The judge overseeing lawsuits alleging JPMorgan Chase & Co. and Deutsche Bank AG knowingly benefited from Jeffrey Epstein’s sex trafficking operation explained his reasoning behind allowing some claims to proceed but dismissing several others.
(Bloomberg) — The judge overseeing lawsuits alleging JPMorgan Chase & Co. and Deutsche Bank AG knowingly benefited from Jeffrey Epstein’s sex trafficking operation explained his reasoning behind allowing some claims to proceed but dismissing several others.
US District Judge Jed Rakoff issued a 54-page opinion Monday elaborating on a four-page ruling March 20 that tossed most claims against the banks in separate proposed class action suits by two Epstein victims, each identified only as Jane Doe. Rakoff also threw out three of four claims against JPMorgan in a US Virgin Islands suit.
But Rakoff said the banks must face key allegations, ruling that each woman met her legal burden to proceed with claims relating to providing financial services to Epstein, who died in jail of an apparent suicide after he was accused in 2019 of sex trafficking.
Both women can proceed under the federal Trafficking Victim Protection Act because they sufficiently alleged each bank “participated” in a commercial sex trafficking venture; knew or disregarded that force, fraud or coercion would be used; and benefited from their participation, Rakoff ruled in Manhattan federal court.
They met their burden of alleging “both JP Morgan and Deutsche Bank went well beyond merely providing their usual services to Jeffrey Epstein and his affiliated entities,” Rakoff wrote. The women also pleaded sufficient facts to support claims that JPMorgan knew of Epstein’s sex-trafficking, “either directly or by recklessly disregarding what was plainly to be seen,” the judge said.
JPMorgan and Deutsche Bank had asked the court to dismiss the claims, arguing they only provided routine banking services to Epstein.
A spokesperson for Deutsche Bank declined to comment. A spokesperson for JPMorgan didn’t immediately respond to a request for comment.
In their lawsuits, the women alleged Epstein had access to large amounts of cash to fuel his operation, avoided cash withdrawals that would raise red flags and used a Highbridge Capital Management private jet to transport young women and girls so he could abuse them. Highbridge is a JPMorgan subsidiary.
The role of Jes Staley, a former JPMorgan executive who was close with Epstein, at “the very least” supported the allegation the bank recklessly disregarded the existence of a sex trafficking venture, Rakoff wrote.
Staley, who was not named as a defendant by either Doe or the USVI, has previously denied involvement in Epstein’s sex-trafficking.
The women can also proceed with a claim the banks intentionally failed to file suspicious activity reports that would have aided investigations of Epstein, according to Rakoff. But Rakoff said the women failed to show that the bank “perpetrated” Epstein’s sex trafficking.
The US Virgin Islands is suing JPMorgan for facilitating similar activity, some of which took place on Epstein’s private island there. That suit was filed after the two Jane Doe lawsuits late last year.
“The USVI asserts that it possesses email correspondence between Epstein and Mr. Staley which suggests, albeit cryptically, that Mr. Staley had sexual encounters while visiting Epstein,” Rakoff wrote. He referred to emails in the USVI’s suit showing conversations between Epstein and Staley about women and Disney princesses.
The judge allowed a negligence claim to proceed, finding that the Jane Does “plausibly allege” that the banks owed a duty to them.
In the Deutsche Bank case, Rakoff dismissed eight counts but allowed four claims to proceed. Rakoff threw out six of the 10 claims against JPMorgan. The judge dismissed racketeering claims and similar allegations made by the USVI under the territory’s version of the law.
The judge’s order on March 20 cleared the way for further discovery in the case. Mary Erdoes, JPMorgan’s asset and wealth management chief executive officer, was deposed in March and Staley was also questioned. JPMorgan CEO Jamie Dimon is scheduled to be deposed later this month.
The cases are Jane Doe 1 v. JPMorgan Chase Bank, 22-cv-10019; Jane Doe 1 v. Deutsche Bank, 22-cv-10018, and USVI v. JPMorgan Chase Bank, 22-cv-10904-UA, US District Court, Southern District of New York (Manhattan).
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