Report: JPMorgan’s handling of Jeffrey Epstein accounts drew late filings as IRS pursued small businesses over structuring
New York Times and federal records highlight a contrast between retroactive anti-money-laundering reports tied to Jeffrey Epstein and years of IRS seizures of small-business cash deposits
A New York Times investigation published this month said JPMorgan Chase filed thousands of suspicious-activity reports tied to Jeffrey Epstein only after his 2019 death, and that federal regulators missed repeated red flags while the financier moved large amounts of cash through the bank.
According to the Times, JPMorgan retroactively flagged roughly 4,700 Epstein-related transactions totaling more than $1.1 billion in a filing made after his death in a New York prison cell. Federal anti‑money‑laundering rules require banks to file currency-transaction reports for each cash transaction greater than $10,000 and to report suspicious activity; the Times said Epstein routinely withdrew about $800,000 in cash annually, much of which investigators say was used to procure girls and young women.
The Times report also noted that JPMorgan kept Epstein as a significant client long after his 2008 guilty plea in Florida on charges of soliciting and procuring a minor for prostitution. Federal regulators issued a cease-and-desist order against JPMorgan in 2013 for anti‑money‑laundering lapses, including failures to report suspicious activity, according to reporting that draws on regulatory records.
The Times' account drew attention because it came amid long-standing criticism of how federal authorities enforce the same structuring and reporting rules against small businesses and ordinary depositors. Between 2005 and 2012, the Institute for Justice calculated that the Internal Revenue Service seized roughly $250 million in civil forfeitures tied to alleged structuring of bank deposits. The group and other watchdogs say many victims were legal businesses that made frequent sub‑$10,000 deposits to avoid triggering required paperwork.
Several small-business cases attracted national coverage after owners challenged IRS seizures. In 2012, Carole Hinders, who ran Mrs. Lady’s Mexican Food in Arnolds Park, Iowa, had about $33,000 seized after depositing cash in amounts under $10,000. Randy Sowers, owner of South Mountain Creamery near Washington, D.C., faced a roughly $63,000 seizure tied to deposits from farmers’ market and local sales. In 2014, L&M Convenience Mart owner Lyndon McLellan in Fairmont, North Carolina, had $107,702.66 taken from his account. Advocacy groups pushed for refunds in multiple cases, and the IRS returned funds in several instances after public pressure and legal challenges.
A 2017 report by the Treasury Inspector General for Tax Administration found that in 91% of the civil seizure cases it reviewed there was no evidence the money seized was the proceeds of illegal activity. The inspector general’s review said task forces had been encouraged to pursue “quick hits,” or seizures that could be resolved more rapidly than investigations tied to other criminal enterprises such as drug trafficking, which contributed to an increase in civil forfeiture actions against smaller sums.
Data and watchdog analyses show the number of IRS civil seizures rose more than fivefold between 2005 and 2012. Institute for Justice reporting said about one-third of cases involved only a series of deposits below the $10,000 reporting threshold. Many victims faced significant legal costs to contest forfeitures; the institute noted that half of the seizures it examined were for less than $35,000, while litigation costs could easily top those amounts.
Congress responded in 2019 with legislation intended to limit IRS seizures of assets from owners who might be innocent of underlying crimes, tightening standards for filing notices of seizure and requiring additional certification in some cases. Regulators and lawmakers have continued to scrutinize banks’ anti‑money‑laundering programs and federal forfeiture practices since those reforms.
The contrast between the handling of Epstein’s accounts and the IRS’s historical enforcement of structuring rules against small-business owners has prompted renewed calls for stronger oversight of both banking compliance and government forfeiture practices. JPMorgan, federal regulators and the IRS did not immediately respond to requests for comment about the reporting and the cases described in public records and press accounts.