The judge in the V.I. government’s lawsuit against JPMorgan Chase on Friday ruled in favor of the bank in its bid to force the Attorney General’s Office to unseal documents it says are necessary to its defense.
Judge Jed Rakoff of Manhattan federal court granted JPMorgan’s motion to de-designate as confidential the annual reports filed by Jeffrey Epstein’s companies to the USVI, as well as his sex-offender file. At the same time, he denied the government’s motion to re-open depositions.
The orders were entered on the court docket, without any attendant explanation.
The rulings cap a week of fractious filings by both sides in the lawsuit, which is scheduled to go to trial on Oct. 23 if a settlement is not reached.
The V.I. Attorney General’s Office filed suit against JPMorgan in December in federal court in Manhattan, alleging it aided Epstein’s sex-trafficking scheme in violation of the federal Trafficking Victims Protection Act. The bank has denied wrongdoing and has called the suit a “masterclass in deflection.”
Epstein, 66 — a registered sex offender who pleaded guilty to procuring a minor for prostitution in Florida in 2008 — was found dead by apparent suicide in August 2019 while in detention in New York on federal human trafficking charges.
His primary residence was Little St. James, his private island off St. Thomas where for years he trafficked in girls and young women and ran a complex web of shell companies registered in the USVI that enabled his crimes, court documents have alleged.
The wealthy financier, who held some 50 JPMorgan accounts, received lucrative tax benefits for his businesses through the territory’s Economic Development Commission, which at the time was chaired by now Gov. Albert Bryan Jr. At the time of his death his estate was valued at more than $577 million, according to court documents.
Currently at issue is JPMorgan’s argument that it should be allowed to use affirmative defenses — essentially that the USVI was equally complicit in fostering a climate in which Epstein could commit his alleged crimes — and treat the government as it would a private civil litigant.
The USVI claims that is nonsense, and on Monday filed an updated memorandum of law in opposition to JPMorgan’s affirmative defenses, including exhibits of internal JPMorgan communications in which bank officials voiced concerns about keeping Epstein as a client as early as 2007 as information about his Florida arrest and subsequent federal investigations into his alleged sex trafficking came to light.
JPMorgan filed an updated 30-page memorandum of law late Wednesday in opposition to the government’s motion to strike the bank’s affirmative defenses. Included were 68 previously sealed exhibits totaling nearly 400 pages, though many of them are still partially redacted.
In its updated memorandum, JPMorgan alleged that for two decades, and for long after it exited Epstein as a client, “the entity that most directly failed to protect public safety and most actively facilitated and benefited from Epstein’s continued criminal activity was the plaintiff in this case — the USVI government itself.”
On Friday, V.I. Attorney General Ariel Smith released a video announcement denouncing JPMorgan’s “constant attacks and blame shifting which attack the fabric of integrity of all Virgin Islands people.”
