JP Morgan Chase and Deutsche Bank have been sued by two women who have accused Jeffrey Epstein of sexual abuse.
They accuse the banks of ignoring “red flags” about their client and profiting from his alleged sex-trafficking activities.
While awaiting trial on sex-trafficking charges, the disgraced financier committed suicide in a prison cell.
Both lawsuits were filed as class action suits in New York on Thursday.
They were brought by lawyers who have represented dozens of the deceased billionaire’s accusers.
The women, who are also seeking financial damages, are not named in the filings, which were first reported by the Wall Street Journal newspaper and have been seen by the BBC.
According to claims in the lawsuit filed against JP Morgan Chase, one woman, described as a former ballet dancer, was abused by Epstein and his associates between 2006 and 2013.
It alleges that JP Morgan knew that its accounts were being used for trafficking because of the identity of the individuals withdrawing large sums of cash, as well as “Epstein’s well-documented criminal history”.
JP Morgan Chase declined to comment when contacted by BBC News.
In a separate lawsuit against Deutsche Bank, another woman claims she was trafficked for sex by Epstein for 15 years, starting in 2003 when she first moved to New York.
It claims that in some instances Epstein would pay the woman directly in cash for sex acts.
The lawsuit suggests that the wealthy Epstein turned to Deutsche Bank when ties were severed with JP Morgan around 2013.
It also refers to previous findings by New York banking regulators about Deutsche Bank’s business with Epstein.
They concluded that “although the bank properly classified Epstein as high-risk, [it] failed to scrutinise the activity in the accounts for the kinds of activity that were obviously implicated by Epstein’s past”.
Deutsche Bank previously admitted that it made a “critical mistake” when taking on Epstein as a client.
But a spokesman for the investment bank said on Thursday: “We believe this claim lacks merit and will present our arguments in court.”
One of the lawyers, Bradley Edwards, said in a written statement: “Epstein and his co-conspirators could not have victimised without assistance from wealthy individuals and financial institutions. We will not stop fighting for the survivors until everyone is held responsible. This is a big step but not the end.
He added: “The time has come for the real enablers to be held responsible, especially his wealthy friends and the financial institutions that played an integral role.”
After a three-year investigation, New York Attorney General Letitia James has filed a civil lawsuit against Donald Trump, three of his children and his real-estate company, claiming they “engaged in numerous acts of fraud and misrepresentation” for at least a decade. The suit claims the Trumps knowingly and consistently overstated the value of at least 23 commercial properties, for the purpose of getting lower interest rates and cheaper insurance. James wants the family and the company to disgorge $250 million, the amount they supposedly saved by duping banks and insurers.
Um, okay? If Trump’s business practices were crooked, it’s appropriate for the correct authorities to hold him accountable. And there’s widespread evidence Trump has pushed the bounds of legality in his long career as a showman and real-estate developer. A 2018 New York Times exposé, aided by leaks of family documents, claimed that Trump participated in a variety of “dubious tax schemes… including instances of outright fraud.” Trump’s former lawyer, Michael Cohen, has likewise accused Trump of criminal activity, including some crimes Cohen participated in and went to prison for.
And yet, the New York AG’s suit seems …underwhelming? The presumed victims in James’s suit aren’t customers Trump defrauded, contractors he stiffed, or shareholders he lied to. The victims are banks and insurance companies that supposedly undercharged Trump for loans and insurance policies, because Trump told them his properties were more expansive and valuable than they actually were.
The government doesn’t usually sue on behalf of big businesses that have their own well-staffed legal departments. Financial firms rely to some extent on customers telling the truth. But they also do their own underwriting, for the explicit purpose of assuring they don’t commit money based on bogus information. When ordinary people apply for a mortgage, the bank doesn’t write a blank check with no questions asked. Instead, it does a thorough credit check, values the property and prices the loan according to the risk it believes it is taking.
It’s harder to do due diligence on a complex business like Trump runs, but that’s what investment banks and other large lenders do for a living. James’s lawsuit, for instance, argues that Trump’s longtime lender Deutsche Bank repeatedly gave Trump favorable interest rates and other loose lending terms because of “the improper, repeated and persistent use of fraudulent and misleading financial statements.” Terrible. But isn’t that Deutsche Bank’s problem? Shouldn’t the bank be the one suing, rather than the New York AG? What harm did Deutsche suffer?
‘There doesn’t have to be a loss’
James seems to be taking this approach, as opposed to a criminal indictment, because New York law empowers the AG to seek damages caused by fraudulent business behavior as a form of consumer protection. The law doesn’t require the AG to identify a victim or even demonstrate anybody suffered harm. Plus, the burden of proof is lower in civil cases than in criminal ones.
“What makes this statute particularly powerful is that there doesn’t have to be a loss,” Will Thomas, a law professor at the University of Michigan’s Ross School of Business, told Yahoo Finance. “This statute has been used to disgorge profits illegally gained. The government can be allowed to claw back all of those profits. Provable nature is lower, and you don’t have to prove intent or willfulness.”
A civil suit also prevents James from bumping into the criminal case against Trump’s company that the Manhattan district attorney is prosecuting. Those two offices sometimes work together on criminal cases, as they’re doing on the recent indictment of former Trump adviser Steve Bannon. With regard to Trump, however, they seem to be pursuing complementary approaches instead of overlapping ones.
Trump, of course, claims the AG’s lawsuit is a politically motivated “witch hunt,” his umbrella phrase for every inquiry into crimes or abuses he may have committed. As Trump points out, James is an elected Democrat in one of the most anti-Trump blue states. But that doesn’t mean James is hassling Trump just because she hates him. Prosecutors and other public officials have an obligation to investigate potential wrongdoing if they become aware of it. Media exposés, allegations by former Trump associates and loads of circumstantial evidence provide James plenty of fodder for a lawsuit. Trump’s primary company is based in New York, giving her jurisdiction. James can plausibly say she’s acting on behalf of the New Yorkers who elected her.
