By Jonathan Stempel
NEW YORK (Reuters) -The U.S. Virgin Islands unveiled new accusations against JPMorgan Chase over the bank’s ties to former client Jeffrey Epstein, including executives discussing how the disgraced late financier surrounded himself with “nymphettes.”
JPMorgan was also accused of working with Epstein for years after firing him as a client in 2013, and was still accepting client referrals a few months before his July 2019 arrest.
The bank countered that the U.S. Virgin Islands was also to blame for allowing Epstein’s sexual abuse of young women and teenage girls, as officials looking out for their own interests made the territory “a haven for Epstein’s criminal activity.”
Both sets of accusations were made in dueling Monday night filings in Manhattan federal court.
The U.S. Virgin Islands is suing JPMorgan for at least $190 million, and likely much more, saying the largest U.S. bank ignored red flags because Epstein was a wealthy and lucrative client for 15 years.
Epstein had owned two private islands within the territory.
He died by suicide in August 2019 in a Manhattan jail while awaiting trial for sex trafficking.
‘WOW’
Ahead of a scheduled Oct. 23 trial, the U.S. Virgin Islands wants a judge to declare that JPMorgan participated in Epstein’s sex trafficking and obstructed law enforcement.
The filings include new accusations that the New York-based bank funneled more than $25 million of payments to Epstein’s now-imprisoned associate Ghislaine Maxwell, and hundreds of thousands of dollars to Epstein’s victims.
They also quoted a Sept. 2012 email from a senior JPMorgan executive to Mary Erdoes, now the bank’s asset and wealth management chief, comparing another client’s house to Epstein’s.
“Reminded me of JE’s house, except it was more tasteful, and fewer nymphettes,” the executive wrote. “More like the Frick (museum). Art was fabulous.”
“Wow,” Erdoes responded.
JPMorgan, in contrast, wants the judge to declare that the U.S. Virgin Islands deserves no damages, and has no standing to pursue a claim it obstructed law enforcement.
The bank has faulted the territory for having a cozy relationship with Epstein.
It said officials accepted cash and gifts in exchange for giving Epstein tax breaks, waiving sex-offender monitoring requirements, arranging visas for victims and “looking the other way” when young women and girls accompanied him at airports.
The bank also said it provided federal officials with information about Epstein for years, and “no reasonable juror could find intentional obstruction.”
Oral arguments are scheduled for Aug. 18.
STALEY
The U.S. Virgin Islands has already received more than $105 million from Epstein’s estate, and reached a settlement with billionaire Leon Black, a former Epstein friend.
JPMorgan agreed last month to pay $290 million to settle a separate lawsuit by dozens of Epstein accusers.
The bank is separately suing former private banking and investment banking chief Jes Staley, a former Epstein friend, to have him cover its losses in the victims’ and U.S. Virgin Islands cases.
In a Monday filing, the U.S. Virgin Islands said JPMorgan reimbursed Staley for meetings with Epstein, while Staley testified that he told JPMorgan Chief Executive Jamie Dimon in 2006 about some of Epstein’s misconduct.
Dimon has testified that he had barely heard of Epstein before his arrest.
Staley has expressed regret for his friendship with Epstein and denied knowing about his sex trafficking. He was British bank Barclays’ chief executive from 2015 to 2021.
The case is U.S. Virgin Islands v. JPMorgan Chase Bank NA, U.S. District Court, Southern District of New York, No. 22-10904.
(Reporting by Jonathan Stempel in New York and Shubham Kalia in Bengaluru; Editing by Stephen Coates and Daniel Wallis)