Doe v. Deutsche Bank Aktiengesellschaft

• Court: U.S. District Court — Southern District of New York
• Writing for the Court: JED S. RAKOFF, UNITED STATES DISTRICT JUDGE
• Citation: Doe v. Deutsche Bank Aktiengesellschaft, 671 F.Supp.3d 387 (S.D. N.Y. 2023)
• Docket Number: 22-cv-10018 (JSR),22-cv-10019 (JSR),22-cv-10904 (JSR)
• Decision Date: 01 May 2023
• Parties: Jane DOE 1, Individually and on Behalf of All Others Similarly Situated, Plaintiff, v. DEUTSCHE BANK AKTIENGESELLSCHAFT, Deutsche Bank AG New York Branch, Deutsche Bank Trust Company Americas, Defendants. Jane Doe 1, Individually and on Behalf of All Others Similarly Situated, Plaintiff, v. JP Morgan Chase Bank, N.A., Defendant. Government of the United States Virgin Islands, Plaintiff, v. JP Morgan Chase Bank, N.A., Defendant.

671 F.Supp.3d 387

Jane DOE 1, Individually and on Behalf of All Others Similarly Situated, Plaintiff, v. DEUTSCHE BANK AKTIENGESELLSCHAFT, Deutsche Bank AG New York Branch,Deutsche Bank Trust Company Americas, Defendants.

Jane Doe 1, Individually and on Behalf of All Others Similarly Situated, Plaintiff, v. JP Morgan Chase Bank, N.A., Defendant.

Government of the United States Virgin Islands, Plaintiff, v. JP Morgan Chase Bank, N.A., Defendant.

22-cv-10018 (JSR)

22-cv-10019 (JSR)

22-cv-10904 (JSR)

United States District Court, S.D. New York

Signed May 1, 2023

David Boies, II, Boies, Schiller & Flexner LLP, Armonk, NY, Andrew Villacastin, Sabina Mariella, Boies Schiller Flexner LLP, New York, NY, Brittany Henderson, Bradley J. Edwards, Edwards Pottinger LLC, Fort Lauderdale, FL, Daniel Crispino, Sigrid S. McCawley, Boies Schiller Flexner LLP, Fort Lauderdale, FL, Paul G. Cassell, S.J. Quinney College of Law at the University of Utah, Salt Lake City, UT, for Plaintiff in 22-cv-10018.

David Boies, II, Boies, Schiller & Flexner LLP (Armonk), Armonk, NY, Andrew Villacastin, Sabina Mariella, Boies Schiller Flexner LLP, New York, NY, Brittany Henderson, Bradley J. Edwards, Edwards Pottinger LLC, Fort Lauderdale, FL, Daniel Crispino, Sigrid S. McCawley, Boies Schiller Flexner LLP, Fort Lauderdale, FL, for Plaintiff in 22-cv-10019.

Andrew Buckley Cashmore, James P. Dowden, Kathryn E. Caldwell, Ropes & Gray LLP, Boston, MA, Andrew Simon Todres, David B. Hennes, Lisa H. Bebchick, Michael Ardeljan, Ropes & Gray LLP, New York, NY, for Defendants in 22-cv-10018.

Bruce Doughty, Caitlin Kovacs, Leonard A. Gail, Rachel S. Morse, Massey & Gail LLP, Chicago, IL, Felicia H. Ellsworth, Wilmer, Cutler, Pickering, Hale and Dorr, LLP, Boston, MA, John Butts, Boston, MA, for Defendant JPMorgan Chase Bank, N.A. in 22-cv-10019

Carol Laura Thomas-Jacobs, Office of the Attorney General Office of the Attorney General, St. Thomas, VI, David Ira Ackerman, Elizabeth Paige Boggs, Mimi Liu, Sara Danielle Aguiniga, Linda Singer, Motley Rice, LLC Public Client Office, Washington, DC, Brendan Austin, Washington, DC, William H. Narwold, Motley Rice LLC, Hartford, CT, Andrew Arnold, Meghan Oliver, Motley Rice LLC, Charlotte Eleanor Loper, Mt. Pleasant, SC, Michael J. Quirk, Motley Rice LLC, Philadelphia, PA, Venetia Velazquez, Office of the Attorney General, Civil Division, Kingshill, VI, for Plaintiff in 22-cv-10904.

