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JPMorgan Draws Line Between Trafficking and Assault in Epstein Case

JPMorgan Draws Line Between Trafficking and Assault in Epstein Case
JPMorgan Chase & Co headquarters in New York, US, on Wednesday, 18 January 2023. (Photo: Gabby Jones/Bloomberg)

JPMorgan Chase & Co. urged a judge to throw out a lawsuit in which it’s accused of supporting Jeffrey Epstein’s sex trafficking, claiming the late sex offender’s victim is on the wrong path in seeking compensation from the bank.

In a hearing in Manhattan federal court Monday, JPMorgan denied it had any knowledge that Epstein trafficked young women — even though the bank has accused its former top executive, Jes Staley, of sexually assaulting one of Epstein’s victims.

One of Epstein’s victims, using the pseudonym Jane Doe, sued JPMorgan and Deutsche Bank AG under the sex-trafficking statute, claiming Epstein’s venture wouldn’t have been possible without the support of the banks, as well as alleged reciprocal arrangements they made with him. JPMorgan argued that although the conduct alleged in the woman’s lawsuit was abhorrent, it didn’t meet the legal definition or standard for sex trafficking.

“It is sexual assault,” JPMorgan’s attorney Felicia Ellsworth told US District Judge Jed Rakoff, asking him to dismiss the lawsuit. JPMorgan’s lawyers said Jane Doe had failed to prove Staley or the bank were aware of commercial sex trafficking or that she was subject to force, fraud or coercion — requirements under the law.

Rakoff said he would try to have a decision by the end of the month.

Erdoes to Testify

JPMorgan executive Mary Erdoes is scheduled to be deposed on Wednesday about how the bank managed Epstein’s accounts when he was a client from 1998 to 2013. Lawyers for the bank are fighting efforts to have Chief Executive Officer Jamie Dimon face similar questioning, arguing he had no involvement in decisions on Epstein’s accounts.

At Monday’s hearing Jane Doe’s lawyer David Boies argued that planes owned by Highbridge Capital, which in 2004 JPMorgan purchased a stake in, were used to transport girls. Ellsworth said the claim wasn’t supported by facts.

Boies said that when people within the bank went to “high level people saying ‘we are supporting sex trafficking and we have to stop’,” top management said no and continued on. He rejected the bank’s claim that it provided only routine banking services to Epstein.

“There is no doubt there was sex trafficking here,” he said. “There is no doubt they knew what they were doing at the time.”

‘Quid Pro Quo’

Deutsche Bank took on Epstein as a client after JPMorgan cut ties with him in 2013. Lawyers for Deutsche Bank argued that Jane Doe had signed a prior settlement agreement that protected entities tied to Epstein from being sued thereafter.

Sigrid McCawley, who is also representing Jane Doe, said the language in the agreement was clear and didn’t extend to financial institutions. The bank had an incentive to keep Epstein on because of the lucrative accounts he brought to it, she said.

Epstein was a client of Deutsche Bank between 2013 and 2018. McCawley alleged the bank allowed Epstein to structure cash withdrawals in a way that avoided raising red flags.

“This was a quid pro quo,” she said.

Staley a Key Figure

Staley has emerged as a key figure in the lawsuit. He held senior positions at JPMorgan, including as the head of the private bank, and had a “close and profound” friendship with Epstein, according to the suit. Emails Staley and Epstein exchanged, which were included in a similar suit filed by the US Virgin Islands, revealed photos of young women, visits Staley made to Epstein’s home and talk of Disney Princesses.

On March 8 JPMorgan sued Staley, claiming he should be held liable for any damages awarded against bank. JPMorgan is also attempting to claw back more than $80 million in compensation it paid to Staley during his “faithless service” and period of disloyalty.

Jane Doe had outlined in her complaint that a powerful financial executive used aggressive force to sexually assault her. In its third-party complaint against Staley, JPMorgan said it believed he was that person.

A lawyer for Staley has denied any involvement in Epstein’s sex trafficking.

Lawyers in the case recently obtained a deposition from Jane Doe, who alleges Epstein abused her for years after the pair met in 2003.

The cases are Jane Doe 1 v. JPMorgan Chase Bank, 22-cv-10019, and Jane Doe 1 v. Deutsche Bank, 22-cv-10018, US District Court, Southern District of New York (Manhattan).


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