From Molchonova v. FirstBank Puerto Rico & First Bancorp, decided today by Judge Jed Rakoff (S.D.N.Y.):

On September 25, 2026, this Court issued a "bottom-line" Order granting in part and denying in part the motion of defendants FirstBank Puerto Rico and First Bancorp (collectively "FirstBank") to dismiss the complaint brought by plaintiff Julia Molchonova. This Opinion sets forth the reasons for that Order….

An excerpt of Molchonova's allegations (which are just allegations at this stage):

Molchonova, who was one of Epstein's victims, alleges that FirstBank participated in, and benefited from, Epstein's vast criminal enterprise in violation of federal and local law…. As alleged, FirstBank maintained dozens of accounts for Epstein, his entities, and his agents, facilitated millions of dollars in transfers to and from these accounts, and served as a banking reference for Epstein when he sought to charter his own banking entity. These services, among others, were "integral in helping [Epstein] trafficking operation." …

The court allowed Molchonova's claim under the Trafficking Victims Protection Act ("on behalf of a putative class of Epstein victims") to go forward:

As this Court recently explained, the TVPA imposes civil liability on any "person or entity that knowingly benefits, or attempts or conspires to benefit, financially or by receiving anything of value from participation in a venture which that defendant knew or should have known has engaged in an act in violation of the TVPA." Participant liability "involves three elements: first, that the defendant participated in a commercial sex trafficking venture; second, that the defendant knew or should have known that the venture either involved the perpetrator's use of force, the threat of force, fraud, or coercion to cause the victims to participate in sex or that the venture involved sex with victims who were under the age of 18; and third, that the defendant benefited from its participation in the venture." …

[F]or her participation claim to survive, Molchonova must allege more than that FirstBank provide routine banking services to the Epstein venture. The Court concludes that she has done so. Molchonova has alleged an extensive, longstanding, and continuous relationship between FirstBank and Epstein. For more than two decades, FirstBank opened and maintained more than 30 accounts for Epstein and related entities. The Complaint alleges that these accounts were used to pay victims, and circulate millions of dollars in funds between various Epstein-related entities and individuals, FirstBank processed millions of dollars in payments from Epstein's personal accounts to the FirstBank accounts of entities held by Epstein and his known associates. Several of these entities owned the properties where much of Epstein's trafficking and sexual abuse transpired, while others made payments to victims of Epstein's abuse.

While such extensive activity was more than "routine," what is crucial is that Molchonova has alleged with specificity that FirstBank maintained this extensive and longstanding relationship with Epstein despite ever more extreme "red flags" that ultimately led every other bank to drop him as a client.

Between 2007 and 2015, HSBC, Goldman Sachs, Bank of America, Merrill Lynch, JP Morgan Chase, UBS, and CitiBank all terminated their relationships with Epstein. But FirstBank simply took advantage of these closures to enhance its profitable banking relationship with Epstein. For example, in 2018, "both Fidelity Investments and Deutsche Bank closed its [sic] accounts with Epstein and sent funds from those closures to FirstBank."

At best, these allegations demonstrate an astonishing ignorance to the apparent consensus of the financial services industry not to provide banking services to someone whose grotesque misconduct was becoming ever more obvious. At worst, drawing all inferences in Molchonova's favor, the complaint alleges that FirstBank provided continuous and substantial financial services to Epstein and his associates despite knowing that these services were being used to further Epstein's sex trafficking venture. See Bank of Am. (finding that facilitating wire transfers constituted participation for purposes of the TVPA because the defendant "had every reason to know that [the plaintiff] had no ability to earn legitimate income in the United States and that Epstein, who arranged the set-up of the account and was involved with the transfers, had already been convicted of sex crimes involving underage girls").

While any one of FirstBank's services to Epstein may be claimed to be "routine" (though in many instances even that is suspicious), together, the complaint alleges that FirstBank was deeply enmeshed in Epstein's misconduct for its own financial benefit….

Having concluded that Molchonova has alleged participation, the Court turns to the second element—whether Molchonova "adequately alleges that [FirstBank] either knew or should have known that Epstein's venture used force, the threat of force, fraud, coercion, or some combination of the same to cause its victims to submit to sex, or that the victims who submitted to sex were under the age of 18." The Court concludes that she has.

As an initial matter, knowledge, for purposes of the TVPA, requires only that the defendant "'should have known' in the usual sense of negligence." … Molchonova's complaint alleges that, throughout its twenty-plus-year relationship with Epstein, FirstBank ignored considerable, publicly available information about Epstein and his close associates. As this Court previously explained with respect to a different bank, "while [FirstBank] was not required to automatically credit" these sources of information about Epstein, "the amended complaint plausibly asserts that the bank turned a blind eye to these repeated, detailed allegations, some emanating from police reports widely circulated in the press, by utterly failing to engage in due diligence about them."

Molchonova also alleges that there was significant FirstBank account activity that itself should have raised red flags. For instance, in 2018—after years of media and law enforcement reports describing Epstein as a sexual abuser and sex trafficker—FirstBank opened a bank account for one of Epstein's victims using the same address in the U.S. Virgin Islands as Epstein and his other related accounts. Likewise, Molchonova alleges with sufficient specificity that Epstein and his agents7 owned a network of FirstBank accounts including accounts for entities and properties that were publicly linked to Epstein's abuse and trafficking venture that received millions of dollars in transfers from other of Epstein's accounts. And, as emphasized above, the complaint plausibly alleges that FirstBank should have been aware of the laundry list of other banks that cut ties with Epstein in the decade preceding his death in 2019….

The third element of a TVPA participation claim is that a defendant must have benefited from its participation in a sex trafficking venture. This element can be satisfied by "allegations that [FirstBank] knowingly received revenue from its participation in generally assisting a venture that it knew, or should have known, involved sex trafficking."…

Molchonova's allegations easily satisfy this standard. She alleges that "Epstein only offered his business to FirstBank because it was knowingly aiding Epstein's sex trafficking operation and the concealment thereof. FirstBank knew that if it stopped aiding the operation, it would lose the Epstein-related accounts and the financial benefits attached to handling those accounts." She also alleges that "FirstBank financially benefitted in the form of profits, high-net-worth clients, and other financial incentives, for its participation in the Epstein sex-trafficking venture." These allegations plainly state that FirstBank profited from its longstanding and continuous relationship with Epstein, and plausibly proffer that Epstein would not have continued banking with FirstBank if it did not turn a blind eye to his use of FirstBank's services to facilitate his sex trafficking venture….

For similar reasons, the court also allowed Molchonova's claims under the New York City Gender-Motivated Violence Protection Act to proceed. But the court dismissed her claims "that FirstBank obstructed enforcement of the TVPA in violation of 18 U.S.C. §§ 1591(d) and 1595":

As this Court has previously concluded in a substantially similar case, "[b]ecause Congress enacted Section 1591(d) in 2008 and did not give that provision retroactive effect, the investigations that resulted in Epstein's 2006 guilty plea and his 2007 non-prosecution agreement there cannot support plaintiffs' claim for obstruction." Accordingly, the relevant inquiry for purposes of Molchonova's obstruction claim is whether she has alleged that FirstBank knew of a post-2008 effort to enforce the TVPA and intentionally obstructed, or attempted to obstruct, that enforcement effort. The Court concludes she has not….

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