The government of the U.S. Virgin Islands said in a court filing on Friday that it is seeking at least $190 million in penalties from JPMorgan Chase for the bank’s failure to detect and report the sex trafficking operation run by the disgraced financier Jeffrey Epstein in the U.S. territory.
Lawyers for the Virgin Islands disclosed the sum in a legal filing in response to a request from the federal judge in Manhattan overseeing the lawsuit it filed against JPMorgan last year, which claimed that the bank turned a blind eye to Mr. Epstein’s activities.
In the filing, the Virgin Islands’ attorney general’s office said it also wants the nation’s largest bank to put in new policies to prevent it from providing financial services to human traffickers.
“We are pursuing this enforcement action because JPMorgan Chase’s institutional failure enabled Jeffrey Epstein’s sex trafficking,” said U.S. Virgin Islands Attorney General Ariel Smith in a statement.
Patricia Wexler, a JPMorgan spokeswoman, said, “This document does not reflect the nature of settlement conversations.” She also said the Virgin Islands’ legal theories were “not well founded and are being challenged by JPM in court.”
The bank, in court papers, has argued that the Virgin Islands government did little itself to deter any illegal activity carried out by Mr. Epstein on his private island residence off St. Thomas.
JPMorgan Chase has already agreed to pay $290 million to settle a class-action lawsuit filed last year on behalf of Mr. Epstein’s many sex abuse victims. The suit, filed by lawyers for Mr. Epstein’s victims, was joined for legal discovery purposes with the lawsuit filed by the Virgin Islands. The bank and the Virgin Islands government have not yet reached a settlement.
The lawsuit filed by the Virgin Islands is tentatively scheduled for an October trial in federal court in Manhattan.
The Virgin Islands said on Friday that its lawsuit is fashioned as an enforcement action against the bank and that it is entitled to the sizable relief to compensate it and deter future conduct by the bank. The $190 million includes penalties and the disgorgement of fees earned from business that the Virgin Islands claims Mr. Epstein directed to JPMorgan.
Last year, the U.S. territory reached a $105 million settlement with the estate of Mr. Epstein, who killed himself in August 2019 while being held in federal custody on sex trafficking charges.
Lawyers for Mr. Epstein’s victims have said at least 200 women — many of them teenagers at the time — were sexually abused by the financier at his private residence in the Virgin Islands, as well as his homes in Manhattan, Florida and elsewhere. Mr. Epstein maintained a private island residence just off St. Thomas for nearly 20 years and ran his investment advisory businesses from the Virgin Islands as well.
The Virgin Islands is being assisted in all the litigation related to Mr. Epstein by lawyers from Motley Rice, a plaintiffs’ law firm based in South Carolina. Motley has a retainer agreement with the Virgin Islands government that entitles it to receive a portion of every settlement and recovery as its compensation.