The proposed $290 million settlement between JPMorgan Chase and sexual abuse victims of Jeffrey Epstein carries no minimum or maximum payout for each individual, leaving that decision to the claims administrator appointed to oversee the process, according to a plan filed in federal court on Thursday.
If approved by a federal judge, the proposed deal with JPMorgan would resolve a class-action lawsuit filed in November in Manhattan federal court against the nation’s largest bank on behalf of women who claimed they had been sexually abused by Mr. Epstein as teenagers or young women. The decision to leave the size of each payout up to an administrator will give that person significant power over the settlement fund, which covers a period of abusive activity by Mr. Epstein from 1998 to 2019.
More than 200 women may be eligible to apply to the settlement fund, judging from the number of claims that had been filed with a separate victims restitution fund established by Mr. Epstein’s estate. The estate created the restitution fund shortly after Mr. Epstein killed himself in August 2019 while awaiting trial in a Manhattan jail on sex trafficking charges.
The proposed settlement with JPMorgan did not prohibit any woman who received a payout from the estate’s restitution fund from getting an additional recovery under the deal with JPMorgan, according to the court filing. The bank had served as Mr. Epstein’s primary financial institution for roughly 15 years before finally ending the relationship in 2013.
Suing the big Wall Street firms that did business with Mr. Epstein has proved to be a successful strategy for getting additional financial relief for Mr. Epstein’s victims. The litigation strategy has also generated big fees for the lawyers bringing the suits.
The same group of lawyers who sued JPMorgan also recently negotiated a tentative $75 million settlement with Deutsche Bank, which became Mr. Epstein’s main banker after JPMorgan dropped him. The proposed deal with Deutsche specifically said that eligible victims who had been abused by Mr. Epstein from 2013 to 2019 could be entitled to receive $75,000 to $5 million in restitution.
The lack of an award range for victims in the JPMorgan deal is the most significant difference between the two proposed settlements.
In both cases, the victims’ lawyers, led by David Boies and Brad Edwards, have requested legal fees up to 30 percent of the settlement funds. The lawyers said the fees were justified by the more than two dozen depositions taken in preparation for the lawsuits and dozens of witness interviews, according to court filings in both cases.
In the proposed settlement, JPMorgan denied that it had supported Mr. Epstein’s sex trafficking activities in any way. The bank said, on a number of occasions, that Mr. Epstein’s activities were “heinous” and in “hindsight, any association with him was a mistake.”
JPMorgan continued to do business with Mr. Epstein for five years after he pleaded guilty in 2008 in Florida to a charge of soliciting prostitution from a teenage girl.
The lawyers for the banks and the victims hammered out the respective settlements with the assistance of a mediator, according to court filings.
Judge Jed Rakoff of Federal District Court in Manhattan, who is overseeing the lawsuits against both banks, must still approve the fee requests. The judge last week gave preliminary approval to the settlement deal between the victims and Deutsche.
The lawyers for the victims and JPMorgan have asked Judge Rakoff to approve Simone K. Lelchuk as the claims administrator for the settlement. Ms. Lelchuk, a lawyer with an expertise in mediation, has already been approved to oversee the process of distributing funds from the Deutsche settlement. She also oversaw the process of assessing settlement claims by victims of disgraced movie producer Harvey Weinstein. The court filing said the fund administrator, when considering a victim’s claim, should consider the extent of the alleged harm, the duration of the abuse, and a victim’s willingness to cooperate with law enforcement.
The deal with JPMorgan also will require the administrator to take into account any award a victim may receive from the Deutsche settlement fund. But it does not preclude a victim from receiving a recovery from both bank settlements, if the abuse overlapped during the years that both institutions had Mr. Epstein as a customer.
Any money left over at the end of the process would be donated to a charitable organization agreed upon by the victims’ lawyers and JPMorgan.
The combined settlements with the two banks is more than twice the roughly $150 million in restitution that Mr. Epstein’s estate has paid out to more than 125 victims.
JPMorgan’s settlement with Mr. Epstein’s victims will not end all of the litigation.
The bank is seeking restitution from James E. Staley, a former top JPMorgan executive who had close ties to Mr. Epstein and had lobbied to keep him as a customer. JPMorgan also is being sued by the government of the U.S. Virgin Islands where Mr. Epstein maintained a private island residence and ran his businesses from for nearly two decades. The Virgin Islands lawsuit is being led by lawyers from Motley Rice, a law firm that has a retainer agreement with the U.S. territory.
Matthew Goldstein
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