Latest / Beyond The Horizon / The USVI And Their Motion In Opposition To JP Morgan's Request For Dismissal (Part 4) (9/21/26)

Transcript

The USVI And Their Motion In Opposition To JP Morgan's Request For Dismissal (Part 4) (9/21/26) · Beyond The Horizon

• 0:00
  Speaker 1: What's up everyone and welcome back to the Epstein Chronicles.
• 0:03
  Speaker 1: In this episode, we're going to pick up where we
• 0:05
  Speaker 1: left off with the USVI and their motion to deny
• 0:10
  Speaker 1: the request to dismiss by J.P. Morgan. 4. J.P. Morgan
• 0:16
  Speaker 1: knowingly benefited. J.P. Morgan argues that the government does not
• 0:20
  Speaker 1: plausibly allege a casual relationship between J.P. Morgan's participation in
• 0:25
  Speaker 1: Epstein's sex trafficking venture and its receipt of a benefit,
• 0:28
  Speaker 1: again relying on Geis. That is wrong. Geis is not controlling.
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  Speaker 1: Other cases, including those relied on by J.P. Morgan, hold
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  Speaker 1: that the statutory language imposes no such casual relationship requirement
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  Speaker 1: and requires only that the defendant knowingly benefit financially. HH v.
• 0:47
  Speaker 1: G6 Hospitality Inc. No. 219-CV-755-2019-WL-668-2152-2 Southern District of Ohio, December 6, 2019.
• 1:01
  Speaker 1: Allegation that rental of a room constitutes a financial benefit
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  Speaker 1: from a relationship with the trafficker is sufficient. There is
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  Speaker 1: no question J.P. Morgan received financial benefits in the form
• 1:13
  Speaker 1: of servicing accounts with hundreds of millions of dollars in
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  Speaker 1: assets and referrals of business opportunities from its relationship with Epstein,
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  Speaker 1: including the acquisition of one of the country's largest hedge
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  Speaker 1: funds as a customer. If the government must allege a
• 1:27
  Speaker 1: casual relationship, it has. Canossa is again instructive. There, the
• 1:32
  Speaker 1: court found that complaint adequately pled a symbiotic relationship between
• 1:36
  Speaker 1: the companies and Weinstein, in which the companies affirmatively enabled
• 1:40
  Speaker 1: and concealed Weinstein's predations as a means of keeping him happy, productive,
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  Speaker 1: and employable, which led to financial and other benefits for
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  Speaker 1: the company. 2019 WL 498865 at 24. So too here
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  Speaker 1: the government alleges a long-standing and close relationship between J.P.
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  Speaker 1: Morgan and Epstein, in which J.P. Morgan knowingly received value
• 2:04
  Speaker 1: from Epstein's business, connections, and referrals in exchange for J.P.
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  Speaker 1: Morgan's participation in his sex trafficking venture. 2. The government
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  Speaker 1: pleads actionable SECO counts. A. SECO applies to J.P. Morgan's conduct. J.P.
• 2:19
  Speaker 1: Morgan baselessly contends that its conduct occurred entirely in New York.
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  Speaker 1: Motion at 15. JP Morgan's criminal activity under SECO occurred
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  Speaker 1: almost entirely in the Virgin Islands. For two decades, JP
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  Speaker 1: Morgan transacted business with a Virgin Islands resident and his
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  Speaker 1: Virgin Islands entities, including managing accounts worth hundreds of millions
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  Speaker 1: of dollars, the principal business of which was trafficking, including
• 2:43
  Speaker 1: in and from the Virgin Islands. JP Morgan processed, redacted
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  Speaker 1: payments to women and girls sex-trafficked in the U.S. Virgin
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  Speaker 1: Islands who it knew may be victims of human trafficking. J.P. Morgan,
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  Speaker 1: through Staley, engaged in multiple visits to Epstein's residence on
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  Speaker 1: Little St. James, where the sex trafficking took place as
• 3:02
  Speaker 1: part of its management of its business relationship with Epstein.
