Latest / The Epstein Chronicles / Mega Edition: Judge Rakoff Makes A Ruling In The Survivors Suit Against USVI (Part 1-4) (9/12/26)

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Mega Edition: Judge Rakoff Makes A Ruling In The Survivors Suit Against USVI (Part 1-4) (9/12/26) · The Epstein Chronicles

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  Speaker 1: What's up everyone and welcome back to the Epstein Chronicles.
• 0:04
  Speaker 1: In this episode we're going to take a look at
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  Speaker 1: Judge Rakoff's opinion and order on the lawsuit filed by
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  Speaker 1: the U.S. Virgin Islands and the survivors against Deutsche Bank
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  Speaker 1: and J.P. Morgan. Case number 22-CV-10904 Opinion and Order The
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  Speaker 1: plaintiffs in these three related cases are two anonymous women
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  Speaker 1: referred to here as JPM, Jane Doe, and DB, Jane Doe,
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  Speaker 1: and the government of the United States Virgin Islands, the USVI.
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  Speaker 1: Plaintiffs claim that defendants JPMorgan Chase Bank, NA, JPMorgan, and
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  Speaker 1: the related entities Deutsche Bank and their affiliates are legally
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  Speaker 1: liable for the alleged facilitation of Jeffrey Epstein's sex crimes.
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  Speaker 1: On February 1, 2023 and February 7, 2023, defendants filed
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  Speaker 1: motions to dismiss the operative complaints in each case. After
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  Speaker 1: full consideration of the parties' written submissions and oral arguments,
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  Speaker 1: the court granted those motions in part and denied those
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  Speaker 1: motions in part by a bottom-line order dated March 20, 2023.
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  Speaker 1: This opinion reconfirms the court's rulings and explains the reasoning
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  Speaker 1: behind them. 1. Plaintiff's Allegations A. Jeffrey Epstein Sex Trafficking
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  Speaker 1: Operation Plaintiffs allege that between 2006 and 2018, D.B. Jane
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  Speaker 1: Doe and J.P.M. Jane Doe were Jeffrey Epstein sex slaves.
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  Speaker 1: He raped them repeatedly, and he sexually abused them in
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  Speaker 1: other ways as well. J.P.M. Jane Doe, F.A.C. 99 D.B.
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  Speaker 1: Jane Doe, F.A.C. 128 He kept them in his thrall
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  Speaker 1: through a combination of promises, payments, and threats. promises to
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  Speaker 1: advance their careers and educations, payments in cash and in kind,
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  Speaker 1: and threats to destroy them if they did not obey
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  Speaker 1: his demands. JPM Jane Doe FAC 70 96 111. DB
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  Speaker 1: Jane Doe FAC 139 143. These Jane Does were not alone.
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  Speaker 1: Plaintiffs allege that beginning in 1998 and continuing until 2019,
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  Speaker 1: over two decades later, Epstein ran an organization that recruited...
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  Speaker 1: hundreds of young women and girls, and coerce them into
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  Speaker 1: performing sex acts. Typically, Epstein would lure a victim to
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  Speaker 1: one of his residences by promising to grant a wish,
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  Speaker 1: would then pressure her into performing massages that became increasingly sexual,
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  Speaker 1: and then would force her to participate in sex acts
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  Speaker 1: on a continuing basis. JPM Jane Doe, FAC 66, DB
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  Speaker 1: Jane Doe, FAC 107. Cash was the lifeblood of Epstein's operation.
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  Speaker 1: Victims were paid hundreds of dollars in cash each time
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  Speaker 1: Epstein abused them, and they were also paid hundreds of
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  Speaker 1: dollars in cash for each additional victim that they recruited.
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  Speaker 1: JPM Jane Doe, FAC 66, DB Jane Doe, FAC 52
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  Speaker 1: and 53. At times, plaintiffs allege Epstein dispensed thousands of
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  Speaker 1: dollars in cash every day to his victims amounting to
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  Speaker 1: on average $ 200, 000 per year. D.B. Jane Doe, FAC, 54.
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  Speaker 1: Epstein could not have run his operation, plaintiffs claim, without
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  Speaker 1: ready access to cash through the banking system. B. J.P.
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  Speaker 1: Morgan's alleged involvement. J.P. Morgan began to serve as Jeffrey
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  Speaker 1: Epstein's principal bank as early as 1998. J.P.M. Jane Doe, FAC, 41. Eventually,
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  Speaker 1: both Epstein and at least a dozen entities affiliated with
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  Speaker 1: Epstein and his operation Maintain bank accounts with J.P. Morgan.
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  Speaker 1: USVI FAC 27. These accounts, plaintiffs allege, were highly lucrative
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  Speaker 1: for J.P. Morgan and essential to Jeffrey Epstein's sex trafficking operation. Specifically,
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  Speaker 1: plaintiffs allege that J.P. Morgan supported Epstein's sex trafficking operation
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  Speaker 1: in four different ways. First, they allege that J.P. Morgan
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  Speaker 1: enabled Epstein to access the large quantities of cash that
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  Speaker 1: fueled his operation. JPM Jane Doe FAC 45. USVI FAC 103. Second,
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  Speaker 1: they allege that JPMorgan assisted Epstein with structuring his cash
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  Speaker 1: withdrawals so as to elude suspicion. JPM Jane Doe FAC 179.
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  Speaker 1: USVI FAC 67. Third, plaintiffs allege that JPMorgan did not
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  Speaker 1: timely file suspicious activity reports that would have alerted authorities
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  Speaker 1: to Jeffrey Epstein's sex trafficking operation. JPM Jane Doe FAC 180-81.
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  Speaker 1: USVI FAC 74 and 75. In particular, plaintiffs allege that J.P.
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  Speaker 1: Morgan delayed filing SARS for thousands of transactions totaling more
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  Speaker 1: than $ 1 billion, including payments to dozens of women, often
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  Speaker 1: with Eastern European surnames. Finally, plaintiff alleges that a J.P.
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  Speaker 1: Morgan subsidiary, Highbridge Capital Management, transported young women and girls
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  Speaker 1: from Florida to Epstein in New York on the company's
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  Speaker 1: private jet. JPM Jane Doe FAC According to the plaintiffs,
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  Speaker 1: by no later than 2006, J.P. Morgan either actually knew
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  Speaker 1: or should have known that it was supporting a sexual predator. J.P.
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  Speaker 1: Jane Doe, FAC 190-196. In 2006, police reports and news
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  Speaker 1: articles revealed that Epstein had sexually abused dozens of young women.
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  Speaker 1: In 2008, Epstein pled guilty to sex offenses, including soliciting
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  Speaker 1: a minor for prostitution, and he registered as a sex offender.
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  Speaker 1: USVI FAC 38. Following Epstein's guilty plea, dozens of public
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  Speaker 1: lawsuits were filed against him, which included detailed accusations of
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  Speaker 1: his sexual abuse of young women and girls. JPM Jane Doe,
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  Speaker 1: FAC 207. While JPMorgan allegedly was aware of several of
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  Speaker 1: these accusations, JPMorgan nonetheless continued to bank Epstein, USVI FAC
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  Speaker 1: at 44. After Epstein was released from prison, accusations that
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  Speaker 1: he trafficked young women and girls and continued to surface.
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  Speaker 1: Plaintiffs alleged that employees within J.P. Morgan would occasionally report
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  Speaker 1: these accusations to their superiors and would ask whether J.P.
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  Speaker 1: Morgan would maintain its relationship with Epstein. In 2010, for example, J.P.
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  Speaker 1: Morgan's Risk Management Division discussed new allegations against Epstein. See
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  Speaker 1: below new allegations of an investigation related to child trafficking.
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  Speaker 1: Are you still comfortable with this client who is now
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  Speaker 1: a registered sex offender? USVI FAC at 45. In January 2011, J.P.
