32 United States Virgin Islands Economic Development Authority, FY2011 Annual Report, p. 12.
33 United States Virgin Islands Economic Development September 30,2013, p. 12. Authority, Annual Report Fiscal Year 2013, October 1, 2012 to
24. Financial Trust applied for tax exemptions offered by USVI's 1DC in 1998." Financial Trust's application disclosed the following information:
25. On September 7, 1999, the IDC met in Executive Session to discuss Financial Trust's application among other matters. The meeting was transcribed by Porter's Court Reporting." The meeting minutes noted the following:
34 VI-JPM-000018359-387 at 359.
33 VI-JPM-000018359-387 at 361.
36 VI-JPM-000018359-387 at 385.
37 VI-JPM-000018359-387 at 362.
38 VI-JPM-000018359-387 at 368.
33 VI-JPM-000018359-387 at 368.
t0 vI•JPM-000018359-387 at 380.
4 ' VI-JPM-000018885-917.
42 VI•JPM400018885417 at 888-889.
"In the September 7, 1999 Executive Session. Mr. Francois Dominique. a Special Assistant in the IDC, stated that 'one to 1.2" was accepted by the IDC "over the years" as "an acceptable ratio." See VI-JPM-000018885-917 at 885, 889. Governor Albert Bryan stated in his June 6, 2023 deposition that "a good return on investment from that tax benefits [USVI was] given" was "(diefinitely at least one and a half, two, would be good." See Bryan Deposition, 47:9-20.
44 VI-JPM-000018885-917 at 889.
VI-JPM-000018885-917 at 916.
VI-JPM-000018885-917 at 915-916.
47 VI-JPM-000012940-956 at 942.
a VWPM-000012940-956 at 942.
49 VI-JPM-000012940-956 at 942.
50 VI-JPM-000012940-956 at 940.
51VI-JPM-000032792; VI-JPM-000032774; VI-JPM-000032775; VI-JPM-000032776; VI-JPM-000032777: VI-JPM-000032778; VI-JPM-000032779; VI-JPM-000032780; VI-JPM-000032781; VI-JPM-000093343: VI-JPM-000041911: VI-JPM-000093344; VI-JPM-000093345; VI-JPM-000093346; VI-JPM-000093347; VI-JPM-000037451; VI-JPM-000037452; VI-JPM-000020120; VI-JPM-000020331; VI-JPM-000093348.
52 VI-JPM-000032792, tab Benefits.
53 VI-JPM-000032792, tab Benefits.
54 VI-JPM-000032792, tab Procurement.
ss VI-JPM-000032792, tab Contribution.
56 VI-JPM-000032792, tab Benefits.
51VI-JPM-000012922-939 at 922.
58 VI-JPM-000012922-939 at 924.
se VI-JPM-000012922-939 at 922,924.
80 VI-JPM-000012922-939 at 922.
81 VI-JPM-000032774, tab Benefits; VI-JPM-000012922-939 at 924.
62 VI-JPM400032774, tab Benefits.
31. According to the EDC's calculations, the 2000 actual cost / benefit ratio for Financial Trust was for every \$1 of cost (tax breaks given away to Financial Trust), USVI received only \$0.29 of benefits (taxes received, local employment, and local purchases).'
32. In 2001, Financial Trust's actual results continued to fall well below the acceptable levels discussed by the IDC when it approved Financial Trust's application. For example, the EDC's 2001 cost / benefit analysis reported the following:
33. According to the EDC's calculations, the 2001 cost / benefit ratio for Financial Trust was for every \$1 of cost (tax breaks given away to Financial Trust), USVI received only \$0.05 of benefits (taxes received, local employment, and local purchases) .n
34. This pattern of "costs" (tax breaks provided to Financial Trust and Mr. Epstein) significantly exceeding the benefits received by USVI continued in 2002-2006. Over this fiveyear period, Mr. Epstein received another \$152 million of tax breaks from the EDC program.
See Exhibit 1.
63 VI-JPM-000032774, tabs Procurement and Employment & Taxes.
VI-JPM-000032774, tabs Procurement and Employment & Taxes.
ss VI-JPM-000032774, tab Procurement.
66 VI-JPM-000032774, tabs Procurement and Employment & Taxes.
67 VI-JPM-000032774, tabs Contribution and Employment & Taxes.
66 VI-JPM-000032774, tab Benefits.
ss VI-JPM-000032775, tab Benefits.
10 VI-JPM-000032775, tab Procurement
71 VI-JPM-000032775, tabs Contributions and Employment & Taxes.
72 VI-JPM-000032775, tab Benefits.
35. In July 2006, Mr. Epstein was arrested for solicitation of prostitution." In June 2008, Mr. Epstein pled guilty to one count of soliciting prostitution and one count of soliciting prostitution from a minor." He ultimately served 13 months of his 18-month jail sentence.i6
36. In 2007, during the inception of what is commonly referred to as the Global Financial Crisis, Financial Trust reported significant losses. For example, Financial Trust reported an Ordinary Business Income loss of over \$10.5 million in its 2007 tax returns.n This pattern of financial losses incurred by Financial Trust continued during 2008 through 2012. See Exhibit 1.
37. In 2009, Financial Trust's original 10-year tax benefits award was set to expire. In January 2009, Financial Trust submitted an application to the EDC for modification/extension of its benefits." In February 2009, while Mr. Epstein was incarcerated in Florida, representatives of Financial Trust met with the EDC to request an extension of benefits as the original 10-year award was set to expire. Per the February 12, 2009, meeting minutes:
38. On April 27, 2009, the EDC Board met to discuss Financial Trust's application, amongst other topics. The meeting minutes indicate the following:
"Associated Press, "A Timeline of the Jeffrey Epstein, Ghislaine Maxwell Scandal; U.S. News & World Report June 28, 2022. available at https://www.usnews.comlnews/politics/articles/2022-06-28/a-timeline-of-the-jeffrey-epsteinghislaine-maxwell-scandal.
"Associated Press, "A Timeline of the Jeffrey Epstein, Ghislaine Maxwell Scandal; U.S. News & World Report June 28. 2022. available at https://www.usnews.conVnews/politics/articles/2022-06-28/a-timeline-of-the-jeffrey-epsteinghislaine-maxwell-scandal.
15V1-JPM-000032669-725 at 723.
78VI-JPM-000012630-688 at 634.
VI-JPM-000018918-926 at 920.
VI-JPM-000016200-205 at 201.
79 VI-JPM-000016200-205 at 202.
VI-JPM-000016200-205 at 201-202.
81 VI-JPM-000016200-205 at 201.
82 VI-JPM-000018918-926 at 920.
83 VI-JPM-000018918-926 at 920.
84 VI-JPM-000018918-926 at 920.
B5 VI-JPM-000018918-926 at 920.
86 VI-JPM-000018918-926 at 922.
87 VI-JPM-000018918-926 at 924.
88 VI-JPM-000018934-945 at 937.
8B VI-JPM-000018934-945 at 937.
" VI-JPM-000018934-945 at 944-945.
91ESTATE_JPM018975-992 at 978.
ESTATE_JPM018975-992.
"compliance review" of Financial Trust for the period January I, 2009 through March 23, 2012.80 The EDC concluded that Financial Trust was out of compliance with its capital investment requirement, and Special Conditions #1 and #2.9, According to the Compliance Report, Special Condition #1 was a requirement that Financial Trust would contribute the greater of \$100,000 per year or 1% of the gross receipts tax exemption value." The Compliance Report also indicated that from September 2007 to December 2009, Mr. Epstein "relinquished" the title of Director/President to Mr. Indyke.96
43. In September 2012, Southern Trust, an S-Corporation wholly owned by Mr. Epstein, applied for tax exemptions from the EDC.97 Southern Trust claimed that its business objective was "to build an extensive DNA database and develop a data-mining platform for the database to be available through the intemet."96 The application indicated that Southern Trust's "platform will be based on databases and information to be kept on servers located in the U.S. Virgin Islands, specifically St. M"99
44. The application indicated the Southern Trust planned to hire only 6 employees in total and be funded with \$400,000 in initial capital.I00 Mr. Epstein was to be the President and Chief Executive Officer with an annual salary of \$200,000.701 Southern Trust disclosed that it intended to hire a "Chief Scientific Officer" with "a Ph.D. in Biomedical Informatics and/or a medical degree with conceivably another degree in Computer Technology or Engineering."102 In
n ESTATE_JPM018975-992 at 975.
