The V.I. government leveled damning new allegations in its civil suit against JPMorgan Chase on Monday, the same day the bank announced it has settled another suit brought by anonymous Jeffrey Epstein victim Jane Doe 1.
In turn, JPMorgan filed a letter asking the court to intervene over the USVI’s refusal to lift “confidentiality designations” on documents the bank seeks to make public in its defense.
While the documents contain “embarrassing communications … avoiding embarrassment is not a basis to keep court filings sealed,” according to the letter signed by Felicia H. Ellsworth of WilmerHale, the law firm representing JPMorgan.
Details of Doe’s tentative settlement with JPMorgan, which must still be approved by Judge Jed Rakoff of Manhattan federal court, have not been disclosed. The New York Times reported a figure of $290 million on Monday, and one of the lead lawyers for Doe said the V.I. Attorney General’s Office was instrumental to the outcome.
“The information and support the U.S. Virgin Islands and its legal team provided to the survivors was enormously valuable, and we recognize the importance of the government’s continued litigation against JPMorgan Chase to prevent future crimes,” Brad Edwards of the firm Edwards Henderson Lehrman said in a statement.
The V.I. Attorney General’s Office said it will continue with its suit, and on Monday filed an updated memorandum of law in opposition to JPMorgan’s affirmative defenses, including 10 exhibits that were previously under seal.
“We are gratified to hear about the settlement that will provide victims of Jeffrey Epstein some compensation for JPMorgan Chase’s role in facilitating Epstein’s crimes against them,” the V.I. Attorney General’s Office said in a statement. “The U.S. Virgin Islands will continue to proceed with its enforcement action to ensure full accountability for JPMorgan’s violations of law and prevent the bank from assisting and profiting from human trafficking in the future. The U.S Virgin Islands is committed to protecting women and girls who could otherwise become victims going forward.”
JPMorgan did not reply to a request for comment on Monday.
The Jane Doe 1 and USVI lawsuits were brought roughly within a month of each other — Doe’s on Nov. 24 and the V.I.’s on Dec. 27 — and were combined for trial purposes by Rakoff as both concerned JPMorgan’s alleged facilitation of Epstein’s sex-trafficking venture in violation of the federal Trafficking Victims Protection Act. Unless a settlement is reached, the government’s case is set to go to trial on Oct. 23.
Another lawsuit by an anonymous Epstein victim, Jane Doe v. Deutsche Bank, was settled for a reported $75 million in May. Still pending is JPMorgan’s third-party lawsuit against its former executive Jes Staley over his ties to Epstein, which the bank blames for its current predicament.
Epstein, 66 — a registered sex offender who pleaded guilty to procuring a minor for prostitution in Florida in 2008 — was found dead by apparent suicide in August 2019 in his New York jail cell where he was being held on federal human trafficking charges. At the time of his death his U.S. Virgin Islands estate was valued at more than $577 million, according to court records.
His primary residence was Little St. James, his private island off St. Thomas where for years he trafficked in girls and young women and ran a complex web of shell companies registered in the USVI that enabled his crimes, those court documents allege.
JPMorgan Had Concerns Early On
The unsealed exhibits filed Monday by the V.I. government reveal internal JPMorgan communications in which bank officials voiced concerns about keeping Epstein as a client as early as 2007 as information about his Florida arrest and subsequent federal investigations into his alleged sex trafficking came to light.
They show that bank officials were monitoring large cash withdrawals, wires and transfers by Epstein, some totaling hundreds of thousands of dollars a day, including to and from accounts in the USVI, as well as any ties to the bank by associates named in press reports about his Florida plea deal.
According to the filing, an email to then private bank attorney Anne Verdon in October 2007 connected the dots between payments made from a JPMorgan account to a woman “whom Epstein publicly identified as his ‘Yugoslavian sex slave,’ describing payments to recruiters and high-value cash withdrawals.”
In January 2008, an email between bank employees Lisa Waters and Mary Casey discussed a New York Post article about Epstein’s plea deal, his Florida court date being pushed back to March, and the need to know the felony he would ultimately plead guilty to, according to one of the exhibits. “No one wants him,” Casey wrote in the email.
Another heavily redacted exhibit shows how bank officials were tracking news of Epstein, including a reference to newspaper articles detailing his indictment in Florida in October 2006. According to the exhibit, the bank decided to retain him as a client after internal discussions that included Staley and other high-level officials, but that it would “not proactively solicit new investment business from him.”
However, in a follow-up meeting in July 2008, after news that Epstein was sentenced to 18 months on the prostitution charges, the bank noted that “Catherine will go back to JES to tell him we are uncomfortable with Epstein and do not want to go to Cutler for approval.”
It was referencing Stephen Cutler, JPMorgan general counsel and former SEC head of enforcement, who was deposed by the government on May 24 and expressed misgivings about keeping Epstein as a client, according to the exhibits, including a redacted transcript of his testimony.
In January 2011, the bank’s then global head of compliance William Langford “expressed concern over the possibility that Mr. Epstein is under investigation for human trafficking,” and was requiring Cutler’s re-approval of him as a client, according to one exhibit.
“Discussions need to be held … to determine how to approach the issue with Jes Staley, who is friends with Epstein. He needs to understand the potential backlash to the firm given all of the work done to root out clients involved in human trafficking,” according to a note detailing the outcome of the discussions. A note dated March 15, 2011, stated, “Paul Morris spoke with JE. The SBLC will not be renewed,” meaning a Standby Letter of Credit.
A follow-up on Aug. 4, 2011, in a review of Epstein’s status with John Duffy, then head of private banking, stated, “Duffy to reach out to Jes Staley and advise that we exit while things are a bit settled,” according to the exhibit.
‘Do We Have This Guy’s Accounts?’
