Every Dog Has His Day–JPMorgan’s Settlements Reach $365 Million Over Civil Claims It Banked Jeffrey Epstein’s Sex Trafficking of Minors; Criminal Charges Could Lie Ahead
BanksterCrime:
By Pam Martens and Russ Martens:
JPMorgan Chase would like the public to believe that it’s going to walk away from the sleaziest financial crime of the century just $365 million poorer in the process. That’s just not going to happen.
Yesterday, the bank settled for $75 million the Jeffrey Epstein related claims brought by the Attorney General of the U.S. Virgin Islands, after settling class action claims brought by Epstein’s victims for $290 million in June. (The June settlement was so questionable that we initiated an inquiry into the presiding Judge, Jed Rakoff, who called it a “really fine settlement.”)
Both lawsuits alleged that JPMorgan Chase actively participated in Epstein’s sex trafficking of minors enterprise by turning a blind eye to his ongoing crimes and failing to file the legally mandated Suspicious Activity Reports (SARs) as Epstein took upwards of $40,000 to $80,000 in hard cash monthly from his accounts. Over the span of 15 years, that hard cash tallied up to more than $5 million according to court documents.
JPMorgan Chase previously admitted in 2014 to two criminal charges brought by the U.S. Department of Justice for banking Bernie Madoff’s Ponzi scheme for decades and ignoring its legal obligation to file SARs with the Financial Crimes Enforcement Network (FinCEN). The settlement with the Justice Department included a penalty of $1.7 billion in restitution to Madoff victims and a promise to reform its anti-money laundering compliance programs. Clearly, JPMorgan Chase has not honored that agreement.
The bank has claimed that its relationship with Epstein spanned approximately 15 years and ended in 2013. Internal emails produced in discovery, however, show that its bankers/brokers continued to make visits to Epstein’s Manhattan mansion for years after 2013. One JPMorgan broker, Justin Nelson, appears on a document produced by the bank as visiting Epstein at his residence 13 times, including as late as 2017. Five of those visits are characterized by the bank as “routine account servicing.” Seven visits are characterized as related to “Leon Black.” One visit to Epstein’s Zorro Ranch in New Mexico says it was to “tour property.” (See pages 3, 4 and 5 at this link.)
Deposition testimony indicates that the bank was aggressively attempting to build a large banking relationship with Black, then head of the private equity firm, Apollo Global Management, who had a deep financial relationship with Epstein. Black has been sued by multiple women alleging they were sexually assaulted by him. The latest lawsuit in July comes from an autistic woman who alleges Black raped her at Epstein’s Manhattan mansion when she was 16. The Senate Finance Committee has also opened an investigation into exactly what kind of services Epstein was providing to Black that would explain the $158 million that Black paid Epstein between 2012 and 2017.
The dial on the moral compass at JPMorgan Chase seems to perpetually default to the green dollar sign. The evidence produced in court documents shows definitively that Epstein was referring ultra wealthy clients to the bank. In a court filing on July 26, the U.S. Virgin Islands lists the following individuals as people Epstein referred as clients to the bank: Microsoft co-founder and billionaire Bill Gates; Google co-founder and billionaire Sergey Brin; the Sultan of Dubai, Sultan Ahmed bin Sulayem; media and real estate billionaire Mort Zuckerman; and numerous others.
Typically, settlement announcements involving salacious court cases are announced late on a Friday afternoon so that the public relations damage fizzles out by Monday morning. So what caused this sudden urgency for JPMorgan to announce the settlement on a Tuesday?
The announcement of the $75 million settlement with the U.S. Virgin Islands yesterday came just hours after Los Angeles Times’ Pulitzer Prize-winning journalist Michael Hiltzik declared the bank guilty in his column. Hiltzik had given his verdict on the case in one of the largest daily newspapers in the U.S., which has a print and digital weekly audience of 4.4 million people. Hiltzik wrote:
“It’s entirely fair to say that Epstein would have been brought to justice well before July 2019, when he was arrested on federal sex-trafficking charges, if JPMorgan merely told authorities what it knew and provided them with the documentation of his financial transactions that the bank held in its possession.
“That these were ‘suspicious’ as defined by the federal disclosure law is hardly subject to question, since so many of the bank’s own executives knew it. Instead, they kept him on as a valued client until the relationship became utterly untenable. So let’s be clear: As an institution, JPMorgan knew what Epstein was up to and let dollars do its thinking about it. Whether the bank should be made to pay will be up to a judge and a jury, if the case gets that far. But is there any doubt about what they should conclude?”
Here are just a few of the hurdles that JPMorgan Chase and its Chairman and CEO, Jamie Dimon, will continue to face for wantonly banking a rapist and sex trafficker of children:
The criminal division of the U.S. Department of Justice had sufficient evidence in its possession in 2007 to bring federal sex trafficking charges against Epstein and put him in prison for decades. Instead, the Justice Department crafted a cozy deal with the Florida State Attorney that saw Epstein spend just 13 months in the private wing of the Palm Beach County jail, with most of that time spent in a work release program where Epstein was driven in his limo to an office each day.
Since that time, the Justice Department’s actions have been assailed on a regular basis in books, newspaper articles, documentaries and by victims speaking out. Now that the U.S. Virgin Islands has effectively made the criminal case against JPMorgan Chase by obtaining in discovery the granular details of the money laundering operation the bank oversaw for Epstein, the criminal division of the DOJ is going to be hard pressed to explain why the bank’s activities with Madoff warranted two criminal felony charges but money laundering by JPMorgan to perpetuate more than a decade of sexual assaults on children results in no criminal action against the bank.
There is also another threat facing the bank related to Epstein. A third federal lawsuit against JPMorgan Chase involving Epstein was dismissed by Judge Rakoff in August. That case was a shareholders’ class action that credibly alleged that the same members of JPMorgan’s Board of Directors who brought its long-tenured Chairman and CEO, Jamie Dimon, to power, were also, verifiably, engaged in business with Jeffrey Epstein.
The lawsuit was dismissed on technical grounds by Judge Rakoff, who wrote that the plaintiffs failed to first make a demand on the bank’s Board of Directors or convincingly explain why that demand would have been futile. (In actuality, the plaintiffs had indeed explained in their complaint why that demand would have been futile: too many members of the Board were tainted by their business ties to Epstein.)
The shareholders’ lawsuit was brought by two pension funds that owned shares of JPMorgan Chase. It named Dimon as a defendant, as well as current and former members of JPMorgan Chase’s Board of Directors. It was brought by a prominent class action law firm that is not likely to go away so easily.
The lawsuit’s theory of the case is that specific members of the Board of JPMorgan Chase “put their heads in the sand” and ignored that the bank had become a cash conduit for Jeffrey Epstein’s child sex trafficking ring because they were hoping that their own business ties to Epstein “would go unnoticed.”
Adding to the culpability of JPMorgan’s Board of Directors is the simple fact that they have not fired Dimon, as either Chairman or CEO, despite the unprecedented crime spree that has taken place as he sat at the helm of the bank. Raising even more suspicions of the Board’s own culpability is that after the bank’s two most recent admissions to felony charges, Dimon was financially rewarded by the Board. See our report: After JPMorgan Chase Admits to Its 4th and 5th Felony Charge, Its Board Gives a $50 Million Bonus to Its CEO, Jamie Dimon.
Corruption of this magnitude cannot be sustained in a true democracy. If the Justice Department brings no criminal charges against this bank for financing horrific sex crimes against children, then Americans will know for certain that U.S. democracy has become a full-fledged kleptocracy.
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