94 ESTATE_JPM018975-992 at 975.
" ESTATE_JPM018975-992 at 983. It is unclear when the EDC modified Financial Trust's Special Condition #1 — as the meeting minutes from 1999 indicate that the Special Condition at the time of the award was "one percent of gross receipts or 45 thousand, whichever is greater will be donated to charity, scholarships and co-op marketing of the IDC..." See VI-JPM-000018885-917 at 912-913. As discussed above, 1% of Financial Trust's gross receipts would have required Financial Trust to contribute millions of dollars to USVI charities, whereas 1% of the gross receipts tax exemption value results in a much lower threshold as the exemption value was only 4.5% of gross receipts.
96 ESTATE_JPM018975-992 at 991. This was the period of time Mr. Epstein was incarcerated in Florida for sex crimes. See Associated Press, "A Timeline of the Jeffrey Epstein. Ghislaine Maxwell Scandal," U.S. News & World Report, June 28,2022, available at https://vAirw.usnews.comfnews/politics/articles/2022-06-28/a-timeline-of-thejeffrey-epstein-ghislaine-maxwell-scandal.
97 VI-JPM-000032669-725.
" VI-JPM-000032669-725 at 670.
" VI-JPM-000032669-725 at 681.
00 VI-JPM-000032669-725 at 674,675.
10' VI-JPM-000032669-725 at 684,701.
103 VI-JPM-000032669-725 at 684.
addition, Southern Trust represented that a "large majority of [its] employees will have advanced degrees in such as Computer Science, Mathematics, Biomedical Informatics, and/or Finance."I" Appendix 21 to the application indicated that the four other employees of Southern Trust would be a "Data Base Manager," a "Technical Assistant," an "Accountant," and an "Administrative Assistant."10t
45. Southern Trust's EDC application also disclosed that Mr. Epstein was a convicted sex offender. The application and its appendices disclosed the following:
103 VI-JPM-000032669-725 at 685.
104 VI-JPM-000032669-725 at 701.
05 VI-JPM-000032669-725 at 679.
10B VI-JPM-000032669-725 at 723.
have been no similar allegations or charges of any misconduct by Mr. Epstein since that period of time seven years ago."107
46. The application also disclosed that Mr. Epstein was the sole owner of Southern Trust and that he had been the sole owner of Financial Trust, which "ha[d] been an EDC beneficiary for the past 13 years."10o
47. Southern Trust's EDC application stated that the "client base of and the product provided by the Applicant differ markedly from those of [Financial Trust], hence the desire to create a new entity that will meet all of the requirements of the EDC.."10 Despite this representation, the application does acknowledge that some Financial Trust "employees may be transferred to" Southern Trust.", According to the application, Southern Trust was projecting annual revenues of \$3—\$7 million over the next 5 years.112
48. The EDC held a public hearing on November 15, 2012, to consider the tax incentive application submitted by Southern Trust.113 On January 2013, the EDC Board met in executive session to discuss Southern Trust's application. The meeting minutes indicate the following:
t07 VI-JPM-000032669-725 at 723.
t00 VI-JPM-000032669-725 at 723.
t00 VI-JPM-000032669-725 at 683.
110 VI-JPM-000032669-725 at 682.
t1 VI-JPM-000032669-725 at 682. See also,m Deposition, 71:13-18 ("Mr. Jeffrey Epstein stated that they were closing out Financial Trust, or they had Financial Trust, and that some of the employees would be transferred over to the new company?).
"2 VI-JPM-000032669-725 at 712.
" 3Exhibit 1 to the Complaint, 1158.
1" VI-JPM-000018551-571 at 557.
15 VI-JPM-000018551-571 at 560.
116 VI-JPM-000018551-571 at 561.
117 VI-JPM-000018551-571 at 568-571; 'Tax Incentives: How Do They Work?" United States Virgin islands Economic Development Authority, available at https://usvieda.orgiresidentsigrowiedc-tax-incentivesttax-incentiveshow-do-they-work.
118ESTATE_JPM014824-828 at 824.
19 ESTATE_JPM020521-527 at 523-527.
125ESTATE_JPM020521-527 at 527.
121 VI-JPM-000007315-406 at 315.
ut VI-JPM-000007315-406 at 319.
72J VI-JPM-000007315-406 at 319.
124 VI-JPM-000007315-406 at 315,319.
725 VI-JPM-000007315-406 at 315.
12e VI-JPM-000007315-406 at 315.
51. The EDC analyzed the actual 2013 cost / benefit of Southern Trust's EDC award. The EDC's 2013 cost / benefit analysis produced in discovery indicated:
52. As a result, rather than generating the forecasted cost / benefit ratio of \$1 of cost for every \$3.90 in benefits received, Southern Trust's award resulted in an actual cost / benefit ratio of \$1 of cost for every \$0.14 of benefits in 2013)33
53. The fiscal year ending December 31, 2014, was Southern Trust's second year in the EDC program. In October 2015, Southern Trust submitted its annual reporting package to the EDC.'' The 2014 reporting package indicated the following:
54. The EDC analyzed the actual 2014 cost / benefit of Southern Trust's EDC award. The EDC's 2014 cost / benefit analysis produced in discovery indicated:
727 VI-JPM-000093347, tab Employment & Taxes.
In VI-JPM-000093347, tab Employment & Taxes.
VI-JPM-000093347, tab Procurement.
133 VI-JPM-000093347, tab Employment & Taxes.
131 VI-JPM-000093347, tab Employment & Taxes and Procurement.
122 VI-JPM-000093347, tab Benefits.
133 VI-JPM-000093347, tab Benefits.
VI-JPM-000007407-473 at 407.
133 VI-JPM-000007407-473 at 410.
728 VI-JPM-000007407-473 at 410.
17 VI-JPM-000007407-473 at 407, 410.
VI-JPM-000007407-473 at 407.
VI-JPM-000007407-473 at 407.
VI-JPM-000037451, tab Employment & Taxes.
141 VI-JPM-000037451, tab Employment & Taxes.
142 VI-JPM-000037451, tab Procurement.
143 VI-JPM-000037451, tab Employment & Taxes.
1" VI-JPM-000037451, tabs Employment & Taxes and Procurement
145 VI-JPM-000037451, tab Benefits.
148 VI-JPM-000037451. tab Benefits.
VI-JPM-000007474-533 at 477.
148 VI-JPM-000007474-533 at 477.
149 VI-JPM-000007474-533 at 474,477.
750 VI-JPM-000007474-533 at 474.
151 VI-JPM-000007474-533 at 474.
incomplete and contains information that is contradicted by Southern Trust's 2015 reporting package. For example:
59. Between 1999 and 2018, USVI's EDC awarded Financial Trust and Southern Trust more than \$300 million in tax benefits. For those years in which Mr. Epstein's companies reported positive ordinary business income, the cost / benefit ratio of tax benefits to Financial Trust and Southern Trust was far lower than EDC's target ratio, as discussed further below:,54
152 VI-JPM-000037452, tab Employment & Taxes; VI-JPM-000007474-533 at 477.
'" VI-JPM-000037452. tab Employment & Taxes: VI-JPM-000007474-533 at 474.
