Jonathan Stempel
NEW YORK, Feb 11 (Reuters) – A U.S. judge said on Wednesday that accusations that U.S. banks recklessly ignored information that late financier Jeffrey Epstein engaged in sex trafficking were enough to allow a proposed class action lawsuit to proceed.
U.S. District Judge Jed Rakoff’s assessment explained his Jan. 29 decision to allow Epstein victims to file two claims alleging that the nation’s second-largest bank knowingly benefited from Epstein’s sex trafficking and obstructed enforcement of the federal Trafficking Victims Protection Act.
The judge also dismissed four other claims against Bank of America, as well as all similar lawsuits against BNY Mellon. He did not decide the substance of Bank of America’s remaining claim.
Bank of America said Wednesday it looked forward to a full review of the facts. Lawyers for Epstein’s victims did not immediately respond to requests for comment after the bell.
The trial is scheduled for May 11.
Charlotte, N.C.-based Bank of America argued that the Jane Doe plaintiffs claimed “at best” that the bank provided banking services to high-net-worth clients with ties to Epstein, but did not show that the bank intentionally obstructed law enforcement.
Judge cites allegations that banks turned a blind eye
However, Rakoff said in a 42-page opinion that the Department of Energy “clearly alleged” that Bank of America provided unconventional banking services to help Epstein.
The judge said that included making Doe a “high-level” client and transferring large sums of money, despite “good reason to know” that Epstein was involved in transfers and sex crimes.
Rakoff also said Bank of America was justified in accusing it of “turning a blind eye” to media reports about the financier and failing to investigate “the manner in which large transfers were made to and from accounts allegedly owned by a penniless young woman,” referring to Bank of America.
The judge also said Doe had a reasonable claim that a bank employee, a former banker for Epstein at JPMorgan Chase and Deutsche Bank, had “direct personal knowledge” of Epstein’s sex trafficking, for which Bank of America could be subject to civil liability.
Doe, who lives in Florida, claimed that Bank of America and Bank of New York had been doing business with Epstein before his arrest in July 2019 because making money was more important than protecting his victims.
Epstein died in his Manhattan jail cell the following month while awaiting trial on sex trafficking charges. The New York City medical examiner ruled the death a suicide.
