Jeffrey Epstein referred Obama White House counsel to JPMorgan as potential customer

Sex predator Jeffrey Epstein was involved in establishing a client relationship between Obama White House counsel Kathryn Ruemmler and JPMorgan Chase in February 2019, four months before he was arrested on federal child sex trafficking charges, a bombshell court filing revealed Tuesday.

Ruemmler, who is now general counsel for Goldman Sachs, was touted by Epstein's personal assistant to JPMorgan as an ideal customer, the filing shows.

The suggestion that JPMorgan take Ruemmler on as a client — which the bank warmly embraced — came almost six years after JPMorgan said it had effectively fired Epstein as a client after internal controls repeatedly raised red flags about him.

And it came five months before Epstein killed himself in August 2019 in a Manhattan federal jail, where he was being held without bail pending trial.

Ruemmler declined to comment through a Goldman Sachs spokesman.

CNBC separately emailed her to ask how she knew Epstein, and what knowledge she had of his history of being convicted in 2008 of a sex crime in Florida.

The Manhattan federal court filing detailing her connection to Epstein was filed by the government of the U.S. Virgin Islands, which is suing JPMorgan.

The American territory alleges that JPMorgan enabled and benefited from Epstein's sex trafficking of young women to the Virgin Islands, where he had a home, during the years he maintained accounts at the bank, from 1998 through 2013.

JPMorgan denies any wrongdoing in the case, where the territory is seeking at least $190 million in damages.

The bank last month agreed to settle a similar lawsuit in the same court by an Epstein accuser, paying $290 million to her and other Epstein victims.

The case is scheduled to go to trial in late October.

"Even after his exit right up until his arrest in 2019, JPMorgan continued to work with Epstein," the Virgin Islands said in its filing.

The filing says that JPMorgan admits "Epstein was involved in the establishment of a customer relationship with Kathryn Ruemmler," who was the longest-serving White House general counsel under former President Barack Obama

The filing says that in February 2019 Epstein's assistant, Leslie Groff, offered to introduce Mary Erdoes, a top JPMorgan executive, to Ruemmler, because she wanted to open an account with JPMorgan and Epstein thought the two of them "would bond."

"Erdoes escalated the referral to Stacey Friedman, JPMorgan's General Counsel, who responded 'she is a rock star litigator at Latham. . . . I would think she would be a great client,'" the Virgin Islands said in its filing.

Ruemmler at the time worked at the law firm Latham & Watkins.

In 2020 she joined Goldman Sachs as a partner, and now is Goldman's chief legal officer and general counsel. 

The filing also said that Epstein at one time referred as a potential JPMorgan client Nicholas Ribis, a gaming advisor who for decades ran casinos for former President Donald Trump.

Ribis did not immediately respond to requests for comment.

JPMorgan claims in court filings that the Virgin Islands was itself "complicit in the crimes of Jeffrey Epstein," arguing that he gave high-ranking government officials money, advice and favors in exchange for looking the other way when he trafficked young women.

JPMorgan also argues that its former executive Jes Staley, who was friends with Epstein when he was a client of the bank, is responsible for any civil liability of the bank due to its business relationship with the sex offender.

On Tuesday, newly unsealed court filings by the bank show that Epstein was asked by former U.S. Virgin Islands Gov. John de Jongh Jr. for a loan of $215,000 after de Jongh was arrested on embezzlement charges that were later dismissed.

Epstein's company also paid de Jongh's wife, Cecile, a $300,000 lump sum severance payment after Epstein killed himself in a federal jail while awaiting trial on child sex trafficking charges in August 2019, JPMorgan's documents say. She had worked for Epstein at his Southern Trust Company.

The documents also say that another Epstein employee who worked for him in the Virgin Islands was granted a U.S. Customs and Border Protection security seal, which allowed that worker to "escort passengers through" customs screening areas.

The bank in other court filings has said that Epstein paid for the school tuitions of the children of the de Jonghs, and that Cecile had made efforts to obtain student visas and a work license for young women connected to Epstein.