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  Speaker 1: Morgan's Director of Anti-Money Laundering Compliance requested re-approval for the
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  Speaker 1: bank's relationship with Epstein from J.P. Morgan's then-General Counsel in
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  Speaker 1: light of the new allegations of human trafficking. And there
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  Speaker 1: were other alleged red flags. Epstein or his associates are
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  Speaker 1: alleged to have made significant cath withdrawals from J.P. Morgan
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  Speaker 1: accounts with no known payee. USVI FAC at 67. For example,
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  Speaker 1: Hyperion Air Incorporated, the Epstein-controlled company that owned Epstein's private jet,
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  Speaker 1: issued over $ 547, 000 in checks payable to cash purportedly for
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  Speaker 1: fuel expenses when traveling to foreign countries. Additionally, J.P. Morgan
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  Speaker 1: accounts in the name of Epstein-affiliated charitable organizations made payments
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  Speaker 1: without a clear connection to those organizations' charitable purposes. For example,
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  Speaker 1: Epstein and or his representatives used the COUQ Foundation account
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  Speaker 1: to pay $ 29, 464. 66 to three young women, including two people
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  Speaker 1: known to be Epstein victims. One final source of J.P.
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  Speaker 1: Morgan's alleged knowledge is James Jess Staley. Circa 2000, Mr.
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  Speaker 1: Staley headed J.P. Morgan's private banking division and he began
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  Speaker 1: to service Epstein's account, JPM Jane Doe FAC at 131. Later,
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  Speaker 1: while Epstein was still a J.P. Morgan client, Mr. Staley
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  Speaker 1: was promoted to be CEO of J.P. Morgan Asset Management.
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  Speaker 1: Plaintiffs allege that Mr. Staley had first-hand knowledge of Jeffrey
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  Speaker 1: Epstein's sex trafficking operation. Mr. Staley is alleged to have
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  Speaker 1: visited Epstein's residences several times while that operation was ongoing,
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  Speaker 1: and during these visits observed JPM Jane Doe as a
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  Speaker 1: sexual trafficking and abuse victim. JPM Jane Doe, FAC, 115.
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  Speaker 1: On December 5th, 2009, one day after Mr. Staley visited
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  Speaker 1: Epstein in New York, Epstein emailed Mr. Staley to say,
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  Speaker 1: you were with Larry and I had to put up
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  Speaker 1: with and attach a picture of a young woman in
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  Speaker 1: a sexually suggestive pose. On December 20th, 2009, Epstein sent Mr.
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  Speaker 1: Staley an email that consisted entirely of a picture of
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  Speaker 1: a young woman. Plaintiffs further allege that Mr. Staley himself
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  Speaker 1: abused some of Epstein's victims, including JPM Jane Doe herself.
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  Speaker 1: JPM Jane Doe claims that one of Epstein's friends, whom
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  Speaker 1: she later identified as Mr. Staley, used aggressive force in
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  Speaker 1: his sexual assault of her and informed Jane Doe that
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  Speaker 1: he had Epstein's permission to do what he wanted to her.
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  Speaker 1: JPM Jane Doe FAC at 107. And the USVI asserts
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  Speaker 1: that it possesses email correspondence between Epstein and Mr. Staley,
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  Speaker 1: which suggests, all but cryptically, that Mr. Staley had sexual
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  Speaker 1: encounters while visiting Epstein. In July of 2010, Mr. Staley
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  Speaker 1: emailed Epstein that was fun. Say hi to Snow White.
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  Speaker 1: To which Epstein responded, what character would you like next? Mr.
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  Speaker 1: Staley answered, Beauty and the Beast. USVI FAC at 61. C.
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  Speaker 1: Deutsche Bank's alleged involvement. In 2013, a J.P. Morgan compliance
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  Speaker 1: officer terminated J.P. Morgan's relationship with Epstein. USVI FAC 63.
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  Speaker 1: Epstein then went on the market for a new bank.
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  Speaker 1: Shortly before then, Paul Morris, a banker with J.P. Morgan
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  Speaker 1: who had serviced Epstein's accounts, left J.P. Morgan and joined
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  Speaker 1: Deutsche Bank, DB Jane Doe FAC at 202. Mr. Morris
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  Speaker 1: suggested to Deutsche Bank's senior management that a relationship with
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  Speaker 1: Epstein could be very lucrative. Banking Epstein would generate millions
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  Speaker 1: of dollars in fees, and it could also lead to
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  Speaker 1: further relationships with Epstein's wealthy friends. Deutsche Bank took Epstein
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  Speaker 1: on as a client in August 19th of 2013, DB
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  Speaker 1: Jangdo FAC 210. Eventually, Epstein, his related entities, and his
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  Speaker 1: associates opened and funded more than 40 accounts at Deutsche Bank,
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  Speaker 1: which held more than $ 110 million in assets. All right,
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  Speaker 1: we're going to wrap up this episode right here. And
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  Speaker 1: in the next episode, we're going to pick up with D.B.
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  Speaker 1: Jane Doe alleges that Epstein used his Deutsche Bank accounts
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  Speaker 1: much as he did his accounts with J.P. Morgan. All
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  Speaker 1: of the information that goes with this episode can be
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  Speaker 1: found in the description box. What's up, everyone? And welcome
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  Speaker 1: back to the Epstein Chronicles. In this episode, we're getting
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  Speaker 1: right back to the Judge Rakoff order and opinion. D.B.
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  Speaker 1: Jane Doe alleges that Epstein used his Deutsche Bank accounts
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  Speaker 1: as much as he did his accounts with J.P. Morgan.
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  Speaker 1: He used them to withdraw cash to pay off his
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  Speaker 1: victims and associates. He solicited Deutsche Bank's advice about how
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  Speaker 1: to structure his withdrawals so as to evade notice. And
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  Speaker 1: he was shielded by Deutsche Bank's failure to file suspicious
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  Speaker 1: activity reports. D.B. Jane Doe likewise alleges that Deutsche Bank
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  Speaker 1: either knew or should have known that Epstein used his
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  Speaker 1: Deutsche Bank accounts to power his sex trafficking operation. In
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  Speaker 1: April 2013, after Mr. Morris proposed taking on Epstein as
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  Speaker 1: a client, a junior relationship coordinator assigned to the Epstein
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  Speaker 1: account prepared a memorandum which noted various risks posed by
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  Speaker 1: a relationship with Jeffrey Epstein. This memorandum noted that Epstein
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  Speaker 1: was charged with soliciting an underage prostitution in 2007, that
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  Speaker 1: he served 13 months out of his 18-month sentence, and
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  Speaker 1: that he was accused of paying young women for a
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  Speaker 1: massage in his Florida home. Around the same time, A
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  Speaker 1: DB compliance officer performed background checks on the beneficiaries of
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  Speaker 1: one of Epstein's entities, the Butterfly Trust. This check revealed
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  Speaker 1: that one of the beneficiaries, Sarah Kellen, was named as
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  Speaker 1: one of Epstein's co-conspirators in a related criminal case. Once
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  Speaker 1: DB began to serve as Epstein's bank, it allegedly continued
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  Speaker 1: to receive red flags. Between 2014 and 2015, DB's anti-financial
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  Speaker 1: crime department alerted DB's senior management to issues concerning Jeffrey
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  Speaker 1: Epstein's sex trafficking. DB Jane Doe, FAC 206 In May 2018,
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  Speaker 1: one of Deutsche Bank's compliance officers asked a relationship manager
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  Speaker 1: assigned to Epstein's account about payments to accounts of women
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  Speaker 1: with Eastern European surnames at a Russian bank. An accountant
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  Speaker 1: at DB, who was looped into the conversations, replied that
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  Speaker 1: the money was sent to a friend for tuition for school.
