As we reported earlier this week, the U.S. Justice Department has been sitting on mountains of evidence against Jeffrey Epstein’s child sex-trafficking operation and his co-conspirators since July of 2006 when the Palm Beach, Florida Police Chief, Michael Reiter, handed a deeply investigated case against Epstein and his co-conspirators over to the FBI.
After crafting a cozy 18-month work-release deal with Epstein in 2008 based on only Florida state charges (and then releasing him from jail five months early) the Justice Department allowed Epstein to return to business as usual for another 10 years until his arrest by the U.S. Attorney’s Office for the Southern District of New York in July 2019.
That same Justice Department allowed Epstein to die with many of his secrets intact as a result of the negligence of the federal prison system to properly monitor him. That same Justice Department has now placed one of his newly indicted co-conspirators, Ghislaine Maxwell, who is a key to unlocking Epstein’s secret ties to other powerful men who abused these underage girls, in the same federal prison system in New York.
During this 14-year span of incompetence and cronyism on the part of the U.S. Justice Department, no federal criminal charges have been brought against any financial institution for looking the other way as Epstein withdrew vast sums of cash to pay off his underage victims and their recruiters.
JPMorgan Chase held a bank account for Epstein for 15 years until 2013. That’s five additional years after it was publicly known in 2008 that Epstein had pleaded guilty to soliciting sex with a minor, became a registered sex offender, and had spent time in jail. (Banks are required under law to “know your customer (KYC),” prevent illicit money dealings, and report suspicions of money laundering to FinCen, a unit of the U.S. Treasury.)
The Justice Department has not brought charges against JPMorgan Chase over its involvement with Epstein despite the bank’s past sordid history in facilitating the laundering of money by Ponzi-schemer Bernie Madoff for decades. JPMorgan Chase pleaded guilty to two felony counts in that matter in 2014. (See JPMorgan and Madoff Were Facilitating Nesting Dolls-Style Frauds Within Frauds.)
Yesterday, instead of the U.S. Justice Department bringing federal charges against JPMorgan Chase in the Epstein matter, the New York State Department of Financial Services (NYSDFS) settled a state civil matter with Deutsche Bank for $150 million. Deutsche Bank is where Epstein moved his account after leaving JPMorgan Chase in 2013. Epstein’s relationship with Deutsche was one-third as long as his relationship with JPMorgan Chase, lasting five years from August 2013 until December 2018, according to the NYSDFS.
It is highly likely that similar activity described by the NYSDFS as occurring in Epstein’s account at Deutsche Bank also occurred in his account at JPMorgan Chase, since dozens of underage girls reported being paid in cash by Epstein during the time that his account existed at JPMorgan Chase.
It also appears highly likely that the same “Relationship Manager” that Epstein had at JPMorgan Chase moved to Deutsche Bank and took charge of Epstein’s accounts when they transferred over. Epstein’s prior bank is identified by the NYSDFS as only “US Bank-1” but the timeframe of the accounts moving in 2013 coincides with when the Epstein accounts left JPMorgan Chase. The NYSDFS indicates that Epstein’s Relationship Manager from US Bank-1 moved to Deutsche Bank and serviced Epstein’s accounts there. (For an in-depth understanding of how Relationship Managers have played integral roles for decades in the laundering of money by Wall Street banks, see our report here.)
The NYSDFS reports the following regarding Deutsche Bank in its 37-page Consent Order that it released this week:
“…Mr. Epstein and his representatives began using Deutsche Bank accounts to send wires to people who had been alleged to be co-conspirators in his past criminal offenses. Over the course of the relationship, Mr. Epstein and his representatives used Deutsche Bank accounts to send dozens of wires, directly and indirectly, including at least 18 wires in the amount of $10,000 or more to alleged co-conspirators who had been the subject of past press reports, including CO-CONSPIRATORS-1, -2, and -3. The Bank was not always aware that the recipients of wire transfers were alleged co-conspirators. For example, the wire transfers in November 2013 were made to an entity that was only later publicly associated with a co-conspirator (in 2015). As described further below, however, the connection was made by Bank personnel for certain transactions.
