JPMorgan Chase and the V.I. Attorney General’s Office each blamed the other for enabling Jeffrey Epstein’s sex-trafficking enterprise in court filings late Monday, with each appealing to the judge to issue summary judgments in their favor in the government’s ongoing lawsuit against the bank.
According to the government, JPMorgan kept the ultra-wealthy and ultra-connected Epstein as a client from about 1998 to 2013 — despite copious financial evidence of questionable payments to young Eastern European women that it was legally bound to report — because by 2006, when he was under investigation for sex crimes in Florida, Epstein “was too big to fail.”
JPMorgan claims the U.S. Virgin Islands created a haven for Epstein’s crimes by granting his shell companies lucrative tax breaks totaling some $300 million through its Economic Development Commission and then looking the other way when he traveled to his private island estate off St. Thomas with young women and girls, despite his sex offender status.
Both have submitted hundreds of pages of exhibits in support of their arguments before Judge Jed Rakoff, who is presiding over the case in Manhattan federal court and set the Monday deadline for the motions to be filed. Both parties did so just before midnight, and filed dozens more exhibits on Tuesday morning, many of them sealed or heavily redacted.
The V.I. government filed suit against JPMorgan in December, alleging the bank violated the Trafficking Victims Protection Act in its dealings with Epstein. JPMorgan claims the territory is equally to blame for enabling his crimes and that the action is a “masterclass in deflection.”
The action came on the heels of the government’s settlement with Epstein’s estate in November for $105 million. And in January, billionaire investor Leon Black agreed to pay the U.S. Virgin Islands $62.5 million to be released from any claims related to the territory’s investigation into the sex-trafficking of Epstein, the New York Times has reported.
Epstein, 66, died by apparent suicide in August 2019 while in custody in New York on federal sex trafficking charges. He declared his private island estate off St. Thomas as his primary residence and moved his sex offender registration to the USVI following his release from a Florida prison in 2009 after serving 13 months for procuring a minor for prostitution.
While JPMorgan has classified the lawsuit as a money grab — the V.I. is seeking at least $150 million in civil penalties, according to its filing — and disputes that the territory suffered any damage from the bank’s relationship with Epstein, the government maintains that its action is a sovereign effort that seeks to redress the wrongs suffered by human trafficking victims and the residents of the territory where some of Epstein’s crimes allegedly occurred.
Late Saturday, Gov. Albert Bryan Jr., who headed the EDC when Epstein was awarded lucrative tax benefits for businesses that court filings have alleged were fronts for his sex-trafficking scheme, issued a statement announcing a “years-long initiative at identifying and potentially preventing human trafficking.” Bryan said more information will be forthcoming on Thursday on the program with the Attorney General’s Office, and that he supports the Justice Department’s effort to enforce federal anti-trafficking laws against JPMorgan Chase, as well as Epstein’s estate, on behalf of his victims.
Bank Seeks to Stay Damages
JPMorgan is asking the court to deny the government’s charge that it obstructed the federal Trafficking Victims Protection Act, as well as any damages, claiming that the USVI is not entitled to compensation after the bank in June settled a class-action suit for $290 million that was brought by an anonymous Epstein victim on behalf of all other victims nationwide.
“Even were USVI permitted to recover for itself damages suffered by others — it is not — JPMC should not pay those damages twice: first to actual victims, then again to the territory that failed them and protected Epstein,” according to the bank’s 29-page memorandum in support of its motion.
(JPMorgan has also filed a third-party suit against its former executive Jes Staley, who it alleges hid knowledge of Epstein’s sex-trafficking from key bank officials and should be held liable if the territory prevails in its lawsuit. Staley has denied those claims and any wrongdoing.)
“With no claim to compensatory damages, USVI has no claim to punitive damages either. Nor can USVI, as a civil plaintiff, pursue fines or penalties that are exclusively available to the United States government in criminal actions. Even if USVI could overcome these hurdles and lay claim to victims’ personal damages, the offsets required by its collection of settlement payouts from Epstein’s estate and [redacted] reduce those damages to nothing,” JPMorgan alleges.
“Nor can USVI — in the name of ‘deterrence’ — seek a free-floating punitive damages award that bears no relationship to an actual injury. This would be nothing more than a ‘criminal penalty in the guise of civil relief’ — a ‘criminal penalty’ USVI cannot seek to impose in this civil case,” it said.
While the Attorney General’s Office claims the territory is entitled to relief because JPMorgan allegedly obstructed a federal TVPA investigation, that claim must be brought by the federal government or the individual victims, and the USVI is neither, according to the bank’s filings.
“Regardless, the record is devoid of any fact suggesting that JPMC intentionally obstructed a TVPA investigation. To the contrary, the uncontested record shows that JPMC provided federal officials with Epstein-related information for years. No reasonable juror could find intentional obstruction on these facts, and summary judgment should enter accordingly,” it said.
