JPMorgan, Jeffrey Epstein and ‘the favour’: extent of ties detailed in new court filings

In 2004, Jeffrey Epstein asked his private bankers at JPMorgan Chase for a favour.

He wanted to open a bank account and arrange a credit card for a teenager who was said to have come to the US from Slovakia for “modelling work”, according to documents filed this week in a New York federal court.

Early on, JPMorgan had little to go on to make a decision — a due diligence report listed her name and a supposed net worth of $100,000 earned from “modelling assignments”, but had no birth date, passport number or driver’s licence for the girl, the court filing showed.

The young woman had arrived “from the Slovak Republic and Epstein has asked us the favour of opening a checking account for her and he will guarantee her credit card application”, JPMorgan wrote in the report.

The Wall Street bank eventually approved Epstein’s request and over the next three years he would pay almost $200,000 into her account. A subsequent internal review of her spending habits found transactions that the bank’s own guidance allegedly considered common red flags among victims of human trafficking.

Even in the more relaxed industry culture of the time, these controls appear lax, according to Emmanuel Hatzakis, a finance professor at the Stevens Institute of Technology.

“Jeffrey Epstein is clearly, in my mind, an operational failure. People were not doing what they’re supposed to do,” said Hatzakis, who previously worked at banks including Goldman Sachs and Bank of America in a two-decade career on Wall Street.

JPMorgan said the anecdote as reported in the court-filed documents “is incomplete and misleading”.

“We did, in fact, gather this woman’s information, including date of birth, social security number and passport number, through her account application form and signature card,” the bank said.

The interaction over the teenager’s account opening was one of a string of previously unreported communications revealed in the new court filings as part of a lawsuit brought by the US Virgin Islands against JPMorgan. The territory, where Epstein had a private island, alleged last year that the bank facilitated the financier’s now-notorious sex trafficking, and is seeking at least $190mn in damages.

JPMorgan has said its relationship with Epstein, a client of its private bank from 1998 until 2013, was “a mistake” but has denied any legal liability. It agreed to settle similar claims from Epstein accusers for $290mn last month.

JPMorgan has argued the US Virgin Islands is blaming a “third-party bank that did not have USVI’s authority to enforce any law, nor USVI’s knowledge of Epstein’s crimes in USVI’s territory”.

The new filings point to the depth and breadth of JPMorgan’s relationship with Epstein, which included providing services to his various businesses and wealthy friends and allowing vast sums of money to flow to his alleged recruiters and victims.

By the time of Epstein’s first arrest in 2006 for soliciting a minor, the bank was providing services to “all the girls and women publicly alleged in 2006 to be recruiters, accomplices, or victims”, the USVI claims, including a woman Epstein was reported to have referred to as his “Yugoslavian sex slave”.

JPMorgan repeatedly approved a $1mn credit line backed by Epstein for a purported modelling agency that had been reported to be a front for sex-trafficking underage girls, according to the court filings.

The filings also shed some light on the inner workings of the bank’s dealings with Epstein. They contain emails going back decades between him and bank executives, revealing that his association extended beyond his substantial personal finances — earlier legal filings have claimed Epstein at times had more than $100mn with JPMorgan — to his introductions of an array of wealthy potential clients to the bank. 

A further clue to Epstein’s value to the bank came in an account by the USVI’s lawyer of how the financier first came to know Jes Staley, the banker who became Epstein’s point man at JPMorgan before he was fired in 2013.

In 2000, Sandy Warner, at the time JPMorgan’s CEO, encouraged Staley to meet Epstein, according to the USVI’s filings. “He’s one of the most connected people I know of in New York,” Warner is alleged to have told Staley, who later became the boss of Barclays.

Warner could not be reached for comment. He told Bloomberg this week that he did not recall this alleged conversation with Staley and that Epstein “dropped a lot of names”.

Staley ended up cultivating what he described as a profound friendship with Epstein, but also a relationship that opened doors to potential clients. In one email, Staley thanked Epstein after being told by a JPMorgan executive that the bank had secured a meeting with Israel’s prime minister Benjamin Netanyahu “against all odds”.

Staley lost his job at Barclays in 2021 following a regulatory investigation into the way he described his relationship with Epstein. He is being sued by JPMorgan, which claims he hid what he knew about Epstein’s crimes from the bank — a claim Staley denies.

The court filings also include talking points prepared for Mary Erdoes, head of asset and wealth management at JPMorgan, before an exit conversation with Epstein as the bank terminated his accounts in 2013. The points said JPMorgan was finally cutting ties with him because of the “repetitive nature” of his cash transactions and his “personal history”.

Even after that conversation, the bank still kept in contact with Epstein, the documents filed by USVI allege, with Erdoes herself approving the relationship “as long as it was through his client accounts”. Epstein died by suicide in 2019 as he awaited trial on federal charges of sex trafficking.

As JPMorgan was severing ties with Epstein in 2013, the regulatory environment was also shifting. Months earlier the bank had been hit with a cease-and-desist order by the US Office of the Comptroller of the Currency for deficiencies in its anti-money laundering and bank secrecy compliance.

In 2014, JPMorgan also agreed to pay $2.6bn to head off criminal prosecution and private litigation over its failures to act on suspicions about Bernard Madoff before his Ponzi scheme was revealed.

As the Madoff scam unravelled in late 2008, Erdoes asked Staley to check in with the well-connected sex offender — then serving an 18-month sentence for soliciting a minor — about the sandal’s fallout.

“The ny/palm beach community will be in shock,” Erdoes wrote to Staley regarding Madoff in December 2008, according to court filings, before asking, “Can you call JE to get the scoop from down there?”

In a statement, JPMorgan said Epstein “was in Florida where many of Madoff’s victims lived. If she had made any call at all, it would have been to reach out to Jes to see if Epstein had any more details about what was happening there”.