“On January 24, 2014, Deutsche Bank opened checking and money market accounts for an Epstein-related trust named ‘The Butterfly Trust.’ The Butterfly Trust included a number of beneficiaries, including, among others, CO-CONSPIRATORS 1-3, and a number of women with Eastern European surnames. When Bank personnel asked Epstein and Epstein’s representatives about his relationship with the beneficiaries, Epstein represented that they were employees or friends…
“Butterfly Trust included, among others, CO-CONSPIRATORS 1-3. The existence of co-conspirators as beneficiaries of the trust created the very real risk that payments through the Trust could be used to further or coverup criminal activity and perhaps even to endanger more young women.
“At the time of onboarding of the Butterfly Trust accounts, Bank personnel were aware that one of the Trust’s beneficiaries was an alleged co-conspirator of Epstein’s prior offenses. In October 2013, a compliance officer performed background checks on the beneficiaries of the trust and flagged for RELATIONSHIP COORDINATOR-1 that one of the beneficiaries, CO-CONSPIRATOR-2, had been alleged to be one of Epstein’s co-conspirators. In reply RELATIONSHIP COORDINATOR-1 confirmed that ‘[CO-CONSPIRATOR-2] was accused as a co-conspirator in a case but was never brought to trial nor ever convicted. . . . The account for which she will be associated is a trust account which names her as a beneficiary.’ The alert was cleared citing the Approval Email from Executive-1.
“While Epstein held accounts at Deutsche Bank, he used the Butterfly Trust account and various other accounts to send over 120 wires totaling $2.65 million to beneficiaries of the Butterfly Trust, including some transfers to alleged co-conspirators or women with Eastern European surnames, for the stated purpose of covering hotel expenses, tuition, and rent.
“Although payments related to legal expenses are not inherently suspicious, Mr. Epstein also used his various accounts for what appear to have been multiple settlement payments totaling over $7 million to law firms, as well as dozens of payments to law firms totaling over $6 million for what appear to have been the legal expenses of Mr. Epstein and co-conspirators.”
The Consent Order also outlines vast sums of cash withdrawn from Epstein’s accounts at Deutsche Bank by an attorney working for Epstein:
“ATTORNEY-1, on behalf of Mr. Epstein, made a total of 97 withdrawals from the Bank’s Park Avenue (New York City) Branch from 2013 to 2017 from personal accounts belonging to Mr. Epstein. The transactions in question occurred roughly two to three times per month, all in the amount of $7,500 per withdrawal, the Bank’s limit for third-party withdrawals (i.e., withdrawals made by an authorized user who is not a primary account holder)…
“Under federal regulations, banks and other financial institutions must file Currency Transaction Reports (‘CTRs’) with the U.S. Treasury Department when there are cash transactions with an individual in excess of $10,000 in one day. Breaking up transactions to avoid the CTR reporting is a criminal offense commonly referred to as ‘structuring’…
“In May 2014, ATTORNEY-1 inquired into how often he could withdraw cash on behalf of Mr. Epstein without triggering an alert. The record is unclear as to whether anyone from the Bank ever responded to ATTORNEY-1’s inquiry…
“In 2018, just prior to the Bank’s closing of the Park Avenue Branch, which was located nearby Mr. Epstein’s house, ATTORNEY-1 withdrew $100,000.00 in cash on behalf of Mr. Epstein. When later questioned why ATTORNEY-1 withdrew these sums from the Bank, ATTORNEY-1 reported that Mr. Epstein needed the funds for tipping and household expenses.
“In total, in a roughly four-year period, ATTORNEY-1 withdrew on Mr. Epstein’s behalf more than $800,000 in cash from Mr. Epstein’s personal accounts.”
This article first appeared on Wall Street on Parade.