Additionally, the Trafficking Victims Protection Act’s obstruction clause was added in December 2008 and may not be retroactively applied to the bank’s relationship with Epstein before that time, JPMorgan argues.
“What USVI wants, despite years of selling official services to a predator under its supervision — catering both its law and policy to serve his deviance — is more cash: either the ‘compensatory damages’ Epstein’s victims can and have now obtained under the TVPA … or criminal penalties only the federal executive may seek via a grand jury, indictment, and criminal trial. It is entitled to neither,” the bank said, referring to evidence that Epstein sought to influence the V.I.’s sex offender legislation through then First Lady Cecile de Jongh, who managed his Southern Trust Company when her husband was governor.
Moreover, the V.I. government cannot claim it was harmed by any alleged obstruction, according to the bank, as the depositions of former governors John de Jongh Jr. and Kenneth Mapp, and current Gov. Albert Bryan Jr. show.
De Jongh and Mapp — whose tenures covered 2007 to 2015, and 2015 to 2019, respectively — said they never thought to investigate Epstein during their collective 12-year tenure in office, according to their depositions. “Despite Epstein’s indictment in 2019, and being aware that Epstein ‘copped a plea to having sex with a hooker who was underage,’ current Governor Albert Bryan Jr. ‘turned [his] attention elsewhere’ after learning that ‘none of [Epstein’s] victims were from the Virgin Islands,” according to a partial transcript of his deposition.
“In retrospect, JPMC regrets its relationship with Epstein and wishes it exited him as a client sooner. But that is not the same thing as intentionally obstructing a federal TVPA investigation,” the bank said. “USVI has had ample opportunity to take discovery to prove that JPMC employees knew of federal efforts to hold Epstein accountable and intentionally tried to stop it. There are no such facts, and no reasonable juror could conclude otherwise.”
Rather, JPMorgan alerted the government about Epstein time and again, the bank alleges, and “unfortunately it took far too long for law enforcement to seek to bring Epstein to justice.”
“Summary judgment should enter in JPMC’s favor on all of USVI’s damages claims,” according to the bank’s memorandum.
‘Epstein Was Too Big to Fail’
According to the government’s 45-page memorandum in support of its motion for partial summary judgment, JPMorgan officials had extensive knowledge of Epstein’s felony sex crimes even before July 2006, when he was arrested in Florida for procuring a minor for prostitution, but he was too valuable a client to let go.
In fact, cynical jokes about Epstein were common among bank executives, according to the government, “from [redacted] asking if Epstein was at a party with ‘Miley Cyrus,’ to David Brigstocke [then CFO of asset wealth management] comparing another client’s house to Epstein’s: ‘Reminded me of JE’s house, except it was more tasteful, and fewer nymphettes.’”
The Justice Department is seeking declaratory and injunctive relief and civil penalties and to bar JPMorgan’s affirmative defenses — essentially that the USVI is equally guilty of facilitating Epstein’s crimes.
According to the memorandum, the bank’s then chief executive Douglas “Sandy” Warner said in 2003 that Epstein was “one of the most connected people I know in New York,” and was, by double, the top revenue generator in the Private Bank and the source of Google co-founder Sergey Brin’s $4 billion relationship, along with many other ultra-wealthy clients and connections, “which would come to include Bill Gates, Leon Black, Larry Summers, the Sultan of Dubai, Prince Andrew, Ehud Barak, Thomas Pritzker, Lord Peter Mandelson, and Prime Minister Netanyahu.”
In 2004, Epstein also was instrumental in JPMorgan’s acquisition of Highbridge Capital Management, a hedge fund company with $7 billion under management, according to the memorandum. He advised both sides on the acquisition and was paid a $15 million consulting fee, it said, and also continued to facilitate introductions to the bank, including a meeting between Staley and the Sultan of Dubai. The government alleges that JPMorgan continued to contact Epstein for referrals until just a few months before his 2019 arrest.
In short, “Epstein was too big to fail,” the government alleges, even after his 2006 arrest, when he admitted to Staley, then CEO of asset and wealth management, that he had engaged in sex with multiple young women for money, “only denying the girls’ ‘ages.’”
Staley communicated the exchange to Mary Erdoes, then CEO of JPMorgan’s Global Private Bank, the next day, allegedly telling her, “I went and saw him last night. I’ve never seen him so shaken. He also adamantly denies the ages.”
“So, JPMorgan did not exit Epstein in 2006. Or 2007. Or 2008. Or 2009. Or 2010. Or 2011. Or 2012. Or the first half of 2013,” and continued to work with him up until his arrest in 2019 on federal human trafficking charges, the memorandum states.
