By A New York federal judge on Monday ruled that the U.S. Virgin Islands and women who accuse the late investor Jeffrey Epstein of sexual abuse can proceed with lawsuits claiming that JPMorgan Chase knowingly benefited from participating in Epstein’s sex-trafficking scheme.
In addition, the judge allowed parts of a separate, similar lawsuit by Epstein’s accusers against Deutsche Bank, including the claim that that bank also knowingly benefited.
The four-page ruling by Manhattan District Judge Jed Rakoff came in response to motions from JPMorgan and Deutsche Bank to dismiss the three lawsuits.
While Rakoff agreed to dismiss multiple counts of each of the cases, he allowed the other explosive counts to remain and to head toward trial. The judge wrote that he would issue an opinion explaining the reasons for his decisions “in due course.”
Epstein, who killed himself in a Manhattan jail in 2019 while awaiting trial on federal criminal child sex-trafficking charges, was a JPMorgan client from 1998 through 2013.
The last five years of that relationship came after he pleaded guilty in Florida to soliciting an underage prostitute. At a court hearing on Thursday before Rakoff, a lawyer for the Virgin Islands said JPMorgan CEO Jamie Dimon “knew in 2008 that his billionaire client was a sex trafficker,” a claim disputed by an attorney for the bank.
Deutsche Bank accepted Epstein as a client in 2013 and kept him as one even after employees reported 40 underage girls making sexual-assault claims against him. The bank paid New York banking regulators a $150 million fine for its dealings with him.
Brad Edwards, the Edwards Pottinger attorney who is representing Epstein abuse accusers, called the rulings Monday “a monumental victory for the hundreds of survivors of Jeffrey Epstein’s sex-trafficking scheme and survivors of sexual abuse in general, all of whom can rest easier knowing no individual or institution is above accountability.”
“Epstein’s sex-trafficking operation was impossible without the assistance of JPMorgan Chase, and later Deutsche Bank,” Edwards said. “And 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.”
In the case against JPMorgan filed by a woman suing on behalf of other Epstein victims, Rakoff sustained the claim that the bank “knowingly benefited from participating in a sex trafficking venture” led by its client Epstein.
The judge also said the accusers could pursue claims that JPMorgan “negligently failed to exercise reasonable care to prevent physical harm,” that the bank failed to exercise reasonable care in providing non-routine banking for Epstein, and that the bank obstructed enforcement of the Trafficking Victims Protection Act.
Rakoff sustained the same claims in the accusers’ separate suit against Deutsche Bank.
In the Virgin Islands’ suit, the judge sustained the government’s claim that JPMorgan benefited from participating in Epstein’s sex trafficking, which included shipping women to his private island in the U.S. territory.
The judge dismissed all other claims in the Virgin Islands’ and accusers’ cases.
In a statement, U.S. Virgin Islands Acting Attorney General Carol Thomas-Jacobs said, “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.”
“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,” Thomas-Jacobs said.
“We look forward to uncovering additional facts regarding the depth and reach of JPMorgan’s conduct in the discovery process and ultimately proving our case in court.”
Patricia Wexler, a spokeswoman for JPMorgan, did not comment on Rakoff’s ruling allowing some of the claims against the bank to proceed toward trial.
But Wexler hours later Monday issued a statement slamming both the U.S. Virgin Islands for making its allegations about Dimon and CNBC for reporting them.
“The USVI’s statements are baseless. Our CEO has no recollection of reviewing [Epstein’s] accounts or even having a conversation about this,” Wexler said.
“It’s irresponsible for CNBC to report their lawyers’ unsubstantiated arguments as facts – saying something out loud doesn’t make it true.”
A spokesman for Deutsche Bank declined to comment on the ruling.
JPMorgan two weeks ago sued Jes Staley, its former investment banking chief, alleging that he is legally responsible for the lawsuits against the bank in connection with Epstein.
The bank seeks to claw back more than $80 million it paid Staley, who resigned as Barclays CEO in late 2021 after an investigation by British financial regulators over his relationship with Epstein.
Epstein for years hobnobbed with celebrity friends who included former presidents Donald Trump and Bill Clinton and Britain’s Prince Andrew.
— With additional reporting by CNBC’s Eamon Javers
