27th Feb 2023

3-Count Felon, JPMorgan Chase, Caught Laundering More Dirty Money

By Pam Martens and Russ Martens, WallStreetOnParade

The International Consortium of Investigative Journalists (ICIJ) has once again managed to do what federal bank regulators refuse to do in the United States – come clean with the American people about our dirty Wall Street banks.

ICIJ dropped a bombshell investigative report yesterday about money laundering for criminals at some of the biggest banks on Wall Street, but you won’t find a peep about it on the front page of today’s Wall Street Journal or New York Times’ print editions. In fact, the New York Times, as of 6:44 a.m. this morning, hasn’t reported the story at all. The Wall Street Journal carries an innocuous headline, “HSBC Stock Hits 25-Year Low,” putting the focus on the British bank, HSBC, when its focus should be on the largest bank in the U.S., JPMorgan Chase, a serial felon.

JPMorgan Chase has already pleaded guilty to three criminal felony counts brought by the U.S. Department of Justice since 2014. Two of those counts related to money laundering and failure to file suspicious activity reports on the business bank account it held for Bernie Madoff for decades. JPMorgan Chase actually told U.K. regulators that it suspected Madoff was running a Ponzi scheme but it failed to share those concerns with U.S. regulators, even though it was required under law to do so.

The third felony count brought by the U.S. Department of Justice came one year later, in 2015. It related to JPMorgan’s involvement in a bank cartel that was engaged in rigging foreign exchange trading. The bank is currently under a criminal investigation for allowing its precious metals desk to be turned into a racketeering enterprise according to the Justice Department. Multiple JPMorgan precious metals traders have already been charged under the RICO statute, typically reserved for members of organized crime.

The ICIJ investigation is based on secret documents leaked from FinCEN, the Financial Crimes Enforcement Network, a unit of the U.S. Treasury. The documents “show that five global banks — JPMorgan, HSBC, Standard Chartered Bank, Deutsche Bank and Bank of New York Mellon — kept profiting from powerful and dangerous players even after U.S. authorities fined these financial institutions for earlier failures to stem flows of dirty money.”

The report has much to say about JPMorgan Chase:

JPMorgan Chase was involved in moving illicit funds for the fugitive, Jho Low, involving the notorious looting of public funds in Malaysia. Jho Low has been accused by multiple jurisdictions of playing a key role in the embezzlement of more than $4.5 billion from a Malaysian economic development fund, 1MDB. JPMorgan Chase moved $1.2 billion in money for Jho Low from 2013 to 2016, according to the report.

The ICIJ bombshell includes the charge that JPMorgan also “processed more than $50 million in payments over a decade, the records show, for Paul Manafort, the former campaign manager for President Donald Trump. The bank shuttled at least $6.9 million in Manafort transactions in the 14 months after he resigned from the campaign amid a swirl of money laundering and corruption allegations spawning from his work with a pro-Russian political party in Ukraine.”

More troubling activity at JPMorgan Chase includes the following, according to ICIJ investigators:

“JPMorgan also moved money for companies and people tied to corruption scandals in Venezuela that have helped create one of the world’s worst humanitarian crises. One in three Venezuelans is not getting enough to eat, the UN reported this year, and millions have fled the country.

“One of the Venezuelans who got help from JPMorgan was Alejandro ‘Piojo’ Isturiz, a former government official who has been charged by U.S. authorities as a player in an international money laundering scheme. Prosecutors allege that between 2011 and 2013 Isturiz and others solicited bribes to rig government energy contracts. The bank moved more than $63 million for companies linked to Isturiz and the money laundering scheme between 2012 and 2016, the FinCEN Files show…”

Wall Street likes to brag about its “KYC” rule (Know Your Customer). But the ICIJ investigators reveal that JPMorgan Chase paid little attention to that rule. The report found this:

“Take the case of a mysterious shell company called ABSI Enterprises. ABSI sent and received more than $1 billion in transactions through JPMorgan between January 2010 and July 2015, the FinCEN Files show.

“This amount included transactions through a direct bank account with JPMorgan, which ABSI closed in 2013, and through so-called correspondent banking arrangements, in which a bank with significant U.S. operations, such as JPMorgan, allows foreign banks to process U.S. dollar transactions through its own accounts.

