U.S. District Judge Jed Rakoff has kept major civil claims alive against FirstBank Puerto Rico and First Bancorp in a suit by Julia Molchonova over alleged support for Jeffrey Epstein’s sex-trafficking venture.
On September 25, 2026, Rakoff issued a bottom-line order that granted in part and denied in part the banks’ motion to dismiss. His later opinion explained the reasons. Trafficking Victims Protection Act claims for a putative class of Epstein victims may proceed, as may claims under the New York City Gender-Motivated Violence Protection Act. Claims that the bank obstructed TVPA enforcement were dismissed.
The case is pending in the Southern District of New York. At this stage the court tests only whether the complaint states plausible claims, drawing inferences in the plaintiff’s favor. No finding of liability has been made. The decision, examined in Reason’s coverage of the FirstBank ruling, turns on how federal participant-liability rules apply to long-running banking relationships when red flags mount.
Rakoff’s opinion opens by framing the dispute and the partial denial of dismissal.
"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...."
The court summarized Molchonova’s pleading posture in direct terms. She is described in the opinion as one of Epstein’s victims. She alleges FirstBank participated in and benefited from Epstein’s criminal enterprise in violation of federal and local law.
As alleged, FirstBank maintained dozens of accounts for Epstein, his entities, and his agents. It facilitated millions of dollars in transfers to and from those accounts. It also served as a banking reference when Epstein sought to charter his own banking entity. The complaint calls those services integral in helping Epstein fuel an international sex-trafficking operation.
Molchonova further alleges an extensive, longstanding, and continuous relationship. For more than two decades, FirstBank opened and maintained more than 30 accounts for Epstein and related entities. Those accounts, the complaint says, were used to pay victims and to circulate millions of dollars among Epstein-related entities and individuals. FirstBank processed millions of dollars in payments from Epstein’s personal accounts to FirstBank accounts of entities held by Epstein and known associates. Several of those entities owned properties where much of the alleged trafficking and sexual abuse occurred. Others made payments to victims of the alleged abuse.
The opinion applies the civil liability standard under the Trafficking Victims Protection Act. The TVPA reaches 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 that the defendant knew or should have known engaged in a TVPA violation.
Rakoff restated the three elements of participant liability. First, the defendant participated in a commercial sex-trafficking venture. Second, the defendant knew or should have known the venture involved force, threat of force, fraud, or coercion, or sex with victims under 18. Third, the defendant benefited from that participation.
On the first element the court was clear. Molchonova had to allege more than routine banking services. The court concluded she had done so.
"[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."
What mattered, the opinion said, was specificity about an extensive relationship that continued despite rising red flags that led every other bank to drop Epstein as a client.
Between 2007 and 2015, the complaint alleges, HSBC, Goldman Sachs, Bank of America, Merrill Lynch, JP Morgan Chase, UBS, and CitiBank all terminated their relationships with Epstein. FirstBank, the pleading claims, took advantage of those closures to deepen a profitable relationship.
In 2018, the complaint continues, both Fidelity Investments and Deutsche Bank closed Epstein accounts and sent funds from those closures to FirstBank. Rakoff’s assessment of the cumulative picture was sharp.
"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."
The court also pointed to prior reasoning in a Bank of America matter. Facilitating wire transfers can count as participation when a bank has every reason to know a customer lacks legitimate U.S. income and that Epstein, already convicted of sex crimes involving underage girls, arranged the account and transfers.
Taken together, the opinion found, the services left FirstBank deeply enmeshed in the alleged misconduct for its own financial benefit, even if any single service might be labeled routine.
Having found participation adequately alleged, the court turned to knowledge. Under the TVPA, knowledge requires only that the defendant “should have known” in the ordinary negligence sense. Rakoff held Molchonova met that bar at the pleading stage.
The complaint alleges that across a twenty-plus-year relationship FirstBank ignored considerable publicly available information about Epstein and close associates. The court borrowed language from an earlier bank case. While a bank need not automatically credit every report, the complaint plausibly asserts the bank turned a blind eye to repeated, detailed allegations, including some from police reports widely circulated in the press, by failing to conduct due diligence.
Account activity itself is said to have raised flags. In 2018, after years of media and law-enforcement reports describing Epstein as a sexual abuser and sex trafficker, FirstBank allegedly opened a bank account for one of Epstein’s victims using the same U.S. Virgin Islands address as Epstein and related accounts. Epstein and his agents allegedly owned a network of FirstBank accounts for entities and properties publicly linked to the abuse and trafficking venture. Those accounts received millions of dollars in transfers from other Epstein accounts. The complaint also claims FirstBank should have noticed the list of other banks that cut ties in the decade before Epstein’s death in 2019.
The third TVPA element is benefit from participation. It can be met by allegations that the bank knowingly received revenue from generally assisting a venture it knew or should have known involved sex trafficking. The court found Molchonova’s allegations easily satisfied that standard.
She alleges Epstein offered his business to FirstBank because it was knowingly aiding the sex-trafficking operation and its concealment. She claims FirstBank knew that stopping would cost it the Epstein-related accounts and attached financial benefits. She further alleges FirstBank financially benefited through profits, high-net-worth clients, and other incentives. Those assertions, the court wrote, plainly state that FirstBank profited from the longstanding relationship and plausibly suggest Epstein would not have continued banking there without a blind eye to the use of its services.
For similar reasons the court also allowed the New York City Gender-Motivated Violence Protection Act claims to proceed. The TVPA participation claim advances on behalf of a putative class of Epstein victims. The motion-to-dismiss stage is not a trial on the merits. The complaint’s account remains a set of allegations that must still be proven.
Molchonova also claimed FirstBank obstructed enforcement of the TVPA in violation of 18 U.S.C. §§ 1591(d) and 1595. Those claims were dismissed.
Rakoff relied on the statute’s timeline. Congress enacted Section 1591(d) in 2008 and did not give it retroactive effect. Investigations that produced Epstein’s 2006 guilty plea and 2007 non-prosecution agreement therefore cannot support an obstruction claim.
"Because 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."
The proper question, the court said, is whether Molchonova alleged that FirstBank knew of a post-2008 effort to enforce the TVPA and intentionally obstructed or tried to obstruct that effort. The court concluded she had not.
The order is a pleading decision. It holds that the TVPA participation theory and the city gender-motivated violence claims are plausible enough to advance. It holds that the obstruction theory is not, given the 2008 enactment date and the absence of adequate post-2008 obstruction allegations.
Investigators and litigants still must test the facts. Courts will need to determine whether the alleged multi-decade account structure, the transfers tied to properties and payments, the post-exit fund flows from other institutions, and the claimed failure to act on public reports meet the TVPA standards with evidence. Class issues, damages theories, and defenses remain for later stages. Authorities have not, in this opinion, announced any parallel criminal findings against the bank defendants.
The opinion repeatedly stresses that inferences run for the plaintiff now. A jury or later summary-judgment record could look different. FirstBank remains a defendant on the surviving counts, not an adjudicated participant in sex trafficking.
When major banks cut ties and warning signs pile up in plain view, the institutions that stay in the relationship face hard questions under laws written to reach those who knowingly benefit. Courts that enforce those statutes at the threshold keep the pressure where Congress and local law put it: on accountability for the financial rails that alleged trafficking networks use.