A spokesman for the Virgin Islands' Attorney General's Office told CNBC that Epstein's loan to former Gov. de Jongh occurred after he left office in 2015. The charges against de Jongh were dropped in early 2016 by the Virgin Islands Department of Justice after he agreed to a separate monetary settlement.

CNBC has reached out to comment from John de Jongh via an asset management company where he is a director.

The Virgin Islands spokesman also said that "it was the federal government and not the Virgin Islands government that granted the 'U.S. Customs and Border Protection security seal.' "

The Virgin Islands has said that JPMorgan's leadership kept Epstein as a client for years despite multiple warnings about him being raised internally at the bank, which included payments to young women, and a 2008 sex crime conviction in Florida which led to a jail term.

In its new court filing on Tuesday, the Virgin Islands cited a July 2011 email between Epstein and Erdoes, after JPMorgan's rapid response team decided that Epstein should be off-boarded as a client, and after JPMorgan's general counsel told Erdoes that Epstein was "not a person we should do business with — period."

Erdoes and Epstein emailed after he and the bank agreed to settle his lawsuit against JPMorgan related to money he said he was owed by Bear Stearns, the investment bank taken over by JPMorgan.

"On July 26, 2011, Epstein wrote to Erdoes, 'lets [sic] move on , [sic] and make some real money,' " the filing said.

"Erdoes responded, 'Onwards and upwards, on so many fronts,' " the filing said.

Epstein was not severed as a JPMorgan client for another two years.

The new Virgin Islands filing said that Staley, in his deposition for the lawsuit, disclosed the names of people and companies that Epstein had referred to the bank as potential clients. An unsealed portion of Staley's deposition was made public Tuesday.

Among the high-powered names listed in the court filing are Google co-founder Sergey Brin, Sultan Ahmed bin Sulayem of Dubai, former Microsoft CEO Bill Gates, former Treasury Department Secretary Larry Summers and television journalist Katie Couric.

Staley, who had been head of the bank's asset and wealth management division, testified that he met all those people at Epstein's townhouse on the Upper East Side of Manhattan.

The deposition also shows that Staley said he had spoken to JPMorgan CEO Jamie Dimon in 2006 when Epstein was arrested on Florida state charges of procuring a minor for prostitution, and solicitation of a prostitute.

JPMorgan has denied that claim. "Staley admits that in 2006 Jamie Dimon communicated with him regarding Epstein's arrest," the Virgin Islands said in the court filing.

"Staley also testified that on or about July 26, 2006, he spoke to Dimon about Epstein's indictment because Dimon was his boss and the indictment of Epstein, a client of the bank, 'was a very public event.'"

Elsewhere in the deposition, Staley answered questions about going to see Epstein after an article was published in 2006 that said, "Jeffrey Epstein craved big homes, elite friends — and, investigators say, underage girls."

The article also stated that two of "Epstein's former employees told investigators that young looking girls showed up to perform massages two or three times a day when Epstein was in town."

The Virgin Islands filing said, "On July 25, 2006, Staley met with Epstein in person at Epstein's home. In that visit, Epstein admitted to the alleged "conduct of engaging in sex for money with young women" — only denying the 'ages.'"

Staley afterward wrote Erdoes: "I went and saw him last night. I've never seen him so shaken. He also adamantly denies the ages," Staley wrote Erdoes, the filing notes.

In his deposition, Staley was asked: "The conduct that he was being accused of, he was admitting that he did it.  He was just denying that he knew the ages of the victims, right?"

Staley replied, "Correct."

"And you were reporting that back to the bank, that what was being denied is the ages, right?" a lawyer for the Virgin Islands said.

Staley said, "Right."

He then conceded that the bank knew that Epstein had admitted to engaging in sex for money with young women, while denying they were underage.

The lawyer then asked, "And so when the bank is receiving that information, they now know what you know, which is, this is the type of conduct that our client is engaging in, and the only dispute that he has about the allegations are the ages of the victims, right?"

Staley replied, "That's correct."