154 Cost benefit ratios are only shown for years in which Financial Trust or Southern Trust reported positive ordinary business income on the companies' Form 1120S. In 2016-2018, Southern Trust continued to receive benefits from the EDC program, but at much lower levels due to a significant decline in Southern Trust's revenues and profitability. In addition, I noted that the 2015 cost / benefit spreadsheet is incomplete and contains information that is contradicted by Southern Trust's 2015 reporting package. In the September 7, 1999 Executive Session, Mr. Francois Dominique, a Special Assistant in the IDC, stated that "one to 1.2" was accepted by the IDC "over the years" as "an acceptable ratio: See VI-JPM-000018885-917 at 885, 889. Governor Albert Bryan stated in his June 6, 2023 deposition that "a good return on investment from that tax benefits [USVI was] given" was "Idlefinitely at least one and a half, two, would be good." See Deposition of Governor Albert Bryan. Jr., June 6. 2013 ("Bryan Deposition"). 47:9- 20. I present the lower of the target cost / benefit ratios for purposes of this table. Actual cost / benefit ratios for Financial Trust and Southern Trust as listed in the Benefits tab of EDC's cost-benefit analysis spreadsheets. See VI-JPM-000032792; VI-JPM-000032774; VI-JPM-000032775; VI-JPM-000032776: VI-JPM-000032777; VI-JPM-000032778; VI-JPM-000032779; VI-JPM-000032780; VI-JPM-000093347; VI-JPM-000037451; VI-JPM-000037452; VI-JPM-000020120; VI-JPM-000020331; VI-JPM-000093348.
| Year 1999 | Target Cost / Benefit Ratio 1.0 to 1.2 | Cost / Benefit Ratio Reported by EDC 0.04 MI |
|---|---|---|
| 2000 | 1.0 to 1.2 | 0.29 |
| 2001 | 1.0 to 1.2 | 0.05 |
| 2002 | 1.0 to 1.2 | 0.12 |
| 2003 | 1.0 to 1.2 | 0.01 |
| 2004 | 1.0 to 1.2 | 0.02 |
| 2005 | 1.0 to 1.2 | 0.01 |
| 2006 | 1.0 to 1.2 | 0.02 |
| 2013 | 1.0 to 1.2 | 0.01 |
| 2014 | 1.0 to 1.2 | 0.01 |
| 2015 | 1.0 to 1.2 | 0.02 1M |
| 2016 | 1.0 to 1.2 | 0.38 |
| 2017 | 1.0 to 1.2 | 0.60 |
| 2018 | 1.0 to 1.2 | 1.54 |
60. During the period 1999 through 2018, USVI's IDC/EDC gave Mr. Epstein over \$300 million of tax breaks associated with his 100% ownership of Financial Trust and Southern Trust to incentivize him to conduct business in USVI. Attached as Exhibit I is a summary of (i) the taxes and duties paid by Financial Trust and Southern Trust to USVI; and (ii) the reported value of the tax exemptions awarded to Mr. Epstein. According to the tax returns submitted by Mr. Epstein's companies to the IDC/EDC each year, Mr. Epstein paid only \$40.4 million of income taxes on over \$567 million of Ordinary Business Income earned by Financial Trust and Southern Trust during the period 1999-2018. This indicates that as a result of the IDC/EDC awards, Mr. Epstein's net effective income tax rate on \$567 million of income earned by his USVI-based companies was only 7.1%.,s5
61. As discussed above, based on the methodology used by the IDC in 1999, it was projected that Financial Trust would generate a cost / benefit ratio of 1 to 1.3.156 This indicates that for
155 540.385,368 (income taxes paid 1999-2018) divided by \$567,899.953 (ordinary business income 1999-2018) equals approximately 7 .1%. See Exhibit 1.
156 VI-JPM-000018885-917 at 888-889.
every \$1.00 of tax breaks that was to be given to Financial Trust (and Mr. Epstein as he was the sole owner of this pass-through company), USVI expected to receive \$1.30 of economic benefits in the form of increased local employment, local tax receipts, and local investment. 62. However, Financial Trust's actual cost / benefit was significantly below the IDC's projections and its so-called "acceptable ratio" of \$1 to \$1.20.1" As reflected in Financial Trust's annual reporting packages and the available EDC cost/ benefit spreadsheets produced in discovery, Financial Trust's actual cost / benefit ratios in 1999-2001 were: a. 1999 ratio = \$1 to \$0.04;1" b. 2000 ratio = \$1 to \$0.29;159 and c. 2001 ratio = \$1 to \$0.05."0 63. Each of these ratios calculated by the EDC were well below: (i) the forecasted ratio of \$1 to \$1.30 that was discussed by the committee at the time it was considering Financial Trust's application and (ii) the "acceptable" ratio of \$1 to \$1.20 discussed by the committee. 64. Southern Trust's actual cost / benefit was similarly also significantly below the EDC's projections and its so-called "acceptable ratio" of \$1 to \$1.20. For example, per the EDC's cost / benefit calculations produced in discovery, the actual cost / benefit in 2014 was only \$1 to \$0.21.181 65. This ratio was well below: (i) the projected ratio that the EDC discussed when it decided to approve Southern Trust's award; (ii) the \$1.00 to \$1.20 "acceptable" level discussed by the EDC in 1999;162 and (iii) the \$1.00 to \$0.50 "unfavorable" level discussed by the EDC in 2013.10 66. Thus, from 1999 to 2018, neither Financial Trust nor Southern Trust came close to generating sufficient benefits to USVI to offset the tax incentives granted to Mr. Epstein and these companies let alone reach the thresholds the EDC considered "acceptable." Based on the record, the EDC was aware of Mr. Epstein's companies' multi-year history of poor cost / benefit performance yet agreed to extend Financial Trust's certificate in 2009 and granted Southern Trust a new certificate in 2013 regardless.
1" VI-JPM-000018885-917 at 889.
VI-JPM-000032792, tab Benefits.
1" %/WPM-000032774, tab Benefits.
163 VI-JPM-000032775, tab Benefits.
161 VI-JPM-000037451, tab Benefits.
tha VI-JPM-000018885-917 at 889.
163 VI-JPM-000018918-926 at 920.
67. USVI's EDC did not properly evaluate Mr. Epstein's applications for benefits and failed to ask him even the most basic questions based on information that was uniquely available to it about his companies.
68. In awarding hundreds of millions of dollars in benefits to Mr. Epstein, USVI failed to perform even perfunctory examination of information that was uniquely available to it and ignored its own calculations that Mr. Epstein's companies were not conferring the promised economic benefits on USVI. In 2009 and 2013, the awards to Mr. Epstein were ultimately approved by Governor de Jongh. He approved these benefits while his wife, First Lady Cecile de Jongh, was the office manager for Mr. Epstein's companies and received a salary, bonuses, and other benefits, including tuition for their children, from Mr. Epstein.1" Based on my review of the record, I have not seen any evidence that USVI or the EDC employed any procedure to manage or investigate the real and/or perceived conflict of interest by Governor de Jongh's approval of tax benefits that directly benefitted his family.786 Governor de Jongh testified that no such measures were put in place."
69. Moreover, based on my review of the record, it does not appear that the EDC exercised their unique ability to investigate or ask questions of Mr. Epstein and his companies during hearings evaluating his businesses. In 1999, when testifying in front of the EDC on behalf of Financial Trust Company, Mr. Epstein made exaggerated statements, including that "until only ten years ago . . . you actually had to be in New York City to do financial business."i°' He also testified "my core business frankly is me"'" but also stated he would "have at least ten employees at a minimum."16D The EDC did not ask for the names of Mr. Epstein's clients, nor why his statements were internally inconsistent and he needed ten additional employees to
164 Government of the United States Virgin Islands v. JPMorgan Chase Bank, NA, Case 1:22-cv-10904-JSR, JPMorgan Chase Bank, N.A.'s Opposition to USVI's Motion to Strike Affirmative Defenses, May 23,2023 ("JPMC Opposition to Motion to Strike"). Exhibit 23, ESTATE_JPM024371: JPMC Opposition to Motion to Strike. Exhibit 25. ESTATE_JPM024548; JPMC Opposition to Motion to Strike, Exhibit 26, ESTATE_JPM024549; Deposition of Governor John de Jongh, May 30,2023 ("John de Jongh Deposition"), 136:19-138:22; Cecile de Jongh Deposition, 10:20-22; 76:3-78:12.
