it is determined that Mr Staley engaged in improper activity, he can be held liable for any damages he may have to pay. A federal judge this week rejected Mr. Staley’s bid to be removed from litigation.

Neither Mr Staley nor his lawyers responded to requests for comment, but in court papers he denied any wrongdoing and said he was unaware of any sex trafficking operation.

Lawyers for Mr Epstein’s victims won a major victory in a similar case last week, when Deutsche Bank, which took over from JPMorgan as Mr Epstein’s lead banker, agreed to pay $75 million for settle a proposed class action lawsuit filed in federal court last year. The German bank previously paid a $150 million fine to New York regulators.

The proposed settlement with Deutsche Bank could become a template for any deal with JP Morgan. JPMorgan had managed 40 accounts for Mr Epstein and handled most of his wire transfers, which included payments to women suspected of being victims, people briefed on the matter said.

“JPM was his true partner,” said Bradley Edwards, who, along with David Boies, is on the legal team representing Mr Epstein’s victims in the lawsuit. “There really isn’t a comparison between the two cases.”

To date, Mr Epstein’s estate – once valued at $600 million – has paid out more than $150 million in settlements to more than 125 victims. These victims could be eligible to get some of the money from the proposed deal with Deutsche Bank.

The Virgin Islands lawsuit against JPMorgan stemmed from information the territory had gathered during a dispute with Mr. Epstein’s estate. The Virgin Islands had sued to recoup tens of millions in tax benefits it gave to Mr Epstein’s St. Thomas-based businesses, reaching a $105 million settlement in November.

The Virgin Islands’ relationship with Mr. Epstein has also sparked controversy over the years. Not only did he give lucrative tax breaks to his businesses, but in 2012 the government eased travel restrictions for Mr. Epstein after a request from his lawyers, according to documents the Times obtained through a request for public records.

Due to his status as a sex offender, Mr Epstein was required to notify authorities of any travel plans, but that notice was reduced from around three weeks to one day by the Virgin Islands attorney general at the time. , according to the documents.

JPMorgan has taken to some of these criticisms of the Virgin Islands government to say the territory is unable to sue for damages. The bank, in a court filing on Tuesday, said U.S. territory officials had a long history of bonding with Mr Epstein and looked ‘on the other side as he walked through USVI airports accompanied by girls and young women”.

The bank also noted that Mr. Epstein has made frequent campaign donations to local politicians and has sought information on Cecile de Jongh, the wife of a former governor of the Virgin Islands, who has long served as office manager for the companies of Mr. Epstein. He is also set to depose Albert Bryan Jr., the current governor, who was the chairman of the agency that gave Mr. Epstein’s businesses the big tax breaks.