Banks that aid in sex trafficking must face consequences

Notorious predator Jeffrey Epstein didn’t commit his crimes alone. Overlooked is the role of a financial institution that allegedly aided and abetted his crimes: JPMorgan Chase.

Recent legal filings claim that an institutional failure at JPMorgan Chase enabled Epstein to sexually abuse and traffic women and girls.

The court filings show that, when Epstein was charged in 2006, and certainly after he pleaded guilty to prostitution of a minor in 2008, JPMorgan Chase was aware of his conduct. Internal company emails indicate that this had become a matter of some discussion within the bank. One email from 2010 said of 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.”

Yet Epstein continued to sexually abuse underage girls while JPMorgan Chase allegedly facilitated payments to the girls. The bank closed his account only in 2013, after servicing his hundreds of millions of dollars for 15 years.

While Epstein himself can no longer answer for his crimes, why has the nation’s largest bank so far gone unpunished for its alleged role in abetting him? 

Federal laws require financial institutions to alert authorities of suspicious and unlawful activities. The court filings by Epstein’s survivors and the U.S. Virgin Islands argue that JPMorgan Chase willfully ignored the digital signs of Epstein’s criminal conduct identified through the bank’s internal ledgers and emails. As the complaint by the Virgin Islands territorial government puts it, “JP Morgan ignored numerous red flags and failed to comply with federal banking regulations until years later, after JP Morgan was no longer benefiting from Epstein’s business.”

JPMorgan Chase senior executives emailed internally about Epstein, with “a 2011 email summarizing a few 2010 news stories connecting Epstein to human trafficking” and promising to “monitor the accounts and cash usage closely going forward.” Likewise, a 2011 compliance memo noted that “[n]umerous articles detail various law enforcement agencies investigating Jeffrey Epstein for allegedly participating in child trafficking and molesting underage girls” and that “Epstein had settled a dozen civil lawsuits out of court from his victims regarding solicitation for an undisclosed amount.”

Even so, JPMorgan Chase continued to ignore unexplained cash withdrawals, payments to young women and suggestive exchanges between Epstein and one of JPMorgan Chase’s senior executives.

It is no secret that banks prioritize their billionaire clientele. Sadly, that included Epstein, whose 15-year client relationship with JPMorgan Chase exceeded the ages of some of his victims. According to these lawsuits, JPMorgan Chase put its profits first and sexual assault victims last, breaking the law in the process.

In Congress, I fought for justice for women who were victims of sexual abuse. Holding perpetrators accountable is only half the battle; we must also take a hard look at institutions which tolerate and facilitate such conduct.

Moreover, although there are already laws on the books that do so, there is much more Congress can do to crack down on financial institutions that help predators like Epstein.

Policymakers should pass legislation imposing a defined civil penalty range with significant minimum financial penalties for banks that violate anti-human trafficking laws. It should be made clear that civil penalties and other relief available to law enforcement can be imposed without proving damages to individual victims. This is important, as we have seen in countless cases, because defendants tend to take a scorched-earth approach, prying into the most intimate details of victims’ lives and relationships and making it too painful for many victims to come forward and seek justice. 

While they are at it, members of Congress should update the law to make it clear that banks are liable not only when they know that their customers are engaged in criminal human trafficking, but also when they fail to use reasonable care to avoid helping sex traffickers like Epstein. In other words, banks and others who facilitate trafficking should be liable for negligence in this regard.

Executives must make sure that their banking services are not used to assist human trafficking. To avoid any confusion, Congress made it the law through the Trafficking Victims Protection Reauthorization Act. Jeffrey Epstein proved that the law could be strengthened. If banks are willing to be conduits for human trafficking, Congress should make it prohibitively expensive to do so.

One way is by adding a provision to the Trafficking Victims Protection Reauthorization Act that imposes strict minimum civil penalties on defendants, in addition to ensuring restitution to victims. This update to the law would also allow judges to increase penalties in cases like Epstein’s, where the bank, it is alleged, with knowledge and self-interest, provided the financial tools that allowed dozens of girls and women to be abused over more than a decade.  

Critics on Wall Street may argue these changes would unfairly require banks to function as law enforcement officers. But a banking license is not a free pass. It offers its holder a powerful privilege, which comes with the basic expectation to avoid funding crimes such as terrorism, the illegal drug trade, and human trafficking. Victims and survivors of human trafficking deserve nothing less.

The government and private plaintiffs will have to prove their cases in court. If they do, JPMorgan Chase might be held to account. This would not only secure some measure of justice for Epstein’s victims and survivors, but also remind institutions that assist other predators and human traffickers that the law must be followed, or else there will be consequences.

Jackie Speier represented California in the U.S. House between 2008 and January 2023.