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Sex-trafficking claims hang over banks that worked with Epstein

A federal judge advanced three lawsuits over the dead pedophile's accounts at JPMorgan and Deutsche Bank.

MANHATTAN (CN) – JPMorgan Chase and Deutsche Bank must face a trio of sex-trafficking cases brought by the U.S. Virgin Islands and surviving victims of pedophile financier Jeffrey Epstein.

U.S. District Judge Rakoff did dismiss some claims within the three separate civil lawsuits but ruled in a 4-page consolidated order Monday that the banks could be on the hook for others, including for negligent failure to exercise reasonable care to prevent physical harm; negligent failure to exercise reasonable care as a banking institution providing non-routine banking; and knowingly benefiting from participating in a sex-trafficking venture.

The government of the U.S. Virgin Islands and the Jane Doe victims each brought complaints in the Southern District of New York that say JPMorgan Chase turned a blind eye to Epstein’s decadeslong sexual predation, electing to maintain profits and develop new clients and business through Epstein’s network rather than preventing harm and trauma.

In its amended complaint, the U.S. Virgin Islands asserted that numerous top bank executives knowingly failed to comply with federal banking laws that are intended to prevent human trafficking between 2000 and 2013, the years that JPMorgan Chase conducted business with Epstein. The filing makes clear that banks have access to unique, real-time information that enables them to detect whether customers may be engaged in unlawful activity.

Judge Rakoff advanced only one claim by the U.S. Virgin Islands: “that defendant JP Morgan Chase Bank, N.A. knowingly benefited from participating in a sex-trafficking venture, in violation of 18 U.S.C. § 1591(a) (2).”

U.S. Virgin Islands Acting Attorney General Carol Thomas-Jacobs applauded the ruling on Monday. “We are pleased that the U.S. Virgin Islands will continue to work alongside survivors to hold JPMorgan Chase accountable for enabling Jeffrey Epstein’s heinous sex-trafficking venture,” she said in a statement. “This case is critically important to ensuring that financial institutions do their jobs, with the detailed, real-time information available to them, as a first line of defense in identifying and reporting potential human trafficking, as the law expects.”

Another opinion from Judge Rakoff will elaborate on the rulings, he said.

Like the Virgin Islands, the anonymous Epstein victims who filed suit allege that JPMorgan Chase is legally responsible to raise red flags and to terminate customers who may be engaged in illegal activity.

JPMorgan Chase whould have seen evidence of Epstein’s sex trafficking scheme, knowingly benefited from it, and bears responsibility, they claim.  

“As we have alleged, Epstein’s sex trafficking operation was impossible without the assistance of JPMorgan Chase, and later Deutsche Bank," said Brad Edwards, an attorney for the anonymous Epstein survivors with the firm Edwards Pottinger.

"We assure the public that we will leave no stone unturned in our quest for justice for the many victims who deserved better from one of America’s largest financial institutions," Edwards added.

Judge Rakoff also allowed claims to proceed in a class action suit against Deutsche Bank, which did business with Epstein from 2013 to 2018. The cases now continue in discovery.

Both banks claimed they did not commit any negligent acts that caused harm to the anonymous victims, and that the lawsuits failed to show how the bank benefitted from Epstein’s sex trafficking. Deutsche Bank argued it only provided “routine banking services” to Epstein, and said the lawsuit does not sufficiently claim that it was part of Epstein’s criminal sex trafficking ring.

JPMorgan Chase sued its former executive Jes Staley earlier this month, alleging in a third-party complaint that he aided in hiding Epstein’s yearslong sex abuse and trafficking in order to keep the financier as a client. The New York bank seeks to hold Staley personally liable for any financial penalties that JPMorgan may have to pay in two related cases. It is also seeking to force Staley to pay back wages he earned during the time he allegedly was 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.

Accusations against Epstein swirled for years but were swept out of the public eye for a time by a cushy nonprosecution agreement that he reached in Florida while pleading guilty to considerably more lenient state charges. After he was federally indicted in July 2019, this time in New York, Epstein was found dead in his jail cell a month later, ruled to have hanged himself.

Ghislaine Maxwell, a former girlfriend of Epstein's, was later convicted for her leadership role in the sex trafficking ring and sentenced to 20 years in prison.

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.

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Categories / Business, Civil Rights, Entertainment, Financial

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