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  Speaker 1: Far from acting for only wholly personal reasons, at the
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  Speaker 1: time of these visits, Staley was serving in the role
• 3:12
  Speaker 1: of J.P. Morgan's senior executive and head of private bank,
• 3:15
  Speaker 1: which was dedicated to extremely wealthy clients like Epstein. J.P.
• 3:19
  Speaker 1: Morgan assigned Staley to manage Epstein and his account's for
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  Speaker 1: his wealth, connections, and referrals of ultra-wealthy and powerful clients. Thus,
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  Speaker 1: Staley's job was to maintain a close relationship with Epstein
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  Speaker 1: so that his money, connections, and referrals would continue to
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  Speaker 1: flow to J.P. Morgan. Staley emailed freely with Epstein about
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  Speaker 1: his visits to Little St. James over his work email
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  Speaker 1: account in full view of J.P. Morgan. J.P. Morgan's conduct
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  Speaker 1: threatened the public safety and caused serious harm to the
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  Speaker 1: Virgin Islands and its residents by facilitating sex trafficking in
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  Speaker 1: and the Commission of Sexual Abuse Against Young Women and
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  Speaker 1: Underage Girls in the Virgin Islands. By sharp contrast, in
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  Speaker 1: American Charities for Reasonable Fundraising Regulation, Inc. v. Pinella County,
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  Speaker 1: which J.P. Morgan claims is analogous, motion at 15 and 16,
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  Speaker 1: there were no allegations that the plaintiffs purposefully direct their
• 4:12
  Speaker 1: efforts to or specifically advise on solicitation aimed at Pinellas County. B.
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  Speaker 1: The government pleads actionable SECO claims. 1. Elements of a
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  Speaker 1: SECO claim. A. Association with and participation in the enterprise.
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  Speaker 1: JP Morgan argues that all the government pleads is that
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  Speaker 1: JP Morgan earn money by providing ordinary banking services to
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  Speaker 1: a client, which is insufficient to establish shared common purpose.
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  Speaker 1: This is incorrect. The government alleges that J.P. Morgan, rather
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  Speaker 1: than provide ordinary banking services, process Epstein's payments to recruiters
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  Speaker 1: and young women who were trafficked in the Virgin Islands
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  Speaker 1: and elsewhere, with knowledge that Epstein was procuring women to
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  Speaker 1: perform commercial sex acts. Staley has been indicted for and
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  Speaker 1: pled guilty to solicitation of a minor for prostitution and
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  Speaker 1: was a criminal felon and registered sex offender, and was
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  Speaker 1: repeatedly under law enforcement investigations for associated with trafficking activity.
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  Speaker 1: JPMorgan handled Epstein's payments even though they had no discernible
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  Speaker 1: business or other legitimate purpose and engaged in a years-long
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  Speaker 1: pattern of ignoring obvious red flags and failing to demonstrate
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  Speaker 1: even basic due diligence on Epstein's accounts, which is particularly
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  Speaker 1: out of the ordinary conduct by JPMorgan for a customer
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  Speaker 1: it designated high risk. Further, JPMorgan said, catapulted Staley's career
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  Speaker 1: based on Staley's profitable work with Epstein and directed Staley
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  Speaker 1: to manage JP Morgan's relationship with Epstein in the pursuit
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  Speaker 1: of more profits and referrals of business opportunities. Staley filled
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  Speaker 1: his end of the bargain, establishing a close relationship with Epstein.
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  Speaker 1: In 2009 and 2010, after Epstein pled guilty to conduct
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  Speaker 1: that is child sex trafficking under the TVPA, Staley's JP
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  Speaker 1: Morgan email account, in full view of JP Morgan, shows
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  Speaker 1: multiple emails with Epstein discussing visits to Epstein's residences, including
• 6:06
  Speaker 1: in the Virgin Islands, women who they referred to by
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  Speaker 1: the names of Disney princesses that Epstein procured for Staley,
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  Speaker 1: discussions of sex with young women, and photos of young
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  Speaker 1: women in suggestive poses. In 2011, following additional news stories
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  Speaker 1: about Epstein's human trafficking, J.P. Morgan's investigation extraordinarily consisted of
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  Speaker 1: asking Staley to discuss those reports with Epstein. This unlawful
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  Speaker 1: conduct and furtherance of the trafficking enterprise on lawful purpose
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  Speaker 1: constitutes association with and participation in the enterprise by J.P. Morgan.
