Case 1:22-cv-10904-JSR Document 48 Filed 02/15/23 Page 1 of 31

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF NEW YORK

____________________________________
)
GOVERNMENT OF THE UNITED )
STATES VIRGIN ISLANDS, ) Case No. 1:22-cv-10904-JSR
)
Plaintiff, )
)
v. )
)
JPMORGAN CHASE BANK, N.A., )
)
Defendant. )
____________________________________)

GOVERNMENT OF THE UNITED STATES VIRGIN ISLANDS’

MEMORANDUM OF LAW IN OPPOSITION TO
JPMORGAN CHASE BANK, N.A.’S MOTION TO DISMISS
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TABLE OF CONTENTS

TABLE OF AUTHORITIES .......................................................................................................... ii

INTRODUCTION .......................................................................................................................... 1
FACTUAL BACKGROUND ......................................................................................................... 3
ARGUMENT .................................................................................................................................. 6
I. The Government Pleads an Actionable TVPA Claim. ............................................................. 6
A. Section 1595(d) Applies to JPMorgan’s Conduct. ....................................................... 6
B. The Government Has Parens Patriae Standing Under § 1595(d). ............................... 9
C. The Government Pleads All Elements of a § 1591(a)(2) Violation............................ 10
1. JPMorgan’s Participation in Epstein’s Commercial Sex-Trafficking Venture..... 10
2. JPMorgan Knew or Acted with Reckless Disregard that Minors Would Be Caused
to Engage in Commercial Sex............................................................................... 14
3. JPMorgan’s Knowledge or Reckless Disregard of the Use of Force, Threats,
Fraud, or Coercion ................................................................................................ 15
4. JPMorgan Knowingly Benefited........................................................................... 18
II. The Government Pleads Actionable CICO Counts. ............................................................... 19
A. CICO Applies to JPMorgan’s Conduct. ..................................................................... 19
B. The Government Pleads Actionable CICO Claims. ................................................... 20
1. Elements of CICO Claim ...................................................................................... 20
a) Association with and Participation in Enterprise ........................................... 20
b) Pattern of Criminal Activity........................................................................... 22
2. Predicate Criminal Activity .................................................................................. 23
C. The Government Has Standing for its BSA-Based CICO Claim. .............................. 24
III. The Government Pleads a CFDBPA Claim. ........................................................................... 25
CONCLUSION ............................................................................................................................. 25

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TABLE OF AUTHORITIES

Cases
Alfred L. Snapp & Son, Inc. v. Puerto Rico, 458 U.S. 592 (1982) ........................................... 9, 10
Alvarez-Machain v. United States, 107 F.3d 696 (9th Cir. 1996) .................................................. 7
American Charities for Reasonable Fundraising Regulation, Inc. v. Pinellas Cty., 221 F.3d 1211
(11th Cir. 2000)......................................................................................................................... 20
AU Optronics Corp. v. South Carolina, 699 F.3d 385 (4th Cir. 2012)......................................... 10
Cabello v. Fernández-Larios, 402 F.3d 1148 (11th Cir. 2005) ...................................................... 7
Canosa v. Ziff, 2019 WL 498865 (S.D.N.Y. Jan. 28, 2019) ............................................. 11, 12, 19
Feld Entm’t, Inc. v. ASPCA, 873 F. Supp. 2d 288 (D.D.C. 2012) ................................................ 22
First Cap. Asset Mgmt., Inc. v. Satinwood, Inc., 385 F.3d 159 (2d Cir. 2004) ............................ 22
G.G. v. Salesforce.com, 603 F. Supp. 3d 626 (N.D. Ill. 2022) ......................................... 11, 12, 13
Geiss v. Weinstein Co., 383 F. Supp. 3d 156 (S.D.N.Y. 2019) ........................................ 11, 12, 18
Gerald v. R.J. Reynolds Tobacco Co., 68 V.I. 3 (V.I. Super. Ct. 2017) ....................................... 23
Handeen v. Lemaire, 112 F.3d 1339 (8th Cir. 1997) .............................................................. 21, 22
HH v. G6 Hospitality, Inc., 2019 WL 6682152 (S.D. Ohio Dec. 6, 2019) ................................... 18
Hughes Aircraft Co. v. U.S. ex rel. Schumer, 520 U.S. 939 (1997)............................................ 7, 8
M.A. v. Wyndham Hotels & Resorts, Inc., 425 F. Supp. 3d 959 (S.D. Ohio 2019) ...................... 14
Niles Freeman Equip. v. Joseph, 161 Cal. App. 4th 765 (Cal. Ct. App. 2008) .............................. 8
Noble v. Weinstein, 335 F. Supp. 3d 504, 524 (S.D.N.Y. 2018) .................................................. 12
Ratzlaf v. U.S., 510 U.S. 135 (1994) ............................................................................................. 24
Stuto v. Fleishman, 164 F.3d 820 (2d Cir. 1999) .......................................................................... 17
Taylor v. Bettis, 976 F. Supp. 2d 721 (E.D.N.C. 2013) ................................................................ 22
United States ex rel. Escobar v. Universal Health Servs., Inc., 842 F.3d 103 (1st Cir. 2016) ..... 17
United States v. Hooker Chems. & Plastics Corp., 749 F.2d 968, 984 (2d Cir. 1984) ................ 10
Unites States ex rel. Grubea v. Rosicki, Rosicki & Assocs., P.C., 318 F. Supp. 3d 680 (S.D.N.Y.
2018) ......................................................................................................................................... 17
Velez v. Sanchez, 693 F.3d 308 (2d Cir. 2012) ............................................................................... 7
Winfree v. N. Pacific R. Co., 227 U.S. 296 (1913) ......................................................................... 8
Statutes
12A V.I.C. § 304 ........................................................................................................................... 25
12A V.I.C. § 328(b) ...................................................................................................................... 25

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12A V.I.C. § 336 ........................................................................................................................... 25

14 V.I.C. § 604(e) ......................................................................................................................... 23
18 U.S.C. § 1591 ........................................................................................................................... 17
18 U.S.C. § 1591(a) ...................................................................................................................... 16
18 U.S.C. § 1591(a)(2) ........................................................................................................ 8, 14, 15
18 U.S.C. § 1595(a) .................................................................................................................. 7, 11
18 U.S.C. § 1595(d) .................................................................................................... 6, 7, 9, 10, 11
5 V.I.C. § 31(3)(B) ........................................................................................................................ 25
Allow States and Victims to Fight Online Sex Trafficking Act of 2017, Pub. L. 115-164, 132
Stat. 1253 (2018)......................................................................................................................... 6
Consumer Fraud and Deceptive Business Practices Act, 12A V.I.C. §§ 301-336 ......................... 2
Trafficking Victims Protection Act, 18 U.S.C. §§ 1580-1597 ....................................................... 2
Trafficking Victims Protection Reauthorization Act of 2003, Pub. L. 108-193, 117 Stat. 2875
(2003) .......................................................................................................................................... 7
Victims of Trafficking and Violence Protection Act of 2000, Pub. L. 106-386, 114 Stat. 1464
(2000) .......................................................................................................................................... 6
Virgin Islands Criminally Influenced and Corrupt Organizations Act, 14 V.I.C. §§ 600-614 ....... 2
Other Authorities
164 Cong. Rec. H1290-02, 2018 WL 1073890 (Feb. 27, 2018)..................................................... 8
164 Cong. Rec. S1849-08, 2018 WL 1415014 (Mar. 21, 2018)..................................................... 8
Federal Trade Commission, Policy Statement Regarding the Scope of Unfair Methods of
Competition Under Section 5 of the Federal Trade Commission Act, (Nov. 10, 2022) ........... 25