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  Speaker 1: The compliance officer did not ask any follow-up questions and
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  Speaker 1: the transaction was cleared. And Epstein's personal attorney withdrew over $ 800, 000
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  Speaker 1: in cash on Epstein's behalf over a four-year period on
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  Speaker 1: multiple occasions asking about the maximum amount that could be
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  Speaker 1: withdrawn without triggering a reporting requirement. The attorney's only explanation
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  Speaker 1: for these withdrawals was that Epstein needed cash for travel, tipping,
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  Speaker 1: and expenses. D. Plaintiff's Claims In total, plaintiffs assert 28
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  Speaker 1: claims against the defendants, Several of these claims were brought
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  Speaker 1: under the Federal Trafficking Victims Protection Act. Others assert violations
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  Speaker 1: of the Federal Racketeering, Influenced and Corrupt Organizations Act and
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  Speaker 1: the USVI's territorial, analog to RICO, the Virgin Islands Criminally
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  Speaker 1: Influenced and Corrupt Organizations Act. A final statutory claim alleges
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  Speaker 1: a violation of the Virgin Islands Consumer Fraud and Deceptive
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  Speaker 1: Business Practices Act and plaintiffs assert a variety of state
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  Speaker 1: tort claims as well. To the discussion. To survive a
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  Speaker 1: motion to dismiss, a complaint must contain sufficient factual matter,
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  Speaker 1: except it is true, to state a claim to relief
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  Speaker 1: that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678, 2009.
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  Speaker 1: Quoting Bell Atlantic Corporation v. Twombly, 550 U.S. 544, 570, 2007.
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  Speaker 1: In reviewing a motion to dismiss, the court accepts the complaints,
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  Speaker 1: factual allegations is true. and draws all reasonable inferences in
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  Speaker 1: the plaintiff's favor. Brown Media Corporation v. K & L
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  Speaker 1: Gates LLP 854 F. 3D 150 156 57 The court begins
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  Speaker 1: by discussing three threshold issues that could potentially bar multiple
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  Speaker 1: claims asserted by two of the plaintiffs. It then discusses
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  Speaker 1: each surviving claim that defendants seek to dismiss. A. Threshold
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  Speaker 1: Issues 1. Release by Settlement Agreement On April 28, 2022, D.B.
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  Speaker 1: Jane Doe resolved her claims against Jeffrey Epstein's estate by
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  Speaker 1: signing a settlement agreement, the Settlement Agreement. D.B. was not
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  Speaker 1: a party to this agreement. Nonetheless, D.B. argues that it
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  Speaker 1: is a third-party beneficiary of that agreement and that, as such,
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  Speaker 1: it is entitled under the terms of the agreement to
• 15:24
  Speaker 1: dismissal of the instant claims. The first issue raised by D.B.
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  Speaker 1: 's argument is whether the court may even entertain it
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  Speaker 1: at this juncture. Asserting that a plaintiff's claim is barred
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  Speaker 1: by agreement is an affirmative defense, and affirmative defenses usually
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  Speaker 1: cannot be considered on a motion to dismiss. CEG Deckard v.
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  Speaker 1: General Motors Corp. 307 F. 3D 556 560 7th Circuit 2002
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  Speaker 1: A motion to dismiss was improper since release is an
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  Speaker 1: affirmative defense, and the existence of a defense does not
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  Speaker 1: undercut the adequacy of the claim. Nonetheless, this bar is
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  Speaker 1: not absolute. For example, the court may consider any affirmative
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  Speaker 1: defense that appears on the face of the complaint. More generally,
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  Speaker 1: the court retains discretion to consider, even at this early stage,
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  Speaker 1: an affirmative defense that presents a straightforward issue of law,
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  Speaker 1: such as a statute of limitations defense where the relevant
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  Speaker 1: facts are not in dispute. While the settlement agreement is
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  Speaker 1: not mentioned in D.B. Jane Doe's complaint, the court finds, nonetheless,
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  Speaker 1: that D.B. 's argument is appropriately considered at this stage.
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  Speaker 1: The authenticity of the settlement agreement is not disputed, and
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  Speaker 1: neither party has suggested that extrinsic evidence would inform the
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  Speaker 1: court's interpretation of it. Thus, Deutsche Bank's argument presents an
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  Speaker 1: unfettered question of law that can be resolved on a
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  Speaker 1: motion to dismiss and should not be deferred. C. Roberts v. Andrew, 579. F.S.U.P.P. 3D-429-438-SDNY-2022.
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  Speaker 1: Considering a similar settlement agreement on a motion to dismiss.
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  Speaker 1: Turning now to the merits of DB's argument, the court
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  Speaker 1: first notes that this argument succeeds only if the parties
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  Speaker 1: to the settlement agreement intended for DB to benefit from it.
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  Speaker 1: See Port Chester Electric Construction Company v. Atlas 357, Northeast 2D-983-985-86, NY-1976.
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  Speaker 1: It is old law that a third party may sue
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  Speaker 1: as a beneficiary on a contract made for his benefit. However,
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  Speaker 1: an intent to benefit the third party must be shown.
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  Speaker 1: Suffolk County v. Long Island Lighting Company, 728, F. 2D, 5263,
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  Speaker 1: 2nd Circuit, 1984. It's ancient law in New York that
• 17:47
  Speaker 1: to succeed on a third party beneficiary theory, a non-party
• 17:50
  Speaker 1: must be the intended beneficiary of the contract, not an
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  Speaker 1: incidental beneficiary to whom no duty is owed. See also
• 17:57
  Speaker 1: Restatement Second of Contracts, Section 302. In general, such an
• 18:02
  Speaker 1: intent can be found only when the language of the
• 18:05
  Speaker 1: contract clearly evidences on an intent to permit enforcement by
• 18:09
  Speaker 1: the third party. Fourth Ocean Putnam Corporation, First Interstate Wrecking Corporation,
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  Speaker 1: 485 NE 2D 208, 212 New York 1985. DB claims
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  Speaker 1: that the settlement agreement Evidence is such an intent because
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  Speaker 1: it styled a broad release of claims against any entities
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  Speaker 1: or individuals who are or who have ever been engaged by,
• 18:31
  Speaker 1: whether as independent contractors or otherwise, employed by or worked in,
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  Speaker 1: any capacity for Jeffrey Epstein. See Declaration of David B.
• 18:40
  Speaker 1: Hennis in Support of Motion to Dismiss. Since D.B. argues D.B.
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  Speaker 1: Jane Doe's own theory of her case is that D.B.
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  Speaker 1: Bank was both engaged by and in some sense worked
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  Speaker 1: for Epstein, DB is covered by the settlement agreement, but
• 18:53
  Speaker 1: the terms engaged by and worked for must be read
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  Speaker 1: in the context of the agreement as a whole. And
• 18:59
  Speaker 1: another provision of the settlement agreement plainly indicates that it
• 19:02
  Speaker 1: was not intended to preclude claims against financial institutions that
• 19:07
  Speaker 1: provided services to Epstein. Specifically, the settlement agreement states, the
• 19:11
  Speaker 1: parties do not believe there is any reasonable interpretation that
• 19:14
  Speaker 1: this general release could be construed to release James, Jess Daly,
• 19:18
  Speaker 1: Leon Black, or their respective entity affiliations. Settlement agreement at
• 19:23
  Speaker 1: page 4, emphasis applied. Jess Staley was employed by J.P. Morgan,
• 19:27
  Speaker 1: which provided financial services to Jeffrey Epstein. In effect, this
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  Speaker 1: demonstrates the party's agreement that the settlement agreement was never
• 19:34
  Speaker 1: intended to release claims against financial institutions that provided services
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  Speaker 1: for Epstein, and indeed could not even be reasonably interpreted
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  Speaker 1: as such. Read as a whole, therefore, The settlement agreement
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  Speaker 1: does not clearly evidence an intent to benefit Deutsche Bank. Thus,
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  Speaker 1: the court finds that DB is not a third-party beneficiary
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  Speaker 1: of that agreement, and DB Jane Doe's claims are not
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  Speaker 1: barred by it. 2. Perrin's Patriot Standing The next two
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  Speaker 1: threshold issues concern whether the USVI can assert claims under
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  Speaker 1: the TVPA. The first such issue is whether the USVI
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  Speaker 1: has standing to assert such a claim. The USVI asserts
• 20:14
  Speaker 1: that it has standing as parens patriae. There can be
• 20:17
  Speaker 1: no doubt that Congress intended to grant it such standing.