“Compliance watchdogs based at the bank’s Columbus, Ohio, operations hub decided to try to figure out ABSI’s actual owner in 2015 after a Russian news site reported that a similarly-named shell company — which JPMorgan’s records indicated was the parent of ABSI — was linked to an underworld figure named Semion Mogilevich.

“Mogilevich has been described as the ‘Boss of Bosses’ of Russia mafia groups. When the FBI put him on its Top Ten Most Wanted list in 2009, it said his criminal network was involved in weapons and drug trafficking, extortion and contract murders. The chain-smoking, beefy Ukrainian’s signature method of neutralizing an enemy, The Guardian once reported, is the car bomb.

“The records show the compliance officers searched in vain through their files on the shell company, unable to determine who was behind the firm or what its true purpose was.

“While those details still remain unclear, JPMorgan had plenty of reasons to examine ABSI years earlier: it operated as a shell company in Cyprus, considered a major money laundering center at the time, and it was directing hundreds of millions of dollars through JPMorgan…

“Through a spokesperson, Mogilevich said he had no knowledge of ABSI.”

Given the roster of former CIA, Secret Service and FBI personnel that have gone to work at JPMorgan Chase over the years, we find it difficult to believe that the bank couldn’t identify the true owner(s) of ABSI.

In February of this year, the Financial Secrecy Index named the United States as the second worst country, behind only the Cayman Islands, in helping individuals hide their finances from the rule of law. The report noted that the U.S. “has yet to sign up to the Common Reporting Standard, which currently has 105 signatories.”

That makes the ICIJ’s money laundering report seem like a feature, not a bug, of the Wall Street banks.

We asked veteran trial lawyer Helen Davis Chaitman her thoughts on the latest ICIJ report. Chaitman and a fellow trial lawyer, Lance Gotthoffer, wrote a book in 2016 titled JPMadoff: The Unholy Alliance Between America’s Biggest Bank and America’s Biggest Crook. The book compares JPMorgan Chase to the Gambino crime family. Chaitman responded with this:

“Those of us who follow the activities of the world’s major financial institutions are not the least bit surprised by the documents in FinCEN’s files. On the contrary, it has been obvious for years that JPMorgan Chase, to take one example, operates just like an organized crime family…The criminalization of the major banks runs so deep that there is no solution other than to liquidate these banks and put their key management in prison.”

The Chairman and CEO of JPMorgan Chase is Jamie Dimon. The Board of Directors of the bank has kept Dimon in these posts through the bank’s pleading guilty to the three criminal felony counts detailed above; through the “London Whale” scandal where the bank lost $6.2 billion of depositors’ money gambling in exotic derivatives in London; through the revelation that an internal whistleblower, lawyer Alayne Fleischmann, had witnessed and reported to management, to no avail, that there was “massive criminal securities fraud” in the mortgage operations of the bank; and through the current ongoing criminal investigation by the Justice Department of JPMorgan’s precious metals operations.

Dimon would be long gone had either the New York Times or the Wall Street Journal used its editorial page to demand his removal. Instead, the Wall Street Journal has used its editorial page to insanely paint the bank as a victim.

An October 20, 2013 editorial in the Wall Street Journal was headlined: “The Morgan Shakedown.” The unsigned editorial began with this:

“The tentative $13 billion settlement that the Justice Department appears to be extracting from J.P. Morgan Chase needs to be understood as a watershed moment in American capitalism. Federal law enforcers are confiscating roughly half of a company’s annual earnings for no other reason than because they can and because they want to appease their left-wing populist allies.”

Never mind that the $13 billion mortgage settlement came as a result of the Justice Department having thousands of documents illustrating what Alayne Fleischmann had alleged: “massive criminal securities fraud.”

In 2017 the Wall Street Journal editorial board was again attempting to portray the banks as victims, writing this time:

“Politicians and journalists have made careers of lamenting that too few bankers have been convicted of crimes. They overlook that, at least in America, to prove a crime you have to have enough evidence and that a mistake is not necessarily criminal.”

