When the banker learned a court had affirmed Jeffrey Epstein’s status as a sex offender likely to harm more victims, she had a terse response.
Erdoes’s statements in a nearly nine-hour deposition conducted in March shed new light on the actions of JPMorgan’s highest-ranking officials while Epstein’s conduct faced legal and public scrutiny.
The Washington Post obtained the transcript of the deposition, much of which has been unreported until now. This report is based on Erdoes’s answers in that deposition, as well as emails and other internal bank documents that were read into the record during the deposition or introduced as evidence in other court filings.
Officials from the U.S. Virgin Islands, where Epstein owned a private island and gaudy mansion, and attorneys for his victims claim the bank was complicit in funding Epstein’s long history of abuse and child sex trafficking. A complaint filed last month by the U.S. Virgin Islands cites Erdoes’s deposition as evidence that JPMorgan knew of accusations against Epstein years before the bank severed ties with him.
Not until 2013 did the bank end its business relationship with Epstein, identifying the financier’s routine and massive cash withdrawals as the reason for terminating the relationship.
JPMorgan has rejected the allegations in the lawsuit and expressed regret for its past association with Epstein.
“We all now understand that Epstein’s behavior was monstrous, and his victims deserve justice — but these suits are misplaced as we did not help him commit his heinous crimes,” JPMorgan spokeswoman Patricia Wexler said in a statement.
The deposition transcript shows Erdoes said she had been made aware of Epstein’s convictions for sexual offenses, his status as a high-risk sex offender, and public allegations of abuse of minors and human trafficking. But she said she didn’t think it was her responsibility to remove him as a client, launch an inquiry into his accounts or refer them to compliance officials. JPMorgan has a separate process for dealing with client-related legal issues, she said.
Jes Staley, Erdoes’s supervisor and one of Epstein’s close friends, did investigate the allegations against Epstein by asking the financier about them, according to records read during the deposition.
JPMorgan in a statement said it was “unfair for The Post to draw these kinds of conclusions without context for the relevant processes at JPMorgan, the tens of millions of clients, and the many professionals involved.”
Attorneys bringing the lawsuit have sought testimony or documents from a wide array of people who had varying levels of contact with Epstein, including Tesla CEO Elon Musk, Google co-founders Larry Page and Sergey Brin, and JPMorgan CEO Jamie Dimon, who is scheduled to be deposed Friday.
U.S. Virgin Islands Gov. Albert Bryan Jr. is set to give a deposition on June 6. JPMorgan in a filing Thursday accused government officials on the islands of shielding Epstein from law enforcement officials in exchange for political donations. Attorneys for the U.S. Virgin Islands called the claim “an obvious attempt to shift blame away from JPMorgan Chase.”
Deutsche Bank, where Epstein took much of his wealth after leaving JPMorgan in 2013, recently agreed to pay $75 million to settle a similar suit.
The lawsuits against the investment banks concern the extent to which various people in Epstein’s orbit are accused of enabling the sprawling sex trafficking operation that led to his arrest in 2019, or at least looking the other way — and profiting — when they should have intervened. U.S. Virgin Islands attorneys say JPMorgan “knowingly facilitated, sustained, and concealed” Epstein’s human trafficking network, while profiting from deals and clients Epstein brought into the bank.
JPMorgan has denied any wrongdoing and said the claims in the U.S. Virgin Islands complaint are meritless. The company has also sued Staley, accusing him of acting on his own to advance Epstein’s interests.
Erdoes in the deposition said that it was the responsibility of the bank’s legal team to exert controls on Epstein’s accounts and that Staley communicated with him about the bank’s periodic concerns.
“The process by which those things work is that legal risk, compliance, including supervisory management … have a natural process they go to when they have things like this that get alerted to them,” she said.
That is a fair description of how most major banks’ compliance systems should work, said Eric Chaffee, a professor at the University of Toledo College of Law. But he added that after repeated unexplained suspicious transactions and public reports of criminal behavior, bank officials have a legal responsibility to step in.
“When you have a lot of red flags come up, it’s one of those things where the senior executives certainly have some obligation to be talking to each other and figuring out what’s going on,” Chaffee said. “Ultimately, there does come a point where the bank, the financial institution, becomes outright complicit in regard to the crime.”
Wexler said that the bank regretted doing business with Epstein and “in hindsight, any association with him was a mistake.”
“We are committed to combating human trafficking, and we will continue to look for ways to invest in advancing this important mission,” Wexler said.
