EXHIBIT 99¶
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK 2 - - -¶
3 GOVERNMENT OF THE UNITED : Case Number: STATES VIRGIN ISLANDS : 1:22-cv-4 Plaintiff, : 10904-JSR 5 JPMORGAN CHASE BANK, N.A. 6 Defendant/Third-Party Plaintiff.¶
7 JPMORGAN CHASE BANK, N.A. . Third-Party Plaintiff, : 8 v. . JAMES EDWARD STALEY . • 9 Third-Party Defendant. :¶
10¶
11 MAY 24, 2023¶
HIGHLY CONFIDENTIAL¶
12 - - -¶
13 Videotaped deposition of¶
STEPHEN CUTLER, taken pursuant to notice, was held at the law offices of Boies Schiller Flexner LLP, 55 Hudson Yards, New York, New York, commencing at 9:40 a.m., on the above date, before Amanda Dee Maslynsky- , a Certified Realtime Reporter and Notary Public in and for the State of New York.¶
22 _ _ _¶
GOLKOW LITIGATION SERVICES, INC. 23 877.370.3377 phl 917.591.5672 fax deps@golkow.com¶
24¶
1 2 3 you know that there was a federal non-prosecution agreement, you just don't know when you knew that?¶
4 5 6 7 8 9 A. I know at a certain point I understood that there was a federal non-pros agreement. I can't tell you exactly when. And I can't tell you that I knew precisely what the terms of it were.¶
10 11 12 13 Q. But you knew at some point while you were general counsel at JPMorgan and Jeffrey Epstein was a client of the bank; is that fair?¶
14 15 A. I believe I knew that there was a non-pros agreement.¶
16 17 Q. Okay. You can put that document away.¶
18 19 20 21 22 Do you recall, in 2008, after Jeffrey Epstein pled guilty to the child sex offenses, that private bank wanted to exit Jeffrey Epstein as a client of the bank?¶
23 A. I do not.¶
1 MR. GAIL: Objection.¶
THE WITNESS: I don't know¶
why you don't think it would make¶
any sense, but I could -- I could¶
conceive of -- if I had been¶
involved in approval in '08, I¶
could also conceive, in 2011,¶
having this view.¶
BY MS. LIU:¶
Q. What happened between¶
11 possibly your approving him in 2008 and¶
your having this view in 2011,¶
Mr. Cutler?¶
A. Well, among other things, I¶
think we would have seen the non-pros¶
agreement. We would have reviewed a lot¶
of press that arose, I want to say in the¶
2010, early 2011 period. We had some¶
direct experience with him in connection¶
with the claims that he was raising¶
against Bear Stearns.¶
And so I think whatever¶
judgment I had had in 2008, clearly by¶
1 2 Jeffrey Epstein should be a client of the firm.¶
3 4 5 6 Q. The press that arose said he was being investigated for child sex trafficking and human trafficking, correct?¶
7 8 9 10 11 12 13 14 A. I don't remember the precise, but -- the precise parameters of the press, but I remember there was a series of articles about a new investigation. There were articles that I remember pointed that he was -- he had resolved claims with -- with a very large number of women.¶
15 16 17 And, yeah, so I remember those being among the articles, you know, that we saw in 2010 or '11.¶
18 Q. Who is Nina Shenker?¶
19 20 21 A. At this point, she was the general counsel of the asset management business.¶
22 23 Q. She was Mary Erdoes's general counsel, correct?¶
1 2 3 4 5 I'll represent to you, and you can -- you can check me on this, 7/21/11, when you say, I would like to put it and him behind us, not a person we should do business with period, was a Thursday.¶
6 A. Okay.¶
7 8 9 Q. And the him, just so it's perfectly clear for the record, is Jeffrey Epstein, correct?¶
10 A. I believe that's right.¶
11¶
12 (Whereupon, Exhibit¶
13 Cutler-23,¶
14 JPM-SDNYLIT-00754982-984, 7/22/11¶
15 16 E-mail, was marked for identification.)¶
17¶
18 BY MS. LIU:¶
19 20 Q. I'm showing you what's been marked as Exhibit-23.¶
21 22 23 So you'll see the top e-mail on Exhibit-23 is from Nina Shenker to Mary Erdoes on 7/22/2011 --¶
1 Q. -- the next day, correct?¶
She writes, Imagine lots to do upon your return to U.S. and for next week.¶
Do you see that?¶
A. Yes.¶
Q. And then there's a redacted 8 portion. And then the next line says, FYI, Steve, at conclusion of JE approval, asked when we are off-boarding JE. I reminded him that we have the other matter outstanding.¶
Do you see that?¶
A. I do.¶
Q. What was the JE approval?¶
A. I don't know. I mean, I could make an assumption that it related to this lawsuit, but I don't know.¶
Q. So the day before you said to Mary Erdoes, I want to put him behind us?¶
A. Correct.¶
Q. Not a person we should do business with?¶
A. Correct.¶
Q. Do you believe that Nina¶
Shenker is referring to an approval of Jeffrey Epstein that predated July 21st, 2011?¶
MR. GAIL: Objection.¶