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INTRODUCTION

For two decades, Defendant JPMorgan Chase Bank, N.A. (“JPMorgan”) facilitated and

sustained Jeffrey Epstein’s sex-trafficking by handling and his payments to young

women and girls who were his victims and recruiters. Sex-trafficking was the principal business

of Epstein’s accounts held by JPMorgan, and JPMorgan profited handsomely from the hundreds

of millions of dollars in assets in those accounts, in addition to Epstein’s connections and referrals

of ultrawealthy and powerful clients. Far from the so-called “ordinary” banking services

JPMorgan claims it provided to Epstein, JPMorgan broke every rule to facilitate Epstein’s sex-

trafficking and feed off his wealth and connections. In 2008, after Epstein pled guilty to felony

charges for procuring a child for prostitution—conduct that is child sex-trafficking under the

TVPA—the expectation was that JPMorgan would cut ties with or, at a minimum, closely monitor

the convicted felon and registered sex offender. It did neither. Instead—and decided at the highest

level (“pending Dimon review”)—JPMorgan continued to facilitate and sustain Epstein’s sex-

trafficking by making the payments and covering up the trafficking, including for many years after

it no longer held Epstein’s accounts, which predictably enabled ongoing and future trafficking by

Epstein. JPMorgan—through its head of Private Bank assigned to manage Epstein and Epstein’s

accounts—made multiple visits to Epstein’s Virgin Islands residence where women and girls were

sex-trafficked. Only when there was nothing left to be gained upon Epstein’s arrest and death in

federal prison in 2019,

The Government of the United States Virgin Islands (“Government”) brings this action as

parens patriae seeking relief for JPMorgan’s participation in Epstein’s sex-trafficking that took
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place in and was directed from the Virgin Islands. Throughout the decades when JPMorgan

handled and Epstein’s payments to victims and recruiters, Epstein lived in the Virgin

Islands on his secluded private island (Little St. James). The Government asserts claims for

JPMorgan’s violations of the Trafficking Victims Protection Act (“TVPA”), 18 U.S.C. §§ 1580-

1597, the Virgin Islands Criminally Influenced and Corrupt Organizations Act (“CICO”), 14

V.I.C. §§ 600-614, and the Consumer Fraud and Deceptive Business Practices Act (“CFDBPA”),

12A V.I.C. §§ 301-336.

JPMorgan tries to shift the blame for its participation onto the Government, contending

that the Government had access to the same information on Epstein that JPMorgan did. This belies

both the facts, ignoring the allegations detailing Epstein’s

, see First Am. Compl. (“FAC”) Ex. 1, and the law,

. The TVPA establishes liability for those who

participate in human trafficking, and JPMorgan’s efforts at misdirection do not alter its legal

responsibility for its own conduct and the profound consequences for the dozens of women whose

trafficking was uniquely visible to and made possible by this bank. Unlike the Government,

 JPMorgan had real-time knowledge of millions of dollars of payments Epstein was

making to young women who were his victims and recruiters, FAC ¶ 42, which had no
conceivable relationship to Epstein’s stated business interests, id. ¶¶ 25-26, 68-69, 76-
77;

 JPMorgan had real-time knowledge that Epstein was using accounts of his charitable
organizations to make payments to young women, id. ¶ 68, which had no conceivable
relationship to the charities’ stated purposes, id. ¶ 68-69, 77;

 JPMorgan’s Global Corporate Security Division, Risk Management Division, and AML
Compliance director over the course of years repeatedly identified evidence of Epstein’s
child trafficking and human trafficking, id. ¶¶ 44-48;

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 JPMorgan identified
id., ¶ 75; and

 JPMorgan had a more than close-up view of Epstein’s sex-trafficking, through the senior
executive JPMorgan assigned to manage Epstein and Epstein’s accounts who, in this role,
built a close relationship with Epstein, visited Epstein’s properties in the Virgin Islands
and elsewhere, exchanged hundreds of messages with Epstein from his JPMorgan email
account in full view of JPMorgan, including some with photos of young women,
discussed Epstein’s provision of services to him during his travel on dates that closely
corresponded with Epstein’s payments to the same young woman from his JPMorgan
accounts, and discussed young women or girls procured by Epstein using the names of
Disney princesses (“Snow White” and “Beauty and the Beast”), id. ¶¶ 52-62.

JPMorgan’s failed attempt to divert attention from its participation in Epstein’s sex-trafficking is

understandable, as its attempted defenses to the Government’s TVPA, CICO, and CFDBPA claims

have no merit.

FACTUAL BACKGROUND

Between 1998 and 2013, JPMorgan serviced approximately 55 Epstein-related accounts

valued in the hundreds of millions of dollars. FAC ¶ 41. During this time, JPMorgan handled

payments by Epstein to at least 20 young women or girls whom he trafficked and subjected to

sexual assault in the Virgin Islands and elsewhere. Id. ¶ 42. The payments had no conceivable

relationship to Epstein’s stated business interests. Id. ¶¶ 25-26, 68-69. Epstein also withdrew

hundreds of thousands of dollars in cash over that time from JPMorgan accounts, especially

significant as Epstein was known to pay for “massages” (sexual encounters) with young girls in

cash. During this time, JPMorgan also processed payments by Epstein totaling almost $1.5 million

to known recruiters of victims to Epstein’s sex-trafficking enterprise, including the MC2 modeling

agency. Id. ¶ 42. Among the recipients of these payments were numerous women with Eastern

European surnames who were publicly and internally identified as Epstein recruiters and/or

victims, including $600,000 to Jane Doe 1, a woman who JPMorgan’s own due diligence reports

stated Epstein purchased at the age of 14. Id. ¶ 66, 40.

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Throughout its relationship with Epstein, JPMorgan’s internal investigation teams

identified evidence that he was engaged in criminal sex-trafficking. In 2006, JPMorgan’s Global

Corporate Security Division reported that Epstein was indicted in Florida for felony solicitation of

minors for prostitution. Id. ¶ 44. In 2008, Epstein pled guilty in Florida to solicitation or

procurement of a minor for prostitution and became a registered sex offender. Id. ¶¶ 21, 22, 38.

JPMorgan’s continued relationship with Epstein after his criminal plea was reviewed and approved

at the highest levels of the bank. An August 2008 internal email states, “I would count Epstein’s

assets as a probable outflow for ’08 ($120mm or so?) as I can’t imagine it will stay (pending Dimon

review).” Id. ¶ 51. Yet the assets did stay,

. In 2010, JPMorgan’s risk management

division discussed new allegations of an investigation of Epstein involving child sex-trafficking.

