Judge sides with Epstein victim who sued Puerto Rico bank

• Key insight: The lawsuit alleges FirstBank Puerto Rico was one of Jeffrey Epstein's banks for more than two decades and helped facilitate his sex-trafficking network. 
• Supporting data: The victim argues that FirstBank ignored multiple red flags, including criminal proceedings against Epstein that should have triggered internal oversight.
• What's at stake: FirstBank denies all of the suit's allegations, arguing it only offered standard banking services and had no knowledge of trafficking operations, and that New York courts lack jurisdiction over any out-of-state conduct.

A federal judge in New York has ruled that a high-profile lawsuit accusing FirstBank Puerto Rico of involvement in Jeffrey Epstein's human-trafficking activity can proceed.

U.S. District Judge Jed S. Rakoff on Friday rejected the bank's requests to throw out a human-trafficking case for lack of personal jurisdiction or because it was filed in an improper venue. Judge Rakoff ruled that the U.S. District Court for the Southern District of New York, where he presides, is a proper forum for the human-trafficking claims.

The plaintiff, Julia Molchonova, who previously had been listed on court documents as "Jane Doe," is a Russian national representing members of a proposed class-action suit.

In June, Molchonova sued $19.2 billion-assed FirstBank Puerto Rico and its parent First Bancorp, both in San Juan, alleging the company knowingly facilitated Epstein's sex-trafficking network by providing banking services to him for more than two decades. Molchonova is seeking unspecified compensatory and punitive damages, along with injunctive and declaratory relief.

Molchonova alleges she was subjected to more than 100 instances of sexual abuse from 2011 to 2019. She argues that the Puerto Rico-based bank ignored multiple red flags, including criminal proceedings against Epstein, that should have triggered internal oversight and the termination of the convicted sex offender's accounts.

Judge Rakoff allowed claims to move forward under the federal Trafficking Victims Protection Act and the New York City Gender-Motivated Violence Protection Act. He dismissed a claim alleging the bank actively obstructed enforcement of human-trafficking laws, but noted that the claim could be revisited depending on the outcome of a separate New York case that is currently under appeal.

Molchonova's complaint detailed a $10.9 million transfer into an account that Epstein associate Ghislaine Maxwell had at FirstBank. Those funds were allegedly rerouted the next day to Maxwell's JPMorganChase account and then dispersed directly to Epstein-controlled accounts.

FirstBank and First Bancorp have denied the suit's allegations, and in August, they requested that the case be dismissed. FirstBank contends that it provided nothing more than routine banking services, and had no active role in or knowledge of Epstein's criminal venture. 

Specifically, FirstBank claims that processing wire transfers, opening accounts, and waiving standard account fees did not amount to active participation in sex trafficking. The bank also says the plaintiff failed to identify a single FirstBank employee who knew of Epstein's trafficking or interacted with his victims. 

Further, FirstBank's lawyers called out references in the plaintiff's lawsuit to nonexistent consent orders and regulatory enforcement actions, which they claimed calls into question the credibility of the plaintiff's allegations.

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Court documents show that in 2016, Epstein kept an average combined balance of more than $5.3 million at FirstBank. FirstBank was Epstein's longest-standing banking partner, spanning from 1998 to at least 2020, and maintained more than 30 commercial, checking and personal accounts for Epstein, his co-conspirators and his holding entities, according to the plaintiff's lawsuit.

The lawsuit alleged that FirstBank knowingly benefited from transaction fees, balances, and client referrals generated from Epstein, and that the bank's financial infrastructure helped facilitate trafficking and abuse. The victim alleges FirstBank failed to perform proper know-your-customer due diligence, ignored red flags such as round-dollar wire transfers, intra-entity transfers and large cash withdrawals, and failed to timely file suspicious activity reports with federal authorities. 

FirstBank filed a suspicious activity report on Epstein 11 days after his 2019 arrest.

A full opinion explaining the judge's reasoning is expected to be released shortly.