186 Bryan Deposition, 133:23-134:2.
166 John de Jongh Deposition, 162:19-164:1.
167 VI-JPM-000016248-270 at 253.
168 VI-JPM-000016248-270 at 264.
166 VI-JPM-000016248-270 at 256.
operate an investment advising business for which he would be the only advisor. In addition, when Financial Trust applied for a renewal of EDC benefits for Financial Trust in February 2009, Mr. Indyke appeared on behalf of the company because Mr. Epstein was incarcerated in the United States.no Based on my review of the record, the EDC did not ask where Mr. Epstein was, about his incarceration, or how he could continue to provide "a broad range of financial, economic and business consulting services" from jail.'7' Moreover, the EDC did not ask about any of the company's clients. Again, based on my review of the record, I am not aware if they discussed these topics in private or in the executive session.
70. USVI also did not conduct checks on Financial Trust during the renewal period. A January 2009 EDC due diligence report states that Mr. Epstein was registered as a financial services firm/investment advisory with the Commodity Futures Trading Commission ("CFTC"), the National Association of Securities Dealers ("NASD"), and the National Futures Association ("NFA"). Yet, I am not aware of anything in the record that indicates the EDC verified this. In July 2011, a researcher with the Daily Beast confirmed that Financial Trust was never registered with any of those entities.ln
71. Nor does the record reflect that the EDC did anything to review—or even acknowledge— Mr. Epstein's criminal history during their granting of benefits to him despite it being laid out and included in his application. In fact, the Chairman of the EDC from 2007 to 2014, current USVI Governor Albert Bryan, Jr., testified he was not aware of news in 2011 that Mr. Epstein had settled more than two dozen lawsuits and claims against him by teenagers who say they gave him sexually charged massages and/or sex in exchange for money despite the fact that this information was publicly available at the time the EDC was voting to renew tax benefits for Financial Trust."3 Mr. Bryan testified that the EDC was generally less concerned about the ethics and integrity of the owner of a business receiving EDC benefits if the business was up for renewal, as Financial Trust was after Mr. Epstein's arrest, because the EDC had a track record of
10 VI-JPM-000016200-205 at 202; Associated Press. "A Timeline of the Jeffrey Epstein, Ghislaine Maxwell Scandal," U.S. News & World Report, June 28.2022. available at https://wmv.usnews.corrtinews/politics/arlicles/2022-06-28/atimeline-of-thedeffrey-epstein-ghislaine-maxwell-scandal.
VI-JPM-000016200-205 at 202.
VI-JPM-000033049-063 at 051. Note that the NFA administers registration and examination of intermediaries on behalf of the CFTC. See "Be Smart: Check Registration & Backgrounds Before You Trade," CFTC, https:/Avww.cftc.govicheck.
In Bryan Deposition, June 6, 2013, 74:7-25; 75:1-13.
how the beneficiary had performed in the past to rely upon.77' However, based on my review of the record, Mr. Epstein's "track record" on performance was in fact "unfavorable."
72. As discussed above, Financial Trust submitted an application for an extension in January 2009.75 On April 27, 2009, the EDC held an Executive Session to discuss the application during which Financial Trust's historically low "unfavorable" cost / benefit performance was discussedim Moreover, it was noted that the application stated that Financial Trust planned to make \$4.93 million in expenditures, but it was anticipated that USW would "forego nearly \$40 million in tax revenues over the same five-year period."1" While this comparison "created some concerns,"118 and there was further discussion regarding needing "support for the position" that they were "giving up more than [they] are getting," "e the motion was tabled until the next meeting in May 2009.100 During the May 2009 Executive Session, after agreeing to certain additional commitments from Financial Trust that did not materially change the company's forecasted cost / benefit performance, the EDC approved Financial Trust's application for a five year extension.",
73. In 2012, Mr. Epstein submitted an EDC application for his new USVI-based company Southern Trust)," Southern Trust's application flagged that Mr. Epstein was the sole owner of Financial Trust;183 acknowledged that Mr. Epstein had been arrested and had been the subject of a government investigation;tBO and noted that some Financial Trust employees "may be transferred to" Southern Trusties Southern Trust's application claimed that Mr. Epstein and Financial Trust made "significant contributions to the [USVI] economy over the past 13 years.'" Southern Trust's EDC application also included a detailed appendix discussing his 2006 arrest, 2008 criminal conviction, and related civil tort claims.,"
1T4 Bryan Deposition, 38:6-13 (emphasis added).
" 5 VI-JPM-000018918-926 at 920.
ne VI-JPM-000018918-926 at 920.
17 VI-JPM-000018918-926 at 920.
178 VI-JPM-000018918-926 at 920.
178 VI-JPM-000018918-926 at 921.
188 VI-JPM-000018918-926 at 924.
181 VI-JPM-000018934-945 at 944-945.
182 VI-JPM-000032669-725.
183 VI-JPM-000032669-725 at 679.
184 VI-JPM-000032669-725 at 679.
185 VI-JPM-000032669-725 at 682.
186 VI-JPM-000032669-725 at 683.
187 VI-JPM-000032669-725 at 723.
74. Mr. Epstein testified in front of the EDC in November 2012 that Southern Trust would "organize[] mathematical algorithms" to create "computer generated solutions for medical problems" but also that it would "search[] the world's databases for what is the best investments ... in a nanosecond."'" Mr. Epstein also testified that he needed "high level mathematicians" to "help program the computers" until the "computers themselves will help redesign some of the computer programs" and become "almost like a chemistry lab in the computer."'" Based on my review of the record, the EDC did not investigate or question Mr. Epstein regarding the reasonableness or feasibility of these claims.
75. Mr. Epstein further testified that he would make money because "[s]ome will be outright purchases, probably the simple ones. There will be leases for longer runs and most people will be coming back. Sometime[s] if you want to know — just like a search engine in answer to one question. So you get paid for that one piece of advice, ongoing advice or exclusive rights like drug companies might want to have for a specific answer.'"90 He also used an anecdote about fries to explain how his business would work: "[W]hen you go in your computer it might target you for a specific type of advertisement because it knows that after you've been searching for fries. So they mine all the people in the area who is looking for fries and said, you know, Randolph seems to like that. So we'll send him a message." f Mr. Epstein proposed to do genetic sequencing in the Virgin Islands to obtain medical data for his database "because it's so isolated" that "[y]ou are able to get much better data than ever before."1"
76. Based on my review of the record, the EDC did not press Mr. Epstein on any of these assertions or ask Mr. Epstein for any detailed information about Southern Trust's mission or plans. For example, the EDC did not question Mr. Epstein about his purportedly established algorithms, names, and qualifications of the people he intended to employ to develop his proprietary DNA database, names of potential clients, or how he would obtain and analyze DNA information. Furthermore, the EDC did not ask how Mr. Epstein would conduct genetic sequencing in USVI, nor how he planned to use that genetic sequencing to generate solutions to medical problems. The EDC did ask if there were other companies attempting similar
VI-JPM-000005898-908 at 900.
VI-JPM-000005898-908 at 901.902.
190 VI-JPM-000005898-908 at 903.
91 VI-JPM-000005898-908 at 902.
19\$ VI-JPM-000005898-909 at 905.
endeavors, to which Mr. Epstein replied: "[t]here is a couple doing it in California. Steve Jobs had a group that was trying to help him and it was a little too short."" Based on my review of the record, the EDC asked no follow-up questions on this topic.
