MANHATTAN (CN) – The international bank JPMorgan Chase & Co. struck an agreement totaling $75 million to settle a civil lawsuit brought by the U.S. Virgin Islands over claims of facilitating and profiting from pedophile financier Jeffrey Epstein’s yearslong trafficking of underage girls, the territory’s Department of Justice announced Tuesday.
The Justice Department of the U.S. Virgin Islands, the longtime home of Epstein's private island residence off St. Thomas, said in a civil complaint that JPMorgan Chase knew about and recklessly disregarded the pedophile financier's sex trafficking venture, which lawyers say brought $1 billion into the bank between 2003 and Epstein’s death in 2019.
The bank, which had already reached a private settlement with Epstein’s victims for $290 million in June, agreed to resolve the enforcement action filed by the U.S. Virgin Islands Department of Justice, marking the first time a state attorney general has used the authority provided by the Trafficking Victims Protection Act.
“As part of the settlement, JPMorgan has agreed to implement and maintain meaningful anti-trafficking measures, which will help prevent human trafficking in the future," U.S. Virgin Islands Attorney General Ariel M. Smith wrote in a statement Tuesday.
"This settlement is an historic victory for survivors and for state enforcement, and it should sound the alarm on Wall Street about banks’ responsibilities under the law to detect and prevent human trafficking. We are proud to have stood alongside the survivors throughout this litigation, and this settlement reflects our continued commitment to them,” Smith's statement continued.
The $75 million total is composed of $55 million that will go toward local charities and assistance for victims, with an additional $20 million going toward legal fees.
The settlement of pending lawsuit must still be approved by U.S. District Judge Jed Rakoff.
"While the settlement does not involve admissions of liability, the firm deeply regrets any association with this man, and would never have continued doing business with him it believed he was using the bank in anyway to commit his heinous crimes," a JPMorgan spokesperson said Tuesday.
The agreement includes commitments by JPMorgan Chase to identify, report and cut off support for potential human trafficking, including establishing and implementing comprehensive policies and procedures to tell law enforcement when customers are flagged for human trafficking; and to terminate customers’ accounts if the bank has credible information that the account is engaged in or facilitating human trafficking.
The settlement would also require the bank to take measures to ensure accounts are not opened without satisfactory due diligence.
Although Epstein had been a JPMorgan client from 1998 through 2013, when the bank terminated his accounts, the U.S. Virgin Islands claims the bank continued to benefit from Epstein’s referrals until his death in jail in August 2019.
By the time of Epstein’s 2006 arrest for prostitution in Palm Beach, Florida, the company’s compliance staff had been aware of purported human trafficking and acknowledged Epstein was “known to pay cash for his massages” and “minors are the issue,” the U.S. Virgin Islands claimed in its motion for summary judgment.
Germany's Deutsche Bank, which did business with Epstein from 2013 to 2018, agreed in May to pay $75 million to settle a separate lawsuit that claimed the lender should have seen evidence of sex trafficking by Epstein when he was a client.
The bank has also reached a settlement in related litigation with its former executive, Jes Staley.
JPMorgan Chase sued Staley in March, saying in a third-party complaint that he aided in hiding Epstein’s yearslong sex abuse and trafficking to keep the financier as a client.
The terms of Staley’s settlement were not immediately disclosed.
The New York bank sought to hold Staley personally liable for any financial penalties that JPMorgan may have to pay in two related cases. It has also been seeking to force Staley to pay back wages he earned during the time he was supposedly aware of the abuse and “personally observed” Epstein’s behavior on multiple occasions.
Staley left JPMorgan in 2013 to become CEO of London-based bank Barclays. He resigned last year following a report by British regulators into his past links with Epstein.
Judge Rakoff was set to hear oral arguments on Tuesday over dismissal of the Staley lawsuit on summary judgment.
Lurid accusations against Epstein loomed for years but were swept out of the public eye for a time by a sweetheart nonprosecution agreement that he reached in Florida while pleading guilty to considerably more lenient state charges.
It would be another decade before Epstein was arrested in 2019 on federal charges accusing him of paying underage girls hundreds of dollars in cash for massages and then assaulting them at his homes in Florida and New York.
Epstein hanged himself in a Manhattan federal jail while awaiting trial on those charges.
At trial in the Southern District of New York, prosecutors documented how Maxwell earned some $30.7 million in the early and mid-2000s by facilitating, as well as sometimes participating in, Epstein's abuse of girls and young women.
In August 2021, the Epstein Victims’ Compensation Program announced it had awarded nearly $125 million to approximately 150 eligible claimants, roughly one year after the program launched on June 25, 2020.
This is a developing story and will be updated.Follow @jruss_jruss
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