JPMorgan and Jeffrey Epstein: the long goodbye

Red flags were raised about the sex offender's activity since the early 2000s — but the bank continued with him for years after his arrestAuthor of the article:You can save this article by registering for free here. Or sign-in if you have an account.As an Arctic storm blasted New York City with snow drifts and sent temperatures as low as 15 degrees below freezing, two unknown 18-year-old “models” walked into a Chase branch on Manhattan’s 2nd Avenue.Subscribe now to read the latest news in your city and across Canada.Subscribe now to read the latest news in your city and across Canada.Create an account or sign in to continue with your reading experience.Create an account or sign in to continue with your reading experience.It was January 2004, barely three years after JPMorgan had merged with Chase. The women, one a United States citizen and the other from Slovakia, asked for checking accounts and credit cards with a limit of US$2,500. An initial deposit of US$3,000 for each was expected.Their guarantor? Jeffrey Epstein.Breaking business news, incisive views, must-reads and market signals. Weekdays by 9 a.m.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Posthaste will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.The sex offender would go on to use JPMorgan to process more than US$1 billion in transactions and withdraw over US$5 million in cash — suspected to have been used to fund his sex-trafficking operation — in his 15 years at the lender’s private bank for wealthy clients. It finally parted company with him in 2013.In the wake of the U.S. Department of Justice’s release of millions of pages of Epstein documents this year, attention has often focused on other financial institutions, notably Deutsche Bank, where the pedophile financier shifted hundreds of millions of dollars after JPMorgan cut him off.But the sheer mass of information — including JPMorgan internal documents and corporate emails — has also cast light on the longevity of Epstein’s relations with America’s biggest bank by assets. The document dump has raised questions as to whether the bank should have cut off ties earlier and to what extent they persisted after it “exited” him.The files show that people at JPMorgan raised red flags about Epstein’s accounts time and again for about a decade. But for years such warnings were not acted on.Before Epstein’s arrest on sex-trafficking charges in 2019, the value of the suspicious activity JPMorgan reported on his accounts totalled US$4.3 million, according to an analysis by Oregon Senator Ron Wyden, a Democrat on the Senate finance committee.After Epstein’s death in 2019, the bank flagged virtually all of its transactions with him, taking the figure to US$1 billion, a move it said it took to aid U.S. law enforcement in its investigation of his crimes. JPMorgan says that it was only at that time that it had full access to the details of the U.S. government’s sex-trafficking charges against the financier.The documents also reveal that Epstein was at various times one of the biggest income generators for JPMorgan’s private bank. In just 2003 alone he provided it with more than US$8 million in revenue through his trading activities and association with Victoria’s Secret boss Les Wexner.Over the years, JPMorgan bankers would boast that Epstein was one of their marquee clients with a net worth of US$500 million, thanked him for referrals, registered at least 45 visits at his homes and welcomed him to the bank’s headquarters.Wyden contends that the activity in Epstein’s accounts should have set off more warnings earlier on. “It had all the hallmarks of financial crimes, even after he was a known sex criminal,” the senator tells the FT.JPMorgan said in a statement that it regretted “any association we had with the man but did not help him commit his heinous crimes”.“JPMorgan filed multiple suspicious activity reports beginning in 2002, and over 100 currency transaction reports on his cash withdrawals over the years but heard nothing back from the government,” it said.The files also show Epstein manoeuvring in a banking system that was more analogue than digital and which relied heavily on personal relationships.They illustrate the hands-off management style of Jamie Dimon, JPMorgan’s chief executive and long the most prominent banker in the world, who stated under oath in 2023 that he did not “recall knowing anything about Jeffrey Epstein until the stories broke sometime in 2019”.This was despite his top employees discussing for years whether to keep the wealthy sex offender on as one of the private bank’s biggest clients.“It just is hard to see how the top person could have just been out of the loop with all this stuff going on,” Wyden says.JPMorgan said: “Jamie never met with him, spoke with him, emailed with him, and was not involved in any decisions about his account.”Urged on by Jes Staley, once a top deputy to Dimon who later became Barclays chief executive only to lose his job over his Epstein ties, JPMorgan dismissed objections by other bank employees about the appropriateness of the sex offender remaining a client after his 2008 guilty plea for soliciting a minor.Those raising alarms included the bank’s chief lawyer and global head of compliance.But Epstein’s network was deemed so valuable that the bank maintained frequent contact with him even after it finally terminated his banking relationship in 2013.JPMorgan said: “The primary reason Epstein was not terminated earlier was Jes Staley, a then-trusted senior