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2023-06-13 | WebClipping | 2023-06-13 | https://nymag.com/intelligencer/2023/06/why-jpmorgan-chase-settled-with-epsteins-victims.html | true |
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The Damning Details That Led JPMorgan Chase to Settle With Epstein’s Victims
Photo: Yuki Iwamura/Bloomberg via Getty Images
Money created Jeffrey Epstein. From his 1990s friendship with Victoria’s Secret billionaire Les Wexner to his relationships with top financiers like Jes Staley and Leon Black, he used his proximity to endless amounts of it to create and run his monstrous child-sex-trafficking operation for decades. The cash let him travel indiscriminately through the echelons of cultural power, doing work for Noam Chomsky, the head of the CIA, and the general counsel of Goldman Sachs, according to published accounts of his calendar. Critical to all this was Epstein’s close ties to Wall Street, which he maintained at two of the world’s most powerful banks: JPMorgan Chase and then, when that ended, Deutsche Bank. For the past seven months, a group of anonymous victims has been suing those banks for propping up Epstein and allegedly ignoring red flags because he brought so many prestigious, wealthy clients along with him. On Monday morning, JPMorgan Chase announced it had settled with Epstein’s victims over its alleged role in banking his child-sex-trafficking operation. It is likely the most significant settlement yet — but it’s unlikely to be the end of Wall Street’s reckoning with Epstein.
The settlement came as things were starting to look conspicuously bad for the bank, with evidence increasingly pointing toward JPMorgan’s knowing full well it was doing business with a monster. On Monday, just hours after the bank settled with the Jane Does, U.S. Virgin Islands prosecutors made public some of the bank’s internal communications about Epstein. “Discovery confirms that JPMorgan knowingly, recklessly, and unlawfully provided and pulled the levers through which Epstein’s recruiters and victims were paid and was indispensable to the operation and concealment of Epstein’s trafficking,” the prosecutors wrote in a new filing on Monday. “JPMorgan had real-time information on Epstein’s payments that the government did not and had specific legal duties to report this information to law-enforcement authorities, which it intentionally decided not to do.”
The details are damning. Going back to 2007, a lawyer for the bank connected a money transfer from Epstein to a child whom he had at one point called his “Yugoslavian sex slave.” In 2008, prior to Epstein’s first conviction, one of his bankers wrote in an internal email, “We need to have the felony he pleads guilty to. So march. No one wants him.” (This appears to be a projection of what the bank would tell him: march, as in, go take a walk. Instead, the bank kept him as a client for another five years). Also that year, Catherine Keating, who is now CEO of Bank of New York Mellon Wealth Management, didn’t want to retain Epstein after his conviction. Other internal documents call him “known child sleaze” and say that “no one on today’s call was in favor of having retained [Epstein] as a client.” The bank’s head of enforcement investigated “whether or not Jeffrey Epstein was continuing to be involved in criminal activity, namely human trafficking,” and told top executives — including Staley (former CEO of JPMorgan Chase’s powerful wealth-management arm), Mary Erdoes (his successor), and Keating — that “this is not an honorable person in any way. He should not be a client.”
It looks as though the settlement is a way for the bank to stem an avalanche of otherwise bad news. Also on Monday, Manhattan federal judge Jed Rakoff certified the class status of the Jane Does, meaning they can proceed with their class-action lawsuit on behalf of dozens, if not more than 100, victims. Jamie Dimon, JPMorgan Chase’s long-time CEO, was just deposed in May. Related litigation pitted Staley against the bank, and he reportedly claims he had conversations with Dimon about keeping Epstein on as a client. (The bank denies this). A filing made by the Jane Does late on Friday accused JPMorgan of “producing documents at an inexplicably slow rate,” which had apparently stunted some of the fact-finding during the deposition process, and sought to reopen it.
For now, details of the settlement are private. (Bloomberg reported it would be as high as $290 million. Ultimately, it has to be approved by the court). Still, for the victims, this is a giant amount of money. Just last month, Deutsche Bank settled with them for $75 million, and the JPMorgan deal was probably significantly higher since Epstein had been a Chase client for more than 15 years. “The settlements that have been reached are both life changing and historic for the survivors,” said Sigrid McCawley, co-counsel for the victims. David Boies, another co-counsel for the victims, paraphrased a line from the 1973 comedy The Sting: “I feel like Johnny Hooker — it’s not enough, but it’s close.”
As with everything related to Epstein, the public interest is huge. There is still a void in our understanding of how he was able to coerce, rape, and traffic so many underage girls for so long and with such impunity. Often, settlements signal the endpoint of the public’s understanding of an alleged crime, an agreement to end discovery, subpoenas, depositions, and all other manners of fact-finding. In this case, though, it’s unlikely to be the end of what we know. The settlement has no effect on the U.S. Virgin Islands case, and a spokesman for the Attorney General there said the office “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.” Nor does it stop the civil litigation between the bank and Staley, who had courted and befriended Epstein. Staley denies doing anything wrong, but the paper trail between them isn’t typical banker talk. “That was fun. Say hi to Snow White,” Staley once emailed to Epstein in 2010. The banker visited Epstein’s island, went to visit him in London, and was apparently a close friend. Epstein lobbied for Staley to become CEO of Barclays, one of the U.K.’s biggest banks. (His relationship with Epstein is why Staley was ultimately ousted from the bank in 2021, and Barclays is now considering clawing back some compensation as more information has come to light).
When JPMorgan announced its settlement, the bank acknowledged its regrets in dealing with Epstein but stopped just shy of admitting responsibility. “We all now understand that Epstein’s behavior was monstrous, and we believe this settlement is in the best interest of all parties, especially the survivors, who suffered unimaginable abuse at the hands of this man,” a JPMorgan spokeswoman said in a statement. “Any association with him was a mistake, and we regret it. We would never have continued to do business with him if we believed he was using our bank in any way to help commit heinous crimes.” The evidence released in other cases throws that last statement into question. Whether the bank will admit responsibility further down the line remains to be seen.
Why JPMorgan Chase Settled With Epstein’s Victims
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