Legal Report: JPMorgan Chase Settles for $75 Million with the U.S. Virgin Islands
Sex trafficking. Multinational bank JPMorgan Chase will pay $75 million to the U.S. Virgin Islands, settling the allegations that the bank “knowingly, negligently, and unlawfully” supported Jeffrey Epstein’s sex trafficking business, according to the complaint. The territory further accused the bank of being “indispensable” to the operation.
Most of the settlement—$55 million—will be paid to local charities that focus on providing assistance to domestic abuse and human trafficking survivors, and to improving local law enforcement efforts in the U.S. Virgin Islands. Another portion of the $55 million is earmarked for the creation of a fund for providing mental health services for the surviving victims of Epstein’s operations. (Government of the U.S. Virgin Islands v. JPMorgan Chase Bank, U.S. District Court for the Southern District of New York, No. 22-cv-10904, 2023)
On top of her prison sentence, Lorna Roxanne Green—who earlier pled guilty to the federal arson charge—was also ordered to three years of probation upon her release and to pay a monetary fine of more than $280,000, although the exact amount has not yet been determined, according to court documents. Green claimed she set fire to the facility because she was opposed to abortion and had nightmares about the clinic.
The May 2022 fire, which occurred about one month before the clinic was scheduled to open, set back the facility’s opening by almost one year. (United States v. Lorna Roxanne Green, U.S. District Court for Wyoming, No. 23-cr-00066-ABJ-1, 2023)
Racketeering. In September 2023, a member of the La Mara Salvatrucha (MS-13) gang received a 28-year prison sentence for racketeering conspiracy, including murder.
Brayan Alexander Torres, 29, was the leader of an MS-13 clique—a smaller group of gang members within a specific area—in Maryland, according to the U.S. Department of Justice (DOJ). The court determined that Torres conspired with other members of the clique to kill more than one person. He was also found guilty of managing extortion payments and money laundering.
In a separate case in September, members from a different MS-13 Maryland clique were sentenced to life in prison over various charges, including racketeering, murder, and conspiracy to conceal and destroy evidence. (United States v. Ordonez-Zometa et al, U.S. District Court for Maryland, No. 20-cr-00229-PX, 2023)
Labor violations. The franchise owners of 14 Subway sandwich locations in California were ordered to pay employees almost $1 million in damages and back pay. A federal court sided with the U.S. Department of Labor (DOL) in finding John and Jessica Meza guilty of various labor violations, including ordering children 14 years of age and older to operate dangerous machinery, failing to regularly pay employees, and assigning work hours to minors that violated federal law.
The couple was ordered to pay $475,000 in back pay, another $475,000 in damages to employees, and $12,000 in punitive damages. The ruling also assessed $150,000 in civil money penalties, according to court documents.
Beyond financial penalties, the couple was also ordered to sell or shut down all of their businesses by 26 November 2023. (U.S. Department of Labor v. John Michael Meza et al, U.S. District Court for the Northern District of California, No. 23-cv-01714, 2023)
National security. The Chinese government published a draft of possible changes to a public security law, with the amendments allowing authorities to arrest someone for clothing, comments, or symbols that would harm the “spirit” of the nation.
Violations could result in a person being detained for up to 15 days, a fine of no more than 5,000 yuan (approximately $695 at the time of this article’s publication).
The ambiguous wording of the amendment has drawn criticisms of how and who will determine what is considered offensive.
Gun control. Connecticut’s ban on the open carrying of firearms and sale of more than three handguns to the same person within a 30-day period became effective on 1 October.
The new law, which was signed by Connecticut Governor Ned Lamont in June, also increased bail and places tighter parameters on probation and parole for any person with repeated serious gun offenses. It expanded the previous ban on assault weapons, increased repercussions for someone in possession of large-capacity magazines, and added certain domestic violence crimes to the list of reasons that would disqualify someone from owning a firearm.
Workplace violence. In late September, California’s Governor Gavin Newsom signed into law SB 553, which requires employers to implement workplace violence prevention plans, keep records of any workplace violence threats or acts, and provide employee training on violence prevention.