In late 2007, in the midst of what would become the greatest Wall Street crash at the hands of corrupt banks since the Great Depression, Rupert Murdoch’s News Corp. bought Dow Jones & Company, parent of the Wall Street Journal, after a century of ownership by the Bancroft family. The purchase curiously came at the same time that the Federal Reserve was secretly propping up the Wall Street banks with what would turn out to be three years of cumulative loans totaling $29 trillion to hide both the banks’ corruption and the Fed’s own negligence as a big bank supervisor.

In 2011, the Pew Research Center released a study on how front page business coverage had changed since the News Corp. purchase of the Wall Street Journal. Pew found that “coverage has clearly moved away from what had been the paper’s core mission under previous ownership—covering business and corporate America. In the past three and a half years, front-page coverage of business is down about one-third from what it had been in 2007, the last year of the old ownership regime.”

Every American should be horrified by this latest report from the ICIJ; every American should be outraged that the U.S. is now second only to the Cayman Islands for hiding dirty money for criminals.

We need an explanation for why people are not being charged and prosecuted. Is this an instance of classic influence peddling corruption in law enforcement? Why no action? The silence is now deafening.

Disney Princesses and Hot Tubs: JPMorgan Executive’s Creepy Texts to Epstein 

By Kate Briquelet, DailyBeast

Former JPMorgan executive Jes Staley and sex-trafficker Jeffrey Epstein exchanged numerous emails that included photos of women in suggestive poses and Staley’s praise for the sex offender, according to a newly unredacted court filing from the U.S. Virgin Islands. In one message, Staley even told Epstein, “I owe you much.”

The Virgin Islands AG sued JPMorgan last December, claiming the investment bank “turned a blind eye” to Epstein’s sex ring in order to reap millions by keeping him as a client. The government filed an amended civil complaint weeks later that unredacted some of its accusations about Staley, including the suggestion that he “may have been involved in Epstein’s sex-trafficking operation.”

“So when all hell breaks lo[o]se, and the world is crumbling, I will come here, and be at peace,” Staley wrote to Epstein in November 2009. “Presently, I’m in the hot tub with a glass of white wine. This is an amazing place. Truly amazing. Next time, we’re here together. I owe you much. And I deeply appreciate our friendship. I have few so profound.”

According to the complaint, the cache of messages reveal that “Staley corresponded with Epstein while Epstein was incarcerated and visited Epstein’s Virgin Islands residence on multiple occasions” and that “Epstein even advised Staley in connection with Staley’s salary negotiations at JP Morgan in July of 2008.”

The filing suggests that Staley was a participant in Epstein’s trafficking scheme and cites emails discussing the banking honcho’s visits to Palm Beach, Florida and London, England, which allegedly coincided with Epstein’s payments to young women in his circle.

In a memorandum also filed on Wednesday, attorneys for the U.S. Virgin Islands said that Epstein “emailed Staley photos of young women in seductive poses.”

The memorandum also claims that Staley’s JPMorgan email account contained messages about “women who they referred to by the names of Disney princesses that Epstein procured for Staley,” and “discussions of sex with young women.”

Meanwhile, the lawsuit claims that at least 20 victims of Epstein were paid more than “$1 million collectively” through JPMorgan accounts between 2003 and 2013.

The filing alleges Epstein withdrew more than $775,000 in cash during that time period and that records show that Epstein’s JPMorgan accounts wired nearly $1.5 million “to known recruiters, including to the MC2 modeling agency, and another $150,000 to a private investigative firm.”

As The Daily Beast has reported, MC2 was the former modeling agency of Jean Luc-Brunel, the French modeling agent who was a friend of Epstein’s and faced accusations of sexual abuse from Virginia Roberts Giuffre, one of the financier’s victims. (Brunel killed himself in a Paris jail last February while awaiting trial on charges that he raped minors.)

JPMorgan, the lawsuit claims, cited Brunel in a review of Epstein’s accounts. The bank also allegedly flagged an account associated with Epstein’s now convicted accomplice Ghislaine Maxwell in 2011. According to the suit, “Maxwell wanted to set up an account for her ‘personal recruitment consulting business.’” But one director with the bank’s anti-money laundering program asked in an email: “What does she mean by personal recruitment?? Are you sure this will have nothing to do with Jeffrey? If you want to proceed, I suggest that we flag this as a High Risk Client.”