Id. ¶ 45. Throughout 2010 and 2011, JPMorgan’s compliance and security divisions reported

evidence of Epstein’s engagement in sex-trafficking, including his settlement of a dozen civil

lawsuits and his payments of $1 million to the MC2 modeling agency engaged with Epstein in

child sex-trafficking, “luring” girls on the pretext of providing modeling opportunities and careers.

Id. ¶¶ 46-48, 23 (citing Ex. 1 ¶ 52).

JPMorgan, through senior executive Jes Staley, engaged in multiple visits to Epstein’s

residence on Little St. James where the sex-trafficking took place as part of its management of its

business relationship with Epstein. At the time of these visits, Staley was serving in the role of

JPMorgan’s head of Private Bank, which was dedicated to extremely wealthy clients like Epstein.

JPMorgan assigned Staley to manage Epstein and his accounts for his wealth, connections, and

referrals of ultrawealthy and powerful clients. Thus, Staley’s job was to maintain a close

relationship with Epstein so that his money, connections, and referrals would continue to flow to

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JPMorgan. Between 2008 and 2012, Staley exchanged over 1,000 messages with Epstein from

his JPMorgan email account in full view of JPMorgan, including emails about his visits to Little

St. James. Id. ¶¶ 52-53, 56, 60, 62, 84, 47, 71, 73, 87. A December 2008 email shows Staley

planning to visit Epstein in early January 2009. Around the time of Staley’s scheduled visit,

Epstein wired $2,000 from his JPMorgan account to a woman with an Eastern European surname.

Id. ¶ 54. In late August 2009, Staley emailed that he was visiting London; Epstein asked if he

needed anything; Staley replied “Yep.” Id. ¶ 55. Soon after, JPMorgan wired $3,000 from an

Epstein account to the same Eastern European woman. Id. In July 2010, Staley emailed Epstein

saying “That was fun. Say hi to Snow White[,]” to which Epstein responded “[W]hat character

would you like next?” and Staley said “Beauty and the Beast.” Id. ¶ 61. Epstein also emailed

Staley photos of young women in seductive poses. Id. ¶¶ 58-59. Following the internal reports of

additional law enforcement investigations into Epstein’s sex-trafficking in 2010 and 2011,

JPMorgan’s response was to send Staley in 2011 to obtain Epstein’s denial, on which the bank

hung its hat. Id. ¶ 47.

JPMorgan was at all times required by federal law to perform due diligence on its

customers and file Suspicious Activity Reports (“SARs”) with the Treasury Department’s

Financial Crimes Enforcement Network (“FinCEN”). Id. ¶¶ 13-19. While Epstein was a customer,

or perform even basic due diligence on Epstein

though he was “high risk.” Id. ¶¶ 75-78, 66-69, 44, 50. During this time, JPMorgan benefited

from Epstein’s wealth and connections. Id. ¶¶ 7, 71-73, 87, 96-98. Epstein helped and promised

to help Staley recruit ultrawealthy clients to JPMorgan. Epstein introduced Staley to the owner of

Highbridge Capital Management, LLC, one of the country’s largest hedge funds. JPMorgan

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subsequently acquired Highbridge, which catapulted Staley’s career with and beyond JPMorgan.

Id. ¶ 72. In 2011, Epstein helped Staley to pitch the creation of a donor advised fund which would

be an “exclusive club” with a minimum $100 million donation. Id. ¶ 73. Epstein continued

trafficking and sexually abusing young women and female children until his arrest in 2019. Id.

¶ 42. It was only after Epstein’s death in federal detention in August 2019 that

. Id. ¶ 75, 40, 66. JPMorgan acknowledged that

Id.

. Id. ¶¶ 6, 32, 42, 91. JPMorgan’s illegal conduct which continued until 2019 caused

repeated and continuous harm to the Virgin Islands and its residents. Id. ¶¶ 91, 107, 118, 128.

ARGUMENT

I. The Government Pleads an Actionable TVPA Claim.

A. Section 1595(d) Applies to JPMorgan’s Conduct.

In 2018, Congress added subsection (d)—which recognizes a right of action for state

attorneys general to prosecute sex-trafficking—to § 1595’s existing civil remedy. See Allow

States and Victims to Fight Online Sex Trafficking Act of 2017, Pub. L. 115-164, § 6, 132 Stat.

1253, 1255 (2018) (“FOSTA”). JPMorgan argues that § 1595(d) “increase[d] [its] liability” “by

widening the universe of possible plaintiffs and relief” and thus cannot be applied retroactively.

Mot. at 5. There is no increased liability. Section 1595(d) applies to a defendant whose conduct

violated § 1591, a criminal prohibition enacted in 2000. See Victims of Trafficking and Violence

Protection Act of 2000, Pub. L. 106-386, § 112, 114 Stat. 1464 (2000). This conduct also was a

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basis for civil liability in 2003. See Trafficking Victims Protection Reauthorization Act of 2003,

Pub. L. 108-193, § 4, 117 Stat. 2875 (2003). So, too, was relief the Government seeks under

§ 1595(d), including damages and attorneys’ fees, previously recoverable under § 1595(a).

Injunctive relief and civil fines were also recoverable under CICO for violations of the TVPA, as

the Government seeks in Count Two. FAC ¶ 119 and Prayer for Relief. See Alvarez-Machain v.

United States, 107 F.3d 696, 702 (9th Cir. 1996) (“act does not impose new duties or liabilities on

defendants” where other laws, including state law, already prohibited conduct and afforded relief),

overruled on other grounds by Marley v. United States, 548 F.3d 1286 (9th Cir. 2008); Cabello v.

Fernández-Larios, 402 F.3d 1148, 1154 (11th Cir. 2005) (same). In Velez v. Sanchez, cited by

JPMorgan, Mot. at 5, by contrast, the 2003 TVPA amendment created a civil remedy where only

criminal liability previously existed. 693 F.3d 308, 325 (2d Cir. 2012).

Hughes Aircraft Co. v. U.S. ex rel. Schumer, 520 U.S. 939 (1997), does not support

JPMorgan’s argument against retroactivity. There, the Supreme Court held that “[t]he extension

of an FCA cause of action to private parties in circumstances where the action was previously

foreclosed . . . . essentially creates a new cause of action” because it materially changed the

incentives and stakes of False Claims Act cases. Id. at 949-50. “As a class of plaintiffs, qui tam

relators are different in kind than the Government. They are motivated primarily by prospects of

monetary reward rather than the public good” and have greater incentives than the “public vessel”

to prosecute claims “under the strong stimulus of personal ill will or the hope of gain.” Id. at 949.

“Qui tam relators are,” Hughes concluded, “thus less likely than is the Government to forgo an

action arguably based on a mere technical noncompliance with reporting requirements that

involved no harm to the public fisc.” Id. at 949 (emphasis added). In these particular

circumstances, Hughes held the amendment “essentially creates a new cause of action, not just an

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increased likelihood that an existing cause of action will be pursued.” Id. at 950 (citing Winfree v.

N. Pacific R. Co., 227 U.S. 296, 302 (1913)).

Here, the legislative history makes clear that the amendment created “a right of action”—

not a new cause of action—for state attorneys general to pursue sex-trafficking. 164 Cong. Rec.

