by Pam Martens and Russ Martens, Wall St On Parade:
For months now, the largest federally-insured bank in the United States, JPMorgan Chase, represented by WilmerHale, a law firm with more than 1,000 attorneys, has been attempting to bamboozle the American people with the narrative that it engaged in no wrongdoing when it provided millions of dollars in cold, hard cash to child sex-trafficker Jeffrey Epstein for more than a decade – without following the legal mandate of reporting this suspicious account activity to law enforcement. Internal emails produced in discovery in two lawsuits against the bank in federal court in Manhattan show that the bank was well aware that Epstein was a known sexual predator of children as it doled out all of this cash – at times reaching $40,000 to $80,000 per month.
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The legal narrative that the WilmerHale attorneys crafted for the public and the media is this: a sole former employee of the bank – Jes Staley – is responsible for all of the bank’s wrongdoing involving Epstein, never mind that the bank was all too willing to take the lucrative business deals and clients that came its way from Epstein via Staley, as also documented in internal emails. To get headlines promoting this narrative, the bank has made a big deal of suing Staley on the premise that it wants to recover its legal costs by clawing back his compensation.
Victims of Epstein had filed a class action lawsuit against the bank last year. The bank offered a settlement of $290 million in that matter in June, which is pending a final fairness hearing. The bank did not acknowledge wrongdoing. (See our report here for the $87 million in legal fees under the settlement for the plaintiffs’ attorneys and the onerous terms for Epstein’s victims.) The second Epstein-related lawsuit against the bank, which is ongoing, was filed by the Attorney General of the U.S. Virgin Islands, where Epstein built a private island compound and engaged in sex trafficking of underage girls.
Given how much time and space media outlets in New York and London have devoted to spinning this tale about Staley (who is certainly not an innocent character by any means, but hardly the mastermind), thinking Americans must ask themselves, why is there now a total news blackouts when a new lawsuit has been filed against JPMorgan Chase with a highly credible bombshell theory of the case: that the same members of JPMorgan’s Board of Directors who brought its Chairman and CEO to power, Jamie Dimon, were also, verifiably, engaged in business with Jeffrey Epstein. (This is not the first time that a major scandal involving JPMorgan Chase has received a news blackout by mainstream media.)
This latest lawsuit brought by two pension funds that owned shares of JPMorgan Chase names both Dimon and Staley as defendants, as well as current and former members of JPMorgan Chase’s Board of Directors. It has been brought by a prominent class action law firm on behalf of shareholders of the bank. The lawsuit’s theory of the case is that specific members of the Board of JPMorgan Chase “put their heads in the sand” and ignored that the bank had become a cash conduit for Jeffrey Epstein’s child sex trafficking ring because they were hoping that their own business ties to Epstein “would go unnoticed.” (We might add an attendant thesis: that Dimon takes very good care of his Board in return for them taking very good care of him.)
A current member of the JPMorgan Chase Board at the time of the filing of the lawsuit who is alleged to have had business ties to Epstein, James S. Crown, will not be able to be deposed by the plaintiffs’ attorneys. He died in a single car accident on a private race track 16 days ago, at age 70 – after serving on JPMorgan Chase’s Board and those of two of its predecessor banks for 32 consecutive years. (See our previous report on the undisclosed conflicts between Crown and JPMorgan Chase.)
The Board members’ business ties to Epstein arise through two specific events: the merger of Bank One (formerly Banc One) with JPMorgan Chase in 2004 – with a number of Bank One Board Members, along with its then CEO, Jamie Dimon, moving from Bank One to JPMorgan Chase. The second key factor is that billionaire and retailing titan, Leslie Wexner, founder of The Limited and Bath & Body Works (and prior corporate owner of Victoria’s Secret), had made Epstein his financial advisor and given him power of attorney in approximately 1986. Wexner had been on the Board of Banc One from at least 1986 to 1991.
Below are excerpts from the new shareholders’ lawsuit that explain the JPMorgan Board members’ business dealings with Epstein:
“These entanglements start no later than the 1980s, when Epstein salvaged a major financing and real estate transaction in which a number of power players in the Columbus, Ohio business community participated. During that period, Wexner worked with prominent local executives, including future JPM [ticker for JPMorgan Chase] directors James S. Crown (Crown) and John W. [Jack] Kessler (Kessler) and the McCoy family (which founded and controlled Bank One Corporation (Bank One), the largest bank in Ohio), to develop an idyllic community called New Albany, Ohio, which sought to house some of the most influential names in American business…” [Wexner and Kessler are still listed as founders of the New Albany Company on its current website. Today, the New Albany community is home to multi-million-dollar estates, including a palatial mansion owned by Wexner.]
“Kessler was a well-connected and prominent corporate lawyer in Columbus, Ohio, who advised on a wide range of deals for Wexner, the McCoys, and the Crowns alike, and enjoyed a seat on the Bank One board…”
“Defendant John W. Kessler (as previously defined, ‘Kessler’) was a director of JPM from 2004 to 2007. Prior to joining JPM’s board, Kessler served as a director of Bank One from 1995 to 2004. From 1998 to present, he has been the chairman of the New Albany Company. Kessler also served on the board of Wexner’s company, Abercrombie & Fitch…”
“Epstein was given a partnership interest in the New Albany project for a nominal investment. Epstein promptly re-organized and restructured the New Albany development project so it could take hold, be completed, and ultimately flourish.”
As to what the Board knew or should have known about Epstein during the 15 years that he maintained over four dozen accounts at the bank (from 1998 to at least 2013), internal emails produced in the earlier two lawsuits show that the General Counsel of the bank, Stephen Cutler – who was the former Director of Enforcement for the Securities and Exchange Commission – was well aware of the reputational risk that Epstein’s accounts presented to the bank but some higher authority prevented Cutler from firing Epstein as a client. The new lawsuit has this to say on that subject: