Government of the United States Virgin Islands v. JPMorgan Chase Bank, N.A., No. 122-cv-10904 (S.D.N.Y. 2022)/238-31.pdf

HIGHLY CONFIDENTIAL – SUBJECT TO PROTECTIVE ORDER Axia Advisors, LLC Expert Report of Jorge Amador June 16, 2023 Case 1:22-cv-10904-JSR Document 238-31 Filed 07/25/23 Page 1 of 161 HIGHLY CONFIDENTIAL – SUBJECT TO PROTECTIVE ORDER i TABLE OF CONTENTS I. QUALIFICATIONS ............................................................................................................ 1 II. FACTS OR DATA CONSIDERED .................................................................................... 2 III. METHODOLOGY USED ................................................................................................... 3 IV. SUMMARY OF OPINIONS ............................................................................................... 5 A. Epstein Had a Significant Financial Relationship with JPMorgan ......................... 5 1. JPMorgan Held at Least 134 Accounts for Epstein and Epstein-Related Individuals and Entities............................................................................... 5 2. The Epstein Accounts Generated Top Revenue Status for JPMorgan’s Private Bank .............................................................................................. 13 B. The Volume and Complexity of the Epstein Accounts Is Suspicious .................. 18 C. The Epstein Accounts Collectively Contain Over $78 Million in Highly Unusual and Unexpected Transactions ............................................................................... 22 1. Epstein Engaged in Extensive Cash Transactions .................................... 24 2. Epstein Made Millions of Dollars of Direct and Indirect Payments to Women ...................................................................................................... 30 3. Epstein Engaged in Numerous Foreign Currency Transactions ............... 46 4. Epstein Paid Over $54 Million to Law Firms and Other Litigation-Related Entities ...................................................................................................... 51 5. Payments Unrelated to Charitable Organization’s Purpose ...................... 54 D. Epstein’s Highly Unusual and Unexpected Transactions Can Also Be Observed at An Individual Account Level................................................................................ 56 1. Epstein’s Personal Account Ending in 0438 ............................................. 56 2. Epstein’s Personal Account Ending in 0663 ............................................. 60 3. Hyperion Air, Inc.’s Account Ending in 4332 .......................................... 64 4. C.O.U.Q Foundation, Inc.’s Account Ending in 1565 .............................. 65 5. The Butterfly Trust Account Ending in 2810 ........................................... 67 E. Epstein-Related Entity Account Activity Inconsistent with Any Legitimate Business Purpose .................................................................................................. 68 1. Financial Trust Did Not Appear to “Advise Private Clients with $1 Billion or More in Assets” .................................................................................... 68 2. Southern Trust Records Show It Was Not Engaged in “Cutting Edge Consulting Service” .................................................................................. 72 Case 1:22-cv-10904-JSR Document 238-31 Filed 07/25/23 Page 2 of 161 HIGHLY CONFIDENTIAL – SUBJECT TO PROTECTIVE ORDER ii 3. NES, LLC’s Credit Card Activity Was Consistent with Personal Use—Not Business Use ............................................................................................. 75 F. Epstein Accounts Reflected Significant Activity by Shell Companies ................ 78 G. JPMorgan Could Have Identified the $78 Million in Highly Unusual and Unexpected Transactions at the Time of the Transactions ................................... 81 V. CONCLUSION .................................................................................................................. 83 Case 1:22-cv-10904-JSR Document 238-31 Filed 07/25/23 Page 3 of 161 HIGHLY CONFIDENTIAL – SUBJECT TO PROTECTIVE ORDER Page 1 of 83 I.QUALIFICATIONS Through my company Axia Advisors, LLC, I provide expert and consulting services regarding securities case investigation and initiation, evaluation of claims under the federal securities laws, industry standards and best practices and procedures for case investigation and evaluation, and related forensic accounting services and analysis. I am a Certified Public Accountant and certified in Financial Forensics with over 35 years of corporate and public accounting experience, including in disputes, litigation, forensic investigations, discovery, and regulatory compliance. I am a member of the American Institute of Certified Public Accountants. I have been an Adjunct Professor at both Golden Gate University and Baruch College where I taught business law, financial accounting, and forensic accounting at both the undergraduate and graduate level. I am also an attorney licensed to practice law in the State of California and a member in good standing of the United States District Court for the Northern District of California. I previously served as Director of Forensic Accounting at the law firms Milberg Weiss and Saxena White. In those roles, I led hundreds of investigations of potential (and actual) securities laws violations. At Saxena White, for example, I led dozens of forensic investigations and I was part of a team that litigated actions, such as Brett Kandell v. Dror Niv et al., In re Wells Fargo & Company Shareholder Derivative Litigation, and In re Wilmington Trust Securities Litigation. As Director at Axia Advisors, LLC, I have consulted on major securities cases, including class actions relating to In re Bear Stearns Cos. Inc. Securities Litigation, In re Countrywide Financial Corporation Securities Litigation, In re Lehman Brothers Equity/Debt Securities Litigation, and Fernandez v. Knight Capital Group, Inc., et al. Case 1:22-cv-10904-JSR Document 238-31 Filed 07/25/23 Page 4 of 161 HIGHLY CONFIDENTIAL – SUBJECT TO PROTECTIVE ORDER Page 2 of 83 I routinely provide forensic accounting services to investment managers concerned about possible improper financial reporting related to investments. A copy of my curriculum vitae is attached as Exhibit A. A list of the cases in which I have testified over the past four years as well as my publications over the past ten years is attached as Exhibit B. I am being compensated in this matter at my usual and customary hourly rate of $570 per hour. My compensation is not contingent upon the substance of my opinions rendered or the outcome of this matter. II. FACTS OR DATA CONSIDERED I considered facts and data from the documents cited herein, including documents produced by JPMorgan Chase Bank, N.A. (“JPMorgan”) in this litigation. These documents include JPMorgan’s internal communications and financial statements for accounts belonging to Jeffrey E. Epstein (“Epstein”) and individuals and entities related to Epstein (“Epstein-Related Individuals and Entities”). One limitation of my analysis is that I did not receive complete financial documents for the accounts related to Epstein-Related Individuals and Entities identified in Exhibit C. These documents may have allowed me to identify additional relevant transactions, but would not change my analysis of the activity described in this report. Throughout my report, I identify exemplar documents and information to support my opinions. However, due to the volume of documents and account activity, I do not identify every relevant document o