The ex-CEO of Abercrombie & Fitch company and his companion have been detained and accused of managing a commercial sexual exploitation enterprise.
Police later arrested former fashion executive Mike Jeffries, his partner Matthew Smith and the couple’s alleged accomplice James Jacobson on Tuesday morning.
Federal prosecutors stated that the men forced, deceived and threatened women into performing “violent and exploitive sex acts.”
Mr Jeffries and his partner have strongly denied any wrongdoing through their lawyers and Mr Jeffries’ lawyer told the BBC News on Tuesday that they would ‘respond in detail to the allegations after the Indictment is unsealed’.
The lawyer representing Mr Smith has been contacted for fresh comments. A&F has not responded to the latest events in the case.
The FBI began an inquiry last year following a BBC News investigation into allegations that Jeffries and his partner, sexually assaulted and trafficked men at parties at their homes in New York and at hotels worldwide.
The BBC News investigation revealed that there was an elaborate system of a middleman and a network of recruitment agents whose main job was to source men for these events.
On Tuesday, Breon Peace, the US attorney for the Eastern District of New York, accused Mr Jeffries of using his money, authority and position as the CEO of A&F to traffic men for his sexual gratification as well as for the satisfaction of his partner, Mr Smith.
Listing the allegations made by the prosecutors, Mr Peace claimed that the couple hired Mr Jacobson as their recruiter who would stage tryouts with men from all over the world by having sexual intercourse with them for cash.
According to Mr Peace, once Mr Jeffries approved the men he would fly them to his home in New York where they were ‘coerced into taking alcohol, Viagra and muscle relaxants’.
Prosecutors also claimed that Mr Jeffries and Mr Smith or those under their command or instigation “administered men with an erection inducing substance where the man was unable or unwilling to perform”.
The ex-CEO “invested millions of dollars into a huge infrastructure for this operation and to keep it concealed”, according to the prosecutors, including international travel, hotels, staff and security for the events.
According to the prosecutors, there were 15 victims listed in the indictment but they claimed that the operation involved “dozens and dozens of men”.
After a court appearance on Tuesday, Mr Jeffries was released on a $10m (£7.7m) bond while Mr Jacobson was released on a $500,000 bond. They are next due in court on Friday.
Mr Smith was ordered detained.
Mr Peace, the federal prosecutor, was able to reveal at a press conference on Tuesday that the authorities had been alerted by the media.
After the BBC News report, a civil lawsuit was also brought in New York against Mr Jeffries and Mr Smith for sex-trafficking, rape and sexual assault.
The lawsuit also claimed that Abercrombie & Fitch had financed a sex trafficking ring run by its former CEO throughout the 20 years he was at the helm.
Earlier on Tuesday, Brad Edwards of Edwards Henderson, a civil lawyer representing some of the alleged victims, said: ‘These arrests are a giant first step toward seeking justice for many victims who were sexually exploited and abused through this sex-trafficking ring that was conducted for years using the guise of a legitimate business, Abercrombie.’
These monumental arrests are down to the unprecedented reporting of the BBC News and the lawsuit our firm filed detailing the operation. This was the result of impressive investigative journalism.”
In its first report, the BBC News interviewed 12 men who said they attended or organized sex acts for Mr Jeffries, 80, and his British associate Mr Smith, 61, between 2009 and 2015.
The eight men who attended the events stated that they were approached by a middleman that the BBC News claimed to be James Jacobson.
Then more men came forward last month. Some of the accusers said Mr Jeffries’ assistants had administered an unknown substance to their penis in the guise of liquid Viagra.
Mr Jacobson, 71, has said in an earlier interview with the BBC News that he was offended by the implication of ‘coercive, deceptive or forceful behavior on my part’ and that ‘I had no knowledge of any such conduct by others’.
The BBC News also spoke to dozens of other people, including former household staff.
Some of the men the BBC News spoke to claimed they were not told the nature of the events or that sex was involved. Some of them said they knew the events would be sexual but they were not sure what they were supposed to do. All were paid.
Several of them said to the BBC News that the middleman or other recruiters mentioned the possibility of modelling jobs with A&F.
David Bradberry, 23 and an aspiring model at the time, said that it was made clear to him that he would not be meeting A&F CEO Mr Jeffries if he did not perform oral sex on Mr Jacobson.
And it was like he was selling fame. And the price was compliance,” Mr Bradberry told the BBC News.
Mr Bradberry said he then went to a party at Mr Jeffries’s mansion in the Hamptons in Long Island and met Mr Jeffries and had sex with him.
He said the “isolated” setting and the fact that Mr Jeffries’ employees, dressed in A&F clothing, were overseeing the activities made him “feel unsafe to decline or to say that he was uncomfortable with something”.
Last year, after the initial expose by the BBC News, A&F said it would launch an investigation into all the matters raised by the media. When we recently asked when this report will be completed – and if the findings would be made public – the company declined to answer.
Like Mr Jeffries and Mr Smith, the brand has been attempting to have the civil lawsuit against it thrown out of court on the grounds that it had no knowledge of “the supposed sex-trafficking venture” spearheaded by its former CEO – which it is accused of having funded.
Earlier this year, a US court decided that A&F is responsible for Mike Jeffries’ legal expenses as he defends against the civil charges of sex-trafficking and rape. The judge said that the allegations were connected to his corporate position after he sued the brand for not paying his legal expenses.
The brand stated that it did not discuss legal issues. In a defence document filed in court, A&F said its current leadership team was ‘previously unaware of’ the allegations until the BBC contacted it, and that the company ‘abhors sexual abuse and condemns the alleged conduct’ by Mr Jeffries and others.
Mr Jeffries resigned as CEO in 2014 due to poor sales and received a retirement package estimated to be worth $25m (£20.5m) at the time, as per filings.
He was once one of the best paid CEOs in America but had been accused of discriminating his staff, questioned on his excessive expenses and criticized for the unofficial involvement of his boyfriend, Matthew Smith, in A&F.