77. Southern Trust's EDC application indicated that its business goal was to "build an extensive DNA database and develop a data mining platform" accessible via the Internet." Southern Trust further claimed to be involved in "biomedical and financial informatics."" According to USVI's own forensic accounting expert, Mr. Jorge Amador, Southern Trust was not in fact performing work related to its stated purpose." Mr. Amador's opinion is based on a "review of Southern Trust's financial documents," these documents were filed with the EDC on a yearly basis." The documents Mr. Amador relied upon contain the same information that existed at the time of Southern Trust's application and the issues in them should have been flagged by the EDC. Nevertheless, EDC did not raise any concerns and continued to provide benefits to Southern Trust until after Mr. Epstein was arrested in 2019." Indeed, even after Mr. Epstein's 2019 arrest, the EDC still did not take steps to terminate Mr. Epstein's benefits. It was only after Mr. Epstein's death that his lawyer's came to EDC and themselves requested termination of benefits."
78. Despite Financial Trust's "unfavorable" cost / benefit performance from 1999 to 2009 and the expectation of continued poor performance, the EDC nevertheless decided to grant Financial Trust a five-year extension on its benefits in 2009 and then went on to grant additional economic benefits to Southern Trust from 2013 to 2018.
'93 VI-JPM-000005898-908 at 905.906.
194 VI-JPM-000032669-725 at 681.
195 VI-JPM-000005898-908 at 899.
198 Expert Report of Jorge Amador, June 16.2023 ("Amador Report"). p. 72-73.
187 Amador Report, p. 73-75.
1P8 Associated Press. "A Timeline of the Jeffrey Epstein, Ghislaine Maxwell Scandal," U.S. News (4 World Report, June 28,2022, available at https://vnvw.usnews.cominews/politicsiarlicles/2022-06-281a-timeline-of-theleffreyepsteirslaine-maxwell-scandal.
iev Deposition, 190:11-192:21.
79. Based on my review of the record, despite being a government entity with the ability to conduct audits and investigations, the EDC and USVI made only cursory attempts to monitor Financial Trust and Southern Trust after granting them EDC tax benefits. The EDC Compliance Officer assigned to Mr. Epstein's entities, Ms. Sandra Bess, did not prepare the first compliance report for that business until April 2008, nine years after Financial Trust first became an EDC beneficiary in April 1999,2weven though compliance reports were required annually.20, Moreover, she did not prepare the second compliance report for Financial Trust until January 2014, almost six years after the first report.2°2
80. During this process, Ms. Bess testified that she dealt with Ms. De Jongh, who served as the office manager of Financial Trust and Southern Trust.203 Ms. Bess testified that, at the time of these EDC site visits, Ms. De Jongh was also the wife of the Governor of USVI, and therefore was the acting First Lady of the Virgin Islands.20, Ms. Bess did not attempt to verify whether Southern Trust was engaged in the business activities they purported to perform during site visits; instead, she chose to rely on information in the annual report provided by Mr. Epstein and his staff.° For instance, Ms. Bess did not do anything to verify that Southern Trust's alleged clients, or the "extensive DNA database" it was developing were real; instead, she chose to rely on representations of Southern Trust's employees.2G3
81. Indeed, the inconsistencies in the reports Financial Trust and Southern Trust submitted to the EDC did not prompt the EDC compliance department to review any information outside of the information Mr. Epstein provided to verify that Mr. Epstein was in fact a resident of the Virgin Islands, as was required to be an EDC beneficiary. This was true even while Mr. Epstein purported to be a USVI resident at the same time he was incarcerated in Florida?° The EDC and USVI also ignored contradictory representations, including testimony that Mr. Epstein's business
200 Deposition of Sandra Bess, May 18,2023 (Tess Deposition"), 24:8-10, 54:1-17.
201 Bess Deposition, 15:12-13.
2°2 Bess Deposition, 70:5-15; Bess Deposition, Exhibit 6.
t03 Bess Deposition, 36:12-23.
2°4 Bess Deposition, 36:12-23.
2°5 Bess Deposition, 40:19-41:9.
2°6 Bess Deposition, 46:2-47:15.
2p1Bess Deposition, 55:22-58:12.
Southern Trust was a new venture that would take some time to get up and running,208 juxtaposed with his reported first-year sales of \$51 million 209
82. The EDC also ignored the fact that Financial Trust did not meet the required contributions to charity, scholarships, and local co-op marketing. As a condition of the award, the IDC required that Financial Trust contribute the greater of \$45,000 or 1% of Financial Trust's gross receipts to charity, scholarships, and local co-op marketing.310 According to Financial Trust's 1999 application, Financial Trust forecasted only average total revenues of \$4.5 million per year over years 1-5.2" Thus, 1% of Financial Trust's forecasted gross receipts/revenues would be \$45,000 per year.
83. As discussed above, Financial Trust's actual revenues during the award period significantly exceeded the forecasted revenues reflected in its application. In its application, Financial Trust projected its revenues would be only \$12 million in years 1-3.2" However, Financial Trust's actual revenues in 1999-2001 were significantly higher:
84. As a result, in order for Financial Trust to meet the IDC's required charitable contribution of 1% of gross receipts, Financial Trust would have needed to make donations to USVI charities of over \$1.5 million in 1999-2001. However, EDC cost / benefit spreadsheets show that Financial Trust failed to meet this requirement. For example: (i) in 1999, Financial Trust no charitable contributions;278 (ii) in 2000, Financial Trust reported only \$189,500 in charitable
208 Bryan Deposition. 85:6-8: VI-JPM-000005898-908 at 902.
232 VI-JPM-000007315-406 at 319.
213 VI-JPM-000018885-917 at 916.
211 VI-JPM-000018359-387 at 380.
212 VI-JPM-000018359-387 at 380.
213 VI-JPM-000012940-956 at 942.
214 VI-PM-000012922-939 at 924.
213 VI-JPM-000012885-921 at 887.
213 VINIPM-000032792, tab Contributions.
contributions (approximately 0.3% of Gross Receipts);212 and (iii) in 2001, Financial Trust reported only \$29,520 in charitable contributions (approximately 0.06% of Gross Receipts).21. I have seen nothing in the record to explain why the IDC/EDC failed to require Financial Trust to comply with its requirement to donate 1% of Gross Receipts each year to USVI charities.
85. The EDC also failed to investigate the criminal allegations against Mr. Epstein, allegations that major news outlets frequently covered, and which were included in his Southern Trust application. After Mr. Epstein was arrested in 2006, upon determining that the circumstances underlying the arrest were not "effectively connected" to Financial Trust nor "in the jurisdiction in the Virgin Islands," the EDC failed to generate a report, investigate the circumstances of the arrest, or perform any other type of investigation?" Even after Mr. Epstein's arrest, EDC compliance employees testified they did not perform any additional investigation into Mr. Epstein because the charges against Mr. Epstein were "irrelevant to the certificate that was issued."22°
86. In the same vein, Southern Trust's application proposed that certain Financial Trust employees would also work for Southern Trust,22I yet it provided no explanation for why the employees of a financial services company (Financial Trust), which at the time included the Governor's wife, Ms. De Jongh, would be qualified to work for a database company. Based on the record, the EDC also did not notice that, of Southern Trust's \$184 million in revenue from 2013 to 2017, \$158 million came from a single customer—Mr. Black 222 There is no explanation for how his large payments were in any way connected to sales based on a DNA database.
87. In a Complaint filed against the Epstein Estate, USVI government has subsequently disclosed a number of additional warning signs that could and should have been discovered and addressed by the EDC during its monitoring of Mr. Epstein's companies, including:
217 VI-JPM-000032774, tabs Contributions and Employment & Taxes.
2" VI-JPM-000032775, tabs Contributions and Employment & Taxes.
219 Bryan Deposition, 22:4-10; 23:17-22.
22° Bess Deposition, 26:15-24.
221 VI-JPM-000032669-725 at 682.
222 See Amador Report, p. 74, fn. 177.
be resident of the Virgin Islands, the network administrator/IT manager was issued a Florida driver's license which listed an address in Miami. Further, the administrator allegedly served as Mr. Epstein's driver and picked up luggage and cargo from Mr. Epstein's private planes on his behal1223
88. These issues identified by USVI in its complaint against the Epstein Estate are the sorts of facts that can easily be learned through basic checks and questions and should all have been discoverable by the EDC and USVI earlier.
