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  • Writer's pictureThe San Juan Daily Star

JPMorgan reaches settlement with Epstein’s victims

A lawsuit filed by sexual abuse victims of Jeffrey Epstein charged that JPMorgan ignored repeated warnings about Mr. Epstein.

By Matthew Goldstein

JPMorgan Chase on Monday reached a tentative settlement with sexual abuse victims of Jeffrey Epstein, the deceased financier, after weeks of embarrassing disclosures about the bank’s longstanding relationship with him, said the bank and lawyers for the victims.

The proposed deal would settle a lawsuit filed last November in Manhattan federal court by an unidentified woman on behalf of victims who were sexually abused by Epstein over a roughly 15-year period when they were teenage girls and young women, the suit said. The number of victims could potentially rise to more than 100.

In the statement, the bank and the lawyers for the victims said they had reached “an agreement in principle to settle” the lawsuit on behalf of the victims and the “settlement is in the best interests of all parties, especially the survivors who were the victims of Epstein’s terrible abuse.” The statement did not disclose a settlement amount.

The settlement agreement was reached roughly two weeks after Jamie Dimon, JPMorgan’s chief executive and one of Wall Street’s best-known bankers, sat for a daylong deposition in which he said he had barely heard of Epstein before the financier’s July 2019 arrest on federal sex trafficking charges.

Epstein killed himself in August 2019 in a Manhattan jail cell a month after his arrest.

JPMorgan still faces a related lawsuit by the government of the U.S. Virgin Islands. That suit remains the biggest outstanding Epstein-related case after years of civil lawsuits against Epstein’s estate and Ghislaine Maxwell’s conviction in 2021 in Manhattan federal court for helping Epstein engage in sex trafficking.

The lawsuit filed by the victims charged that JPMorgan ignored repeated warnings that Epstein had been trafficking teenage girls and young women for sex, even after he registered as a sex offender and pleaded guilty in a 2008 Florida case to soliciting prostitution from a teenage girl. The complaint said the bank overlooked red flags in Epstein’s activity because it valued him as a wealthy client who had access to dozens of even wealthier people.

Court documents and deposition testimony reviewed by The New York Times revealed that bank employees had filed numerous suspicious activity reports about Epstein’s repeated large cash withdrawals. The legal documents revealed that after designating Epstein a “high risk client” in 2006, the bank kept him on as a customer despite media reports detailing allegations of his sexual abuse of teenage girls and evidence that some of the cash withdrawals were for payments to dozens of young women.

JPMorgan had provided banking services for Epstein from roughly 1998 to 2013 — a period in which the federal authorities and victims have said some of the worst conduct was committed by the financier, who had palatial homes in Manhattan, Florida, the U.S. Virgin Islands, New Mexico and Paris.

The bank had said a number of times before the agreement was reached that it did not assist Epstein in committing “his heinous crimes” and “in hindsight, any association with him was a mistake.”

In a separate lawsuit, the same lawyers for Epstein’s victims last month negotiated a tentative $75 million settlement with Deutsche Bank, which succeeded JPMorgan as Epstein’s primary banker. Deutsche, which ended its relationship with Epstein in late 2018, paid a $150 million fine to New York regulators in 2020 over allegations that it failed to sufficiently police its financial dealings with the disgraced financier among other compliance failures.

The settlements with both banks must be approved by Judge Jed Rakoff of U.S. District Court in Manhattan. Rakoff is also presiding over the related lawsuit by the government of the U.S. Virgin Islands.

The Virgin Islands, the U.S. territory in the Caribbean, contends that JPMorgan should pay it damages for enabling Epstein to set up a sex trafficking operation on his private island residence off St. Thomas. But JPMorgan, in court papers, has bitterly opposed the lawsuit, arguing that government officials there cozied up to Epstein for nearly two decades.

Two of Epstein’s businesses received lucrative tax breaks from the U.S. territory worth tens of millions of dollars. Shortly after JPMorgan ended its relationship with Epstein, the Virgin Islands approved a first-of-its-kind boutique banking license for Epstein.

Rakoff had put the lawsuits against JPMorgan on a fast track, with more than a dozen depositions given over the past three months, including the one from Dimon and another from Albert Bryan Jr., the governor of the Virgin Islands. The deal between JPMorgan and Epstein’s victims was hammered out as some of the plaintiffs’ lawyers were taking the deposition of James E. Staley, the former JPMorgan executive who had close ties to Epstein.

In court filings, the Virgin Islands claimed Epstein and Staley shared sexually suggestive emails about young women.

Staley, better known as Jes, has in court papers repeatedly denied doing anything wrong or being aware that Epstein had sexually abused young women and teenage girls. JPMorgan then sued Staley seeking to ensure that, if it is determined that he did engage in improper activity, he can be held liable for damages the bank ends up paying.

The victims lawyers who were most involved in litigating and negotiating the proposed settlements with the two banks included David Boies, Sigrid McCawley, Brad Edwards and Brittany Henderson.

Boies said of the proposed settlement with JPMorgan, “It has taken a long time, too long, but today is a great day for Jeffrey Epstein survivors.” McCawley, who argued before Rakoff that the JPMorgan lawsuit should be treated as a class action, said the settlements signal that financial institutions have an important role to play in spotting and shutting down sex trafficking.

In court papers associated with the proposed settlement with Deutsche Bank, the victims’ lawyers said they expect to seek fees of up to 30%. The lawyers are likely to submit a similar fee request in the JPMorgan litigation. Any fee request must be approved by Rakoff.

In the Deutsche Bank settlement, the victims will each be entitled to receive anywhere from $75,000 to $5 million in restitution, according to court filings.

The settlements with the two banks will add to the total relief that the many victims of Epstein have received in recent years. Epstein’s estate has paid out about $150 million in restitution to over 125 victims — many of whom may be eligible to apply for additional compensation from the deals with Deutsche and JPMorgan.

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