JPMorgan Chase has agreed to pay $75 million to the U.S. Virgin Islands to settle claims that it facilitated the activities of Jeffrey Epstein, the convicted sex offender who died by suicide in 2019, according to statements released by the parties on Tuesday.
The tentative settlement comes just weeks before a scheduled trial in federal court in Manhattan on the U.S. territory’s claim that the bank enabled Mr. Epstein’s sex trafficking operation of teenage girls and young women for nearly 15 years.
The bank also said in its statement that it had reached a confidential settlement with James E. Staley, a former top banker who had been one of the biggest advocates for keeping Mr. Epstein as a client.
JPMorgan, the nation’s largest bank, already agreed in June to pay $290 million to the nearly 200 victims of Mr. Epstein in a class-action lawsuit that mirrored many of the claims raised by the Virgin Islands.
The U.S. Virgin Islands sued JPMorgan in December, and about a month later, lawyers for Mr. Epstein’s victims had sued the bank. The U.S. territory said it was seeking up to $190 million in compensation from the bank, which it claimed had ignored warning signs about Mr. Epstein’s activities and chose to look the other way because he generated business for it.
The money the bank is paying to the Virgin Islands, where Mr. Epstein had a private island residence for roughly two decades, will mostly go toward funding charitable causes in the U.S. territory in the Caribbean and paying lawyer fees. The settlement, the bank said, specifically calls for $30 million to go to local charities that support local victims of sex crimes and $25 million to help law enforcement fight sex trafficking and other crimes.
The Virgin Islands said that $10 million of the total was being aimed at providing mental health support for Epstein victims.
Mr. Epstein killed himself in a federal jail in Manhattan in August 2019, a month after he had was arrested on federal sex trafficking charges. Mr. Epstein had been a client of JPMorgan both before and after he pleaded guilty in 2008 to a charge of soliciting prostitution from a teenage girl and had to register as a sex offender in New York, Florida and the Virgin Islands.
The bank agreed to settle with the Virgin Islands after months of embarrassing disclosures about how top executives continued to keep Mr. Epstein on as a client despite numerous warning signs that he was paying large sums of money to teenage girls and young women without any good explanation.
The parties, however, took issue with how each side had characterized some of the terms of the settlement in their respective news releases.
The Virgin Islands government said in a statement that the bank made “substantial commitments” as part of the settlement to bolstering its systems to detect and deter sex trafficking. But JPMorgan said in a follow-up statement that the settlement contained “no new commitments” and the bank simply agreed to continue work on “previous and ongoing efforts to fight human trafficking.”
The bank dismissed Mr. Epstein as a client in 2013 but only after Mr. Staley, the former head of JPMorgan’s private bank, left for another job.
The bank sued Mr. Staley, also a former chief executive of Barclays, shortly after the U.S. Virgin Islands filed its lawsuit. The bank had been seeking reimbursement for some of its cost associated with the litigation. The bank said the terms of the settlement with Mr. Staley were confidential.
Representatives for Mr. Staley declined to comment.
JPMorgan said its settlement with the Virgin Islands did not involve any admission of liability. The bank, as it has said before, reiterated in its statement that it “deeply regrets any association” with Mr. Epstein.
The settlement includes $20 million in lawyer fees, which the Virgin Islands will use to pay Motley Rice, a big U.S. plaintiffs firm that has a retainer agreement with the government.
The Virgin Islands previously reached a $105 million settlement with the estate of Mr. Epstein and a $62.5 million settlement with the Wall Street billionaire Leon Black, who was the single biggest client of Mr. Epstein’s main money making business in St. Thomas.