Putting the pressure on other prosecutors
James also seems to be priming the pump for other possible criminal prosecutions of Trump, by other agencies. She’s overt about referring evidence of crimes obtained during the AG civil investigation to federal prosecutors and the Internal Revenue Service.
Do they really need the help? The Justice Department already has detailed information on Trump’s business operations, from the Cohen case and other events. Trump was eventually identified as “Individual 1” in documents related to Cohen’s 2018 guilty plea on charges of tax evasion, fraud and campaign finance violations. Individual 1 was complicit in some of the same crimes Cohen went to prison for. In 2019 Congressional testimony that named Trump as “Individual 1,” Cohen further detailed the types of financial shenanigans James is now suing Trump for.
The IRS has supposedly been auditing Trump’s taxes for years. How could it not be? Given the many public charges of tax evasion—whether legal or illegal—the agency would be negligent not to look into whether it’s true that Trump is bilking the tax man.
Maybe James feels it’s necessary to pressure other prosecutors into doing their jobs. The Justice Department reportedly dropped its inquiry into the campaign-finance violations Trump ordered Cohen to commit. The Manhattan district attorney, Alvin Bragg, has scaled back his criminal probe into Trump. Criminal proceedings against the company will begin in October, but those won’t focus on Trump personally, even though a prominent prosecutor who left the DA’s office has said there’s ample evidence Trump himself committed crimes.
Other Trump prosecutions seem to be moving briskly. In Georgia, Fulton County District Attorney Fani Willis seems to be on course to bring criminal charges of election fraud against Trump and others working with him to overturn the 2020 election results. The Justice Department has hinted at possible obstruction of justice charges related to its lightning raid of Trump’s Mar-a-Lago property in August, when it recovered troves of classified documents Trump wasn’t supposed to have.
Allen Weisselberg, former chief financial officer of the The Trump Organization, has already pleaded guilty to more than a dozen felonies as part of the Manhattan DA’s probe. Weisselberg will testify against Trump’s company—but not against Trump himself—when that trial kicks off on Oct. 24.
James could end up settling the civil lawsuit against the Trumps, though she would probably insist they agree to harsh terms that make it look like she won. If there’s no settlement, the case will likely go before a jury. But the suit alone, and the evidence it has produced, may already be a form of victory for prosecutors seeking to punish Trump for years of transgressions.
Mike Curtler, formerly of Deutsche Bank, was among 38 former traders and brokers prosecuted after the US Department of Justice declared their conduct illegal 10 years ago.
But earlier this year a US appeal court decided no rules had been broken.
Mr Curtler’s lawyer said they were “extremely pleased” with the decision.
In the past eight years, 38 former brokers and traders have been prosecuted over emails and messages asking colleagues to tweak their estimates of the cost of borrowing cash to suit their bank’s commercial interests – a practice which the US Department of Justice declared to be illegal interest rate “rigging” in 2012, when it fined Barclays Bank for it.
Just as the FTSE tracks the prices of shares, Libor tracks the interest rates banks are paying to borrow cash on the wholesale money markets.
For the past 35 years, it has been used to set interest rates on millions of residential and commercial loans around the world.
To work out Libor each day, 16 banks answer a question – at what interest rate could they borrow money? They submit their answers and an average is taken.
The evidence against Mike Curtler and other traders consisted of messages and emails asking for those interest rates to be submitted “high” or “low”.
Mike Curtler admitted he had acted on the emailed requests and, faced with the risk of up to 15 years in a US jail if he went to trial, pleaded guilty.
But in January this year a US appeal court ruled that the requests were not illegal after all, acquitting former Deutsche Bank traders Gavin Black from Middlesex and Matt Connolly from New Jersey.
Now US courts are acquitting even those who pleaded guilty, such as Mike Curtler, saying they must be viewed as innocent.
“I’m very glad the US courts have decided that what we did was not criminal. The past decade has been horrible but hopefully we can now start to rebuild,” Mr Curtler told the BBC.
Mr Curtler’s lawyer, David Krakoff, said: “We are extremely pleased that Mike Curtler has been cleared and that the courts have decided that there was no wrongdoing whatsoever.”
A month ago New York court threw out the conviction of former trader Tim Parietti, 56, who had also pleaded guilty, ordering the government to repay a £1m fine.
It leaves the UK as the only country in the world where convictions for “rigging” interest rates have, so far, been sustained.
Nine have been convicted in the UK, including Tom Hayes, Peter Johnson, Jonathan Mathew, Alex Pabon, Jay Merchant, Christian Bittar, Philippe Moryoussef, Carlo Palombo and Colin Bermingham.
The agreement was laid in the house, a day after the Majority Leader and Suame MP, Osei Kyei-Mensah-Bonsu, was attacked in his constituents over the nature of roads in his constituency where the interchange will be constructed.
Speaking during the debate, the Majority Leader urged his constituents not to foment trouble due to the nuisance of dust pollution that may occur during the construction.
Mr. Kyei-Mensah-Bonsu recently assured that the project would start in September 2022.
Construction of the road started late in June 2022, but was suspended due to a shortage of bitumen.
The contractor is however said to have resumed work after the tensions that saw the MP accosted by artisans in the Suame Magazine enclave when he visited the area.
Residents have complained that the poor road is hampering business in the industrial hub due to the build-up of dust brought on by the moving cars.