JPMorgan Kept Jeffrey Epstein as a Client Despite Internal Warnings


looked past his criminal history and sex offender status. As a result, he managed to retain crucial business connections even as, prosecutors said in a federal indictment last month, he engaged in the sexual trafficking of girls as young as 14.

Mr. Epstein, a JPMorgan client for about 15 years, is being held without bail in a Manhattan jail. He has pleaded not guilty to the sex-trafficking charges. His lawyers did not respond to requests for comment.

Joseph Evangelisti, a JPMorgan spokesman, disputed The New York Times’s reporting. “Mary would never overrule our compliance team or other controls functions to retain a customer,” he said. “She has only one recollection of formally meeting with the customer, which was the day she fired him as a client.”

Ms. Erdoes, viewed within JPMorgan as a potential successor to Jamie Dimon, the longtime chief executive, was not alone in making the case for Mr. Epstein inside the bank.

told The Times.

In 2002, Leslie H. Wexner, the billionaire founder of the L Brands retail empire, which includes Victoria’s Secret and Bath & Body Works, opened an account at JPMorgan’s private-banking offices in Midtown Manhattan. Bankers there received a stack of stock certificates worth roughly $1 billion that Mr. Wexner wanted to deposit, according to two private-bank employees who were there.

At the time, Mr. Epstein was the personal financial adviser to Mr. Wexner, who had empowered him to make numerous financial and investment decisions on his behalf. A person close to Mr. Wexner said the retail magnate’s relationship with JPMorgan had predated his relationship with Mr. Epstein.

Mr. Epstein connected Mr. Staley to Glenn Dubin, who was then running the hedge fund Highbridge Capital Management. In 2004, Mr. Staley arranged for JPMorgan to buy a majority stake in the fund. The deal transformed JPMorgan’s asset-management division into a crucial profit engine for the entire company, and propelled Mr. Staley to new career heights.

Mr. Staley is now the chief executive of the British bank Barclays. A Barclays spokesman declined to comment on Mr. Staley’s behalf.

At JPMorgan, Mr. Epstein’s accounts attracted scrutiny when the bank’s compliance team, beginning at the end of 2008, initiated a wide-ranging review of its customers.

later said had enabled him to “launder billions of dollars.”

Officials at the Office of the Comptroller of the Currency ordered JPMorgan to review its client roster to make sure that customers were not violating laws or depositing tainted funds at the bank, according to four of the former bank employees.

Compliance officers inside JPMorgan’s private bank were instructed to comb through the files of all clients to confirm that their paperwork was in order and that nothing about the nature of their lives or work could entangle the bank in illegal activity or otherwise damage its reputation.

The review lasted multiple years, and Mr. Epstein’s accounts were flagged as potentially problematic, the former employees said. A team of company lawyers and compliance officers concluded that JPMorgan should eject him as a client. The exact nature of their concerns is unclear, but by then Mr. Epstein had been imprisoned in Florida and required to register as a sex offender.

publicly ordered the bank to improve its processes for detecting money laundering and rigorously scrutinizing customers.

Later that year, Mr. Staley left JPMorgan and joined a hedge fund. Around that time, JPMorgan cut its ties to Mr. Epstein.

After being expelled by JPMorgan, Mr. Epstein moved his business to Deutsche Bank, where he opened dozens of accounts. Compliance officers at the German bank raised concerns about Mr. Epstein and transactions that they regarded as suspicious, and they tried to get the bank to end its relationship with him. Executives overruled their concerns.

Deutsche Bank stopped doing business with Mr. Epstein in June 2019.

Ms. Erdoes, who joined JPMorgan in 1996, remains in charge of the asset-management division, which has more than $2 trillion in assets. She also has a seat on JPMorgan’s powerful operating committee.

Kate Kelly and Emily Steel contributed reporting.

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