Government of the United States Virgin Islands v. JPMorgan Chase Bank, N.A., No. 122-cv-10904 (S.D.N.Y. 2022)/016.pdf

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK GOVERNMENT OF THE UNITED ) Case Number: 1:22-cv-10904 JSR STATES VIRGIN ISLANDS ) ) ACTION FOR DAMAGES PLAINTIFF, ) ) JURY TRIAL DEMANDED V. ) ) JPMORGAN CHASE BANK, N.A. ) ) DEFENDANT. ) FIRST AMENDED COMPLAINT AND DEMAND FOR A JURY TRIAL Plaintiff Government of the United States Virgin Islands (“Government”) files this Complaint against JPMorgan Chase Bank, N.A. (“JP Morgan”) for violations of Trafficking Victims Protection Act, 18 U.S.C. §§ 1591 to 1595, the Virgin Islands Criminally Influenced and Corrupt Organizations Act, 14 V.I.C. §§ 600 to 614, and the Virgin Islands Consumer Fraud and Deceptive Business Practices Act, 12A V.I.C. §§ 301 to 336, and in support thereof alleges as follows: PARTIES 1.The Attorney General of the United States Virgin Islands (hereinafter “Virgin Islands”) brings this parens patriae action on behalf of the Plaintiff, Government of the Virgin Islands, pursuant to 15 U.S.C. § 1595(d) and 3 V.I.C. § 114 and her statutory authority to enforce the laws of the Virgin Islands and protect public safety. 2.The Attorney General, pursuant to her authority to represent the Government of the United States Virgin Islands, also acts on behalf of, and with the lawfully delegated authority of, the Virgin Islands Department of Licensing and Consumer Affairs under 12 V.I.C. § 327 in regard to Count Four of the Government’s Complaint alleging violations of the Virgin Islands Consumer Case 1:22-cv-10904-JSR Document 16 Filed 01/10/23 Page 1 of 34 2 Fraud and Deceptive Business Practices Act. 3.This action stems from an enforcement action the Government filed against the Estate of Jeffrey E. Epstein, the Co-Executors of the Estate, and various entities relating to Jeffrey Epstein (“Epstein”), under the Virgin Islands’ Criminally Influenced and Corrupt Organizations Act (“CICO Act”), see Government of the U.S. Virgin Islands v. Indyke et al., Case No. ST-20- CV-14 (Super. Ct. V.I. Jan. 15, 2020). The Attorney General brings this action, after presenting her findings to JP Morgan in September 2022, in her ongoing effort to protect public safety and to hold accountable those who facilitated or participated in, directly or indirectly, the trafficking enterprise Epstein helmed. The investigation revealed that JP Morgan knowingly, negligently, and unlawfully provided and pulled the levers through which recruiters and victims were paid and was indispensable to the operation and concealment of the Epstein trafficking enterprise. Financial institutions can connect—or choke—human trafficking networks, and enforcement actions filed and injunctive relief obtained by attorneys general are essential to ensure that enterprises like Epstein’s cannot flourish in the future. 4.Defendant JPMorgan Chase Bank, N.A. is an American multinational investment bank and financial services company headquartered in New York City and incorporated in Delaware. 5.At all relevant times, JP Morgan engaged in business in the Virgin Islands, including, but not limited to, the acts and practices described herein. 6.As described below, based on documents reviewed and interviews conducted by the Government, JP Morgan knowingly facilitated, sustained, and concealed the human trafficking network operated by Jeffrey Epstein from his home and base in the Virgin Islands, and financially benefitted from this participation, directly or indirectly, by failing to comply with federal banking Case 1:22-cv-10904-JSR Document 16 Filed 01/10/23 Page 2 of 34 3 regulations, . JP Morgan facilitated and concealed wire and cash transactions that raised suspicion of—and were in fact part of—a criminal enterprise whose currency was the sexual servitude of dozens of women and girls in and beyond the Virgin Islands. Human trafficking was the principal business of the accounts Epstein maintained at JP Morgan. 7.Upon information and belief, JP Morgan turned a blind eye to evidence of human trafficking over more than a decade because of Epstein’s own financial footprint, and because of the deals and clients that Epstein brought and promised to bring to the bank. These decisions were advocated and approved at the senior levels of JP Morgan, including by the former chief executive of its asset management division and investment bank, whose inappropriate relationship with Epstein should have been evident to the bank. Indeed, it was only after Epstein’s death that JP Morgan belatedly complied with federal banking regulations regarding Epstein’s accounts. JURISDICTION, VENUE, AND RELATED CASE 8.This action is brought pursuant to and based on federal and Virgin Islands statutes, including the federal Trafficking Victims Protection Act, 18 U.S.C. §§ 1591 to 1595 (“TVPA”), and the federal Bank Secrecy Act, 31 U.S.C. §§ 5311 to 5336 and its implementing regulations (“BSA”). 9.This Court has federal question subject-matter jurisdiction pursuant to 28 U.S.C. § 1331 because the Government’s TVPA and BSA-based causes of action arise under federal law. 10.This Court has supplemental jurisdiction over the Government’s Virgin Islands law claims pursuant to 28 U.S.C. § 1367(a) because these claims are so related to those arising under or based on federal law as to form part of the same case or controversy under Article III of the United States Constitution. Case 1:22-cv-10904-JSR Document 16 Filed 01/10/23 Page 3 of 34 4 11.This Court is an “appropriate district court of the United States” in which for the Government to obtain appropriate relief under 18 U.S.C. § 1595(d) and venue is proper under 28 U.S.C. § 1391(b)(2) because Defendant maintains its principal place of business within this judicial district, so that this Court may exercise general personal jurisdiction over Defendant, and because many of the alleged acts and omissions of Defendant giving rise to the Government’s claims took place within this judicial district, so that this Court may exercise specific personal jurisdiction over Defendant. 12. Pursuant to Local Civil Rule 1.6(a), the undersigned believe that this action is related to Doe 1 v. JP Morgan Chase & Co., No. 1:22-cv-10019 (S.D.N.Y. Nov. 24, 2022), because both actions arise from a common nucleus of operative fact involving Defendant JP Morgan’s alleged participation, directly or indirectly, in Epstein’s sex-trafficking venture by facilitating payments to women and girls, channeling funds to Epstein to fund the operation, and concealing Epstein’s criminal conduct by failing to comply with federal banking regulations. BACKGROUND I.JP Morgan’s Federal and State Legal Requirements 13.JP Morgan is subject to federal laws, including the BSA and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56, 115 Stat. 272 (“USA PATRIOT Act”), which amended certain BSA regulations. 14.Under both the BSA and USA PATRIOT Act, JP Morgan is required to implement adequate, risk-based anti-money laundering (“AML”) policies and systems to detect and prevent money laundering or other use of the institution’s services to facilitate criminal activities. This includes, but is not limited to, maintaining a due diligence program, filing suspicious activity Case 1:22-cv-10904-JSR Document 16 Filed 01/10/23 Page 4 of 34 5 reports (“SARs”) when the financial institutions detect suspicious behavior and currency transaction reports (“CTRs”) for currency transactions or series of curren