form. MR. EDELMAN: Objection to¶
THE WITNESS: I'm sorry, an approval of him as a client?¶
BY MS. LIU:¶
Q. Yes.¶
A. No.¶
Q. Okay. Let me understand¶
What do you believe, FYI¶
Steve, at conclusion of JE approval,¶
asked when we are off-boarding JE?¶
A. I I don't think I would have said when are we off-boarding him if we were speaking about an approval of his account. It just -- the two things in conjunction don't make sense to me.¶
I would think, just based on¶
1 2 Exhibit-23 that it's somehow the approval of the settlement.¶
3 Q. I see.¶
4 5 Steve, at the conclusion of the Jeffrey Epstein settlement approval?¶
6 7 A. I -- that makes more sense to me.¶
8 Q. Okay.¶
9 A. I don't remember it.¶
10 11 12 Q. Okay. Fine. Just want to try to understand what you think it means.¶
13 14 So -- asked when we are off-boarding Jeffrey Epstein.¶
15 16 17 18 That's consistent with your telling Mary Erdoes and others in the e-mail before this is not a person we should be doing business with?¶
19 MR. GAIL: Objection.¶
20 21 THE WITNESS: Well, I think the notion of off-boarding¶
22 23 somebody that I don't think we should be doing business with, I¶
1 consistent, yes.¶
BY MS. LIU:¶
Q. And it's also consistent that JPMorgan retained Jeffrey Epstein as a client to deal with the Bear Stearns litigation that Jeffrey Epstein had, correct?¶
A. I don't know that.¶
9 Q. Because then she writes, I reminded him that we have the other matter outstanding.¶
Do you see that?¶
A. I do.¶
Q. So we had the one, it's been approved, settlement is done. But Steve, from Nina, we've got that other litigation with Jeffrey Epstein.¶
Do you recall that?¶
A. I don't.¶
20 Q. Do you recall the Zwirn¶
Highbridge litigation?¶
A. I've now seen documents that remind me there was -- there was another claim that Epstein had.¶
1 embarked upon was the only reason, or even a primary reason, to exit Mr. Epstein.¶
BY MS LIU:¶
Q. You had already decided there were other reasons?¶
A. Yeah. I don't think I was oblivious to the issue that William raised. But I -- in my own mind, I don't remember it as being the core of the -- 11 of the issue that drove my conclusion.¶
Q. Do you recall William Langford saying to you, AML investigations does not want -- believe we should retain Jeffrey Epstein as a client, in early 2011?¶
A. I don't remember him referring to AML investigations in particular. I think what he communicated to me was concern about the reputational issues. Those concerns are heightened, if you will, by the human trafficking initiative that we're doing, given that he was convicted of these crimes.¶
BY MS. LIU:¶
away. Q. You can put that document¶
Mr. Cutler, are you aware that in or around 2020, Deutsche Bank was fined by the New York State Department of Financial Services $150 million in connection with its conduct related to Jeffrey Epstein's accounts?¶
A. I believe I read about that.¶
(Whereupon, Exhibit Cutler-39, No, Department of Financial Services Article, was marked for identification.)¶
BY MS. LIU:¶
1 2 3 press release that was issued by the New York State Department of Financial Services. It's Exhibit-39.¶
4 5 6 7 And at the same time, I'm going to hand you the actual consent order by the New York State Department of Financial Services. And it's Exhibit-40.¶
8¶
9 (Whereupon, Exhibit¶
10 11 12 13 Cutler-40, No, Consent Order Under New York Banking Law 39 and 44, was marked for identification.)¶
14¶
15 BY MS. LIU:¶
16 17 18 19 Q. I would ask you to first take a look at Exhibit-40 and see if you recall that being the consent order that you recall reading?¶
20 21 MR. GAIL: Objection. That misstates.¶
22 23 THE WITNESS: I don't think I ever read the consent order.¶
1 Q. II, you --¶
2 A. I think you --¶
3 Q. -- read about this at the 4 time?¶
5 A. I think you asked me if I 6 was aware of it. And I believe I read 7 about it.¶
8 9 Q. Fair enough. I misunderstood you.¶
10 11 12 A. And I don't -- I don't believe I've ever seen this document before.¶
13 14 15 Q. You can put that document away. I just want to look at the press release, then.¶
16 A. Okay.¶
17 18 19 20 21 22 Q. So you'll see the title is, Superintendent Lacewell Announces DFS, Department of Financial Services, Imposes a $150 Million Penalty on Deutsche Bank in Connection with Bank's Relationship with Jeffrey Epstein.¶
23 24 And it also mentions something unrelated to Jeffrey Epstein. 1 Do you see that?¶
2 A. I do.¶
3 Q. And if you turn to the¶
4 5 6 7 second page of the document and you go to the first full paragraph, With respect to the case of Jeffrey Epstein, before the bullets.¶