H1290-02, H1292, 2018 WL 1073890 (Feb. 27, 2018). Further, the Government has no incentives

making it more likely than victims to bring a civil action under § 1595, and JPMorgan has asserted

none. The legislative history shows that the amendment was intended to have states fight alongside

victims to provide “extra litigation leverage for individuals who are impacted in a devastating

manner.” Id. at H1303. Congress intended “more resources, more investigators, and more

prosecutors for the perpetrators of these heinous crimes,” 164 Cong. Rec. S1849-08, S1865, 2018

WL 1415014 (Mar. 21, 2018), thereby increasing the likelihood an existing cause of action would

be pursued. Such “a more efficient and complete remedy” is not impermissibly retroactive.

Winfree, 227 U.S. at 301-02; see also Niles Freeman Equip. v. Joseph, 161 Cal. App. 4th 765, 783-

87 (Cal. Ct. App. 2008) (“merely … broaden[ing] [the public entities] authorized to bring [an

existing cause of action] . . . . is not an impermissible retroactive effect”) (distinguishing Hughes

Aircraft, 520 U.S. at 950).

Even if the amendment did not apply retroactively, the Government alleges post-enactment

conduct by JPMorgan violating § 1591(a)(2).

. JPMorgan is wrong that

its post-enactment conduct is irrelevant because, it contends, it no longer was processing new

payments. Mot. at 4. The Government alleges JPMorgan continued facilitating Epstein’s ongoing

trafficking by

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for over a year after § 1595(d)’s enactment. FAC ¶¶ 6, 32, 42, 91, 94. Section

1595(d) thus does not have impermissible retroactive effect.

B. The Government Has Parens Patriae Standing Under § 1595(d).

JPMorgan is wrong that the Government “does not assert any quasi-sovereign interest

sufficient to support parens patriae standing.” Mot. at 6. The Supreme Court has long recognized

that a state “has a quasi-sovereign interest in the health and well-being—both physical and

economic—of its residents in general.” Alfred L. Snapp & Son, Inc. v. Puerto Rico, 458 U.S. 592,

607 (1982). The Government asserts that interest here. See, e.g., FAC ¶ 3 (“Attorney General

brings this action . . . in her ongoing effort to protect public safety and to hold accountable those

who facilitated or participated in . . . the trafficking enterprise”); id. (“Financial institutions can

connect—or choke—human trafficking networks, and [state] enforcement actions filed . . . are

essential to ensure that enterprises like Epstein’s cannot flourish in the future”); id. ¶ 107

(JPMorgan “has caused serious harm to the Virgin Islands and its residents . . . by facilitating the

commission of sexual abuse against young women and underage girls, including their engagement

in commercial sex acts, in the Virgin Islands”); id. ¶ 108 (JPMorgan’s conduct furthered “a

widespread and dangerous criminal sex-trafficking venture operated in and from the Virgin

Islands” and demonstrated “such wanton disregard for the safety of young women and underage

girls in the Virgin Islands”).

JPMorgan argues the Government “does not allege that Epstein’s victims included any

USVI residents, but even if it did, USVI would still need to articulate how JPMC’s conduct directly

or indirectly injured a ‘substantial’ portion of its population.” Mot. at 7. The Government alleges

that a number of Epstein’s victims were trafficked to, held captive in, and sexually abused in the

Virgin Islands, causing them grave physical, mental, and emotional injury. FAC ¶¶ 23, 42. The

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Government also alleges that it has a substantial interest in assuring its residents it will act to

protect them from the harmful effects of criminal sex-trafficking enterprises flourishing in the

Islands that are their home. Cf. Snapp, 458 U.S. at 609 (“State has a substantial interest in assuring

its residents that it will act to protect them from . . . the harmful effects of discrimination”). In any

event, neither § 1595(d) (“an interest of the residents”) nor parens patriae requires the Government

to allege injury to specific numbers of persons. See United States v. Hooker Chems. & Plastics

Corp., 749 F.2d 968, 984 (2d Cir. 1984) (injury to “a fairly narrow class of persons”).

JPMorgan also argues in parens patriae cases, “a State seeks injunctive relief for ongoing

conduct[.]” Mot. at 6. This argument fails under the plain language of § 1595(d), which provides

the Government with a right of action where an interest of its residents “has been or is threatened

or adversely affected,” and under Snapp, which “involve(d) the 1978 apple harvest on the east

coast,” but was filed in 1979, after the conduct occurred, and sought relief for “past practices of

petitioners” and sought injunctive relief—not to enjoin ongoing conduct—but to require

defendants “to conform to the relevant federal statutes and regulations in the future,” 458 U.S. at

597-99. Whether the State seeks damages or restitution that may inure to individuals does not alter

the State’s quasi-sovereign interest where the purpose of this case is the protection of the public

health and safety of the residents of the Virgin Islands. See AU Optronics Corp. v. South Carolina,

699 F.3d 385, 394 (4th Cir. 2012) (“claim for restitution, when tacked onto other claims being

properly pursued by the State” does not “alter the State’s quasi-sovereign interest”).

C. The Government Pleads All Elements of a § 1591(a)(2) Violation.

1. JPMorgan’s Participation in Epstein’s Commercial Sex-Trafficking

Venture

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JPMorgan is wrong that the Government fails to allege that it participated by “knowingly

assisting, supporting, or facilitating a sex-trafficking venture.”1 Mot. at 8 (citing § 1591(e)(4)).

The Government alleges that JPMorgan participated by facilitating payments to women and girls

who were Epstein’s victims and recruiters, channeling funds to Epstein to fund the operation, and

. FAC ¶ 94.

JPMorgan’s facilitation and made the sex-trafficking venture possible and allowed

ongoing and future sex-trafficking. “Financial institutions can connect—or choke—human

trafficking networks . . . .” Id. ¶ 3.

The Government’s allegations are on all fours with Canosa v. Ziff, No. 18 Civ. 4115, 2019

WL 498865 (S.D.N.Y. Jan. 28, 2019). Mot. at 9. There, the Court found that a Weinstein-victim

plaintiff sufficiently alleged participation by production companies where the complaint alleged

“specific means and methods used by multiple company employees to facilitate Weinstein’s sexual

assault and to cover them up afterwards . . . with the predictable effect of enabling future assaults

by Weinstein.” Canosa, 2019 WL 498865, at *24. So too here, the Government alleges that

JPMorgan facilitated Epstein’s sex-trafficking by facilitating payments to women and girls who

were Epstein’s trafficking victims and recruiters totaling millions of dollars and

1
JPMorgan’s own cited cases also show it is incorrect that the “knowingly” criminal scienter in §
1591(e)(4) applies to a civil action under § 1595(a). See Geiss v. Weinstein Co., 383 F. Supp. 3d
156, 167 n.3 (S.D.N.Y. 2019) (constructive knowledge applies in civil action); G.G. v.
Salesforce.com, 603 F. Supp. 3d 626, 644 (N.D. Ill. 2022) (same). This issue has not been decided
under § 1595(d). While subsection (d) does not explicitly reference the “should have known”
language in subsection (a), to the extent subsection (d) was added to give “extra litigation leverage
to individuals” and “more resources” to pursue a civil action against sex-trafficking, Congress of
course did not intend to apply a higher scienter requirement to a government civil action than to
the parallel action brought by a victim. In any event, the Government alleges that JPMorgan
knowingly facilitated Epstein’s sex-trafficking.
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, which also allowed Epstein to continue to engage in sex-trafficking until he was

arrested in 2019. FAC ¶¶ 6, 32, 41, 42, 66, 75, 91, 94. In efforts to distinguish Canosa, JPMorgan

argues there the production company gave Weinstein “medications and other paraphernalia to

perform sex acts.” Mot. at 9. No different here where JPMorgan processed the payments for

Epstein and his associates to perform sex acts. The Government also alleges JPMorgan issued

payments to recruiters like the Canosa companies paying employees “whose responsibilities

includ[ed] introducing Weinstein to young women.” 2019 WL 498865, at *23.