In December 2008, the men allegedly discussed plans for Staley to drop into the sex offender’s Florida lair. Around the time of Staley’s scheduled visit, the complaint alleges, Epstein wired $2,000 to a woman with an Eastern European surname.

According to the filing, Epstein also transferred $3,000 to the same woman in August 2009, just days after Staley emailed Epstein that he’d be in London in a week. The financier asked Staley whether he’d need anything while in the U.K. city, and Staley answered, “Yep.”

In December 2009, Staley sent another alleged missive to Epstein: “I realize the danger in sending this email. But it was great to be able, today, to give you, in New York City, a long heartfelt, hug.”

Epstein replied the next day, saying, “you were with Larry, and I had to put up with…” and included a photo of a young woman.

“Don’t tell me a French wine,” Staley wrote.

“Always thoughts of alcohol,” Epstein replied, according to the lawsuit.

Later that month, the filing states, Epstein sent Staley an email that included only a picture of a young woman.

Staley, who reportedly sailed his yacht to Epstein’s island during the course of their friendship, emailed Epstein again in January 2010.

“Arrived at your harbor,” the banking boss wrote. “Someday, we have to do this together.”

Six months later, Staley fired off another email, saying, “Maybe they’re tracking u?”

“That was fun,” Staley added. “Say hi to Snow White.”

“[W]hat character would you like next?” Epstein replied.

“Beauty and the Beast,” Staley wrote, to which Epstein answered, “well one side is available.”

Earlier this month, JPMorgan filed a scathing memorandum in support of its motion to dismiss the U.S. Virgin Islands’ case.

“Having sought and obtained more than $100 million from Jeffrey Epstein’s estate and businesses for damages caused by his sex-trafficking crimes, the United States Virgin Islands (USVI) now casts farther afield for deeper pockets,” JPMorgan’s filing began.

“USVI’s lawsuit is a masterclass in deflection that seeks to hold JPMC responsible for not sleuthing out Epstein’s crimes over a decade ago,” the document continues. “Yet USVI had access at the time to the same information, allegations, and rumors about Epstein on which it alleges JPMC should have acted.

“Indeed, as a law-enforcement agency, USVI had access to much more, along with the investigative advantage of physical proximity to Epstein’s crimes.”

JPMorgan added that the territory “did nothing to stop Epstein,” who was registered as a sex offender there.

“To the contrary, during the same period, USVI granted Epstein and his businesses lucrative privileges and massive tax incentives,” attorneys for the bank stated. “Nonetheless, USVI’s suit proceeds on the untenable theory that JPMC was a participant in an Epstein sex-trafficking venture and was somehow uniquely situated to bring it to a halt.”

But in a Wednesday memorandum, the U.S. Virgin Islands argued that Staley’s visits to Epstein’s private island, called Little St. James, “took place as part of [JPMorgan’s] management of its business relationship with Epstein.”

“At the time of these visits, Staley was serving in the role of JPMorgan’s head of Private Bank, which was dedicated to extremely wealthy clients like Epstein,” the filing states. “JPMorgan assigned Staley to manage Epstein and his accounts for his wealth, connections, and referrals of ultrawealthy and powerful clients.

“Thus, Staley’s job was to maintain a close relationship with Epstein so that his money, connections, and referrals would continue to flow to JPMorgan.”

The AG’s office added, “Staley emailed freely with Epstein about his visits to Little St. James over his work email account in full view of JPMorgan.”

Staley, who in November 2021 resigned as Barclays’ chief executive after British regulators probed his claims about his relationship to Epstein, has denied any wrongdoing in connection to the late sex-trafficker.

Staley’s lawyer told the Financial Times that his emails with Epstein “were innocuous.”