Attorneys representing Staley, the U.S. Virgin Islands and Epstein’s victims declined to comment.
On more than 100 occasions during the deposition, Erdoes said she did not recall details of her role helping supervise Epstein’s accounts, some of which date back two decades. She described Epstein’s crimes as “allegations” even though he pleaded guilty to procuring a child prostitute in 2008 and was declared a Level 3 sex offender — the most serious designation — by a New York state appeals court in 2011.
Asked in the March 15 deposition whether she believed Epstein, who died by suicide in 2019, was engaged in sex trafficking, Erdoes said, “I don’t know what to believe.”
Epstein first opened accounts at JPMorgan in 1998, and he became an important client.
Through his own accounts and the ones he managed for former Victoria’s Secret CEO Leslie Wexner, Epstein “generate[d] one of the largest annual revenue flows of private clients in the private bank,” reads a JPMorgan due diligence report from 2003, when the private bank was considerably smaller, cited in the deposition. (Wexner severed ties with Epstein in 2008, and later said Epstein misappropriated $46 million of the Wexner family’s money.)
A 2006 internal bank report referenced Epstein’s routine cash withdrawals several times a month in amounts ranging from $40,000 to $80,000, adding up to more than $750,000 a year.
By 2008, Epstein had $121 million in accounts with JPMorgan, records read during the deposition show. But Epstein, a prodigious money manager, sought to bring the bank more business, according to legal filings, and profit from fees associated with the work.
Throughout that period, according to filings, Epstein benefited from the friendship and internal advocacy of Staley, who preceded Erdoes as head of JPMorgan’s wealth management unit.
Staley, who became the head of British bank Barclays in 2015, described a “profound” friendship with Epstein, according to court records. He resigned from Barclays in 2021 after U.K. regulators launched an investigation into his relationship with Epstein.
Text messages and emails entered into evidence by the U.S. Virgin Islands suggest “albeit cryptically, that Mr. Staley had sexual encounters” with Epstein’s trafficking victims, Judge Jed S. Rakoff of the Southern District of New York wrote in a May order in the U.S. Virgin Islands case.
In a 2006 email exchange with Staley that was read during the deposition, Erdoes described a Palm Beach Post article about Epstein being accused of soliciting minors as “so painful to read.”
Staley responded: “I went and saw him last night. I’ve never seen him so shaken. He adamantly denies the ages.”
Staley’s departure from JPMorgan in 2013 allowed Erdoes to end the bank’s relationship with Epstein, she said in the deposition. “There was no one there to vouch for Mr. Epstein,” Erdoes said.
In a legal filing last month, Staley’s attorneys said JPMorgan’s claims amount to “provocative media fodder,” but “never explain how an employee [Staley] who is not alleged to have had decision-making authority over Epstein’s accounts — and who is not alleged to have seen any of the suspicious account activity that other JPMorgan employees ignored — caused the plaintiffs’ alleged injuries.”
Around that time, she said, she became aware that Epstein’s regular withdrawals were in cash. At the time, Erdoes said, she did not see Epstein’s criminal history and the withdrawals as related.
“Never at the time was that something that I was connecting in my mind with anything to do with any of the allegations of what he may or may not have done,” she said.
Wexler said the firm “did not know that such transactions could have had anything to do with a sex trafficking operation.”
Banks have wide discretion to drop clients in the name of risk tolerance, experts say, and are sometimes encouraged by regulators to close suspicious accounts or face penalties.
During the deposition, Erdoes said that it was not her responsibility to initiate internal investigations or flag concerns about Epstein’s behavior that arose from legal developments or news reports about his convictions or suspected trafficking. Instead, she said repeatedly that it was the job of the bank’s legal and compliance officers to vet the information.
“My responsibility is not to do something with every piece of news media that comes out on our client base,” she said later.
Internal JPMorgan records referenced in the U.S. Virgin Islands complaint show that bank employees flagged Epstein’s copious cash withdrawals as early as 2006.
In a 2010 internal email also cited in the complaint, risk management officials surfaced “allegations of an investigation related to child trafficking.”
In 2011, according to the filings, JPMorgan’s anti-money-laundering compliance director requested re-approval from JPMorgan’s general counsel of the bank’s relationship with Epstein “in light of the new allegations of human trafficking.”
Erdoes later in the deposition appeared to say the bank’s policies were hazy when encountering a client accused but not convicted of certain crimes. “I don’t know what the proper process is when it’s an allegation,” she said.