Boyd Milo Johnson, III, Hillary Chutter-Ames, Robert Lee Boone, Wilmer Cutler Pickering Hale and Dorr LLP, New York, NY, Bruce Doughty, Caitlin Kovacs, Leonard A. Gail, Rachel S. Morse, Massey & Gail LLP, Chicago, IL, Felicia H. Ellsworth, Wilmer, Cutler, Pickering, Hale and Dorr, LLP, Boston, MA, John Butts, Boston, MA, Ronald Machen, Jr., Wilmer Cutler Pickering Hale and Dorr LLP, Washington, DC, for Defendant in 22-cv-10904.

OPINION AND ORDER

JED S. RAKOFF, UNITED STATES DISTRICT JUDGE:

The plaintiffs in these three related cases are two anonymous women, referred to here as "JPM Jane Doe" and "DB Jane Doe," and the Government of the United States Virgin Islands (the "USVI"). Plaintiffs claim that defendants JP Morgan Chase Bank, N.A. ("JP Morgan") and the related entities Deutsche Bank Aktiengesellschaft, Deutsche Bank AG New York Branch, and Deutsche Bank Trust Company Americas (collectively, "Deutsche Bank") are legally liable for their alleged facilitation of Jeffrey Epstein's sex crimes.

On February 1, 2023, and February 7, 2023, defendants filed motions to dismiss the operative complaints in each case. After full consideration of the parties' written submissions and oral arguments, the Court granted those motions in part and denied those motions in part by a "bottom-line order" dated March 20, 2023. This Opinion reconfirms the Court's rulings and explains the reasoning behind them.

I. Plaintiffs' Allegations¹

A. Jeffrey Epstein's Sex-Trafficking Operation

Plaintiffs allege that between 2006 and 2018, DB Jane Doe and JPM Jane Doe were Jeffrey Epstein's sex slaves. He raped them repeatedly, and he sexually abused them in other ways as well. JPM Jane Doe FAC, ¶ 99; DB Jane Doe FAC, ¶ 128. He kept them in his thrall through a combination of promises, payments, and threats: promises to advance their careers and educations, payments in cash and in kind, and threats to destroy them if they did not obey his demands. JPM Jane Doe FAC, ¶¶ 70, 96, 111; DB Jane Doe FAC, ¶ 139, 143.

These Jane Does were not alone. Plaintiffs allege that beginning in 1998 and continuing until 2019, over two decades later, Epstein ran an organization that recruited hundreds of young women and girls and coerced them into performing sex acts. JPM Jane Doe FAC, ¶¶ 62, 67, 76; DB Jane Doe FAC, ¶¶ 39, 40, 88. Typically, Epstein would lure a victim to one of his residences by promising to grant a wish, would then pressure her into performing massages that became increasingly sexual, and then would force her to participate in sex acts on a continuing basis. JPM Jane Doe FAC, ¶ 66; DB Jane Doe FAC, ¶ 107.

Cash was the lifeblood of Epstein's operation. Victims were paid hundreds of dollars, in cash, each time Epstein abused them; and they were also paid hundreds of dollars, in cash, for each additional victim that they recruited. JPM Jane Doe FAC, ¶¶ 66, 68; DB Jane Doe FAC, ¶¶ 52-53, 115. At times, plaintiffs allege, Epstein dispensed thousands of dollars in cash every day to his victims, amounting to, on average $200,000 per year. DB Jane Doe FAC, ¶¶ 54, 280-81; USVI FAC, ¶ 80. Epstein could not have run his operation, plaintiffs claim, without ready access to cash through the banking system.

