Sending an alarm through Wall Street last week, the U.S. Virgin Islands Department of Justice achieved an historic $75 million settlement against JPMorgan Chase. Nearly one year after filing this groundbreaking enforcement action, justice has prevailed.
It is difficult to overstate the significance of what the USVI has achieved. Under the settlement agreement, JPMorgan is required to establish, implement, and maintain policies to identify and report potential human trafficking – and most importantly, stop banking clients who are suspected of breaking the law and putting people in harm’s way. The Trafficking Victims Protection Act, on which the USVI’s enforcement action was based, reflects the recognition that financial transactions are often the first signs of human trafficking.
The TVPA’s effectiveness in combating human trafficking relies, in large part, on banks upholding their duty to timely identify and report such signs of human trafficking as the law requires. Our hope is that by making clear that banks will face serious consequences when they fail in their legal obligation to use the information that is uniquely in their possession to prevent human trafficking, we can encourage compliance and potentially save lives and human suffering. All banks and financial institutions will now think long and hard before offering safe harbor to criminals or jeopardizing public safety.
Obviously, this case – like any meaningful endeavor – was not simple. Every development in our legal proceedings against JPMorgan Chase – the largest financial institution in the world – seemed to usher in a new wave of worldwide exposure for our close-knit community. Additionally, this case put on full display the painful realities of not only those impacted by Jeffrey Epstein’s heinous crimes, but any survivor of human trafficking, slavery and sexual assault. But, despite various outside efforts to distract the public from the very real documented failures under the TVPA, we never lost sight of the need to bring attention to the serious harm that could result when financial institutions fail to sound the alarm when monetary transactions point to human trafficking.
This enforcement action was the first such action brought by a state attorney general under the TVPA, which less than a decade ago was amended to permit such state actions to address the serious and devastating failure of financial institutions that fail to uphold their obligations under the law to stop human trafficking. That is why it was important for the Virgin Islands to agree to a settlement that put victims first, and encouraged the institutions’ changes in conduct, which could ultimately prove life-saving.
The settlement will go toward long-term services to address societal ills of disenfranchised persons who are most vulnerable to becoming criminally victimized, including those who are most vulnerable to the scourge of human trafficking and sexual assault, and other crimes. As research shows, disenfranchised persons, whether due to economic status and poverty, isolation, displacement, homelessness and the like, are most often preyed upon and become victimized. It is important that we address these issues, and address crime from a more holistic perspective – from developing solutions long before a person is victimized and advocating for those who have fallen prey well beyond a criminal prosecution. This settlement provides $20 million dollars to broadly address these issues in the U.S. Virgin Islands.
Additionally, we are especially pleased to have secured a separate $10 million fund to provide mental health services for Epstein’s survivors – many of whom bravely came forward over the years to share their stories to ensure that Epstein and others could finally be held accountable. All of them deserve the opportunity to heal and move towards recovery.
It is also a significant part of my mission as Attorney General, consistent with the mandates of my office, to prevent new tragedies by addressing ills at the front end, long before they become prosecutorial concerns. To make this possible, the USVI has secured an additional $25 million, to further our law enforcement goals, through training, capital improvement, operational needs, and the like. The USVI will apply these funds to make meaningful change.
In sum, when coupled with the important conduct provisions, the $75 million settlement from JPMorgan Chase and the manner in which the USVI has chosen to apply those funds, reflect the values that undergirded this enforcement action.
This was always a fight worth waging. No other state attorney general has ever gone up against a bank – much less the nation’s largest bank — to hold an institution accountable under the Trafficking Victims Protection Act. We are hopeful that, in remaining steadfast, the USVI has sent the message that attorneys general stand ready to guard and enforce the TVPA. Lives depend on it.
I am so grateful for every person who contributed to this historic victory and look forward to the work ahead to make sure resources are utilized responsibly and transformatively.
By U.S. Virgin Islands Attorney General Ariel Smith