From Jeffrey Epstein to Sam Bankman-Fried to Madoff – JPMorgan Banks the Creepy Crooks

By Pam Martens and Russ Martens,

If yesterday had been National Creepy Crooks Day, JPMorgan Chase would have taken top honors. Bloomberg News reported on the creepy emails that former JPMorgan Chase executive Jes Staley was sending back and forth from his email account at the bank to child sex trafficker Jeffrey Epstein, as the bank was only too happy to handle 55 accounts worth hundreds of millions of dollars for Epstein. One set of emails suggested Staley was having kinky or sexual relationships with individuals dressed up as Disney characters. (Leave it to JPMorgan to take down not only its own brand but taint Disney’s brand as well.)

Anyone who has ever worked at a major Wall Street brokerage firm or investment bank knows full well that emails are monitored by the company. This suggests that Staley knew he had nothing to fear from the bank’s email monitors.

A 2019 investigation conducted by Wall Street On Parade indicated that Epstein’s ties to JPMorgan Chase date back to at least 2001, when Epstein presided as Chairman over an offshore company incorporated in Bermuda called Liquid Funding Ltd. That company grew to at least $6.7 billion in outstanding liabilities. JPMorgan Chase was one of three banks providing a $250 million liquidity facility to Liquid Funding Ltd. JPMorgan Chase was also listed as its “Security Trustee.” Liquid Funding appeared to be propping up dodgy subprime mortgage dealers by giving them loans. Bear Stearns, where Epstein had worked from 1976 to 1981, owned 40 percent of the equity in the company.

If the Bloomberg News article wasn’t enough repulsion for one day, the New York Times reported yesterday that “JPMorgan holds $400 million that FTX’s founder, Sam Bankman-Fried, invested in an obscure hedge fund, Modulo Capital….” Since federal regulators allege that all of Bankman-Fried’s wealth comes from equity investors he defrauded or the looted accounts of his crypto customers, it appears that, once again, JPMorgan Chase has failed miserably in conducting proper due diligence on its customers, or has simply chosen to look the other way as it did during Bernie Madoff’s decades at the bank. (Bankman-Fried has pleaded innocent to an eight-count indictment. Two of his former top executives, however, Caroline Ellison and Gary Wang, have pleaded guilty to similar charges and are cooperating with federal prosecutors.)

One would think that the two criminal felony counts that JPMorgan Chase was hit with by the U.S. Department of Justice in 2014 in the Madoff Ponzi scheme matter might have changed its jaded ways. (It didn’t.) The layers of fraud taking place between the bank and Madoff resembled Russian Nesting Dolls – frauds within frauds – as we detailed in our investigation in 2014. The bank even loaned Madoff’s “business” $145 million in 2005 and 2006, which helped to prop up his Ponzi scheme when it was on the verge of collapsing. When the revolting details of the relationship between the bank and Madoff surfaced, the Los Angeles Times made an astute query in a photo caption of a smirking Madoff, asking: “Bernie Madoff: Was he part of the JPMorgan ring, or was JPMorgan part of his ring?”

Two trial lawyers literally wrote the book in answering that question. In JPMadoff: The Unholy Alliance Between America’s Biggest Bank and America’s Biggest Crook, Helen Davis Chaitman and Lance Gotthoffer argue that RICO, the Racketeer Influenced and Corrupt Organizations Act, is “the perfect tool” to bring JPMorgan to heel. The lawyers explain:

“In enacting RICO, Congress meant business. This powerful law enforcement weapon requires proof that the defendant committed ‘at least two acts of racketeering activity’ within a ten year period, that are related to financial gain. The predicate acts are drawn from a list of 27 federal and eight state law crimes. They include the typical mob crimes like murder, kidnapping, gambling, arson, robbery, extortion, and drug dealing. But the predicate acts also include a lot of the crimes committed by Wall Street banksters in order to enrich themselves at the expense of others, such as bribery, mail and wire fraud, fraud in the sale of securities, embezzlement, financial institution fraud, obstruction of justice, tampering with or retaliating against a witness, victim or informant, and money laundering.”