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  Speaker 1: One section of the Trafficking Victims Protection Act, codified U.S.
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  Speaker 1: Code 18, Section 1595D, reads, In any case in which
• 20:30
  Speaker 1: the Attorney General of a state has reason to believe
• 20:32
  Speaker 1: that an interest of the residents of that state has
• 20:35
  Speaker 1: been or is threatened or adversely affected by any person
• 20:38
  Speaker 1: who violates Section 1591, the Attorney General of the state
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  Speaker 1: may bring a civil action against such a person on
• 20:45
  Speaker 1: behalf of the residents of the state in an appropriate
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  Speaker 1: district court of the United States to obtain appropriate relief. U.S.
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  Speaker 1: Code 18, Section 1595D. Congress, however, does not have final word.
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  Speaker 1: Article 3 of the Constitution has been interpreted to impose
• 21:02
  Speaker 1: distinct requirements for standing to sue in federal court. And
• 21:05
  Speaker 1: those requirements are not automatically satisfied when a statute grants
• 21:09
  Speaker 1: a person a statutory right and purports to authorize that
• 21:13
  Speaker 1: person to sue to vindicate that right. Spokio Inc. v.
• 21:16
  Speaker 1: Robbins 578 U.S. 330-341-2016 As revised May 24, 2016 To
• 21:17
  Speaker 1: establish Article 3 standing, any plaintiff must show 1. that
• 21:29
  Speaker 1: he suffered an injury, in fact, that is concrete, particularized,
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  Speaker 1: and actual or imminent, two, that the injury was likely
• 21:36
  Speaker 1: caused by the defendant, and three, that the injury would
• 21:39
  Speaker 1: likely be redressed by judicial relief. TransUnion, LLC v. Ramirez, 141,
• 21:44
  Speaker 1: Supreme Court, 2190-2203, 2021. States and territories that seek to
• 21:51
  Speaker 1: sue Perrin's Patriae must also, one, allege an injury to
• 21:55
  Speaker 1: a quasi-sovereign interest that affects a sufficiently substantial segment of
• 21:59
  Speaker 1: its population, and two, seek relief to the territory's injury
• 22:03
  Speaker 1: that would be unavailable to individual plaintiffs. See Alfred L. Snapinson, Inc. v. P.R. X. Rel. Perez,
• 22:09
  Speaker 1: 458 U.S. 592-607-1982. Nonetheless, even though Congress' creation of a
• 22:18
  Speaker 1: statutory right of action does not settle whether these requirements
• 22:22
  Speaker 1: are satisfied, it is instructive. Spokio 578, U.S. 341, Congress
• 22:28
  Speaker 1: may elevate harms that exist in the real world before
• 22:31
  Speaker 1: Congress recognizes them to actionable legal status. J.P. Morgan's Challenge,
• 22:36
  Speaker 1: the USVI Parents' Patriot Standing. It argues first that to
• 22:40
  Speaker 1: the extent that the USVI sues on behalf of Epstein's
• 22:43
  Speaker 1: victims who resided in the USVI, that interest is not
• 22:46
  Speaker 1: distinct from the interest of a particular private party and
• 22:50
  Speaker 1: therefore cannot be the basis for the parens patriae standing.
• 22:55
  Speaker 1: Defense Memorandum of Law in support of motion to dismiss
• 22:57
  Speaker 1: at 6. But second, to the extent that the USVI
• 23:01
  Speaker 1: seeks to vindicate a more generalized interest, such as an
• 23:04
  Speaker 1: interest in assuring its residents that it will act to
• 23:07
  Speaker 1: protect them from the harmful effects of criminal sex trafficking
• 23:10
  Speaker 1: enterprises flourishing in the islands that are their home. Memorandum
• 23:14
  Speaker 1: of Law in Opposition to Defense Motion to Dismiss at
• 23:18
  Speaker 1: page 9 and 10. This interest, J.P. Morgan says, is
• 23:21
  Speaker 1: insufficiently concrete and particularized. However, J.P. Morgan overstates the second objection.
• 23:28
  Speaker 1: The USVI's asserted interest in assuring its residents it will
• 23:32
  Speaker 1: act to protect them from the harmful effects of of
• 23:34
  Speaker 1: criminal sex trafficking enterprises flourishing in the islands that are
• 23:37
  Speaker 1: their home is indeed general, as all interests that ground
• 23:41
  Speaker 1: Perrin's patriotic standing must be. But it directly parallels the
• 23:45
  Speaker 1: interests that Puerto Rico successfully asserted in SNAP, which was
• 23:49
  Speaker 1: an interest in assuring its residents that it will act
• 23:51
  Speaker 1: to protect them from the harmful effects of discrimination. Indeed,
• 23:55
  Speaker 1: the similarities between the interests asserted by the USVI here
• 23:59
  Speaker 1: and that asserted by Puerto Rico in SNAP are considerable.
• 24:02
  Speaker 1: Like the discrimination that was at stake in SNAP, sex
• 24:05
  Speaker 1: trafficking is a problem that might well reoccur, especially in
• 24:09
  Speaker 1: a remote and isolated territory such as the USVI. Additionally,
• 24:14
  Speaker 1: sex trafficking is a problem that the USVI would, if
• 24:17
  Speaker 1: it could, likely attempt to address through its sovereign lawmaking powers.
• 24:21
  Speaker 1: SNAP remains a leading case, perhaps the leading case on
• 24:25
  Speaker 1: parents' patriotic standing, since the interest asserted by the USVI
• 24:29
  Speaker 1: here is directly analogous to To the interest that provided
• 24:33
  Speaker 1: Perrin's Patriot standing in snap, the USVI has Article 3 standing.
• 24:37
  Speaker 1: All right, we're going to wrap up right here. And
• 24:39
  Speaker 1: in the next episode, we're going to pick up with three.
• 24:42
  Speaker 1: Retroactivity of U.S. Code 18, Section 1595D. All of the
• 24:46
  Speaker 1: information that goes with this episode can be found in
• 24:50
  Speaker 1: the description box. What's up, everyone? And welcome back to
• 24:53
  Speaker 1: the Epstein Chronicles. In this episode, we're picking up where
• 24:57
  Speaker 1: we left off with Judge Rakoff and his ruling and order. 3.
• 25:02
  Speaker 1: Retroactivity of U.S. Code 18, Section 1595-D. The last threshold
• 25:08
  Speaker 1: issue which similarly affects whether the USVI can assert a
• 25:11
  Speaker 1: TVPA claim is whether the applicable statutory provision, U.S. Code 18,
• 25:16
  Speaker 1: Section 1595-D, applies retroactively. While the statute providing a federal
• 25:21
  Speaker 1: civil remedy for victim of sex trafficking, U.S. Code 18,
• 25:25
  Speaker 1: Section 1595, was mostly enacted in 2003, the Parents-Patriot Subdivision
• 25:31
  Speaker 1: Section 1595-D was not added until 2018, approximately five years
• 25:37
  Speaker 1: after J.P. Morgan terminated its relationship with Jeffrey Epstein. J.P.
