The US Virgin Islands is seeking $190 million in penalties and disgorgement from JPMorgan Chase and requesting that it implement safeguards against human trafficking in its ongoing case alleging the bank benefited financially from disgraced financier Jeffrey Epstein's sex trafficking operation and failed to report suspicious financial activity.
The government for the Virgin Islands said in a court filing it also wants JPMorgan Chase to implement an independent compliance consultant to prevent human trafficking and to separate its business and compliance functions.
Epstein was found dead in a jail cell in 2019 in what was later ruled a suicide; his death came before he could face trial on federal charges of sexually abusing underage girls. Unraveling his alleged actions, the legal fallout and the effects on individuals and institutions around the world has continued since then.
JPMorgan should also analyze "the root causes of the bank's failures in its banking relationship with Jeffrey Epstein and identifying the missed opportunities to report his criminal activities," the Virgin Islands Department of Justice said in a statement.
But the bank disagreed.
"This document does not reflect the nature of settlement conversations," a spokesperson for JPMorgan Chase said. "As for the USVI's misdirected damages theories, they are not well founded and are being challenged by JPM in court."
The policies requested by the Virgin Islands would prevent JPMorgan from opening bank accounts without basic details from customers and ban "the participation of employees with personal relationships to clients in decisions related to retaining those clients," a government press release indicated.
The Virgin Islands' government argued that JPMorgan Chase should have given Epstein closer scrutiny as a client after he entered a guilty plea to state charges in Florida of soliciting prostitution with a minor in 2008.
The Virgin Islands' DOJ filed a brief in the United States District Court in the Southern District of New York on Friday.
In June, JPMorgan Chase agreed to pay $290 million to settle a class-action lawsuit from Jeffrey Epstein's alleged sexual abuse victims, who accused the bank of enabling sex trafficking by the deceased financier when he was a client.
The Virgin Islands government filed its own lawsuit against JPMorgan Chase in December 2022.
"Over more than a decade, JPMorgan clearly knew it was not complying with federal regulations in regard to Epstein-related accounts as evidenced by its too-little too-late efforts after Epstein was arrested on federal sex trafficking charges and shortly after his death, when JPMorgan (JPM) belatedly complied with federal law," states the complaint filed by US Virgin Islands Attorney General Denise George.
The lawsuit also claimed "human trafficking was the principal business of the accounts Epstein maintained at JPMorgan."
When he died, Epstein was awaiting trial on federal charges accusing him of operating a sex trafficking ring from 2002 to 2005 at his Manhattan mansion and his Palm Beach estate and allegedly paying girls as young as 14 for sex.
JPMorgan Chase CEO Jamie Dimon denied knowing about internal reviews of Epstein's criminal conduct and his account with the bank when they were happening in depositions for the lawsuit.
A JPMorgan spokesperson said regarding the deposition that, "had the Firm believed he was engaged in an ongoing sex trafficking operation, Epstein would not have been retained as client. In hindsight, we regret he was ever a client," in a previous statement to CNN.
The trial is set to begin October 23.
