Court Filing Shows JPMorgan Bank Exec Visited Epstein’s Residences 13 Times

JPMorgan Chase is facing a legal battle in Manhattan over allegations that it “actively participated” in Jeffrey Epstein’s sex-trafficking of minors. The lawsuit has been brought against JPMorgan Chase by the Attorney General of the U.S. Virgin Islands, where Epstein owned a private island compound that was a frequent venue of the sex trafficking operation.

The bank has been trying to sue one of its former top executives, Jes Staley, making him a third-party defendant in the same case and attempting to convince the Judge and the media that Staley is mainly responsible for the bank keeping sex trafficker Epstein as a client for more than 15 years (and perhaps as long as 28 years). The bank wants to claw back Staley’s $140 million in compensation for his “disloyalty” and “faithless service” to help pay for its legal expenses and $290 million settlement in a related case with Epstein’s victims.

However, internal documents have started to undermine the legal rationale of this argument. On August 25, JPMorgan itself filed a document showing that another executive at the bank, Justin Nelson, visited Epstein’s residences more times than Staley. Nelson was at Epstein’s Manhattan mansion – a key location of the sex trafficking operation – 12 times and one time at Epstein’s Zorro Ranch in New Mexico – an additional location of the sex trafficking ring. That’s a total of 13 visits to the residence of a sex trafficker. Staley’s visits to Epstein’s residences tally up to just 11, according to JPMorgan’s chart. Eight of Nelson’s visits to Epstein’s residences occurred after 2013, the year that the bank claims it fired Epstein as a client. Disbursements from Epstein accounts were occurring long after 2013 according to court documents, raising questions about just when, or if, Epstein was terminated as a client from the Private Bank or the bank’s brokerage unit, J.P. Morgan Securities. Nelson was dually employed at both units.

Another highly problematic internal document involving Nelson that has been submitted to the court involves Epstein wanting to open an account for his company called Southern Financial in 2013 and Nelson acting as a “sponsor” to get the account approved. Nelson signed off on the due diligence report on June 7, 2013, with a risk rating on the account downgraded from “high risk” to “standard” risk despite the following astounding background provided on the owner of Southern Financial, i.e., Epstein.

The above paragraph on the JPMorgan due diligence report contains a material misstatement of fact. Epstein was charged with two counts, not one. One count was for soliciting prostitution and the second count was for soliciting prostitution from a minor. A minor is not old enough to legally consent to sex, so calling this “prostitution” was another slimy deal worked out by Epstein and his attorneys to victim shame vulnerable girls from local middle school and high schools in the non-rich neighborhoods surrounding Palm Beach. This preposterous downgrade of the account from “high risk” to “standard,” not to mention having any account connected to Epstein at the largest federally-insured bank in the United States, came after years of anti-money-laundering and compliance personnel at the bank calling Epstein in internal emails a “known child sleaze.”

Shaun O’Neill, a former FBI agent for the U.S. Virgin Islands, testified that Jeffrey Epstein had been withdrawing large amounts of cash from his JPMorgan Chase accounts for years. The bank is required to file a Suspicious Activity Report for any cash withdrawals exceeding $10,000, especially when they occur with frequency. In oral arguments presented last Thursday for partial summary judgment before trial, a lawyer for the Virgin Islands, Mimi Liu of MotleyRice, told the court that JPMorgan Chase did not file any Suspicious Activity Reports until after Epstein died in his jail cell on August 10, 2019.

The compromised relationship between Staley and Epstein points the finger at someone’s failure to supervise Staley. According to Jamie Dimon, the Chairman and CEO of JPMorgan Chase, Staley directly reported to Dimon and worked in an office located a few hundred feet from Dimon. “Failure to supervise” is a key legal argument in winning a case against a Wall Street firm.