8 Do you see that?¶
9 A. Yes.¶
10 11 12 13 14 15 16 Q. All right. The bank failed to properly monitor account activity conducted on behalf of the registered sex offender, despite ample information that was publicly available concerning the circumstances surrounding Mr. Epstein's earlier criminal misconduct.¶
17 Do you see that?¶
18 A. I do.¶
19 20 21 22 23 24 Q. The bank -- The result was that the bank processed hundreds of transactions totalling millions of dollars that, at the very least, should have prompted additional scrutiny, in light of Mr. Epstein's history.¶
1 And then it lists a number of things, correct?¶
A. Yes.¶
Q. All right. Payments to individuals who were publicly alleged to have been Mr. Epstein's co-conspirators in sexually abusing young women.¶
8 Do you see that?¶
9 A. I do.¶
10 Q. JPMorgan also made 11 payments -- handled payments from Mr. Epstein's accounts to individuals who are publicly alleged to have been Mr. Epstein's co-conspirators in sexually abusing young women, correct?¶
MR. GAIL: Objection.¶
THE WITNESS: Are you referring to the non-pros agreement, which refers to certain people as potential co-conspirators?¶
BY MS. LIU:¶
Q. Yes.¶
1 2 3 4 what you said here today and what you have shown me, there are payments that were made out of Epstein accounts to one or more of those individuals.¶
5 6 7 8 9 10 11 Q. Next bullet, Settlement payments totalling over $7 million dollars, as well as dozens of payments to law firms totalling over $6 million for what appears to have been the legal expenses of Mr. Epstein and his co-conspirators.¶
12 Do you see that?¶
13 A. I do.¶
14 15 16 17 18 19 Q. And you recall earlier this morning I showed you a spreadsheet that contained many payments, many in the amount of $100,000, from Jeffrey Epstein's accounts to law firms and lawyers?¶
20 Do you recall that?¶
21 A. I do.¶
22 23 24 Q. The next bullet, Payments to Russian models, payments for women's school tuition, hotel and rent¶
1 expenses -- and rent expenses and, consistent public allegations of prior wrongdoing, payments directly to numerous women with Eastern European surnames.¶
Do you see that?¶
A. I do.¶
Q. And you'll recall we looked 8 at a document that showed payments to women whose names, you said, could be Russian or could be Eastern European.¶
11 Do you recall that?¶
A. I should clarify, I mean, they could be Americans with those names.¶
But I get the point that there are certain names that you might associate with Russian heritage or Eastern European heritage.¶
Q. Next one, Periodic suspicious cash withdrawals, in total, more than $800,000 over approximately four years.¶
Do you see that?¶
A. I do.¶
•¶
Q. And then if you turn to the next page, you'll see the second sentence begins, For example, certain conditions imposed upon the Epstein accounts by a bank reputational risk committee, conditions that, if followed, might have detected and prevented many subsequent suspicious transactions were either not transmitted to the majority of the account relationship team or were misinterpreted by a compliance officer.¶
1 Do you see that?¶
2 A. I do.¶
3 Q. Okay. So you'll recall that¶
4 5 6 7 I we talked about this condition that was imposed following rapid response meetings that Epstein was to be a banking only client.¶
8 Do you recall that?¶
9 A. I do.¶
10 11 12 13 Q. And then you'll recall later, in the Justin Nelson KYC, there were numerous entries which referred to him as an active brokerage client?¶
14 A. Right.¶
15 16 17 18 I -- what I don't know is whether that was contemplated within the panoply of activities that could take place at the bank.¶
19 Q. And then --¶
20 21 22 23 24 A. Nor do I know that any of those activities or the -- you know, if those activities hadn't been affected, that would have allowed for detection and prevention of suspicious transactions as¶
1 2 reflected in the sentence that you just read.¶
3 4 5 6 Q. And then after this section I just read, related to Epstein, it moves on to a different account, Don Esconia, right?¶
7 8 9 10 A. Yes. I gather that the fine imposed here was both for Epstein and for other relationships that Deutsche Bank had.¶
11 12 away. Q. You can put that document¶
13 14 MR. GAIL: We've got you with one minute left.¶
15 16 17 MS. LIU: I have no further questions, Mr. Cutler. I appreciate your time.¶
18 19 20 MR. GAIL: Let me just confer with my colleague, but I'm sure we're done.¶
21 22 VIDEO TECHNICIAN: Do you want to go off the record?¶
23¶