JPMorgan to pay $75 million to settle Jeffrey Epstein lawsuit with US Virgin Islands
JPMorgan Chase & Co. (JPM) said Tuesday it reached an agreement with the US Virgin Islands to settle a lawsuit alleging that the bank participated in a sex trafficking venture headed by Jeffrey Epstein, the convicted sex offender who died in a Manhattan jail in 2019 by suicide.
The country's largest bank will pay $75 million to end the litigation, with $55 million going to charities and assisting victims while the other $20 million will pay attorney fees of law firm Motley Rice.
"While the settlement does not involve admissions of liability, the firm deeply regrets any association with this man, and would never have continued doing business with him if it believed he was using the bank in any way to commit his heinous crimes," JPMorgan said in a statement shared with Yahoo Finance.
The settlement stops the case short of going to trial in October, ending a nine-month legal battle that began in December of last year when the US Virgin Islands sought up to $190 million in compensation from the bank for claims it ignored warning signs about the disgraced financier and chose to look the other way.
The US Virgin Islands did not immediately respond to Yahoo Finance's request for comment.
Under the terms of the settlement JPMorgan said it will give $30 million to charitable organizations in the US Virgin Islands that combat sex trafficking and support survivors in recovery. Another $25 million will go to the US Virgin Islands government to improve its infrastructure and law enforcement efforts to prevent and combat human trafficking and other crimes within the US territory.
JPMorgan said it had also reached a confidential agreement with former executive James "Jes" Staley who worked with Epstein while running JPMorgan's asset management unit. Staley later became the CEO of its corporate and investment banking division.
The bank previously claimed that Staley misled its executives about Epstein. Staley's lawyers have denied the allegations.
JPMorgan in June reached a separate settlement in a US class-action lawsuit brought by hundreds of Epstein’s alleged victims. David Boies, the victims’ attorney, said settlement with the banking giant totaled $290 million.
The alleged victims, all minors at the time of their interaction with Epstein, said that they were harmed by the bank’s relationship with Epstein because it provided banking services that fueled his international sex trafficking operation.
The settlement came weeks after JPMorgan’s CEO Jamie Dimon testified in a deposition about what he knew about Epstein’s banking transactions while the convicted sex predator was a longtime customer of the bank.
During a May 26 deposition conducted at JPMorgan's headquarters in Manhattan, Dimon said repeatedly that he never met Epstein or talked to him. He also said he had no memory of being told anything about him by any of his executives.
JPMorgan has agreed to pay $365 million in total settlements for its relationship with Epstein, having him as a client until 2013.
Earlier this year, Deutsche Bank agreed to pay $75 million to settle a lawsuit with Epstein's victims. The bank took Epstein as a client in 2013 after JPMorgan tossed him out.
Epstein, who pleaded guilty in 2008 to soliciting a minor for prostitution, was arrested in 2019 on child sex trafficking charges. He was later found dead in prison in an apparent suicide.
David Hollerith is a senior reporter for Yahoo Finance covering banking. Alexis Keenan is a legal reporter for Yahoo Finance.
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