Dive Brief:
- A federal judge on Thursday dismissed Jeffrey Epstein-related claims filed against BNY by an alleged victim, but permitted some claims against Bank of America to move forward.
- The proposed class-action lawsuits, filed in October by Jane Doe, an alleged victim of the late financier and convicted sex offender, accused the banks of participating in and benefiting from Epstein’s sex trafficking enterprise.
- U.S. District Court Judge Jed Rakoff dismissed four claims against BofA but allowed two to proceed. A Bank of America spokesperson said the lender is “pleased the court dismissed most of the claims. On the remaining claims, it’s important to understand the underlying facts have not been reviewed at this stage of the litigation. We look forward to a full review of the facts.”
Dive Insight:
The lawsuits, filed in the U.S. District Court for the Southern District of New York, alleged Epstein’s trafficking operation wouldn’t have existed without banks providing special treatment to him and co-conspirators.
Both banks had been accused of failing to file suspicious activity reports about Epstein-related transactions “before it was too late.”
The banks had filed motions to dismiss the lawsuits, calling the allegations “threadbare” and “razor-thin.” Doe added more allegations in an amended complaint Dec. 29, after the judge expressed skepticism about the lawsuits, which he said were “frequently conclusory” and failed to demonstrate the banks’ wrongdoing.
For its part, BNY said Friday that it is “pleased with the court’s decision dismissing the lawsuit in its entirety, which reinforces that BNY had no involvement in Epstein’s crimes. BNY has great sympathy for the victims of Jeffrey Epstein and believes his crimes should be fully investigated and prosecuted.”
Rakoff said he would issue an explanation of his reasoning by Feb. 13.
The claims against BofA that Rakoff allowed to remain include accusations the bank was a “knowing beneficiary” in a sex trafficking venture and that it obstructed the federal government’s enforcement of trafficking laws.
But Rakoff dismissed claims that Bank of America knowingly participated in and aided and abetted Epstein’s operation, and that the lender failed to comply with anti-money laundering and know-your-customer laws regarding Epstein-related accounts.
In the amended complaint, Doe said the Charlotte, North Carolina-based BofA conducted no due diligence when it opened an account in an Epstein victim’s name, even though it had “actual and constructive knowledge” that the account was being used to facilitate his sex trafficking venture.
BofA’s “failure to timely file SARs about Epstein’s sex-trafficking venture, in spite of numerous red flags, was wrongful and purposeful,” the alleged victim said.