executive at JPMorgan. He repeatedly vouched for him, advocated for retaining him and used the trust colleagues had in him to keep him at the bank. We now know that trust was misplaced.”However, many other executives who maintained ties with Epstein after his conviction, and others who had worked with him in the years before, remain at the top of JPMorgan today.For the majority of Epstein’s time at the bank, the person tasked with serving as his personal banker was Mary Casey (née Rieth).In 2001 she was handpicked for the role as she was “smart [and] aggressive and… would be able to interact well w/ Jeffrey”. The decision was personally endorsed by Jes Staley, who at the time was heading up JPMorgan’s private bank and had said she “would be great”.When the two teenagers walked into the Chase branch in January 2004, the decision to approve the accounts fell to her.Casey, a Princeton graduate who previously worked at the World Bank, commissioned a due diligence report into the pair that was received in early 2004.It concluded that “Epstein often provides support to emerging models”. In this case, the 18-year-old “has arrived from the Slovak Republic and Epstein has asked us the favour of opening a checking account for her”, according to the report.It added that Casey would meet the Slovakian. In a 2023 deposition she said she never did. JPMorgan approved the accounts for the two 18-year-olds. The bank’s anti-money laundering team later placed the pair in Palm Beach at the height of Epstein’s crimes in the city.Casey had already seen and approved a due diligence report on Epstein in May 2003. That briefing raised several red flags through the inclusion of a Vanity Fair article that referred to Epstein’s pursuit of “mostly young” women who were sometimes summoned to his home by his co-conspirator and former girlfriend Ghislaine Maxwell.In July 2006 — Epstein’s largest year of cash withdrawals from the bank, almost reaching US$1 million — Casey forwarded an article to Staley detailing the charge against Epstein. “Thought you should see this article…give me a ring when you have a moment,” she added.Less than two weeks later she complained to Staley and Mary Erdoes, who ran the private bank, and suggested moving Epstein to a banking and client service-only relationship.Red flags were raised but little changed.By the end of 2006, JPMorgan had processed more than US$400 million in transactions for Epstein. He had used the bank to withdraw at least US$2.9 million in cash.In September 2007, Erdoes opened an email with an article about Epstein.Erdoes was a protégé of Staley, who had championed her rise. She was running the private bank, working for Staley who headed up the asset management division.She earned a reputation as a superstar with clients and a hard-nosed operator who suffered no fools.The New York Post was reporting that Epstein’s lawyers were negotiating a plea deal for paying girls for sex and transporting them across state lines.Days later, Epstein struck a non-prosecution agreement with Florida prosecutors, a deal that granted him immunity from federal child sex trafficking charges but required him to register as a sex offender and meant prison time.The plea deal ran directly counter to assurances that Staley had given Erdoes when he was first arrested in 2006, saying Epstein had “adamantly” denied that any girls were underage.The guilty plea was perhaps the largest red flag of Epstein’s time at JPMorgan. A client with a history of large cash withdrawals and news stories about his pursuit of young women had admitted that he had solicited prostitution from a minor.JPMorgan bankers went into crisis mode. Staley arranged a call in October with top bankers including Erdoes to discuss Epstein.The plea deal was flagged in a JPMorgan due diligence report that same month. Lisa Waters, a JPMorgan oversight executive, wrote to Casey in early 2008 that “no one wants” Epstein. Casey said she would speak to Erdoes “about moving him”.A month later, and as Epstein sought a new $1mn letter of credit, Casey asked Erdoes and other senior executives: “Any l/c issued today will be outstanding for a year… Are we comfortable taking on additional credit exposure just ahead of his pending plea arrangement?”The then head of credit in the wealth management division, Steven Sonnick, almost resigned to fate, suggested that the bank’s options were limited by its previous decision to grant Epstein a credit line: “Since we have already done one, I don’t see how we can turn it down.”Casey posed questions to her superiors about Epstein in 2007 and 2008, as well as commissioning batches of due diligence into him, Maxwell and their accounts.Epstein entered prison in July 2008. Months later JPMorgan decided to house his trading accounts at Bear Stearns, the investment bank it acquired in early 2008. JPMorgan would still maintain the sex offender’s bank accounts.By the end of the year, Epstein had directly paid women more than US$1.29 million from JPMorgan accounts, according to a 2023 expert report. More than US$500 million had moved in and out of his accounts.Casey handed the Epstein account over to Paul Morris, another senior private banker, in March 2010. Despite her concerns over the previous four years, she emailed Staley optimistically five days after the handover was complete: “Jeffrey is well covered and hopefully the relationship will grow from here.”The Epstein relationship grew even as his notoriety increased. Epstein continued to withdraw hundreds of thousands of dollars in cash — ostensibly for jet fuel — and