An attorney for the U.S. Virgin Islands argued in federal court that JPMorgan ChaseJamie Dimon and ex-top bank executive Jes Staley were aware of sex trafficking by the bank’s notorious client Jeffrey Epstein.
The lawyer’s argument pushed back at JPMorgan’s move earlier this month to shift any legal responsibility for its business relationship with the late Epstein onto Staley alone.
“Jamie Dimon knew in 2008 that his billionaire client was a sex trafficker,” attorney Mimi Liu told Manhattan U.S. District Judge Jed Rakoff at a hearing late Thursday, referring to the year Epstein was first criminally charged with sex crimes.
“If Staley is a rogue employee, why isn’t Jamie Dimon?” Liu said at the hearing, which dealt with JPMorgan’s efforts to dismiss the Virgin Islands’ lawsuit against the bank over its relationship with Epstein.
The lawyer continued: “Staley knew, Dimon knew, JPMorgan Chase knew” about Epstein’s criminal conduct.
Liu said there were multiple cash transactions and wire transfers by Epstein, including sending hundreds of thousands of dollars to several women, which should have been officially flagged as suspicious.
“They broke every rule to facilitate his sex trafficking in exchange for Epstein’s wealth, connections and referrals,” Liu argued
“This case was not just Jes Staley … there will be numerous documents that go far beyond his office to the executive suite,” she said.
A lawyer for JPMorgan disputed those arguments, “in particular the point about Jamie Dimon having any specific knowledge.”
Dimon is not a named defendant in the suit against the bank.
JPMorgan spokeswoman Patricia Wexler in a statement said, “It is unfair for CNBC to report lawyers’ unsubstantiated arguments as facts.”
Wexler also said, “Jamie Dimon has no recollection of reviewing the Epstein accounts.”
Staley has denied knowing about Epstein’s illegal conduct. He was CEO of Barclays from 2015 until late 2021, when he quit after a probe by British financial regulators into his ties to Epstein.
Attorneys for the Virgin Islands previously have highlighted an August 2008 internal email at JPMorgan which suggested that Epstein’s account would be closed that year because of concerns over his conduct.
“I would count Epstein’s assets as a probable outflow for ’08 ($120mm or so?) as I can’t imagine it will stay (pending Dimon review),” an unidentified employee wrote in that email, mentioned in the Virgin Islands’ lawsuit.
That email came two years after JPMorgan’s Global Corporate Security Division found several newspaper articles “that detail the indictment of Jeffrey Epstein in Florida on felony charges of soliciting underage prostitutes,” the lawsuit noted.
The Virgin Islands’ lawsuit against the bank alleges that Epstein’s 15-year customer relationship with the bank helped him transport young women, whom he and others then sexually abused at his property in the Virgin Islands.
The suit was filed three years after Epstein, who was a former friend of ex-Presidents Donald Trump and Bill Clinton, died by suicide in a Manhattan jail while awaiting trial on federal child sex trafficking charges.
JPMorgan has said Dimon was not involved in decisions related to Epstein’s account at the bank.
Last week, the bank sued Staley, its former chief of investment banking, alleging that he is legally responsible for lawsuits from the Virgin Islands and Epstein’s victims related to Epstein’s relationship with JPMorgan. The suit seeks to claw back more than $80 million in compensation Staley received.
In arguments Thursday, a lawyer for the bank said “all roads go to Mr. Staley.”
“He will be at the center of this case whether there is one or two” trials for each lawsuit, the lawyer said.
Epstein was a private wealth client of the bank until 2013, at least partly because Staley had vouched for him.
But in 2008, Epstein pleaded guilty to a Florida state charge of procuring an underage prostitute, a crime that was extensively reported at the time. He later served 13 months in jail.
“In 2013 — the year that JP Morgan terminated its relationship with Epstein — JPMorgan flagged in Epstein’s history that ‘[p]er bank policy, felons [like Epstein] are considered high risk and require additional approval,'” the Virgin Islands’ suit notes.
Rakoff, the judge, did not rule Thursday on the motion to dismiss the suit.
He said he would rule on that question by the end of March, but agreed that the Virgin Islands has the right to file a lawsuit on behalf of anyone who was a resident of the territory.