The reviews continued through 2013, but those portions of the exhibit are completely redacted. Yet as early as December 2010, bank officials were questioning in internal emails why Epstein remained a client after his Florida conviction and following widespread media reports of the federal investigation into his alleged child trafficking, according to another exhibit.
“Do we have this guy’s accounts?” Phillip A. DeLuca, then managing director for the bank’s Financial Intelligence Unit, asked Maryanne X. Ryan, vice president of anti-money laundering operations, in an email.
“Yes in the PB [Private Bank] and approved to stay after his criminal conviction by Cutler. My fear is will all our touting of good will on the HT [Human Trafficking] work, if anyone should ever say yet we bank Epstein, a known child sleaze,” she replied.
“That is what I was thinking when I read this. I’ll call you,” DeLuca said.
The conversation continued in January 2011 as bank officials discussed their exposure as Epstein’s connections to French model scout Jean-Luc Brunel, and the MC2 modeling agency the pair founded, were becoming known, according to another exhibit. (Brunel, who faced allegations of sexual assault spanning three decades, was charged in France in 2021 with drugging and raping a 17-year-old girl. He was found dead in his jail cell in February 2022 after allegedly hanging himself.)
Again, Epstein’s personal friendship with Staley was at the center of the discussion.
According to an email dated Jan. 7, 2011, from Ryan to DeLuca and others, she wrote, “Epstein was released in July from house arrest and the Palm Beach Post carried two articles saying DOJ may be investigating for child trafficking via a modeling agency he is part owner in. I think Catherine believes that after the briefing on [Human Trafficking] that Jes would need to point blank ask Jeffrey the status of any criminal investigations. Catherine made sure we knew that no one on today’s call was in favor of having him retained as a client. Seems it all is due to Jes’s personal relationship. Note he has about 212 mil in the bank and some in JPMS (old Bear PCS).”
Ryan wrote that she had also spent “a good deal of time” looking into the account of Epstein’s “assistant or young lady he brought over from Prague (or some place like that) … She was involved in some of the detailed escapades. She opened accounts in PB sponsored by him. Oh my were her debit transactions enlightening as compared to countless stories related to his escapades. Lots of salon, lingerie shops, drug stores ny palm beach and in st thomas (his places of residence). Plus lots of videos like girls gone wild and some other shops not fit for my good catholic upbringing! The transactions are old 05 to 08. Besides frequent frequent spa like charges it has died down. Surprised she was never subpoenaed.”
Ryan also detailed “one new concerning thing,” which was an article about the DOJ investigating allegations that Epstein brought underage girls to the U.S. via the modeling agency, according to the exhibit. “Turns out the banker said today we extended Epstein a loan in relation to this modeling agency. It appears to be a legit modeling agency. If girls were exploited via their contract or arrangement it would be hard for us to tell. … Bottom line we need W to meet with Jes to explain HT and then Jes could decide the next steps.”
Ultimately, Ryan said she would look into the modeling agency and Epstein’s personal accounts, but that “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.”
She also noted that the private bank officials were not thrilled with retaining Epstein, “it was all due to Jes,” according to the exhibit.
In an email to Staley and other bank officials on July 20, 2011, in response to an email about an Epstein transaction, Cutler stated, “This is not an honorable person in any way. He should not be a client.”
It was two more years before the bank severed its ties with Epstein, though it kept close tabs on his activity as a “high-risk” private bank customer, including annual reviews, according to two of the exhibits detailing conversations in 2012 and 2013.
In July 2013, CEO of private banking John Duffy wrote to Mary Erdoes, CEO of JPMorgan’s Asset and Wealth Management business, about “talking points” in dropping Epstein as a client.
“What do you think?” Duffy said in the email, detailing three points the pair would make to Epstein.
“1. The repetitive nature of your cash transactions is a problem for us and our relationship with you,” Duffy wrote.
“2. The regulatory standards in the banking industry continue to evolve with a very low tolerance for cash activity when combined with your personal history,” he continued.
“3. So, given the intersection of these circumstances we are in a uniquely challenged situation. Remediation is required and we need to ask you — in an orderly manner — to find another bank for your needs.”
Erdoes replied, “I think that is fine. I think the harder stuff to answer is all the questions he will pose back so we need to do that together.”
Epstein and JPMorgan parted ways in 2013, and he eventually moved his business to Deutsche Bank.
Lifting a Veil of Confidentiality
JPMorgan has called the V.I. government’s suit a “masterclass in deflection.” Key to their argument is the fact that the V.I. government, through its Economic Development Commission, granted Epstein lucrative tax and other benefits during the same period that it is accusing JPMorgan Chase of helping to further the wealthy financier’s sex trafficking scheme.
The bank contends that, having won a $105 million settlement in its lawsuit against Epstein’s estate in November, the V.I. Attorney General’s Office “now casts afield for deeper pockets,” despite the USVI government itself having afforded Epstein lucrative financial perquisites as a beneficiary of the territory’s EDC program.
On Monday, the bank appealed to the court to order the government to withdraw confidentiality designations over public records it produced in response to JPMorgan’s document requests.
The bank’s lawyers have deposed V.I. Delegate to Congress Stacey Plaskett and Gov. Albert Bryan Jr., and have sought to subpoena former Sen. Celestino White.
According to the letter to Rakoff, which is partially redacted, the government is incorrectly shielding the documents as confidential under a USVI statute related to sex offender registration. The letter references “embarrassing communications” but the details are blacked out.
“JPMC respectfully requests that the Court issue an Order rejecting USVI’s confidentiality designations and allow JPMC to refile its Opposition in unredacted form, along with exhibits redacted only to the extent necessary to prevent the disclosure of personal information regarding unrelated individuals,” the letter concludes.
Rakoff had not ruled on the bank’s request as of Monday.
