Erdoes’s statements in a virtually nine-hour deposition carried out in March shed new mild on the actions of JPMorgan’s highest-ranking officers whereas Epstein’s conduct confronted authorized and public scrutiny.
The Washington Submit obtained the transcript of the deposition, a lot of which has been unreported till now. This report is predicated on Erdoes’s solutions in that deposition, in addition to emails and different inner financial institution paperwork that had been learn into the document in the course of the deposition or launched as proof in different courtroom filings.
Officers from the U.S. Virgin Islands, the place Epstein owned a non-public island and gaudy mansion, and attorneys for his victims declare the financial institution was complicit in funding Epstein’s lengthy historical past of abuse and youngster intercourse trafficking. A criticism filed final month by the U.S. Virgin Islands cites Erdoes’s deposition as proof that JPMorgan knew of accusations towards Epstein years earlier than the financial institution severed ties with him.
Not till 2013 did the financial institution finish its enterprise relationship with Epstein, figuring out the financier’s routine and big money withdrawals as the explanation for terminating the connection.
JPMorgan has rejected the allegations within the lawsuit and expressed remorse for its previous affiliation with Epstein.
“All of us now perceive that Epstein’s habits was monstrous, and his victims deserve justice — however these fits are misplaced as we didn’t assist him commit his heinous crimes,” JPMorgan spokeswoman Patricia Wexler mentioned in an announcement.
The deposition transcript reveals Erdoes mentioned she had been made conscious of Epstein’s convictions for sexual offenses, his standing as a high-risk intercourse offender, and public allegations of abuse of minors and human trafficking. However she mentioned she didn’t assume it was her accountability to take away him as a shopper, launch an inquiry into his accounts or refer them to compliance officers. JPMorgan has a separate course of for coping with client-related authorized points, she mentioned.
Jes Staley, Erdoes’s supervisor and one in all Epstein’s shut associates, did examine the allegations towards Epstein by asking the financier about them, based on data learn in the course of the deposition.
JPMorgan in an announcement mentioned it was “unfair for The Submit to attract these sorts of conclusions with out context for the related processes at JPMorgan, the tens of hundreds of thousands of purchasers, and the numerous professionals concerned.”
Attorneys bringing the lawsuit have sought testimony or paperwork from a big selection of people that had various ranges of contact with Epstein, together with Tesla CEO Elon Musk, Google co-founders Larry Web page and Sergey Brin, and JPMorgan CEO Jamie Dimon, who’s scheduled to be deposed Friday.
U.S. Virgin Islands Gov. Albert Bryan Jr. is about to present a deposition on June 6. JPMorgan in a submitting Thursday accused authorities officers on the islands of protecting Epstein from legislation enforcement officers in change for political donations. Attorneys for the U.S. Virgin Islands referred to as the declare “an apparent try and shift blame away from JPMorgan Chase.”
Deutsche Financial institution, the place Epstein took a lot of his wealth after leaving JPMorgan in 2013, not too long ago agreed to pay $75 million to settle an identical swimsuit.
The lawsuits towards the funding banks concern the extent to which numerous individuals in Epstein’s orbit are accused of enabling the sprawling intercourse trafficking operation that led to his arrest in 2019, or at the very least trying the opposite means — and profiting — when they need to have intervened. U.S. Virgin Islands attorneys say JPMorgan “knowingly facilitated, sustained, and hid” Epstein’s human trafficking community, whereas benefiting from offers and purchasers Epstein introduced into the financial institution.
JPMorgan has denied any wrongdoing and mentioned the claims within the U.S. Virgin Islands criticism are meritless. The corporate has additionally sued Staley, accusing him of appearing on his personal to advance Epstein’s pursuits.
Erdoes within the deposition mentioned that it was the accountability of the financial institution’s authorized workforce to exert controls on Epstein’s accounts and that Staley communicated with him in regards to the financial institution’s periodic considerations.
“The method by which these issues work is that authorized danger, compliance, together with supervisory administration … have a pure course of they go to after they have issues like this that get alerted to them,” she mentioned.
That could be a truthful description of how most main banks’ compliance programs ought to work, mentioned Eric Chaffee, a professor on the College of Toledo Faculty of Legislation. However he added that after repeated unexplained suspicious transactions and public stories of prison habits, financial institution officers have a obligation to step in.
“When you’ve plenty of pink flags come up, it’s a type of issues the place the senior executives actually have some obligation to be speaking to one another and determining what’s happening,” Chaffee mentioned. “In the end, there does come a degree the place the financial institution, the monetary establishment, turns into outright complicit in regard to the crime.”
Wexler mentioned that the financial institution regretted doing enterprise with Epstein and “in hindsight, any affiliation with him was a mistake.”
“We’re dedicated to combating human trafficking, and we’ll proceed to search for methods to put money into advancing this essential mission,” Wexler mentioned.