• 25:42
  Speaker 1: Morgan argues that Section 1595-D does not apply retroactively and
• 25:46
  Speaker 1: therefore does not provide the U.S. V.I., with a right
• 25:49
  Speaker 1: to assert the Perrin's Patriot TVPA claim alleged in the
• 25:53
  Speaker 1: USVI's complaint. As a general matter, federal courts apply a
• 25:57
  Speaker 1: two-pronged test to determine whether statutes apply retroactively. Landgraf v.
• 26:02
  Speaker 1: USI Film Productions 511, U.S. 244-280-1994, Velez v. Sanchez, 693 F. 3D 308-324-25,
• 26:05
  Speaker 1: 2nd Circuit 2012. The first step is to ask whether Congress...
• 26:17
  Speaker 1: has expressly prescribed the statute's proper reach. Landgraf 511 U.S.
• 26:22
  Speaker 1: at 280. Velez 693 F. 2D at 325. If Congress is silent,
• 26:28
  Speaker 1: a court must ask whether the statute would impair rights
• 26:32
  Speaker 1: a party possessed when he acted, increase a party's liability
• 26:35
  Speaker 1: for past conduct, or impose new duties with respect to
• 26:38
  Speaker 1: transactions already completed. Landgraf 511 U.S. at 280. Velez 693 F. 3D
• 26:42
  Speaker 1: at 325. Since Congress did not expressly indicate whether Section
• 26:50
  Speaker 1: 1595D applies retroactively, the precise issue before the court is
• 26:55
  Speaker 1: whether Section 1595D increased parties' liabilities for past conduct to
• 27:00
  Speaker 1: such an extent that it does not apply retroactively. To
• 27:04
  Speaker 1: address that question, the court must consider whether Section 1595D
• 27:08
  Speaker 1: so greatly increased the likelihood that the defendants would face
• 27:11
  Speaker 1: suit that it is equivalent to a new cause of action.
• 27:14
  Speaker 1: Section 1595D does not, in itself, impose any legal liability.
• 27:19
  Speaker 1: It merely allows a new group of people, state attorneys general,
• 27:23
  Speaker 1: to vindicate liabilities that already existed. C.F. Hughes Aircraft Company v. U.S. Schumer,
• 27:29
  Speaker 1: 520 U.S. 939-950-1997 Distinguishing a statute that essentially creates a
• 27:37
  Speaker 1: new cause of action from one that creates an increased
• 27:39
  Speaker 1: likelihood that an existing cause of action will be pursued.
• 27:43
  Speaker 1: nonetheless by conferring a right of action on an expanded
• 27:46
  Speaker 1: universe of plaintiffs with different incentives, ID at 950. A
• 27:50
  Speaker 1: statute can so greatly increase the likelihood of a suit
• 27:53
  Speaker 1: that it is functionally equivalent to a new cause of action.
• 27:56
  Speaker 1: Determining whether a statute does this demands a common-sense functional
• 28:00
  Speaker 1: judgment about whether the new provision attaches new legal consequences
• 28:04
  Speaker 1: to events completed before its enactment, INS v. St. Cyr,
• 28:07
  Speaker 1: 533 U.S. 289.321.2001. The court's judgment should be guided by
• 28:14
  Speaker 1: familiar considerations of fair notice, reasonable reliance, and settled expectations.
• 28:19
  Speaker 1: Martin v. Haddix, 527 U.S., 343-345, 1999. Applying this standard,
• 28:27
  Speaker 1: the court finds that Section 1595D applies retroactively. State attorneys
• 28:32
  Speaker 1: generals do indeed have somewhat different incentives to bring suit
• 28:36
  Speaker 1: than private citizens. Presumably, that is one reason why Congress
• 28:40
  Speaker 1: added Section 1595D. So there likely will be some cases
• 28:45
  Speaker 1: in which a state attorney general files a civil action
• 28:47
  Speaker 1: under the TVPA when low individual victims of human trafficking
• 28:52
  Speaker 1: would not. But Section 1595D only authorizes state attorney generals
• 28:57
  Speaker 1: to vindicate the interests of their individual residents, acting as
• 29:00
  Speaker 1: parents' patriots. This limits the incremental exposure of defendants in
• 29:04
  Speaker 1: two ways. First, Section 1595D confers a right of action
• 29:09
  Speaker 1: on only a small number of new plaintiffs in each case.
• 29:13
  Speaker 1: the attorneys general of each state whose residents have been
• 29:15
  Speaker 1: harmed by a particular sex trafficking venture. Second, and more important,
• 29:20
  Speaker 1: the quasi-sovereign interests that give states standing to sue under
• 29:23
  Speaker 1: Section 1595D are tied to injuries that would give individual
• 29:27
  Speaker 1: plaintiffs a right to sue under Section 1595A. For both
• 29:32
  Speaker 1: of these reasons, Section 1595D increases the likelihood of suit
• 29:37
  Speaker 1: to a relatively small degree. A comparison, to the facts
• 29:40
  Speaker 1: of Hughes is instructive. Hughes considered the inverse of the
• 29:44
  Speaker 1: facts presented here. Prior to a 1986 amendment, the False
• 29:48
  Speaker 1: Claims Act did not permit private realtors to sue on
• 29:51
  Speaker 1: behalf of the government when their suits were based on
• 29:54
  Speaker 1: information already in the government's possession. Idea 941. The government,
• 29:59
  Speaker 1: by contrast, could sue on its own behalf. A 1986
• 30:02
  Speaker 1: amendment eliminated that precondition for private parties to sue. Thus,
• 30:06
  Speaker 1: the 1986 amendment to the False Claims Act enabled countless
• 30:10
  Speaker 1: private parties to sue under circumstances in which previously only
• 30:13
  Speaker 1: the government could sue. The statutory amendment, considered in Hughes, therefore,
• 30:18
  Speaker 1: expanded the likelihood of suit dramatically. The Second Circuit's decision
• 30:22
  Speaker 1: in Velez is not the contrary. In Velez, the Second
• 30:25
  Speaker 1: Circuit rejected plaintiffs' claims that the TVPA's private right of action, U.S.
• 30:30
  Speaker 1: Code 18, Section 1595A, applies retroactively. Applying this right of
• 30:35
  Speaker 1: action retroactively, the Second Circuit held, would represent a significant
• 30:39
  Speaker 1: expansion of civil liability. Velez, 693, F. 3D, at 325. See
• 30:45
  Speaker 1: also Hughes, 520, U.S. at 939. The extension of an
• 30:49
  Speaker 1: FCA cause of action to private parties in circumstances where
• 30:53
  Speaker 1: the action was previously foreclosed essentially creates a new cause
• 30:57
  Speaker 1: of action, Doe v. Sittig, A10-FSUPP.2D-127-135, rejecting the retroactive applicability
• 31:06
  Speaker 1: of U.S. Code 18, Section 1595A because it represented a
• 31:10
  Speaker 1: significant expansion of civil liability. But there is a crucial
• 31:14
  Speaker 1: difference between Velez and the USVI's claims against J.P. Morgan.
• 31:18
  Speaker 1: Before Congress established a private right of action under the TVPA,
• 31:22
  Speaker 1: the TVPA was purely criminal statute. Thus, when Congress added
• 31:26
  Speaker 1: a private right of action to the TVPA in 2003,
• 31:30
  Speaker 1: it added civil liability to a statute that previously only
• 31:33
  Speaker 1: imposed criminal sanctions. That act did indeed represent a significant
• 31:37
  Speaker 1: expansion of civil liability, Velez 693 F. 3d at 325. By contrast,
• 31:44
  Speaker 1: in 2018, when Congress empowered state attorneys general to assert
• 31:48
  Speaker 1: TVPA claims, it merely gave a new set of plaintiffs
• 31:51
  Speaker 1: the right to vindicate potential liabilities which already existed. Put
• 31:55
  Speaker 1: another way, U.S. Code 18 Section 1595D did not expand
• 32:00
  Speaker 1: any party's liability. It merely made it more likely that
• 32:04
  Speaker 1: such liability would actually be assessed. CFU's 520 U.S. at 950.