89. As discussed above, the goal of the EDA tax benefit program is to "drive growth, diversity, and employment in USVI" and USVI's economy.227 Consistent with that mission, the EDC Applications Division staff were trained to analyze the amount of tax exemptions offered in
223 VI-JPM-000003873-981 at 895.
224 VI-JPM-000003873-981 at 895.
225 VI-JPM-000003873-981 at 895.
225 VI-JPM-000003873-981 at 896.
227 Deposition of Kenneth Mapp, May 24, 2023, 21:9-13.
relation to economic development benefits brought to USV1.223 Again, the EDC considered a cost / benefit ratio of 1 to 1.2 to be "an acceptable ratio."222
90. Based on my review of the record, the EDC was aware that the cost-benefit ratios for Financial Trust fell well short of the EDC's stated goals. In 1999, for every dollar of tax breaks that USVI gave to Financial Trust, USV1 received only \$.04 in economic benefits.232 In 2000, for every \$1 of cost (tax breaks given away to Financial Trust), USVI received only \$0.29 of benefits (taxes received, local employment, and local purchases) 23f In 2001, for every \$1 of cost (tax breaks given away to Financial Trust), USVI received only \$0.05 of benefits.232 The EDC Board recognized this poor performance when it deliberated whether to extend EDC benefits to Financial Trust in 2009, noting that the cost / benefit of Financial Trust's request seemed "very unfavomble."233
91. Moreover, granting EDC benefits to Southern Trust also failed to meaningfully spur investment and growth in USVI. For example, in 2014, Southern Trust's award resulted in an actual cost / benefit ratio of \$1 of cost for every \$0.21 in benefits.23, .
92. The EDC's grant of tax benefits to Mr. Epstein's USVI-based companies was contrary to its mission and conferred only paltry benefits to the residents of USVI. The lack of economic sense raises the obvious question of why these benefits continued to be granted to Mr. Epstein's companies over a twenty-year period.
93. I have reviewed the Motion to Strike Opposition filed by JPMC in this case and the supporting exhibits. That filing lays out facts suggesting an improper quid-pro-quo relationship between Mr. Epstein and certain high-placed USVI officials with influence over the benefits. For example, First Lady de Jongh received a salary, bonuses, and tuition payments for her children from Financial Trust and Southern Trust.233 Her husband, the Governor, signed off on
228 United States Virgin Islands Economic Development Authority. FY2012 Annual Report. p. 13.
228 VI-JPM-000018885-917 at 889
238 VI-JPM-000032792, tab Benefits.
231 VI-JPM-000032774, tab Benefits.
232 VI-JPM-000032775, tab Benefits.
2" VI-JPM-000018918-926 at 920.
234 VI-JPM-000037451, tabs Employment & Taxes, Procurement, and Benefits.
238 JPMC Opposition to Motion to Strike. Exhibit 23, ESTATE_JPM024371; JPMC Opposition to Motion to Strike, Exhibit 25, ESTATEJPM024548; JPMC Opposition to Motion to Strike, Exhibit 26, ESTATE_JPM024549; John de Jongh Deposition, 136:19-138:22; Cecile de Jongh Deposition, 10:20-22; 76:3-78:12.
the benefits."' In addition, Mr. Epstein gave money from Southern Trust to fund USVI Department of Planning and Natural Resources ("DNPR"), an agency whose support I understand he needed to receive permits for his construction activities.23, He also funneled a \$15,000 donation from Southern Trust to Ms. Plaskett and a \$10,000 donation to the Mapp-Potter Inaugural committee.7'
94. In my experience as a fraud investigator, where benefits granted by public entities on a private individual make no economic sense to the public entity, private payments and benefits to key decisionmakers involved in dispersing those benefits raise questions with respect to conflicts of interest and as to why the transactions occurred at all. Here, such payments from Mr. Epstein could provide a plausible explanation as to why the EDC continually extended more than \$300M in benefits to Mr. Epstein and his USVI-based companies over a twenty-year period without proper examination and without a strong economic reason to do so.
95. USVI experts Mr. Jonathon Rusch and Mr. Amador each provide different calculations of the revenue they claim was generated by JPMC from accounts associated with Mr. Epstein, which they each claim partially demonstrates the significance of Mr. Epstein's relationship with JPMC. Messrs. Rusch and Amador both appear to base their calculation on JPMorgan Chase Bank, N.A.'s Supplemental Responses and Objections to Plaintiff's Second Set of Interrogatories, Response to Interrogatory No. 19 ("Interrogatory Response 19"). JPMC's Interrogatory Response 19 includes exhibits that show revenue from the Bank's Private Bank segment, among others, for 2009-2019.2" It appears that their opinions are based on aggregating
376 Cecile de Jongh Deposition, 77:5-14 ('a: You couldn't get the tax exemptions without the governor personally signing off? A: Correct.").
232 JPMC Opposition to Motion to Strike, Exhibit 2, ESTATE_JPM015326-327.
236 JPMC Opposition to Motion to Strike, Exhibit 14, ESTATE_JPM016163; JPMC Opposition to Motion to Strike, Exhibit 17, ESTATE_JPM015733.
232 Jane Doe 1, Individually and on behalf of all others similarly situated, vs. JPMorgan Chase Bank, N.A., JPMorgan Chase Bank, N.A.'s Supplemental Responses and Objections to Plaintiffs Second Set of Interrogatories, May 30, 2023 ("Interrogatory Response 19").
the total amount of revenue for certain Private Bank clients (albeit it appears Messrs. Rusch and Amador included different accounts and different timeframes).240 However, neither Mr. Rusch nor Mr. Amador provide any additional analysis to support their opinions that the revenue figures they calculate are relevant to accounts associated with Mr. Epstein and/or that these
figures demonstrate the "significance" of the relationship between Mr. Epstein and JPMC.
96. Mr. Rusch claims that "JPMorgan derived significant revenue from its dealings with Epstein."24, It appears Mr. Rusch based his claim by aggregating the total revenues generated from each customer listed in Interrogatory Response 19 for 2009-2019, yielding a total of \$36.3 million242 As such, Mr. Rusch's analysis indicates that each customer listed on Interrogatory Response 19 is directly linked to JPMC's "relationship with [Mr.] Epstein."243 This supposition is improper and unsupported. Indeed, Interrogatory Response 19 states that it includes customers that "Plaintiff considers associated with Jeffrey Epstein, an Epstein-Related Entity, or an Epstein-Related Individual," and that the "inclusion of an account [in Interrogatory Response 19] is not a concession by JPMC that the account is actually an account of Mr. Epstein, associated with him, or that of an Epstein-related individual or entity."244 Mr. Rusch did not provide any support or analysis to demonstrates the link between Mr. Epstein and the approximately 30 revenue-generating customers included in Interrogatory Response 19. In addition to Mr. Epstein, at most, 19 of those customers had accounts for which Mr. Epstein had signature authority or owned.245
97. Mr. Amador appears to support his claims based in part on aggregating the total revenues generated from approximately 20 customers listed in Interrogatory Response 19 for 2009- 2019.20 Mr. Amador's analysis indicates that JPMC "earned over \$8.1 million in revenue from Mr. Epstein and the Epstein-related Entities from 2009-2014."20 The revenue included in Interrogatory Response 19 does not equal the profit earned, or loss incurred, by JPMC for any
24° Mr. Rusch includes 45 revenue-generating customers from 2009-2019 in his total of Epstein and Epstein-Related Entities; some of which I understand the Bank contends are not "Epstein-Related: Mr. Amador includes 22 revenuegenerating customers from 2009-2014 in his total of Epstein and Epstein Related Entities.
241 Expert Opinion Report of Jonathan J. Ruse!). June 16,2023 ("Rusch Report') at 27.
202 Rusch Report, p. 27.
t43 Rusch Report. p. 27.