Attorneys representing Staley, the U.S. Virgin Islands and Epstein’s victims declined to remark.
On greater than 100 events in the course of the deposition, Erdoes mentioned she didn’t recall particulars of her function serving to supervise Epstein’s accounts, a few of which date again 20 years. She described Epstein’s crimes as “allegations” although he pleaded responsible to procuring a baby prostitute in 2008 and was declared a Stage 3 intercourse offender — essentially the most severe designation — by a New York state appeals courtroom in 2011.
Requested within the March 15 deposition whether or not she believed Epstein, who died by suicide in 2019, was engaged in intercourse trafficking, Erdoes mentioned, “I don’t know what to consider.”
Epstein first opened accounts at JPMorgan in 1998, and he grew to become an essential shopper.
By his personal accounts and those he managed for former Victoria’s Secret CEO Leslie Wexner, Epstein “generate[d] one of many largest annual income flows of personal purchasers within the non-public financial institution,” reads a JPMorgan due diligence report from 2003, when the non-public financial institution was significantly smaller, cited within the deposition. (Wexner severed ties with Epstein in 2008, and later mentioned Epstein misappropriated $46 million of the Wexner household’s cash.)
A 2006 inner financial institution report referenced Epstein’s routine money withdrawals a number of occasions a month in quantities starting from $40,000 to $80,000, including as much as greater than $750,000 a yr.
By 2008, Epstein had $121 million in accounts with JPMorgan, data learn in the course of the deposition present. However Epstein, a prodigious cash supervisor, sought to carry the financial institution extra enterprise, based on authorized filings, and revenue from charges related to the work.
All through that interval, based on filings, Epstein benefited from the friendship and inner advocacy of Staley, who preceded Erdoes as head of JPMorgan’s wealth administration unit.
Staley, who grew to become the pinnacle of British financial institution Barclays in 2015, described a “profound” friendship with Epstein, based on courtroom data. He resigned from Barclays in 2021 after U.Ok. regulators launched an investigation into his relationship with Epstein.
Textual content messages and emails entered into proof by the U.S. Virgin Islands counsel “albeit cryptically, that Mr. Staley had sexual encounters” with Epstein’s trafficking victims, Decide Jed S. Rakoff of the Southern District of New York wrote in a Might order within the U.S. Virgin Islands case.
In a 2006 e mail change with Staley that was learn in the course of the deposition, Erdoes described a Palm Seaside Submit article about Epstein being accused of soliciting minors as “so painful to learn.”
Staley responded: “I went and noticed him final night time. I’ve by no means seen him so shaken. He adamantly denies the ages.”
Staley’s departure from JPMorgan in 2013 allowed Erdoes to finish the financial institution’s relationship with Epstein, she mentioned within the deposition. “There was nobody there to vouch for Mr. Epstein,” Erdoes mentioned.
In a authorized submitting final month, Staley’s attorneys mentioned JPMorgan’s claims quantity to “provocative media fodder,” however “by no means clarify how an worker [Staley] who is just not alleged to have had decision-making authority over Epstein’s accounts — and who is just not alleged to have seen any of the suspicious account exercise that different JPMorgan staff ignored — prompted the plaintiffs’ alleged accidents.”
Round that point, she mentioned, she grew to become conscious that Epstein’s common withdrawals had been in money. On the time, Erdoes mentioned, she didn’t see Epstein’s prison historical past and the withdrawals as associated.
“By no means on the time was that one thing that I used to be connecting in my thoughts with something to do with any of the allegations of what he could or could not have performed,” she mentioned.
Wexler mentioned the agency “didn’t know that such transactions might have had something to do with a intercourse trafficking operation.”
Banks have vast discretion to drop purchasers within the title of danger tolerance, specialists say, and are typically inspired by regulators to shut suspicious accounts or face penalties.
Through the deposition, Erdoes mentioned that it was not her accountability to provoke inner investigations or flag considerations about Epstein’s habits that arose from authorized developments or information stories about his convictions or suspected trafficking. As a substitute, she mentioned repeatedly that it was the job of the financial institution’s authorized and compliance officers to vet the knowledge.
“My accountability is to not do one thing with each piece of reports media that comes out on our shopper base,” she mentioned later.
Inner JPMorgan data referenced within the U.S. Virgin Islands criticism present that financial institution staff flagged Epstein’s copious money withdrawals as early as 2006.
In a 2010 inner e mail additionally cited within the criticism, danger administration officers surfaced “allegations of an investigation associated to youngster trafficking.”
In 2011, based on the filings, JPMorgan’s anti-money-laundering compliance director requested re-approval from JPMorgan’s normal counsel of the financial institution’s relationship with Epstein “in mild of the brand new allegations of human trafficking.”
Erdoes later within the deposition appeared to say the financial institution’s insurance policies had been hazy when encountering a shopper accused however not convicted of sure crimes. “I don’t know what the correct course of is when it’s an allegation,” she mentioned.