• 32:09
  Speaker 1: Distinguishing statute that essentially creates a new cause of action
• 32:12
  Speaker 1: from one that creates an increased likelihood that an existing
• 32:16
  Speaker 1: cause of action will be pursued. Velez, therefore, does not control. B.
• 32:20
  Speaker 1: TVPA Participation Liability. Having disposed of the threshold issues, the
• 32:25
  Speaker 1: court now turns to the plaintiff's individual claims. Each plaintiff
• 32:28
  Speaker 1: claims that J.P. Morgan, or D.B., participated in Jeffrey Epstein's
• 32:32
  Speaker 1: sex trafficking venture in violation of U.S. Code 18, Section
• 32:37
  Speaker 1: 1591a and 2. This claim involved three elements. First, the
• 32:40
  Speaker 1: defendant must have participated in a commercial sex trafficking venture. Second,
• 32:45
  Speaker 1: the defendant must have known or recklessly disregarded that force, fraud,
• 32:49
  Speaker 1: or coercion would be used in the sex trafficking venture. Finally,
• 32:53
  Speaker 1: the defendant must have benefited from its participation in the venture. 1.
• 32:58
  Speaker 1: Participation J.P. Morgan and Deutsche Bank argue that they did
• 33:01
  Speaker 1: not participate in Jeffrey Epstein's sex trafficking venture because they
• 33:05
  Speaker 1: merely provided their usual banking services to him and his
• 33:08
  Speaker 1: affiliated entities. That, they contend, is not enough to participate
• 33:12
  Speaker 1: in the venture under the TVPA. Participation requires specific conduct,
• 33:17
  Speaker 1: That furthered the sex trafficking venture, Noble v. Weinstein 335F. SUPP
• 33:20
  Speaker 1: 3D 504 524 SDNY 2018. More than just passive facilitation,
• 33:22
  Speaker 1: but some level of active engagement. GG v. Salesforce.com 603F. SUPP
• 33:25
  Speaker 1: 3D 626644, Northern District of Illinois 2022. Simply providing their
• 33:27
  Speaker 1: usual services, defendants say, does not rise to the level
• 33:30
  Speaker 1: of such active engagement. See Geist v. Weinstein Company Holdings
• 33:50
  Speaker 1: LLC 383F. SUPP 3D 156169 SDNY 2019 Salesforce.com 603F. SUPP 3D 648
• 34:03
  Speaker 1: But even if participation requires such engagement, plaintiffs adequately allege
• 34:07
  Speaker 1: that defendants so participated in Jeffrey Epstein's sex trafficking venture.
• 34:12
  Speaker 1: JPM Jane Doe and the USVI allege inter alia that
• 34:15
  Speaker 1: JPMorgan assisted with structuring cash withdrawals so that those withdrawals
• 34:20
  Speaker 1: would not appear suspicious. JPMorgan, Jane Doe, FAC 179-89. They
• 34:26
  Speaker 1: allege that JPMorgan delayed filing suspicious activity reports concerning Epstein's activities.
• 34:32
  Speaker 1: And they allege that JPMorgan actually trafficked women and girls
• 34:36
  Speaker 1: for Jeffrey Epstein through its subsidiary, Highbridge. J.P. Jane Doe, FAC. Similarly, D.B.
• 34:42
  Speaker 1: Jane Doe alleges that Deutsche Bank concealed its delivery of
• 34:45
  Speaker 1: hundreds of thousands of dollars in cash to Epstein and
• 34:48
  Speaker 1: his associates by willfully failing to file suspicious activity reports. D.B.
• 34:53
  Speaker 1: Jane Doe, FAC. 324. That D.B. structured 97 CAF withdrawals
• 34:58
  Speaker 1: for Epstein's co-conspirators in the amount of $ 7, 500 per withdrawal
• 35:03
  Speaker 1: to avoid alerting authorities. I.D. at 337. that Deutsche Bank
• 35:08
  Speaker 1: failed to implement oversight imposed by its America's Reputational Risk
• 35:12
  Speaker 1: Committee at 325, and that DB allowed Epstein to use
• 35:16
  Speaker 1: its accounts to send dozens of wires directly and indirectly,
• 35:19
  Speaker 1: including at least 18 wires in the amount of 10,000
• 35:22
  Speaker 1: or more, to then-known co-conspirators. Moreover, even the cash that
• 35:27
  Speaker 1: DB provided to Epstein DB Jane Doe alleges was unusual.
• 35:31
  Speaker 1: Idea 320 It was far from routine for DB to
• 35:35
  Speaker 1: provide $ 200, 000 per year in cash to someone like Epstein
• 35:38
  Speaker 1: who did not have an apparent need for such extravagant sums. Moreover,
• 35:42
  Speaker 1: the circumstances in which Epstein was requesting such large amounts
• 35:46
  Speaker 1: were far from routine and raised numerous red flags taking
• 35:50
  Speaker 1: it well outside routine circumstances. In short, plaintiffs allege that
• 35:54
  Speaker 1: both J.P. Morgan and DB went well beyond merely providing
• 35:58
  Speaker 1: their usual services to Jeffrey Epstein and his affiliated entities. Thus,
• 36:03
  Speaker 1: even if it is true that active participation in a
• 36:05
  Speaker 1: sex trafficking venture requires some special tailoring of one's services
• 36:09
  Speaker 1: to that venture, plaintiffs plausibly plead that this element of
• 36:13
  Speaker 1: participation liability is satisfied. Alright, we're going to wrap up
• 36:17
  Speaker 1: right there, and in the next episode we're going to
• 36:19
  Speaker 1: pick up with two, knowledge. All of the information that
• 36:22
  Speaker 1: goes with this episode can be found in the description box.
• 36:26
  Speaker 1: What's up everyone, and welcome back to the Epstein Chronicles.
• 36:30
  Speaker 1: In this episode, we're picking up where we left off
• 36:32
  Speaker 1: with Judge Rakoff's opinion and order in regards to the
• 36:36
  Speaker 1: Epstein survivors and the lawsuit against Deutsche Bank and J.P. Morgan. 2.
• 36:44
  Speaker 1: Knowledge The second element of participation liability under the TVPA
• 36:48
  Speaker 1: is knowledge. The defendant must either have known or recklessly
• 36:52
  Speaker 1: disregarded the fact that force, fraud, or coercion was used
• 36:55
  Speaker 1: to cause a person to engage in a commercial sex act, U.S.
• 36:59
  Speaker 1: Code 18, Section 1591, A and 2. To satisfy this
• 37:03
  Speaker 1: element is not enough for the defendant to have only
• 37:06
  Speaker 1: an abstract awareness of sex trafficking in general. S.J. v.
• 37:10
  Speaker 1: Choice Hotels International, 473 F.S.U.P.P.. 3D, 147154, Eastern District of
• 37:18
  Speaker 1: New York, 2020. Instead, the defendant must have known or
• 37:22
  Speaker 1: recklessly disregarded that forced fraud or coercion was used in
• 37:26
  Speaker 1: the particular sex trafficking venture that it is alleged to
• 37:29
  Speaker 1: have participated in. Defendants argue that even more specific knowledge
• 37:33
  Speaker 1: is necessary. They say that they can be held liable
• 37:37
  Speaker 1: only if they knew that force, fraud, or coercion was
• 37:39
  Speaker 1: used with respect to the plaintiff herself. It is true
• 37:43
  Speaker 1: that some courts appear to have taken this position in
• 37:46
  Speaker 1: the past. CEG Salesforce.com 603 F.SUPP 3D at 646 A
• 37:53
  Speaker 1: claim under Section 1595 requires that the defendant must have
• 37:57
  Speaker 1: either actual or constructive knowledge that the venture in which
• 38:00
  Speaker 1: it voluntarily participated and from which it knowingly benefited violated
• 38:05
  Speaker 1: Section 1591. As to the plaintiff, Lundstrom v. Choice Hotels International, Inc.,
• 38:10
  Speaker 1: 2021 WL 5579-117-8, Colorado, November 30, 2021. Failure to allege
• 38:20
  Speaker 1: defendant should have known about plaintiff sex trafficking in its hotels. A.B. v.