JPMorgan is also wrong that the allegations as to JPMorgan “are even more deficient than

those deemed insufficient in Geiss, Noble, and Lawson.” Mot. at 8-9. In Geiss and Lawson, the

only purported participation alleged was making hush payments or drafting of NDAs—conduct

that took place after the trafficking and was not alleged as here to have enabled ongoing sex-

trafficking. See Geiss, 383 F. Supp. 3d at 168 n.4 (discussing Lawson). In those narrow

circumstances, the allegations were deemed insufficient to demonstrate participation in the

trafficking. Noble v. Weinstein involved only allegations that defendant facilitated perpetrator’s

travel. 335 F. Supp. 3d 504, 524 (S.D.N.Y. 2018). Here, as explained, JPMorgan was involved

in both carrying out and . In further contrast,

—enabled

ongoing and future sex-trafficking by Epstein until his arrest in 2019.

G.G. v. Salesforce.com, Inc., 603 F. Supp. 3d 626 (N.D. Ill. 2022), also does not support

JPMorgan’s argument that the Government does not sufficiently allege participation. Mot. at 9.

In Salesforce.com, the court held that the plaintiff failed to allege participation by a software

supplier whose software was used by an online marketplace to post advertisements for commercial

sex. 603 F. Supp. 3d at 646-47. The Court found no plausible allegations that Salesforce did

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anything but “just sell Backpage off-the-shelf software.” Id. at 648 (finding no personalized

services tailored to Backpage or customization of its software to meet Backpage’s needs). In other

words, Salesforce merely supplied its regular product to Backpage.

Unlike Salesforce.com, JPMorgan did much more than provide Epstein with its regular

banking services. It handled payments Epstein was making to young women who were his victims

and recruiters totaling millions of dollars, FAC ¶ 42, which had no conceivable relationship to

Epstein’s stated business interests, id. ¶¶ 25-26, 68-69, 77. It further handled payments from the

accounts of Epstein’s charitable organizations to young women, which again had no conceivable

relationship to the charities’ stated purposes, id. ¶¶ 68-69, 77. It ignored obvious red flags relating

to Epstein’s accounts that in the normal course would have prompted action by JPMorgan and

instead reported “nothing unusual” in Epstein’s account transactions. Id. ¶¶ 65-69. It failed to

demonstrate even basic due diligence on Epstein’s accounts—particularly irregular given Epstein

was a “high-risk” customer. Id. ¶¶ 76-78, 82, 43-44, 47, 50. It continued to maintain Epstein’s

assets for over a decade despite the fact that he pled guilty to criminal felony charges constituting

child trafficking and its internal security, risk management, and compliance teams repeatedly

identified evidence of child and human trafficking. Id. ¶¶ 21-22, 44-48, 51.

. JPMorgan gave Epstein the most “personalized”

and “customized”—and illegal—services. Moreover, unlike Salesforce.com, JPMorgan had

Further, Salesforce.com differentiated cases where there was “‘a showing of a continuous

business relationship between the trafficker and the [defendant] such that it would appear that the

trafficker and the [defendant] have established a pattern of conduct or could be said to have a tacit

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agreement’ as to the venture[.]” 603 F. Supp. 3d at *644. In M.A. v. Wyndham Hotels & Resorts,

Inc., 425 F. Supp. 3d 959, 962, 970-71 (S.D. Ohio 2019), for example, the court found a

sufficiently continuous relationship to constitute participation where the defendant hotel operator

repeatedly rented rooms to a trafficker over 17 months. Here, while doing business with Epstein

in and beyond his accounts, JPMorgan handled and Epstein’s payments to victims and

recruiters for over ten years, FAC ¶ 42, and

, id. ¶¶ 75, 91.

JPMorgan separately contends that its

does not constitute participation because

Mot. at 10. Putting

aside that JPMorgan ignores the Government’s allegations that it facilitated the sex-trafficking by

handling payments to victims and recruiters, the Government’s claim is that JPMorgan did detect

Epstein’s sex-trafficking, see FAC ¶¶ 44-48, 54-55, 61 (Staley), 75, 86, but

, id. ¶¶ 14-19, 74-75,

in turn allowing Epstein’s ongoing and future sex-trafficking, id. ¶¶ 6, 32, 42, 91.

2. JPMorgan Knew or Acted with Reckless Disregard that Minors Would

Be Caused to Engage in Commercial Sex

JPMorgan acted with knowledge or reckless disregard that Epstein was sex-trafficking

minors based on law enforcement indictments, Epstein’s own criminal guilty plea, and numerous

additional law enforcement investigations. In 2006, JPMorgan knew that Epstein had been

indicted for and later pled guilty to federal criminal charges of solicitation and procurement of a

minor for prostitution. FAC ¶¶ 21-22, 37-38, 44, 45, 50. Solicitation and procurement of a minor

for prostitution are acts covered by § 1591(a)(2): “[R]ecruits, entices, harbors, transports,

provides, obtains . . . maintains . . . or solicits by any means a person” and “the person has not

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attained the age of 18 years and will be caused to engage in a commercial sex act[.]” The

Government further alleges that in 2009 the non-prosecution agreement between Epstein and the

United States became public and revealed additional federal law enforcement allegations that

Epstein may have used interstate commerce to induce minors to engage in prostitution, engaged in

illicit sexual conduct with minors, and trafficked minors. FAC ¶ 39.

The Complaint details other law enforcement investigations of child sex-trafficking by

Epstein of which JPMorgan was aware based on investigations and reports by its own security,

risk management, and compliance teams. In a 2010 internal email, JPMorgan’s risk management

division wrote of new allegations “of an investigation related to child trafficking – are you still

comfortable with this client who is now a registered sex offender.” FAC ¶ 45. In March 2011,

JPMorgan’s Global Corporate Security Division reported that it was aware of numerous articles

detailing “various law enforcement agencies investigating Jeffrey Epstein for allegedly

participating, directly or indirectly, in child trafficking and molesting underage girls. Jeffrey

Epstein has settled a dozen civil lawsuits out of court from his victims regarding solicitation for

an undisclosed amount.” Id. ¶ 48. The same internal JPMorgan reports pointed to “derogatory

information” that “Jean Luc Brunel, owner of MC2 Model Management and Jeffrey Epstein

engaged in racketeering that involved luring in minor children for sexual play for money.” Id.