more troubling news articles came out.During earlier conversations about closing Epstein’s accounts, Staley had told colleagues that Epstein had “paid his debt to society” after his stint in prison. JPMorgan due diligence reports later echoed this: “Our view is that Mr Epstein has served his time and completing [sic] his duties to society.” But Staley left JPMorgan in early 2013.By then, the primary banker at JPMorgan on the Epstein account was Justin Nelson, who inherited the assignment in 2012 from Morris.In February, Nelson called Epstein’s office to ask for two minutes of his time to “get some colour” on the high number of new accounts that Epstein was opening. Multiple due diligence reports and discussions followed.Erdoes met Epstein in the summer of 2013 to tell him he would need to find a new bank — discussions that ended up with his move to Deutsche Bank, where Morris, his former contact at JPMorgan, had recently relocated.According to talking points prepared for her discussion with Epstein by John Duffy, then head of JPMorgan’s U.S. private bank, Erdoes gave as reasons the “repetitive nature of your cash transactions” and evolving regulatory standards around cash activity.After a phone call with Epstein about his account closures, Duffy wrote to Erdoes that he “understands better now the impact of his cash activities — sticking to aviation needs”.That was a reference to Epstein’s claim that his extensive use of cash was for “jet fuel” payments — an assurance about which Duffy said in 2023 he took him “at his word”.The final account related to Epstein was closed in March 2014. By then, he had used JPMorgan to withdraw more than US$5 million in cash, pay more than US$3 million to women and almost US$55 million in legal expenses over 11 years.Duffy had already decided to keep a relationship with Epstein as a source for future referrals. He delegated this responsibility to Nelson.From 2014 to 2017, JPMorgan bankers made eight more documented visits to Epstein’s homes. The visits were principally by Nelson.Epstein connected Nelson with an executive in the family office of Leon Black, the billionaire who provided the sex offender with much of his income during the last decade of his life.Black, one of New York’s wealthiest residents, was a key part of the enduring connection between JPMorgan and Epstein.The bank said its ties with Epstein after 2013 were purely because of his role as an adviser to Black, who remained a JPMorgan client. “JPMorgan Chase does not control clients’ choice of advisers,” the bank said.Nelson later testified that Epstein did not refer any future business to JPMorgan other than to Black and his circle.His final documented visit to Epstein was in 2017 on Valentine’s Day.Erdoes also exchanged emails with Epstein’s office, although she said in 2022 that she could only recall one formal meeting with the sex offender, which was the 2013 discussion to “exit” him as a client.JPMorgan said it would be “wrong to suggest an inconsistency” in Erdoes’s public statements and that “as with many other private banking clients, [she] had periodic correspondence with” Epstein.The messages between Erdoes and Epstein’s office went on until as late as 2019, the year of his death. She fielded a referral from Epstein’s assistant for Kathy Ruemmler, a former top White House lawyer under Barack Obama who later quit a top job at Goldman Sachs over her own connections to Epstein.The Epstein saga continues to haunt JPMorgan even as it has made every effort to make it go away. In 2023 the bank paid US$75 million to settle a lawsuit by the U.S. Virgin Islands, where Epstein owned a private island, and a further US$290 million to deal with lawsuits from his victims.JPMorgan has sought to portray Staley as the one responsible for protecting the relationship with Epstein. But many of the people who nurtured it and made the decision to keep in contact with him after 2013 remain in senior positions at JPMorgan.Erdoes, a close ally of Dimon who had once been talked about taking on the mantle of chief executive from him, still runs JPMorgan’s asset and wealth management division. She is one of the highest-paid executives at the bank, making almost US$30 million in 2024. That year, Forbes estimated her net worth at US$300 million.Casey is a vice-chair at JPMorgan’s private bank. She relocated from New York to Miami in 2017, giving up her managerial responsibilities. One colleague described Casey as being tired and wanting less stress.JPMorgan said Casey remained “a valued employee” and had “advocated for terminating Epstein as a client years before he was exited”.Nelson remains a managing director, currently in his 28th year with JPMorgan. He is known for having one of the private bank’s biggest books of business, covering hedge fund clients out of JPMorgan’s Greenwich, Connecticut, office.“Following our firing of Epstein in 2013, the two met only in Epstein’s capacity as Leon Black’s adviser. He has never been accused of any wrongdoing,” JPMorgan said in a statement.In Congress, Wyden is pushing for the Treasury department to turn over bank records related to Epstein to congressional investigators. He is also calling for reforms to how banks disclose and report suspicious activity reports, and to ensure bankers have personal responsibility for misconduct by their clients.“We’re going to stay at it until we get all the facts out,” Wyden says. “This is a question of making sure this doesn’t happen again.”© 2026 The Financial Times LtdPostmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.