JPMorgan Chase’s decision to stop doing business with Jeffrey Epstein became easier after there was no one at the bank to advocate for him, a top executive at the nation’s largest lender said in a deposition taken in connection with two lawsuits arising from the institution’s nearly 15-year relationship with the disgraced financier.
Mary Erdoes, head of JPMorgan’s asset and wealth management division, said in a March deposition reviewed by The New York Times that she decided to dismiss Mr. Epstein as a client in summer 2013 because of concerns about repeated large cash withdrawals from his many accounts with the bank.
She said an annual review of Mr. Epstein’s accounts took place several months after James E. Staley, who had been a top private banker at JPMorgan and the main advocate of Mr. Epstein, left the bank in January 2013.
Ms. Erdoes said Mr. Epstein, who became a registered sex offender after a 2008 guilty plea in Florida to soliciting prostitution from a teenage girl, was considered a “high risk client.” Ms. Erdoes said she hadn’t known when Mr. Epstein was labeled such.
“Mr. Staley was Mr. Epstein’s advocate in the bank and was the senior relationship manager for Mr. Epstein,” Ms. Erdoes said. “And without someone there advocating for Mr. Epstein and the situation that I viewed, I was exiting Mr. Epstein.”
A decade after JPMorgan ended its dealings with Mr. Epstein, and nearly four years after his death by suicide while awaiting trial on federal sex trafficking charges, the issue of what executives at the nation’s biggest bank knew about Mr. Epstein’s abuse of dozens of teen girls and young women is critical in the lawsuits facing the bank.
The two suits — one brought by lawyers representing Mr. Epstein’s victims and the other by the government of the U.S. Virgin Islands — claim that JPMorgan ignored multiple warnings that Mr. Epstein was using money in his dozens of accounts at the bank to finance illicit sexual activities at his residences in New York, Florida and the Virgin Islands. The lawsuits have charged that JPMorgan chose to keep Mr. Epstein as a client after he became a registered sex offender because he was bringing business to the bank.
A blame game is also going on at JPMorgan, with some suggesting that Mr. Staley should have known about Mr. Epstein’s sex trafficking at the time, and that he had the duty to let others know. The bank has named Mr. Staley as a third-party defendant in the lawsuits in a bid to hold him liable for any damages JPMorgan may have to pay.
Mr. Staley, who is scheduled to be deposed as soon as next week, has argued in court papers that he did nothing wrong or inappropriate. His lawyers did not return requests for comment.
Better known as “Jes” on Wall Street, Mr. Staley had to resign as chief executive of Barclays in 2021 following an investigation by British regulators into how he had characterized his prior relationship with Mr. Epstein.
JPMorgan has repeatedly denied any knowledge of Mr. Epstein’s sex crimes. In a statement, the bank said of Mr. Epstein that “in hindsight, any association with him was a mistake and we regret it, but we did not help him commit his heinous crimes.”
David Boies, a lawyer for the victims suing the bank, said Ms. Erdoes and others at JPMorgan, for some time, “were fully aware of Epstein’s large cash withdrawals and Epstein’s sex trafficking.”
So far, dozens of depositions have been taken in the litigation, with Judge Jed S. Rakoff of Federal District Court in Manhattan putting them on a fast track. On Friday, Jamie Dimon, JPMorgan’s chief executive, testified for several hours during a deposition at the bank’s Manhattan headquarters.
Lawyers have been debating how much of Mr. Dimon’s deposition can be made public. The bank issued a statement on Friday that said Mr. Dimon never met or emailed Mr. Epstein and “does not recall ever discussing his accounts internally, and was not involved in any decisions about his account.”
Mr. Dimon’s testimony could be crucial because Mr. Staley, when he ran the bank’s private wealth group and later its investment bank, reported directly to him.
In Ms. Erdoes’s deposition, portions of which were earlier reported by The Washington Post, she said she believed Mr. Staley had reported directly to Mr. Dimon from 2006 until the time he left the bank. Ms. Erdoes has reported directly to Mr. Dimon since 2009, she said, and before that to Mr. Staley.
In her deposition, Ms. Erdoes said she did not know why Mr. Staley left the bank but it was her understanding “it was a mutual decision.”
Ms. Erodes said in her deposition that she personally informed Mr. Epstein that she was dismissing him as a client in summer 2013, during a visit to his Manhattan home. She said it was only the second time she had met him in person.
Ms. Erdoes said she was not satisfied with Mr. Epstein’s explanation that large cash withdrawals were associated solely with his air travel. But when lawyers for the victims asked her whether the withdrawals may have been for payments to “women and girls,” Ms. Erdoes said she wasn’t sure what Mr. Epstein did with the funds.
When asked why similar cash withdrawals by Mr. Epstein had not led to his dismissal earlier, Ms. Erdoes said she wasn’t “privy to those discussions.”
A court document filed in the litigation suggests Mr. Epstein’s transactions had raised warning signs within the bank for years. In the court document — initially filed publicly but now under seal — JPMorgan said dozens of bank employees had been involved in determining whether suspicious activity reports, or SARs, should be filed about some of Mr. Epstein’s transactions from 2000 to 2019.
The document offered no details on those transactions. Banks file SARs with U.S. regulators to alert them to possible money laundering, fraud or other illegal activity.
The same document also reported that in fall 2019 the bank’s board held two meetings to discuss “Epstein-related issues.” The document did not provide any information on those meetings, which occurred shortly after Mr. Epstein’s death. The document noted that during the 15 years the bank did business with Mr. Epstein, the board never met to discuss the bank’s dealings with him.
The board meetings came around the time that a number of news organizations, including The Times, were reporting on the bank’s relationship with Mr. Epstein and his close ties with Mr. Staley.
Judge Rakoff, who is presiding over both suits, is considering whether to grant class-action status to the lawsuit brought on behalf of Mr. Epstein’s victims. That status could permit well over 100 women to share in any settlement with the bank.
The lawyers for the victims have already reached a tentative $75 million class action settlement with Deutsche Bank, which became Mr. Epstein’s primary bank after JPMorgan fired him as a client in 2013. Deutsche Bank ended its relationship with Mr. Epstein in late 2018.
In her deposition, Ms. Erdoes said she “did not recall any conversation with anyone at Deutsche Bank about Mr. Epstein,” or JPMorgan’s decision to stop doing business with him.
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