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  Speaker 1: CEG Handen v. Lemaire, 112, F. 3D, 1339, 1350, 8th Circuit, 1997.
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  Speaker 1: The law firm's assistance with Sham, Transactions and false court
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  Speaker 1: filings in furtherance of a client's misuse of bankruptcy to
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  Speaker 1: shield enterprise assets constitutes association and participation. Taylor v. Bettis 976F. SUPP
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  Speaker 1: 2D721-735-EDNC 2013 If a doctor or lawyer provides services that
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  Speaker 1: go to the heart of the allegedly fraudulent scheme, the
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  Speaker 1: professional may be liable for providing some direction in the
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  Speaker 1: affairs of the enterprise. the government also sufficiently pleads participation. J.P.
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  Speaker 1: Morgan argues that providing banking services, even with knowledge of
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  Speaker 1: an underlying fraud, is not enough to establish participation. Motion
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  Speaker 1: at 19. Here, too, the government alleges more that J.P.
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  Speaker 1: Morgan provided banking services with knowledge of wrongdoing. It alleges
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  Speaker 1: that J.P. Morgan directly or indirectly participated in the wrongdoing
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  Speaker 1: by handling payments for Epstein sex trafficking in with no
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  Speaker 1: conceivable relationship to Epstein's stated business interests, having a close-up
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  Speaker 1: view of Epstein's sex trafficking through Staley and also over J.P.
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  Speaker 1: Morgan email and redacted in the face of evidence of
• 8:02
  Speaker 1: illicit purpose which allowed the ongoing trafficking. B. Pattern of
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  Speaker 1: Criminal Activity J.P. Morgan argues that the government does not
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  Speaker 1: allege conduct related to the enterprise affairs. To the contrary,
• 8:14
  Speaker 1: the government alleges extensive conduct by J.P. Morgan, associated with
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  Speaker 1: a trafficking enterprise, see Supra, Section 11b-1. J.P. Morgan also
• 8:23
  Speaker 1: argues that the government does not allege conduct within the
• 8:26
  Speaker 1: past five years because its termination of Epstein's accounts in
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  Speaker 1: 2013 effectively ended its conduct. It did not, the government
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  Speaker 1: alleges redacted that occurred through 2019 and which allowed Epstein's
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  Speaker 1: ongoing sex trafficking. This satisfies SECO's requirement of a pattern
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  Speaker 1: of criminal activity, an instance of which was within five
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  Speaker 1: years of the filing of the suit, and triggers equitable
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  Speaker 1: tolling of the statute of limitations under Virgin Islands law. Two,
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  Speaker 1: predicate criminal activity. Under SECO, criminal activity includes conduct violating
• 9:00
  Speaker 1: any federal criminal law, the violations of which is a felony.
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  Speaker 1: This includes the TVPA and the BSA. The government claims
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  Speaker 1: that J.P. Morgan violated the TVPA On the grounds discussed above, J.P.
• 9:14
  Speaker 1: Morgan repeats by reference its arguments on the TVPA as
• 9:17
  Speaker 1: grounds for dismissing the government's TVPA-based SECO claim. Motion at 20.
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  Speaker 1: The government restates by reference its arguments in opposition, C. Supra, I.C.