Yesterday’s Bloomberg News article about Jes Staley’s sick emails to Epstein are derived from a lawsuit brought against JPMorgan Chase by the government of the U.S. Virgin Islands, where Epstein owned a secluded island compound. The lawsuit alleges the following:

“For two decades, Defendant JPMorgan Chase Bank, N.A. (‘JPMorgan’) facilitated and sustained Jeffrey Epstein’s sex-trafficking by handling and [redacted] his payments to young women and girls who were his victims and recruiters. Sex-trafficking was the principal business of Epstein’s accounts held by JPMorgan, and JPMorgan profited handsomely from the hundreds of millions of dollars in assets in those accounts, in addition to Epstein’s connections and referrals of ultrawealthy and powerful clients.”

What’s curious about the above paragraph is that the redacted portion appears to be only a one-word redaction. Let’s face it, those two sentences are absolutely devastating to the largest bank in the United States, so what one word could be so much worse that it needs to be blacked out for public digestion? Try finding a word that fit’s in that phrase: “…by handling and [redacted] his payments to young women and girls who were his victims and recruiters.” The dangerous word can’t be “facilitating” because that word appears unredacted throughout the lawsuit in describing the role JPMorgan Chase played in payments to Epstein’s victims. The unredacted words “handling” and “facilitating” suggest an enabler but not a direct participant in the crime. Words like “making” or “processing” on the other hand, sound like direct participation in the crime.

As for those creepy references to Disney characters, the Virgin Islands’ lawsuit shares this:

“In July 2010, Staley emailed Epstein saying ‘That was fun. Say hi to Snow White[,]’ to which Epstein responded ‘[W]hat character would you like next?’ and Staley said ‘Beauty and the Beast.’ Epstein also emailed Staley photos of young women in seductive poses. Following the internal reports of additional law enforcement investigations into Epstein’s sex-trafficking in 2010 and 2011, JPMorgan’s response was to send Staley in 2011 to obtain Epstein’s denial, on which the bank hung its hat.”

And there is this:

“Throughout its relationship with Epstein, JPMorgan’s internal investigation teams identified evidence that he was engaged in criminal sex-trafficking. In 2006, JPMorgan’s Global Corporate Security Division reported that Epstein was indicted in Florida for felony solicitation of minors for prostitution. In 2008, Epstein pled guilty in Florida to solicitation or procurement of a minor for prostitution and became a registered sex offender. JPMorgan’s continued relationship with Epstein after his criminal plea was reviewed and approved at the highest levels of the bank. An August 2008 internal email states, ‘I would count Epstein’s assets as a probable outflow for ’08 ($120mm or so?) as I can’t imagine it will stay (pending Dimon review).’ Yet the assets did stay [redacted text]. In 2010, JPMorgan’s risk management division discussed new allegations of an investigation of Epstein involving child sex-trafficking. Throughout 2010 and 2011, JPMorgan’s compliance and security divisions reported evidence of Epstein’s engagement in sex-trafficking, including his settlement of a dozen civil lawsuits and his payments of $1 million to the MC2 modeling agency engaged with Epstein in child sex-trafficking, ‘luring’ girls on the pretext of providing modeling opportunities and careers.”

Given the five criminal felony counts that the U.S. Department of Justice has brought against JPMorgan Chase in the past nine years and its institutional knowledge of the crimes this bank is willing to tolerate in its search for profits, one has to ask this: why is the government of the U.S. Virgin Islands bringing these charges instead of the government of the United States?

Do yourself a favor. Think for yourself. Be your own person. Question everything. Stand for principle. Champion individual liberty and self-ownership where you can. Develop a strong moral code. Be kind to others. Do no harm, unless that harm is warranted. Pretty obvious stuff...but people who hold to these things in their hearts seem to be disappearing from the earth at an accelerated rate. Stay safe, my friends. Thanks for being here.

Sources:

Epstein's Little Black Book

FBI Files Jeffrey Epstein

Epstein's Private Jet's Flight Manifests

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The nonprofit organization End Violence Against Women International began the national Start By Believing Campaign in 2011, to promote positive responses to sexual assault survivors who disclose. As the campaign’s name suggests, a statement of belief can have a huge impact on sexual assault survivors, and can influence their decision whether or not to disclose their sexual assault again. Start By Believing also provides more tips on what to say and what not to say when someone confides in you they’ve been sexually assaulted.

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