244 Interrogatory Response 19, pp. 3-4.
246 Interrogatory Response 19, pp. 3-4.
746 Amador Report. p. 17; Interrogatory Response 19. Exhibit A.
247 Amador Report, p. 17.
given customer. As a result, Mr. Amador's revenue figure does not include any cost JPMC incurs in the normal course of business such as compensation expense and other costs associated with customer maintenance. For example, Mr. Amador does not consider JPMC's compensation expense, which ranged from 54.4% to 59.6% of non-interest revenue from 2009-2014.2" Thus, Mr. Amador bases his analysis on revenue figures instead of profit (or loss) figures.
98. Based on the lack of analysis performed by Messrs. Rusch and Amador, it is unclear what basis they have to conclude that the revenue figures they calculate are relevant to accounts associated with Mr. Epstein or that those figures indicate Mr. Epstein had a "significant" business relationship with the Bank.
99. Mr. Amador asserts in his Report that "the sheer volume of the bank accounts identified...have no apparent business justification. Rather, they are used as instruments to shuffle funds to affiliated entities and individuals."219 He also states Mr. "Epstein maintained and overly complex organizational structure involving multiple entities."250 To support these assertions, Mr. Amador focuses on Mr. Epstein's eight JPMC accounts and ten separate entities related to Mr. Epstein's six personal aircraft.2" He also cites the fact that Mr. Epstein was paying aircraft expenses out of his personal account.252 However, Mr. Amador has not only failed to consider the legitimate reasons (e.g., liability reasons) why it would be necessary to maintain this account structure related to the aircraft, but he has failed to conduct analysis regarding the "shuffling of funds" he asserts was taking place.
100. First, Mr. Amador's description of accounts related to Mr. Epstein's aircraft only relates to ten of the 59 Epstein-Related accounts he identifies. He also fails to compare Mr. Epstein's account structure at JPMC to any comparable entity or individual to establish that the "sheer
246 JPMorgan Chase & Co., SEC Form 10-K for the fiscal year ended December 31, 2011, filed on February 29, 2012, p. 178: JPMorgan Chase & Co., SEC Form 10-8 for the fiscal year ended December 31, 2014, filed on February 24. 2015, p. 172.
246 Amador Report, p. 18.
270 Amador Report, p. 18.
251Amador Report, pp. 18-20.
262 Amador Report, p. 22.
volume" of accounts has no apparent business justification. Without such a benchmark, Mr. Amador's "analysis" lacks context and his opinion is unsupported and speculative.
101. Second, Mr. Amador has not presented any analysis of any "shuffling of funds" between the aircraft-related accounts or any of Mr. Epstein's other accounts. He merely points to the fact that Mr. Epstein utilized his personal JPMC account(s) to pay for some aircraft expenses. Mr. Amador does not explain why this fact supports his opinion that Mr. Epstein's account structure was unusual, rendering his opinion baseless and speculative.
102. Third, there are potential legitimate reasons why it is not unusual to have separate entities hold title to different aircraft. For example, for liability purposes, it is best practice (and financial institutions and/or insurance companies often recommend) that ownership of significant assets be owned by separate legal entities. This is done not only to protect the value of one aircraft should liabilities be generated from another aircraft, but also to maintain corporate formalities.
103. Mr. Amador has failed to present any analysis to support his opinions. He has also failed to consider the nature and scope of Mr. Epstein's businesses and asset holdings.
Executed on this 23rd day of June 2023
Str.aivp
Carlyn Irwin
555 W. 5' Street, 38'b Floor • Los Angeles, CA 90013
213.553.2533 • fax 213.553.2699
cinvin@cornerstonc.com
| 1992 | University of Southern California
M.B.A., Accounting and Finance | Los Angeles, California |
| 1989 | University of California, Santa Barbara
B.A., Organizational Psychology, Cum Laude | Santa Barbara, California |
More than twenty-five years of litigation consulting and expert witness experience, including analyzing economic, financial, causation, and accounting issues in context of damages claims, valuing businesses, class certification, and conducting financial forensic analysis in a wide variety of commercial disputes. Has experience in broad range of industries including real estate, medical devices, healthcare, technology, entertainment, consumer products, textiles, and financial and professional services. Has worked with clients and counsel throughout the litigation process during all phases of the litigation process. Examples of testimony and casework experience include:
| 2002—Present | Cornerstone Research, Inc. | Los Angeles, California |
|---|---|---|
| 1994-2002 | PricewaterhouseCoopers | Los Angeles, California |
| 1992-1994 | Mitchell Silberberg & Knupp | Los Angeles, California |
| 1991-1992 | University of Southern California School of Business | Los Angeles, California |
TESTIMONY EXPERIENCE (CONTINUED)
TESTIMONY EXPERIENCE (CONTINUED)
JPMorgan Chase & Co., N.A., v. James Edward Staley, Case No. 1:22-cv-10904-JSR, Third-Party Complaint, March 8, 2023
Government of the United States Virgin Islands v. JPMorgan Chase Bank, N.A, Case 1:22-cv-10904-JSR, Second Amended Complaint and Demand for a Jury Trial, April 12, 2023
Government of the United States Virgin Islands v. JPMorgan Chase Bank, N.A, Case 1:22-cv-10904-JSR, JPMorgan Chase Bank, N.A.'s Opposition to USVI's Motion to Strike Affirmative Defenses, May 23, 2023 and Exhibits
Jane Doe 1, Individually and on behalf of all others similarly situated, vs. JPMorgan Chase Bank, N.A., JPMorgan Chase Bank, N.A.'s Supplemental Responses and Objections to Plaintiffs Second Set of Interrogatories, May 30, 2023
Expert Opinion Report of Jonathan J. Rusch, June 16, 2023
Expert Report of Jorge Amador, June 16, 2023
Deposition of Sandra Bess, May 18, 2023 and Exhibits
Deposition of Kenneth Mapp, May 24, 2023
Deposition of trials Borque, May 26, 2023 and Exhibits
Deposition of Margarita May 26, 2023 and Exhibits
Deposition of Cecile de Jongh, May 29, 2023 and Exhibits
Deposition of Governor John de Jongh. May 30. 2023 and Exhibits
Deposition of Governor Albert Bryan, Jr., June 6, 2023 and Exhibits
VI-JPM-000012940
VI-JPM-000012922
VI-JPM-000012885
VI-JPM-000012850
VI-JPM-000012816
VI-JPM-000012743
VI-JPM-000012722
VI-JPM-000012689
VI-JPM-000012630
VI-JPM-000013335
VI-JPM-000013219
VI-JPM-000013122
VI-JPM-000013087
VI-JPM-000012996
VI-JPM-000007315
VI-JPM-000007407 VI-JPM-000007474
VI-JPM-000007534
VI-JPM-000007588
VI-JPM-000007663
United States Virgin Islands Economic Development Authority, FY2009 Annual Report
United States Virgin Islands Economic Development Authority, FY2010 Annual Report
United States Virgin Islands Economic Development Authority, FY2011 Annual Report
United States Virgin Islands Economic Development Authority, FY2012 Annual Report
United States Virgin Islands Economic Development Authority, Annual Report Fiscal Year 2013, October 1, 2012 to September 30, 2013
