Banks Are Accused of Facilitating Jeffrey Epstein’s Sex Trafficking in a Lawsuit That Faces High Legal Hurdles

JPMorgan and Deutsche Bank were sued by two women who say the banks overlooked red flags about Jeffrey Epstein. But proving they facilitated his sex trafficking faces legal barriers.

US Attorney for the Southern District of New York Geoffrey Berman announces charges against Jeffery Epstein on July 8, 2019 in New York City.
Banks could be on the hook for their dealings with Jeffrey Epstein. Photo by Stephanie Keith/Getty Images

JPMorgan and Deutsche Bank were sued last week by two women who say they were sexually abused by the late financier Jeffrey Epstein. The lawsuits, which were filed in a federal court in New York Nov. 24, allege the banks facilitated Epstein’s sex-trafficking operation, and overlooked red flags regarding their client’s behavior.

The women are not named in the complaints, which were first reported by the Wall Street Journal. They’re seeking class-action status as well as financial damages, though the amount was not specified. The complaints were filed the same day New York’s Adult Survivors Act took effect, allowing adult survivors of sexual abuse to sue their abusers regardless of when the abuse occurred.

Deutsche Bank has already been cited for its relationship with Epstein, and the institution agreed to pay New York regulators $150 million in 2020 for failing to “adequately monitor” his activity. But it can be tricky to prove guilt under one of the statutes cited in this case, according to Bridgette Carr, a legal expert specializing in human trafficking, because the bar to prove institutions were aware exploitation was occurring is high.

JPMorgan and Deutsche Bank were “complicit” in trafficking, lawsuits allege

The lawsuits filed last week allege both JPMorgan and Deutsche Bank did business with Epstein even after allegations he was sexually abusing minors came to light. Epstein started banking with JPMorgan around 1998, the lawsuit alleges, and the bank kept him on as a client through 2013, well after he pleaded guilty to soliciting prostitution from someone under the age of 18, in 2008 in Florida. Deutsche Bank didn’t sever ties with the financier until 2018, the lawsuit alleges, when a Miami Herald investigation revealed more than 60 women said they were abused under a sex-trafficking operation built by Epstein. He was arrested on federal sex trafficking charges in New York in 2019, and died in his jail cell that August.

The complaints cite findings by both New York and U.K. regulators to argue the banks violated human-trafficking laws by facilitating payments to Epstein’s victims. Jes Staley, a former head of private banking at JPMorgan who later resigned as CEO of Barclays last year over a probe into his relationship with Epstein, visited the financier while he was serving a sentence for soliciting prostitution in Florida, and exchanged thousands of emails with him, according to the JPMorgan lawsuit. Epstein reportedly worked with Staley to help JPMorgan purchase a majority stake in the hedge fund Highbridge Capital Management in 2004. Epstein opened more than 40 different accounts while at Deutsche Bank and made periodic cash withdrawals totaling $800,000 over four years, the 2020 investigation by New York state regulators found.

Both women suing the banks allege Epstein withdrew large sums of money from JPMorgan and Deutsche Bank to pay for sex acts.

A Deutsche Bank spokesman said the claims lack merit, and the bank intends to present its arguments in court. JPMorgan would not comment on active litigation.

Banks aren’t often held accountable for facilitating trafficking

Both lawsuits are alleging violations under the newly-enacted Adult Survivors Act, as well as the Trafficking Victims Protection Act (TVPA), a law passed in 2000 intended to hold corporations, including financial institutions, liable if they know or “should have known” about exploitation happening under their watch.

“We haven’t seen financial institutions really being on the hook” for trafficking under TVPA, said Carr, director of the human trafficking law clinic at the University of Michigan. In the case of sex trafficking, in particular, the biggest barrier in these cases is often proving institutions were aware not just that money was exchanged for commercial sex under their watch, but that it involved trafficking as well.

“That has been the barrier in so many of these cases,” Carr said. “Can you meet that requirement—that whatever supporting entity knew, or should have known, about the trafficking? Not simply that commercial sex was occurring.” In the case of Epstein, the banks may still be found guilty if lawyers for the plaintiffs prove they were aware minors were involved in these sex acts, she added.

The case is likely to raise questions about how the banks determine what constitutes a red flag when it comes to possible trafficking cases. Institutions don’t have to be formally part of a trafficking enterprise to be charged under the TVPA, and the lawyers may argue the banks should have known minors were involved with Epstein. The idea behind the TVPA law is to recognize that “trafficking doesn’t occur in a silo,” and many other entities may financially benefit from exploitation, Carr said.

Lawyers representing the women suing JPMorgan and Deutsche Bank didn’t respond to a request for comment. “The time has come for the real enablers to be held responsible, especially his wealthy friends and the financial institutions that played an integral role,” said Bradley Edwards, one of the lawyers representing the plaintiffs, in a written statement to the Wall Street Journal. “These victims were wronged, by many, not just Epstein. He did not act alone.” Banks Are Accused of Facilitating Jeffrey Epstein’s Sex Trafficking in a Lawsuit That Faces High Legal Hurdles