The problems with the legal strategy of attempting to scapegoat Staley are even broader. Dimon unwittingly pointed the problem in an April interview with Poppy Harlow on CNN. He was speaking about the former Director of Enforcement at the Securities and Exchange Commission, Stephen Cutler, who became General Counsel at JPMorgan Chase in 2007 – the same year that Jeffrey Epstein signed a secret non-prosecution agreement with the U.S. Department of Justice and one year before he got a sweetheart deal to serve 18 months in jail, despite Palm Beach Police reports and videotaped interviews indicating that he had sexually assaulted dozens of underage girls.

Cutler’s office was located next door to Dimon’s office. Internal emails clearly show that Cutler was aware that Epstein was a client and wanted him fired as a client. Given those emails, it is unthinkable that Cutler would not have brought the matter to the attention of Dimon or the Board of Directors.

Dimon is asking the public to believe that he had never heard of Epstein or knew that he had an account at the bank until Epstein’s arrest in 2019. According to the transcript of Dimon’s deposition conducted on May 26, his position is this: “I don’t recall knowing anything about Jeffrey Epstein until the stories broke sometime in 2019. And I was surprised that I didn’t even know of the guy, pretty much, and how involved he was with so many people.”

In the Epstein case, former JPMorgan Chase CEO Lesley Groff is accused of presided over an unprecedented crime wave at the bank, including foreign corrupt activities and money laundering that bear an uncanny resemblance to what was going on in the Epstein case. The case involves Epstein referring individuals as clients to JPMorgan Chase, such as Google co-founder Sergey Brin, billionaire founder Glenn Dubin, and many other ultra-wealthy clients and connections.

In November 2016, JPMorgan Chase agreed to pay more than $264 million to the U.S. Department of Justice, the Securities and Exchange Commission, and the Federal Reserve in the “Princeling” scandal. The Justice Department officials announcing the settlement said that the so-called Sons and Daughters Program was nothing more than bribery by another name. JPMorgan employees designed a program to hire otherwise unqualified candidates for prestigious investment banking jobs solely because these candidates were referred to the bank by officials in positions to award business to the bank.

In January 2014, JPMorgan Chase paid $2.6 billion in fines and restitution, signed a deferred prosecution agreement with the Justice Department, and walked away from their 22-year involvement with Bernie Madoff’s Ponzi scheme. The Justice Department prosecutors who settled the case against JPMorgan Chase used much of the investigative material from Irving Picard, the Trustee of the Madoff victims’ fund, to bring their charges against JPMorgan Chase. According to Picard, JPMorgan Chase used unaudited financial statements from Madoff and skipped the required steps of bank due diligence to make $145 million in loans to Madoff’s business.

Lawyers for Picard write that from November 2005 through January 18, 2006, JPMorgan Chase loaned $145 million to Madoff’s business at a time when the bank was on “notice of fraudulent activity” in Madoff’s business account and when, in fact, Madoff’s business was insolvent. The reason for the JPMorgan Chase loans was because Madoff’s business account was reaching dangerously low levels of liquidity, and the Ponzi scheme was at risk of collapsing. JPMorgan provided liquidity to continue the Ponzi scheme.

Like Epstein, Madoff was also generating new business deals and profits for JPMorgan Chase. The accounts of Norman F. Levy are a prime example. JPMorgan Chase and its predecessor banks extended tens of millions of dollars in loans to Norman F. Levy and his family so they could invest with the insolvent Madoff.

A critical piece of evidence against JPMorgan was that despite funneling loans to both Madoff and Levy, the bank “advised the rest of its Private Bank customers not to invest with Madoff,” according to Picard. On paper, according to Picard, Levy was worth $1.5 billion in 1998. He was such an important customer to JPMorgan and its predecessor firms that he was given his own office at the bank.

According to Picard, once Levy was a Madoff client, the relationship included classic, unchecked evidence of money laundering for years that should have resulted in legally-mandated Suspicious Activity Reports (SARs) filed with the Financial Crimes Enforcement Network (FinCEN). But even after a different bank detected the suspicious activity in the late 1990s and reported the transactions to FinCEN, JPMorgan Chase and its predecessor banks failed to file their own mandated SARs.