(emphasis added). The Government also alleges that Epstein, through JPMorgan, paid more than

$600,000 to Jane Doe 1, a woman with an Eastern European surname, who JPMorgan’s own due

diligence reports stated Epstein purchased at the age of 14. Id. ¶ 66.

3. JPMorgan’s Knowledge or Reckless Disregard of the Use of Force,

Threats, Fraud, or Coercion

With respect to victims 18 and over, § 1591(a)(2) requires that a beneficiary of sex-

trafficking like JPMorgan has acted with knowledge or reckless disregard of the fact that means

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of force, fraud, and/or coercion will be used to cause a victim to engage in a commercial sex act.

The Government alleges that JPMorgan knew it was processing Epstein’s payments to specific

young women around the world, FAC, ¶ 42, that these women were trafficked by or recruiters of

victims for Epstein, id., that JPMorgan knew these payments had no conceivable relationship to

Epstein’s stated business interests, id., ¶¶ 25-26, 65-69, and that JPMorgan knew Epstein was

being connected repeatedly to “human trafficking” activity, id., ¶¶ 44-49. After Epstein’s arrest

and death in 2019, JPMorgan acknowledged that recipients of the payments “may be victims of

human trafficking.” Id. ¶ 75.

In addition to consistent references to “human trafficking” by JPMorgan, the Government

alleges that JPMorgan’s internal reports showed accounts of MC2 modeling agency and Epstein

“luring” victims. Id. ¶ 48. It is inferable that the young women would have been “lured” by a

modeling agency with the fraudulent promise of modeling opportunities and careers. Id. ¶ 23

(citing to Ex. 1 at ¶¶ 43-75). Moreover, JPMorgan handled payments for numerous women with

Eastern European surnames who were publicly and internally identified as Epstein recruiters

and/or victims, including Jane Doe 1 who JPMorgan’s own internal reports stated Epstein

“purchased” when she was a child; it is inferable these young women from Eastern Europe were

subject to fraud, force, or coercion. FAC ¶¶ 66, 75, 40.

JPMorgan argues that the Government fails to allege knowledge of trafficking of a specific

victim. Mot. at 10. This argument is incorrect for two reasons. First, JPMorgan omits § 1591(a)’s

coverage of a defendant having “reckless disregard.” Second, JPMorgan ignores that the

Government identifies 20 specific young women who were trafficked by Epstein in the Virgin

Islands and elsewhere for whom JPMorgan handled Epstein’s payments knowing there was no

conceivable relationship to Epstein’s stated business interests, knowing that Epstein was

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repeatedly being connected to trafficking, and recognizing that these women “may be victims of

human trafficking.” FAC ¶ 75. JPMorgan’s own internal reports stated that Epstein purchased

Jane Doe 1 at 14, yet it processed $600,000 in payments by Epstein to her. Id. ¶ 66. The

Government also alleges that JPMorgan had an up-close view of Epstein’s conduct. Id. ¶¶ 53-59,

61 (Staley). These allegations support a plausible inference that JPMorgan knew or at a minimum

acted with reckless disregard for the probability that these women were being subjected to force,

threats, fraud, and/or coercion. See, e.g., Stuto v. Fleishman, 164 F.3d 820, 827 (2d Cir. 1999)

(reckless disregard shown by recognition of substantial probability of harm and action with

disregard for its occurrence).

JPMorgan separately argues that the Government cannot establish knowledge based solely

on JPMorgan’s awareness of “allegations” of Epstein’s trafficking. Mot. at 11 (citing United

States ex rel. Grubea v. Rosicki, Rosicki & Assocs., P.C., 318 F. Supp. 3d 680, 701 (S.D.N.Y.

2018) (Rakoff, J.) (quoting United States ex rel. Escobar v. Universal Health Servs., Inc., 842 F.3d

103, 112 (1st Cir. 2016))). Again, JPMorgan omits reckless disregard, Epstein’s guilty plea to

conduct that constitutes child sex-trafficking under § 1591—which is knowledge, not an

allegation—and its own observation of red flags and adoption of the trafficking allegations. FAC

¶¶ 44-45, 53-62, 65-69, 75. Moreover, the allegations (or lack thereof) in Grubea are a far cry

from this case. Grubea found that there was no evidence of knowledge of wrongdoing—not even

“allegations.” 318 F. Supp. 3d at 701 (argument that government knew of the fraudulent conduct

at issue is “pure speculation”). In Escobar, the “allegations” that were held insufficient to give

rise to knowledge were some complaints by private individuals to state regulators about a

healthcare provider. 842 F.3d at 108, 112. The allegations here were numerous, widely reported,

in many cases involved law enforcement investigations, and extended over a number of years.

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Given Epstein was a registered sex offender, felon, and high-risk client, JPMorgan’s failure to

follow up on these allegations, other than to assign Staley—whose JPMorgan emails strongly

suggest he was involved in Epstein’s sex-trafficking and whose relationship with Epstein

catapulted his career—to talk to Epstein, FAC ¶¶ 52-62, 72, 47, at a minimum shows reckless

disregard.

JPMorgan cites S.J. v. Choice Hotels Int’l, Inc., 473 F. Supp. 3d 147, 154 (E.D.N.Y. 2020),

see Mot. at 12-13, for the proposition that “knowledge or willful blindness of a general sex

trafficking problem . . . does not satisfy the mens rea requirements of the [TVPA].” This is

inapposite because the Government alleges not that JPMorgan had general knowledge of

trafficking, but that it had knowledge of the “specific sex trafficking venture,” id., Epstein was

operating through the foregoing evidence that was uniquely in its sights.

4. JPMorgan Knowingly Benefited

JPMorgan argues that the Government does not plausibly allege a “causal relationship”

between JPMorgan’s participation in Epstein’s sex-trafficking venture and its receipt of a benefit,

again relying on Geiss. Mot. at 13. This is wrong. Geiss is not controlling.2 Other cases, including

those relied on by JPMorgan, hold that “the statutory language imposes no such [causal

relationship] requirement” and requires only that the defendant “knowingly benefit financially.”

HH v. G6 Hospitality, Inc., No. 2:19-cv-755, 2019 WL 6682152, at *2 (S.D. Ohio Dec. 6, 2019)

(allegation that “rental of a room constitutes a financial benefit from a relationship with the

2
Further, in Geiss, the Court found that Weinstein benefited the production company with his
continued employment there which generated revenue for the company “in spite of” – not because
of – the company’s alleged facilitation of his misconduct. 383 F. Supp. 3d at 169-70. Here, the
Complaint alleges human trafficking was the principal business of the accounts JPMorgan
managed for Epstein. FAC ¶ 6. Epstein thus benefited JPMorgan with the money in those accounts
because of JPMorgan’s facilitation of Epstein’s sex-trafficking venture by processing payments to
the young women and girls who were Epstein’s victims and recruiters.
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trafficker” is sufficient). There is no question JPMorgan received financial benefits in the form of

servicing accounts with hundreds of millions in assets and referrals of business opportunities from

its relationship with Epstein, including the acquisition of one of the country’s largest hedge funds

as a customer. FAC ¶¶ 7, 71-73, 87, 96-98.