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  Speaker 1: On the BSA-based SECO claims, J.P. Morgan argues that the
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  Speaker 1: government does not adequately redacted. Just the opposite. J.P. Morgan's
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  Speaker 1: redacted Ratzliff v. U.S. 510 claims U.S. 135-138-1994, BSA's willfulness
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  Speaker 1: element requires knowledge of unlawfulness. J.P. Morgan argues that Epstein's
• 9:51
  Speaker 1: July 2019 arrest on trafficking charges changed the meaning of
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  Speaker 1: these earlier transactions. It did not. JP Morgan elsewhere argues
• 10:00
  Speaker 1: that allegations are not enough. By the time Epstein was
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  Speaker 1: charged in 2019, he had already pled guilty to child
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  Speaker 1: sex offense a decade earlier and repeatedly alleged to be
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  Speaker 1: engaged in trafficking. The 2019 charges highlighted what JPMorgan already knew,
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  Speaker 1: that the women receiving his payments through JPMorgan may be
• 10:20
  Speaker 1: victims of human trafficking. The government sufficiently alleges a willful violation. C.
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  Speaker 1: The government has standing for its BSA-based SECO claim. JPMorgan
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  Speaker 1: argues that the government lacks standing for its BSA-based SECO
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  Speaker 1: claim because it does not allege an injury fairly traceable
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  Speaker 1: to the BSA violation. This argument fails because the government
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  Speaker 1: plausibly alleges that J.P. Morgan's redacted harmed the Virgin Islands
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  Speaker 1: and its residents by facilitating the continuation of Epstein's trafficking.
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  Speaker 1: Suspicious activity reporting is critical to the United States' ability
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  Speaker 1: to utilize financial information to combat criminal activity and ensures
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  Speaker 1: that the government act when alerted to potential illegal conduct.
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  Speaker 1: A key purpose of federal banking regulations is to give
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  Speaker 1: law enforcement real-time information so that I can act to
• 11:10
  Speaker 1: deter violations of the law and protect public safety. In fact,
• 11:14
  Speaker 1: the federal government did ultimately take action to bring Epstein's
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  Speaker 1: trafficking to a halt. 3. The government pleads a CFDBPA claim.
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  Speaker 1: The CFDBPA makes it unlawful for any person to engage
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  Speaker 1: in unfair methods of competition in the conduct of any
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  Speaker 1: trade or commerce. The government claims that J.P. Morgan engaged
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  Speaker 1: in unfair competition by facilitating and redacted Epstein's trafficking to
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  Speaker 1: gain referrals over the other banks. The government seeks civil
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  Speaker 1: penalties under 12A VIC and the prayer for relief. J.P.
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  Speaker 1: Morgan is wrong that this claim is barred by the
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  Speaker 1: Act's six-year statute of limitations. Motion at 25. The statute
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  Speaker 1: of limitations under this chapter is governed by Title V,
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  Speaker 1: Virgin Island Code 31, 3B. Section 31.3b does not apply
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  Speaker 1: to a government enforcement action for a penalty, as here,
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  Speaker 1: but only to an action upon a liability created by statute,
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  Speaker 1: other than a penalty of forfeiture, which this, of course,
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  Speaker 1: is not. Virgin Island Code 5, Section 31.3b. In any event, J.P.
• 12:22
  Speaker 1: Morgan's redacted continued into 2019. J.P. Morgan also incorrectly argues
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  Speaker 1: that the government pleads insufficient facts about the business opportunities
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  Speaker 1: and competitors at issue. The government identifies the business referral
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  Speaker 1: at issue, and alleges that compliant banks were unfairly denied
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  Speaker 1: the opportunity. Moreover, the Federal Trade Commission clarified in its
• 12:44
  Speaker 1: recently issued policy statement regarding unfair methods of competition that
• 12:49
  Speaker 1: it is not necessary to show actual anti-competitive effects, but
• 12:53
  Speaker 1: rather that the challenge conduct negatively affects competitive conditions. See
• 12:58
  Speaker 1: Federal Trade Commission policy statement regarding the scope of unfair
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  Speaker 1: methods of competition under Section 5 of the Federal Trade Commission. Conclusion.
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  Speaker 1: For all the reasons set forth above, the motion to
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  Speaker 1: dismiss should be denied. This was signed by Carol Jacobs,
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  Speaker 1: the Acting Attorney General, and it was signed on February 15, 2023. Alright,
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  Speaker 1: that's going to do it for this one. All of
• 13:22
  Speaker 1: the information that goes with this episode can be found
• 13:26
  Speaker 1: in the description box.