• 38:25
  Speaker 1: Hilton Worldwide Holdings Inc. 484 F.S.U.P.P. 3D 921, 938, and
• 38:33
  Speaker 1: 39 Oregon 2020 Failure to allege facts which sufficiently link
• 38:38
  Speaker 1: notice to plaintiff sex trafficking to any of these defendants.
• 38:42
  Speaker 1: But these decisions do not control this court and defendants
• 38:45
  Speaker 1: do not cite to any element of either the text
• 38:47
  Speaker 1: or the legislative history of U.S. Code 18, Section 1591a
• 38:52
  Speaker 1: and 2 that supports this interpretation. Instead, the text of
• 38:56
  Speaker 1: Section 1591a and 2 directly supports the plaintiff's interpretation of
• 39:01
  Speaker 1: the knowledge element of their TVPA claims. Section 1591a and
• 39:06
  Speaker 1: 2 imposes liability for knowingly benefiting from participating in a
• 39:10
  Speaker 1: sex trafficking venture. A sex trafficking venture in turn is
• 39:14
  Speaker 1: defined as a venture that Thank you for watching. Thank
• 39:20
  Speaker 1: you for watching. Knowledge, therefore, is required with respect to
• 39:50
  Speaker 1: the venture, not with respect to any particular person. Plaintiffs
• 39:54
  Speaker 1: have pled sufficient facts to support their sex trafficking venture,
• 39:58
  Speaker 1: either directly or by recklessly disregarding what was plainly to
• 40:02
  Speaker 1: be seen. As detailed above, plaintiffs alleged that J.P. Morgan
• 40:06
  Speaker 1: was aware of Epstein's convictions for sex crimes and ignored
• 40:09
  Speaker 1: numerous red flags associated with Epstein's accounts, which all suggested
• 40:13
  Speaker 1: that Jeffrey Epstein operated a sex trafficking venture. Even these
• 40:17
  Speaker 1: allegations alone are sufficient to support plaintiff's allegations that JP
• 40:21
  Speaker 1: Morgan knew or recklessly disregarded that Epstein operated such a venture.
• 40:26
  Speaker 1: And just to interject real quick here, this is the
• 40:28
  Speaker 1: same issue that Stacey Plaskett and the USVI is going
• 40:31
  Speaker 1: to run into. Because Epstein was already convicted, remember, when
• 40:35
  Speaker 1: they were in here wheeling and dealing and taking his money.
• 40:38
  Speaker 1: So this is going to be an issue moving forward
• 40:40
  Speaker 1: with this lawsuit. But there is more, such as Jeff
• 40:43
  Speaker 1: Staley's alleged personal knowledge of Epstein's sex trafficking venture. When
• 40:47
  Speaker 1: an agent is employed to perform certain duties for his
• 40:49
  Speaker 1: principal and acquires knowledge material to those duties, the agent's
• 40:53
  Speaker 1: knowledge is imputed to the principal. Apollo Fuel Oil v.
• 40:57
  Speaker 1: United States, 195 F. 3D, 74-76 Second Circuit, 1999. When Epstein
• 41:04
  Speaker 1: was J.P. Morgan's client, Mr. Staley was one of J.P.
• 41:07
  Speaker 1: Morgan's high-level executives, and his duties included overseeing Epstein's account, USVI-FAC-84.
• 41:15
  Speaker 1: And if the allegations and plaintiff's complaints are taken as true, Mr.
• 41:19
  Speaker 1: Staley had actual first-hand knowledge that Epstein conducted a sex
• 41:23
  Speaker 1: trafficking venture. In fact, JPM Jane Doe alleges that Mr.
• 41:27
  Speaker 1: Staley observed her specifically as a sexual trafficking and abuse victim,
• 41:31
  Speaker 1: FAC 115. Through attribution of Mr. Staley's alleged knowledge to JPMorgan,
• 41:38
  Speaker 1: the complaint might well support an allegation that JPMorgan actually
• 41:42
  Speaker 1: knew that Jeffrey Epstein ran a sex trafficking venture. At
• 41:45
  Speaker 1: the very least, they sufficiently support plaintiff's allegation that J.P.
• 41:49
  Speaker 1: Morgan recklessly disregarded the existence of such a venture. D.B.
• 41:53
  Speaker 1: Jane Doe also pleads sufficient facts to support her allegations
• 41:57
  Speaker 1: that Deutsche Bank knew or recklessly disregarded that Jeffrey Epstein
• 42:00
  Speaker 1: ran a sex trafficking venture. Before Epstein was onboarded at
• 42:04
  Speaker 1: Deutsche Bank, D.B. Jane Doe alleges Epstein was convicted of
• 42:08
  Speaker 1: soliciting a minor for prostitution. D.B. Jane Doe, FAC 42
• 42:12
  Speaker 1: and 43. 279. Then in November 2012, Paul Morris joined
• 42:18
  Speaker 1: DB from JP Morgan, where he had been a member
• 42:21
  Speaker 1: of the team that serviced Epstein's account. He brought to
• 42:24
  Speaker 1: DB his knowledge of Epstein's affairs. Idea 201. Thereafter, beginning
• 42:29
  Speaker 1: around November 2013, Epstein began using DB accounts to send
• 42:33
  Speaker 1: wire transfers to collaborators in his sex trafficking operation, whose
• 42:38
  Speaker 1: names and alleged collaborative activity had by then been made public.
• 42:42
  Speaker 1: Idea 212-16. Not much after that, in 2014 and 2015,
• 42:47
  Speaker 1: an internal department within DB alerted management about Epstein's sex trafficking.
• 42:53
  Speaker 1: ID at 231. And a DB executive is alleged to
• 42:56
  Speaker 1: have met with Epstein and to have observed victims in
• 42:59
  Speaker 1: Epstein's home. ID at 235 and 36. If taken as
• 43:03
  Speaker 1: true and viewed in a light most favorably to DB
• 43:07
  Speaker 1: Jane Doe, these allegations make it plausible that DB knew
• 43:10
  Speaker 1: of or recklessly disregarded Jeffrey Epstein Sex Trafficking Venture Thus,
• 43:15
  Speaker 1: the court finds that the plaintiffs have pled sufficient facts
• 43:19
  Speaker 1: to support their allegations that J.P. Morgan and Deutsche Bank
• 43:22
  Speaker 1: knew or recklessly disregarded that Jeffrey Epstein conducted a sex
• 43:26
  Speaker 1: trafficking venture. 3. Benefit The last element of liability for
• 43:31
  Speaker 1: participation in a sex trafficking venture is that the defendant
• 43:34
  Speaker 1: benefited from its participation. J.P. Morgan and D.B. do not
• 43:39
  Speaker 1: contest that they received fees and other revenue from providing
• 43:42
  Speaker 1: services to Jeffrey Epstein and his affiliated entities, but they
• 43:46
  Speaker 1: both assert that the mere receipt of revenue does not
• 43:49
  Speaker 1: satisfy the benefit requirement. Instead, they say plaintiffs must allege
• 43:53
  Speaker 1: that they receive revenue from Jeffrey Epstein and his affiliated
• 43:56
  Speaker 1: entities in exchange for their furtherance of Epstein's sex trafficking venture.