B. JP Morgan's Alleged Involvement

JP Morgan began to serve as Jeffrey Epstein's principal bank as early as 1998. JPM Jane Doe FAC, ¶ 41; USVI FAC, ¶ 41. Eventually, both Epstein and at least a dozen entities affiliated with Epstein and his operation maintained bank accounts with JP Morgan. USVI FAC, ¶ 27. These accounts, plaintiffs allege, were highly lucrative for JP Morgan and essential to Jeffrey Epstein's sex-trafficking operation.

Specifically, plaintiffs allege that JP Morgan supported Epstein's sex-trafficking operation in four different ways. First, they allege that JP Morgan enabled Epstein to access the large quantities of cash that fueled his operation. JPM Jane Doe FAC, ¶ 45; USVI FAC, ¶ 103. Second, they allege that JP Morgan assisted Epstein with "structuring" his cash withdrawals so as to elude suspicion. JPM Jane Doe FAC, ¶ 179; USVI FAC, ¶ 67. Third, plaintiffs allege that JP Morgan did not timely file suspicious activity reports ("SARs") that would have alerted authorities to Jeffrey Epstein's sex-trafficking operation. JPM Jane Doe FAC, ¶¶ 180-81; USVI FAC, ¶¶ 74-75. In particular, plaintiffs allege that JP Morgan delayed filing SARs for "thousands of transactions . . . totaling more than $1 billion, including payments to dozens of women, often with Eastern European surnames." USVI FAC, ¶ 75. Finally, plaintiffs allege that a JP Morgan subsidiary, Highbridge Capital Management, transported young women and girls from Florida to Epstein in New York, on the company's private jet. JPM Jane Doe FAC, ¶ 170.

According to the plaintiffs, by no later than 2006, JP Morgan either actually knew or should have known that it was supporting a sexual predator. JPM Jane Doe FAC, ¶¶ 190, 196. In 2006, police reports and news articles revealed that Epstein had sexually abused dozens of young women and girls. Id. at 190. In 2008, Epstein pled guilty to sex offenses, including soliciting a minor for prostitution, and he registered as a sex offender. USVI FAC, ¶ 38. Following Epstein's guilty plea, dozens of public lawsuits were filed against him, which included detailed accusations of his sexual abuse of young women and girls. JPM Jane Doe FAC, ¶¶ 207-209. While JP Morgan allegedly was aware of several of these accusations, JP Morgan nonetheless continued to bank Epstein. USVI FAC, ¶ 44.

After Epstein was released from prison, accusations that he trafficked young women and girls continued to surface. Plaintiffs allege that employees within JP Morgan would occasionally report these accusations to their superiors and would ask whether JP Morgan should maintain its relationship with Epstein. In 2010, for example, JP Morgan's risk management division discussed new allegations against Epstein: "See below new allegations of an investigation related to child trafficking - are you still comfortable with this client who is now a registered sex offender?" USVI FAC, ¶ 45. In January 2011, JP Morgan's director of anti-money laundering compliance requested re-approval for the bank's relationship with Epstein from JP Morgan's then-General Counsel "in light of the new allegations of human trafficking . . ." Id. at ¶ 46.

And there were other alleged red flags. Epstein and/or his associates are alleged to have made significant cash withdrawals from JP Morgan accounts with no known payee. USVI FAC, ¶ 67. For example, Hyperion Air, Inc. -- the Epstein-controlled company that owned Epstein's private jet -- issued over $547,000 in checks payable to cash purportedly for "fuel expenses when traveling to foreign countries." Id. Additionally, JP Morgan accounts in the name of Epstein's affiliated charitable organizations made payments without a clear connection to those organizations' charitable purposes. For example, Epstein and/or his representative used the C.O.U.Q. Foundation account to pay $29,464.66 to three young women, including two people known to be Epstein's victims. USVI FAC, ¶ 68.

One final source of JP Morgan's alleged knowledge is James ("Jes") Staley.² Circa 2000, Mr. Staley headed JP Morgan's private banking division, and he began to service Epstein's account. JPM Jane Doe FAC, ¶ 131. Mr. Staley is alleged to have developed a close personal friendship with Epstein. Indeed, Mr. Staley once wrote to Epstein, "I deeply appreciate our friendship. I have few so profound." USVI FAC, ¶ 56. Later, while...