United States Virgin Islands Economic Development Authority, Annual Report Fiscal Year 2014, October 2013 to September 2014
United States Virgin Islands Economic Development Authority, Annual Report 2015
United States Virgin Islands Economic Development Authority, 2016 Annual Report, October 1, 2015 to September 30, 2016
United States Virgin Islands Economic Development Authority, 2017 Annual Report
Virgin Islands Economic Development Authority, FY2018 Annual Report, October 1, 2017 - September 30, 2018
VI-JPM-000032792
VI-JPM-000032774
VI-JPM-000032775
VI-JPM-000032776
VI-JPM-000032777
VI-JPM-000032778
VI-JPM-000032779
VI-JPM-000032780
VI-JPM-000032781
VI-JPM-000093343
VI-JPM-000041911
VI-JPM-000093344
VI-JPM-000093345
VI-JPM-000093346
VI-JPM-000093347
VI-JPM-000037451
VI-JPM-000037452
VI-JPM-000020120
VI-JPM-000020331
VI-JPM-000093348
ESTATE \_JPM014824
ESTATE JPM018975
ESTATE JPM020521
JPM-SDNYLIT-00149653
VI-JPM-000003873
VI-JPM-000005898
VI-JPM-000005919
VI-JPM-000016200
VI-JPM-000016248
VI-JPM-000017983
VI-JPM-000018005
VI-JPM-000018359
VI-JPM-000018551
VI-JPM-000018885
VI-JPM-000018918
VI-JPM-000018934
VI-JPM-000019063
VI-JPM-000032669
VI-JPM-000033049
Associated Press, "A Timeline of the Jeffrey Epstein, Ghislaine Maxwell Scandal," U.S. News & World Report, June 28, 2022, available at https://www.usnews.com/news/politics/articles/2022-06-28/a-timeline-of-the-jeffreyepstein-ghislaine-maxwell-scandal
JPMorgan Chase & Co., SEC Form 10-K for the fiscal year ended December 31, 2011, filed on February 29, 2012
JPMorgan Chase & Co., SEC Form 10-K for the fiscal year ended December 31, 2014, filed on February 24, 2015
JPMorgan Chase & Co., SEC Form 10-K for the fiscal year ended December 31, 2022, filed on February 21, 2023
29 VIC § 1101
"Be Smart: Check Registration & Backgrounds Before You Trade," CFTC, https://www.cftc.gov/check
"Biography. Congresswoman Stacey E. Plaskett," U.S. House of Representatives, available at https://plaskett.house.gov/biography
"Biography, Stacey Plaskett Campaign," Plasket for Congress, available at hflps://plaskettforcongress.org/biography
"Biography, Governor Albert Bryan Jr.," U.S. Virgin Islands Government, available at https://www.vi.gov/governor-bryan/
"Statement on Standards for Forensic Services No. 1," AICPA, available at https://www.aicpa.org/resources/download/statement-on-standards-for-forensic-services
"Tax Incentives: How Do They Work'?" United States Virgin Islands Economic Development Authority. available at https://usvieda.org/residents/grow/edc-tax-incentives/tax-incentives-how-do-they-work
"Virgin Islands," The World Factbook, available at https://www.cia.gov/the-world-factbooktcountries/virginislands/
"Virgin Islands Gov. John de Jogh, Jr.: National Governors Association, available at htlps://www.nga.orgigovemor/4796-21
Note: Even if not included in this list, I also considered and relied upon any other documents cited in my report or exhibits.
| 1999 | 2000 | 2001 | 2002 | 2003 | |||||||||||
| Taxes and Duties Paid | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | Subto4al | |||||
| Gross Recaps | \$0 | SO | SO | \$0 | SO | \$0 | \$0 | \$0 | SO | SO | SO | \$400 | 1400 | 30 | \$800 |
| Real Progeny Tall | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Exase Taxes | 227 | 3.017 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 3.271 |
| Income Taxes | 1.731.411 | 8.4131.932 | 2.747.483 | 3.085.634 | 2859.613 | 1411.196 | 1.488.733 | 3.951.894 | 0 | 0 | 0 | 0 | 112.048 | 1.432.123 | 27.282.065 |
| Customs Ousts | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| peer Taxes | 750 | 750 | 132.119 | 132.844 | 100.541 | 83.247 | 43.927 | 2.274 | 1.297 | 1.447 | 1297 | 1.297 | 1.447 | 0 | 503.837 |
| Total Taxes Paid Value of Tax Exemptions | \$1,732,388 | \$8,465,729 | 52880.202 | \$3,216,478 | \$2,960,154 | 53,494.443 | 51.832.660 | 53.954.168 | 51,297 | 51,447 | \$1,297 | 51.697 | \$113,893 | 51.432.123 | 527.789.976 |
| Gross Rao:opts | \$1,720270 | \$2,576,360 | 51.872.615 | \$3,827,492 | \$2,820,564 | \$2,540,174 | \$1,069,972 | \$2.445.828 | 5160.297 | \$0 | \$4,000 | \$3, 00 | 26.225 | SO | 519.246417 |
| Real Property Tax | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Exase Taxes | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Income Taxt, | 15.582.699 | 25.845.200 | 21.217 .187 | 37.080.724 | 26.215.499 | 27.424.383 | 15.036 447 | 33 392.781 | 0 | 0 | 0 | 0 | 90.757 | 423.407 | 202.309.086 |
| Customs Ousts | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total Value of Exemptions Fedora! Tax Return (Form 1120S) | \$17,302,969 | \$28.421.910 | 523,089,802 | \$40908,216 | \$29036,063 | \$29,964,557 | 516.106,419 | 536,038,611 | 5140,297 | 54 | \$4.000 | 53.600 | \$95,982 | \$423 407 | \$221,555303 |
| Net Saba | \$43.004739 | \$64.409.495 | \$48,615,387 | 596,687.311 | 370.514,094 | SW.504.341 | 325,749.290 | 984145,711 | \$4.007.430 | (315.692.249) | \$100.000 | \$100.030 | \$125,000 | 50 | \$435.472.565 |
| ordnary Business Income | \$42.765,787 | \$62,752,301 | \$44.183279 | \$93.122211 | \$67.773,535 | \$61,638,638 | \$37,586,420 | \$89,909,941 | (\$10,552,859) (\$64.729.152) (\$16904.387) (S22278.483) | (\$9,635,609) | (\$1.812.922) | \$374,018.700 |
| Taxes and Dulles Paid | 2014 | 2015 | 2016 | 2017 | 2018 | Subtotal | Total | |
| Gross Rootlets | SO | SO | SO | SO | SO | \$0 | SO | \$800 |
| Real Properly Tax | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Excise Taxes | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 3.274 |
| Income Taxes | 2.143.371 | 8.089.682 | 4,207.381 | 299.580 | 71,340 | 291.969 | 13.103 303 | 40 385.368 |
| Customs Duke | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Taxes | 1.297 | 491 | 750 | 790 | 450 | 3.947 | 7.725 | 511.562 |
| Total Taxes Paid Value of Tax Exemptions | \$Z144.66\$ | \$6.090.153 | \$4201.111 | \$300.370 | \$71.790 | \$295.936 | 5134 11.028 | \$40,901,004 |
| Gross Recaps | 52.580,000 | \$3.500.000 | \$2.740.909 | SO | \$400.000 | SO | 59,199.909 | \$20A46.410 |
| Real Properly Tax | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Excise Tams | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Income Taxes | 19.290.340 | 34.360,298 | 17.441.640 | 111.932 | 124.031 | 47.996 | 71.376.237 | 273.685.323 |
| Cusloms Duet" | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total Value of Exemptions Federal Tax Return (Form 11205) | 521.640,340 | 531,660,298 | 520,191.639 | \$111932 | \$524.031 | \$47.996 | \$10,576,238 | 5302.131.739 |
| Net SS | 551.003.030 | 570.000.000 | 554.999.980 | 50 | 58,000030 | 50 | 5183.999.9/90 | 5819.472.545 |
| Ordnary Business Income | \$50227,528 | 567.529.822 | 552.793.729 | 54.751.300 | \$17.058,555 | 51.520.319 | 4193.881,253 | 5567.899.953 |
Sou•ce. VI-JP/A.040012940 VI.JP41-000012922: VI-JPIA-000012885; VI,IPM.000012850 VI-JPM-000012818; VI-SI/1-000012743, VI-JP/a-000012722, a/WPM-400012689; VSJP1.1-0000 /2630. VI-JP1.1000013335: Vl-SM-000013219 VI-JPM-000013122. VI-JPM-000013087. VINIPM-00C012996. VI-JPTI-000007315. VINPPM-000007407. VirJPM-0000074 74 vi.JPM-003007534: VI-JP/A-030307588: VI-OM-0030076W