If the Government must allege a causal relationship, it has. Canosa is again instructive.

There, the court found that the complaint adequately pled “a symbiotic relationship between the

[companies] and Weinstein, in which the companies affirmatively enabled and concealed

Weinstein’s predations as a means of keeping him happy, productive, and employable” which led

to financial and other benefits for the company. 2019 WL 498865, at *24. So too here, the

Government alleges a long-standing and close relationship between JPMorgan and Epstein in

which JPMorgan knowingly received value from Epstein’s business, connections, and referrals in

exchange for JPMorgan’s participation in his sex-trafficking venture. FAC ¶¶ 7, 71-73, 87, 95-

98.

II. The Government Pleads Actionable CICO Counts.

A. CICO Applies to JPMorgan’s Conduct.

JPMorgan baselessly contends that its conduct “occurred entirely in New York.” Mot. at

15. JPMorgan’s criminal activity under CICO occurred almost entirely in the Virgin Islands. For

two decades, JPMorgan transacted business with a Virgin Islands resident and his Virgin Islands

entities, including managing accounts worth hundreds of millions of dollars, the principal business

of which was trafficking including in and from the Virgin Islands. JPMorgan processed and

payments to women and girls sex-trafficked in the Virgin Islands who it knew “may be

victims of human trafficking.” FAC ¶¶ 5, 6, 20, 41, 42, 75, 114. JPMorgan, through Staley,

engaged in multiple visits to Epstein’s residence on Little St. James where the sex-trafficking took

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place as part of its management of its business relationship with Epstein. Far from acting “for only

wholly personal reasons,” Mot. at 16 n.9, at the time of these visits, Staley was serving in the role

of JPMorgan’s senior executive and head of Private Bank, which was dedicated to extremely

wealthy clients like Epstein. JPMorgan assigned Staley to manage Epstein and his accounts for

his wealth, connections, and referrals of ultrawealthy and powerful clients. Thus, Staley’s job was

to maintain a close relationship with Epstein so that his money, connections, and referrals would

continue to flow to JPMorgan. Staley emailed freely with Epstein about his visits to Little St.

James over his work email account in full view of JPMorgan. FAC ¶¶ 52-53, 56, 60, 62, 84, 47,

71, 73, 87. JPMorgan’s conduct threatened public safety and caused serious harm to the Virgin

Islands and its residents by facilitating sex-trafficking and the commission of sexual abuse against

young women and underage girls in the Virgin Islands. Id. ¶¶ 3, 6, 20, 42, 91, 118, 128. By sharp

contrast, in American Charities for Reasonable Fundraising Regulation, Inc. v. Pinellas Cty.,

which JPMorgan claims is “analogous,” Mot. at 15, 16, there were no allegations that “the

plaintiffs purposefully direct their efforts to, or specifically advise on solicitations aimed at,

Pinellas County.” 221 F.3d 1211, 1217 (11th Cir. 2000).

B. The Government Pleads Actionable CICO Claims.

1. Elements of CICO Claim

a) Association with and Participation in Enterprise

JPMorgan argues that all the Government pleads is that JPMorgan “earned money by

providing ordinary banking services to a client, which is insufficient” to establish a shared common

purpose. Mot. at 17-18. This is incorrect. The Government alleges that JPMorgan, rather than

provide ordinary banking services, processed Epstein’s payments to recruiters and young women

who were trafficked in the Virgin Islands and elsewhere, FAC, ¶ 42, with knowledge that Epstein

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was procuring women to perform commercial sex acts, id., ¶¶ 54-55, 61 (Staley), had been indicted

for and pled guilty to solicitation of a minor for prostitution and was a criminal felon and registered

sex offender, id. ¶¶ 21-22, 44, and was repeatedly under law enforcement investigations for and

associated with trafficking activity, id., ¶¶ 44-47, while also

, id., ¶¶ 66-69, 74-84. JPMorgan

handled Epstein’s payments even though they had no discernible business or other legitimate

purpose and engaged in a years-long pattern of ignoring obvious red flags and failing to

demonstrate even basic due diligence on Epstein’s accounts—which is particularly out-of-the-

ordinary conduct by JPMorgan for a customer it designated high-risk. Id. ¶¶ 25-26, 66-69, 76-78,

82, 43, 44, 50, 80.c. Further, JPMorgan catapulted Staley’s career based on Staley’s profitable

work with Epstein and directed Staley to manage JPMorgan’s relationship with Epstein in the

pursuit of more profits and referrals of business opportunities. Staley filled his end of the bargain,

establishing a close relationship with Epstein. In 2009 and 2010, after Epstein pled guilty to

conduct that is child sex-trafficking under the TVPA, Staley’s JPMorgan email account—in full

view of JPMorgan—shows multiple emails with Epstein discussing visits to Epstein’s residences,

including in the Virgin Islands; women who they referred to by the names of Disney princesses

that Epstein procured for Staley; discussions of sex with young women; and photos of young

women in suggestive poses. Id. ¶¶ 52-62. In 2011, following additional news stories about

Epstein’s human trafficking, JPMorgan’s investigation extraordinarily consisted of asking Staley

to discuss those reports with Epstein. Id. ¶ 47.

This unlawful conduct in furtherance of the trafficking enterprise’s unlawful purpose

constitutes association with and participation in the enterprise by JPMorgan. See, e.g., Handeen

v. Lemaire, 112 F.3d 1339, 1350 (8th Cir. 1997) (law firm’s assistance with sham transactions and

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false court filings in furtherance of client’s misuse of bankruptcy to shield enterprise assets

constitutes association and participation); Taylor v. Bettis, 976 F. Supp. 2d 721, 735 (E.D.N.C.

2013) (“If a doctor or lawyer provides services that go to the heart of the allegedly fraudulent

scheme, the professional may be liable for providing some direction in the affairs of the

enterprise.”).

The Government also sufficiently pleads participation. JPMorgan argues that “providing

banking services—even with knowledge of [an underlying] fraud—is not enough” to establish

participation. Mot. at 19. Here too the Government alleges more than that JPMorgan provided

banking services with knowledge of wrongdoing. It alleges that JPMorgan directly or indirectly

participated in the wrongdoing by handling payments for Epstein’s sex-trafficking with no

conceivable relationship to Epstein’s stated business interests, having a close-up view of Epstein’s

sex-trafficking through Staley and also over JPMorgan email, and

, in the face of evidence

of illicit purpose, which allowed the ongoing trafficking. FAC ¶¶ 42, 44-47, 54-55, 66-69, 74-84.