• 44:01
  Speaker 1: See Geis v. Weinstein Company Holdings, LLC. 383F. SUPP 3D 156
• 44:10
  Speaker 1: 169 SDNY 2019. There must be a casual relationship between
• 44:13
  Speaker 1: affirmative conduct furthering the sex trafficking venture and receipt of
• 44:17
  Speaker 1: a benefit. Although the court is not convinced that the
• 44:19
  Speaker 1: benefit element should be read in this way, even assuming
• 44:22
  Speaker 1: our guendo that defendants are correct, the plaintiffs have here
• 44:26
  Speaker 1: offered sufficient allegations to satisfy this element. Indeed, JPM Jane
• 44:31
  Speaker 1: Doe expressly alleges, that JPMorgan chose to ignore warnings that
• 44:35
  Speaker 1: Epstein was involved in sex trafficking because JPMorgan understood that
• 44:39
  Speaker 1: it would lose a lot of money if it fired
• 44:41
  Speaker 1: Epstein as a client. JPM Jane Doe also alleges that
• 44:51
  Speaker 1: JPMorgan executives specifically lobbied to keep Epstein as the client
• 44:55
  Speaker 1: despite reports of sex trafficking. DB Jane Doe makes similar
• 44:58
  Speaker 1: allegations against Deutsche Bank. DB Jane Doe alleges that DB
• 45:02
  Speaker 1: Bank overlooked warnings that Epstein was involved in sex trafficking
• 45:06
  Speaker 1: because of the number of sizable deals that DB obtained
• 45:09
  Speaker 1: through its relationship with Jeffrey Epstein. DB Jane Doe, FAC 243.
• 45:15
  Speaker 1: DB Jane Doe also alleges that Paul Morris proposed that
• 45:18
  Speaker 1: DB establish accounts for entities affiliated with Jeffrey Epstein, not
• 45:23
  Speaker 1: personal accounts in Epstein's name, to help conceal both DB's
• 45:26
  Speaker 1: participation in Epstein's sex trafficking venture and the existence of
• 45:31
  Speaker 1: that venture. Like plaintiffs' allegations against J.P. Morgan, these allegations
• 45:35
  Speaker 1: make it plausible that D.B. knowingly benefited from furthering Jeffrey
• 45:40
  Speaker 1: Epstein's sex trafficking venture. 4. Conclusion In short, the allegations
• 45:46
  Speaker 1: in the complaints, if taken as true and viewed in
• 45:48
  Speaker 1: a light most favorable to the plaintiffs, plausibly support such
• 45:52
  Speaker 1: elements of plaintiffs' claims under U.S. Code 18, Section 1591a
• 45:55
  Speaker 1: and 2. Accordingly, defendants' motions to dismiss these claims are denied. C.
• 46:03
  Speaker 1: Liability for obstructing TVPA enforcement JPM Jane Doe and DB
• 46:08
  Speaker 1: Jane Doe also allege that JPMorgan and Deutsche Bank obstructed
• 46:12
  Speaker 1: the enforcement of the TVPA. U.S. Code 18 Section 1591-D
• 46:18
  Speaker 1: makes it unlawful to obstruct, attempt to obstruct, or in
• 46:21
  Speaker 1: any way interfere with or prevent the enforcement of U.S.
• 46:24
  Speaker 1: Code 18 Section 1591-D. For a defendant to be liable
• 46:29
  Speaker 1: for obstructing the enforcement of the TVPA, it must 1.
• 46:33
  Speaker 1: Know of an effort to enforce the TVPA and 2.
• 46:36
  Speaker 1: Intentionally obstruct or attempt to obstruct the enforcement effort. See
• 46:40
  Speaker 1: United States v. Farah, 766 F. 3D, 599, 612 6th Circuit, 2014.
• 46:48
  Speaker 1: Plaintiffs allege that J.P. Morgan and Deutsche Bank obstructed the
• 46:51
  Speaker 1: enforcement of the TVPA by, among other things, failing to
• 46:55
  Speaker 1: file suspicious activity reports that would have alerted authorities to
• 46:59
  Speaker 1: Epstein's sex trafficking venture. JPM Jane Doe, FAC 476-79, DB
• 47:06
  Speaker 1: Jane Doe, FAC 449-52. As an initial matter, defendants argue
• 47:13
  Speaker 1: that JP Jane Doe and DB Jane Doe have no
• 47:16
  Speaker 1: rights to assert obstruction claims. The TVPA's Civil Remedy, U.S.
• 47:21
  Speaker 1: Code 18, Section 1595A, only provides a right of action
• 47:25
  Speaker 1: to a victim of a violation of the TVPA. U.S.
• 47:28
  Speaker 1: Code 18, Section 1595A. And defendants argue that JPM, Jane Doe,
• 47:34
  Speaker 1: and DB, Jane Doe, are not the victims of any
• 47:37
  Speaker 1: obstruction of an enforcement effort. The only victims of such
• 47:41
  Speaker 1: an action, defendants say, is the government that makes such
• 47:44
  Speaker 1: an effort. See Doe v. Fitzgerald, 2022, WL425-016 at 4.
• 47:46
  Speaker 1: Central District, California. January 6, 2022. The victim of the
• 47:55
  Speaker 1: obstruction of enforcement set out in Section 1591-D is the
• 47:59
  Speaker 1: state or federal government. Thus, defendants say the Jane Does
• 48:03
  Speaker 1: do not have a right to assert their obstruction claims.
• 48:06
  Speaker 1: The statute cannot be read in this cramped fashion. While
• 48:09
  Speaker 1: 18 U.S. Code Section 1595-A does not define victim, a
• 48:14
  Speaker 1: different section of the Federal Criminal Code, which establishes criminal
• 48:17
  Speaker 1: procedure that is generally applicable across federal crimes, defines crime
• 48:22
  Speaker 1: victim as a person directly and proximately harmed as a
• 48:25
  Speaker 1: result of the commission of a federal offense. U.S. Code 18,
• 48:29
  Speaker 1: Section 1371, E2 and A. See also U.S. Code 18,
• 48:33
  Speaker 1: Section 10, 608, E2, defining a victim as a person
• 48:38
  Speaker 1: that has suffered direct physical or emotional harm as a
• 48:41
  Speaker 1: result of the commission of a crime. This definition accords
• 48:44
  Speaker 1: with ordinary usage, which recognizes as a victim or one
• 48:48
  Speaker 1: that is injured, destroyed, or sacrificed under any various conditions. Thus,
• 48:53
  Speaker 1: the victims of one who obstructs the enforcement of the
• 48:56
  Speaker 1: TVPA include not just the government, but also include those
• 49:00
  Speaker 1: who suffered harm because the government's enforcement efforts were hindered.
• 49:04
  Speaker 1: Turning now to the merits of plaintiffs' claims, the court
• 49:06
  Speaker 1: finds that the plaintiffs placed sufficient facts to support their
• 49:10
  Speaker 1: obstruction claims. JPM Jane Doe and DB Jane Doe allege
• 49:14
  Speaker 1: that JP Morgan and DB, respectively, knew of investigations into
• 49:19
  Speaker 1: Jeffrey Epstein's sex trafficking operation and that they intentionally failed
• 49:22
  Speaker 1: to file suspicious activity reports in order to frustrate such investigations. Thus,
• 49:28
  Speaker 1: the court denies defendants' motions to dismiss plaintiff's obstruction claims. Alright,
• 49:33
  Speaker 1: we're going to wrap up this episode here and in
• 49:35
  Speaker 1: the next episode we're going to pick up with D.
• 49:37
  Speaker 1: TVPA Perpetrator Liability All of the information that goes with
• 49:41
  Speaker 1: this episode can be found in the description box.