“Rather than exit Epstein in 2006, JPMorgan handled millions of dollars in payments to Epstein’s other ‘rock star’ lawyers who the Bank knew were working to discredit Epstein’s victims and help Epstein avoid federal sex-trafficking charges,” the government alleges. At the same time, it provided banking services to all the girls and women publicly alleged in 2006 to be recruiters, accomplices, or victims, including Ghislaine Maxwell, who is currently serving a 20-year sentence for her role in the scheme, and whom the government alleges JPMorgan made over $25 million in payments to from Epstein, including $7 million for a helicopter.
Also on the payroll was a girl Epstein reportedly referred to as his “Yugoslavian sex slave” who came from that country as a teenager in 2004 to work as a model and was sponsored by Epstein, according to the memorandum. The bank also handled Epstein’s business with MC2 Model Management, extending it a $1 million Stand By Letter of Credit in 2005, despite knowing he was accused of using the agency to traffic and abuse underage girls, the government alleges. His partner in that venture, Jean-Luc Brunel, was arrested in December 2020 in France and charged with the rape of minors. He died in February 2022 of an apparent suicide while in jail awaiting trial.
“The Bank’s only concern: ‘Are we comfortable taking on additional credit exposure just ahead of his pending plea arrangement?’” according to the memorandum.
The bank “really never stopped” handling Epstein’s excessive cash withdrawals — including a total of more than $675,000 to a young woman identified in 2006 as a recruiter of girls for Epstein — and also opened accounts for two teenagers, another victim, and “models in NYC and friends of Jeffrey Epstein,” according to the memorandum. JPMorgan’s Due Diligence Report on [name redacted] was approved by the Private Bank even though it had no birthdate, confirmed Social Security Number, or a passport or driver’s license number, it said.
As for the Yugoslavian girl, JPMorgan made more than $36,000, $67,000, and $82,000 in payments from Epstein’s account to her in 2004, 2005, and 2006, respectively, even though he represented her net worth was $100,000 from “modeling assignments,” the memorandum alleges.
JPMorgan also knew the girl’s “debit transactions” at the time — which the anti-money laundering compliance officials reviewed more than four years later — were “enlighting [sic] as compared to countless stories related to [Epstein’s] escapades. Lots of salon, lingerie shops, drug stores ny palm beach and in st Thomas (his places of residence). Plus lots of video like girls gone wild and some other shops not fit for my good catholic upbringing!” according to the bank’s internal communications.
Moreover, bank officials held a “Rapid Response” meeting regarding Epstein in October 2006, considering reports about his arrest, and identified cash withdrawals of $40,000 to $80,000 several times a month, totaling more than $750,000 for that year to date, and acknowledged that he was “known to pay cash for his massages” and “minors are the issue,” according to the memorandum. Prior to his plea in 2008, it had handled nearly $1.75 million in cash withdrawals for Epstein, it said. Beginning that year, several payments were sent to high-risk human-trafficking locations such as Belarus, Lithuania, and Russia.
The large cash withdrawals — totaling more than $5 million from 2003 to 2013 — were ultimately the claimed reason for JPMorgan’s parting with Epstein in 2013 “when combined with his personal history,” according to the memorandum. His 2011 “explanation that the cash was for jet fuel for his foreign travel was [redacted] and not supported by any receipts or other documentation. … Further, JPMorgan knew Epstein was in jail and on house arrest from July 2008 through July 2010 and thus not traveling overseas,” the government alleges.
Meanwhile, the bank’s compliance and in-house human trafficking experts were worried about JPMorgan’s exposure and wanted Epstein gone as news reports mounted about investigations into his behavior, with one referring to him as a “known child sleaze” and “that scum Epstein.”
“But business — including [then CEO of asset wealth management Mary] Erdoes — decided otherwise,” according to the memorandum. Staley, in particular, had what has been termed a “profound” friendship with Epstein.
“JPMorgan did not seek an explanation for Epstein’s excessive cash withdrawals until 2011, again in violation of its own policy,” which calls for a Suspicious Activity Report if a transaction of more than $5,000 is suspected to be for criminal activity, according to the memorandum.
While JPMorgan has argued that the government should have done more itself to monitor Epstein as a registered sex offender, he had constitutional rights the government is required to respect, including not entering his island or conducting searches without concrete evidence that crimes were being committed, according to the memorandum.
“JPMorgan’s attempts to distract from its violations of the TVPA … by claiming that the Government should have done more are particularly galling. The Government must comply with constitutional and legal principles that protect all individuals by ensuring that investigations cannot proceed without concrete evidence. JPMorgan had that evidence — in spades — in its own files; the Government did not,” the memorandum states.
“JPMorgan had virtually every financial detail of Epstein’s venture — from payments to young women in Lithuania and Russia, to transfers for the purchase of a helicopter by Maxwell, to a ‘revoked’ credit card for an alleged recruiter who talked to the police — in real-time and kept virtually all of it, and thus its own outsized role, under wraps until Epstein was dead and gone,” the government alleges.
The case is scheduled to go to trial on Oct. 23.