See Handeen, supra; Feld Entm’t, Inc. v. ASPCA, 873 F. Supp. 2d 288, 327 (D.D.C. 2012) (service

providers “may be liable for operating or managing the enterprise when they participate in the

central activities of the enterprise”); see generally First Cap. Asset Mgmt., Inc. v. Satinwood, Inc.,

385 F.3d 159, 178 (2d Cir. 2004) (it is “no great leap to find that one who assists in the fraud also

conducts or participates in the conduct of the affairs of the enterprise”).

b) Pattern of Criminal Activity

JPMorgan argues that the Government does not allege conduct related to the enterprise’s

affairs. Mot. at 19. To the contrary, the Government alleges extensive conduct by JPMorgan

associated with the trafficking enterprise. See supra § II.B.1.a. JPMorgan also argues that the

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Government does not allege conduct within the past five years because its termination of Epstein’s

accounts in 2013 effectively ended its conduct. Mot. at 20. It did not. The Government alleges

that occurred

through 2019, and which allowed Epstein’s ongoing sex-trafficking. FAC ¶¶ 7, 32, 42, 74-75, 83,

90-91. This satisfies CICO’s requirement of a pattern of criminal activity, an instance of which

was within five years of the filing of suit, and triggers equitable tolling of a statute of limitations

under Virgin Islands law. Id. ¶¶ 85-91; Gerald v. R.J. Reynolds Tobacco Co., 68 V.I. 3, 136 (V.I.

Super. Ct. 2017) (tolling for fraudulent concealment triggered by affirmative concealment,

knowledge or reason to know of concealment, prevention of discovery, and lack of reasonable

opportunity to discover).

2. Predicate Criminal Activity

Under CICO, “criminal activity” includes conduct violating “any Federal criminal law, the

violation of which is a felony[.]” 14 V.I.C. § 604(e). This includes the TVPA and the BSA. The

Government claims that JPMorgan violated the TVPA on the grounds discussed above, FAC

Count Two, ¶¶ 110-117, and the BSA by

or to perform due diligence on Epstein, id. Count Three, ¶¶ 121-126 (citing 31 C.F.R.

§§ , 1010.620).

JPMorgan repeats by reference its arguments on the TVPA as grounds for dismissing the

Government’s TVPA-based CICO claim. Motion at 20. The Government restates by reference

its arguments in opposition. See supra § I.C.

On the BSA-based CICO claim, JPMorgan argues that the Government does not adequately

. Motion at 21-22. Just the opposite,

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JPMorgan’s

. Ratzlaf v. U.S., 510

U.S. 135, 138 (1994) (BSA’s willfulness element requires knowledge of unlawfulness). JPMorgan

argues that Epstein’s July 2019 arrest on trafficking charges changed the meaning of these earlier

transactions. Mot. at 21. It did not. JPMorgan elsewhere argues that allegations are not enough.

See Mot. at 11. By the time Epstein was charged in 2019, he had already pled guilty to a child sex

offense a decade earlier and been repeatedly alleged to be engaged in trafficking. FAC ¶¶ 43-50.

The 2019 charges highlighted what JPMorgan already knew—that the women receiving his

payments through JPMorgan “may be victims of human trafficking.” Id. ¶75. The Government

sufficiently alleges a willful violation.

C. The Government Has Standing for its BSA-Based CICO Claim.

JPMorgan argues that the Government lacks standing for its BSA-based CICO claim

because it does not allege an injury fairly traceable to the BSA violation. Mot. at 23-24. This

argument fails because the Government plausibly alleges that JPMorgan’s

harmed the Virgin Islands and its

residents by facilitating the continuation of Epstein’s trafficking. FAC ¶¶ 6, 32, 42, 91, 107, 118,

128. Suspicious activity reporting “is critical to the United States’ ability to utilize financial

information to combat” criminal activity and ensures that the government act when alerted to

potential illegal conduct. Id. ¶¶ 16-18. “A key purpose of federal banking regulations is to give

law enforcement real-time information so that it can act to detect violations of the law and protect

public safety.” Id. ¶ 88. In fact, the federal government did ultimately take action to bring

Epstein’s trafficking to a halt. Id. ¶¶ 32, 42, 90-91.

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III. The Government Pleads a CFDBPA Claim.

The CFDBPA makes it “unlawful for any person to engage in unfair methods of

competition . . . in the conduct of any trade or commerce.” 12A V.I.C. § 304. The Government

claims that JPMorgan engaged in unfair competition by facilitating and Epstein’s

trafficking to gain referrals over other banks. FAC ¶ 135. The Government seeks civil penalties

under 12A V.I.C. § 328(b). Id. Prayer for Relief. JPMorgan is wrong that this claim is barred by

the Act’s six-year statute of limitations. Mot. at 25 (citing 12A V.I.C. § 336). 12A V.I.C. § 336

provides “The statute of limitations under this Chapter is governed by Title 5 Virgin Islands Code

§ 31(3)(B).” Section 31(3)(B) does not apply to a government enforcement action for a penalty,

as here, but only to “[a]n action upon a liability created by statute, other than a penalty or

forfeiture,” which this of course is not. 5 V.I.C. § 31(3)(B) (emphasis added). In any event,

JPMorgan’s continued into 2019. FAC ¶¶ 7, 74-75, 83, 90-91.

JPMorgan also incorrectly argues that the Government pleads insufficient facts about the

business opportunities and competitors at issue. Mot. at 25. The Government identifies the

business referral at issue, FAC ¶ 72, and alleges that compliant banks were unfairly denied this

opportunity, id. ¶ 135. Moreover, the Federal Trade Commission clarified in its recently issued

policy statement regarding unfair methods of competition that it is not necessary to show actual

anticompetitive effects, but rather that the challenged conduct negatively affects competitive

conditions. See Federal Trade Commission, Policy Statement Regarding the Scope of Unfair

Methods of Competition Under Section 5 of the Federal Trade Commission Act, 9-10 (Nov. 10,

2022), https://www.ftc.gov/system/files/ftc_gov/pdf/P221202Section5PolicyStatement.pdf.

CONCLUSION

For all the reasons set forth above, the motion to dismiss should be denied.

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Dated: February 15, 2023 CAROL THOMAS-JACOBS, ESQ.

ACTING ATTORNEY GENERAL

/s/ Linda Singer

Linda Singer (pro hac vice)
Mimi Liu (pro hac vice pending)
David I. Ackerman
Paige Boggs (pro hac vice)
MOTLEY RICE LLC
401 9th Street NW, Suite 630
Washington, DC 20004
Tel: (202) 232-5504
Fax: (202) 232-5513
lsinger@motleyrice.com
mliu@motleyrice.com
dackerman@motleyrice.com
pboggs@motleyrice.com

Carol Thomas-Jacobs (pro hac vice)

Acting Attorney General of the
United States Virgin Islands
Virgin Islands Department of Justice
34-38 Kronprindsens Gade
St. Thomas, U.S. Virgin Islands 00802
Tel: (340) 774-5666 ext. 10101
carol.jacobs@doj.vi.gov

Attorneys for Plaintiff Government of the

United States Virgin Islands

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CERTIFICATE OF SERVICE

I hereby certify that on February 15, 2023, I electronically filed the foregoing

Memorandum of Law in Opposition to Motion to Dismiss with the Clerk of the Court and served

on counsel of record using the Court’s CM/ECF system. Notice of this filing will be sent to all

parties of record by operation of, and parties may access this filing through, the Court’s CM/ECF

system.

By: /s/ Linda Singer

Linda Singer