The prevention plans will include, among other aspects, a clear procedure for reporting incidents or threats of workplace violence, ways to alert others to emergencies involving workplace violence, and review and revision procedures of the overall plans.
As of 1 July 2024, California employers must keep a log of all reports of workplace violence, including incidents where there was a threat of such violence, as well as the employer’s response to the incident.
Surveillance. All Atlanta-area gas stations will soon be required to have and maintain high-resolution video surveillance systems, continuously monitoring individual gas pumps.
The new law—unanimously approved by the city council for Atlanta, Georgia, in early August—aims to reduce opportunistic crimes, such as car thefts and violence, at service stations.
Service stations will also be required to maintain a working backup system to support the video feed. In the event of a crime, or if a station employee suspects there has been a crime, Ordinance 23-O-1346 mandates that the employee give the video feed to a police officer.
The ordinance will be effective after approval of an implementation plan is presented, with a plan required to be presented to the council by 5 December 2023 (120 days after the ordinance’s approval).
Privacy. Ireland’s Data Protection Commissioner (DPC) fined social media platform TikTok 345 million euros ($368 million) after finding that the company breached multiple EU privacy laws, specifically ones dealing with the processing of minors’ personal data.
This is the first fine the DPC has issued against TikTok, which is owned by ByteDance, and comes after an investigation that began in September 2021.
The investigation found various violations of the General Data Protection Regulation (GDPR), including, but not limited to, defaulted profile settings for underage (younger than 13 years old) users were set to public, allowing anyone on or off of TikTok to view the user’s content.
Money laundering. The Financial Conduct Authority (FCA) fined a brokerage firm more than £6 million ($7.2 million) for maintaining inadequate anti-money laundering systems and controls.
Despite receiving warnings from the FCA in 2014 about the absence of a formal process that would allow the firm to classify customers based on risk, ADM Investor Services International Limited still lacked current policies, according to a press release from the FCA. Some of the remaining “significant failings” included that the firm’s risk assessment of customers was “basic” and did not take into account the financial crime risk of a customer; a failure to conduct a money laundering risk assessment throughout the entire organization; little proof of ongoing monitoring; and outdated policies.
ADM’s agreement to accept the FCA’s decision resulted in a 30 percent settlement discount.
Corruption. A chemicals manufacturing company agreed to settlement of more than $218 million which will close an investigation from the DOJ and U.S. Securities and Exchange Commission (SEC). The federal agencies were looking into possible violations of the Foreign Corrupt Practices Act.
The agencies allege that Albemarle Corporation conspired to bribe government officials to acquire and keep a chemical catalyst business in Vietnam, Indonesia, and India between 2009 and 2017. “Albemarle obtained profits of approximately $98.5 million as a result of the scheme,” according to a DOJ press release.
As part of the three-year non-prosecution agreement with the DOJ, Albemarle agreed to pay a fine of $98.2 million and forfeited approximately $98.5 million. The company also agreed to pay approximately $103.6 million to resolve the SEC’s investigation.
Also of Interest
Security Management also tracks instances where security incidents and interests intersect with judicial, legislative, and regulatory agencies. The following are stories of potential significance.
Discrimination. A U.S. civil rights group filed a suit against car manufacturer Tesla, claiming that the company tolerated the harassment of some Black workers in Tesla factories.
Corruption. A former senior FBI official, Charles McGonigal—accused of of accepting a $225,000 bribe from a former Albanian contact—plead guilty to one count of concealing material facts. In a separate case where McGonigal is accused of laundering money for a Russian oligarch he once investigated, he pled guilty to conspiring to violate U.S. penalties and launder funds.
Hate crime. A Texas man pled guilty to federal hate crime charges after he shot and killed one person and injured four more at a commercial garage in Dallas, Texas.
Poison. Criminal charges were filed against Grei Mendez and Carlisto Acevedo Brito—including narcotics possession—after they failed to keep the drugs out of the hands of four children in a New York daycare facility. The children—who were all younger than 3 years old—were poisoned with fentanyl.