Ex-Abercrombie CEO charged with running sex trafficking ring

The former CEO of Abercrombie & Fitch (A&F) and his partner have been arrested and charged with running a prostitution and international sex trafficking business.

Authorities arrested former fashion executive Mike Jeffries, his partner Matthew Smith, and the couple’s alleged middleman – James Jacobson – on Tuesday morning.

Federal prosecutors said the men used force, fraud, and coercion to engage in “violent and exploitive” sexual acts.

Mr. Jeffries and his partner have previously denied any wrongdoing via their lawyers, and Mr. Jeffries’ lawyer told the BBC on Tuesday that they would “respond in detail to the allegations after the Indictment is unsealed”.

A lawyer for Mr Smith has been approached for new comment. A&F declined to comment on the latest developments.

Warning: This story contains descriptions of sexual acts

The FBI opened an investigation last year after the BBC revealed claims that Mike Jeffries and his partner sexually exploited and abused men at events they hosted in their New York residences and hotels around the world.

The BBC investigation found that there was a sophisticated operation involving a middleman and a network of recruiters tasked with finding men for these events.

On Tuesday, US attorney for the Eastern District of New York, Breon Peace, alleged that Mr Jeffries used his wealth, power, and status as CEO of A&F “to traffic men for his sexual pleasure” and the pleasure of his partner, Mr Smith.

Outlining prosecutors’ accusations, Mr Peace alleged the couple employed Mr Jacobson as their recruiter who would conduct “tryouts” with men from across the globe by engaging them in sex acts in exchange for money.

Once Mr. Jeffries approved of the men, they would be flown to his New York home where they were “pressured to consume alcohol, Viagra, and muscle relaxants”, Mr Peace claimed.

Prosecutors further alleged that Mr Jeffries and Mr. Smith directed others or personally “injected men with an erection-inducing substance” when they were incapable or unwilling to participate.

The ex-CEO “spent millions of dollars on a massive infrastructure to support this operation and maintain its secrecy”, prosecutors said, which included international travel, hotel stays, paid staff, and security for the events.

Prosecutors said there were 15 victims mentioned in the indictment but alleged that the operation “encompassed 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, confirmed at a press conference on Tuesday that authorities were initially tipped off by media reports.

Following the BBC’s reporting, a civil lawsuit was also filed in New York accusing Mr. Jeffries and Mr. Smith of sex trafficking, rape, and sexual assault.

The lawsuit also accused Abercrombie & Fitch of having funded a sex-trafficking operation led by its former CEO over the two decades he was in charge.

Earlier on Tuesday, Brad Edwards of Edwards Henderson, a civil lawyer representing some of the alleged victims, said: “These arrests are a huge first step towards obtaining justice for the many victims who were exploited and abused through this sex-trafficking scheme that operated for many years under the legitimate cover Abercrombie provided.

“The unprecedented reporting of the BBC, coupled with the lawsuit our firm filed detailing the operation, is to credit for these monumental arrests. This was the result of impressive investigative journalism.”

In its initial investigation, the BBC spoke to 12 men who described attending or organizing events involving sex acts run for Mr. Jeffries, 80, and his British partner Mr. Smith, 61, between 2009 and 2015.

The eight men who attended the events said they were recruited by a middleman who the BBC identified as James Jacobson.

Then, more men came forward last month. Some alleged Mr Jeffries’ assistants had injected them in the penis with what they were told was liquid Viagra.

Mr. Jacobson, 71, previously told the BBC in a statement through his lawyer that he took offense at the suggestion of “any coercive, deceptive or forceful behavior on my part” and had “no knowledge of any such conduct by others”.

The BBC also interviewed dozens of other sources, including former household staff.

Some of the men the BBC spoke to said they were misled about the nature of the events or not told sex was involved. Others said they understood the events would be sexual, but not exactly what was expected of them. All were paid.

Several told the BBC the middleman or other recruiters raised the possibility of modeling opportunities with A&F.

David Bradberry, then 23 and an aspiring model, said that it was “made clear” to him that without performing oral sex on Mr Jacobson, he would not be meeting A&F CEO Mr Jeffries.

“It was like he was selling fame. And the price was compliance,” Mr Bradberry told the BBC.

Mr Bradberry said he later attended a party at Mr Jeffries’s mansion in the Hamptons on Long Island where he met Mr Jeffries and had sex with him.

He said the “secluded” location and presence of Mr. Jeffries’ staff, dressed in A&F uniforms, supervising events meant he “didn’t feel safe to say ‘no’ or ‘I don’t feel comfortable with this'”.

After the BBC’s initial investigation was published last year, A&F announced it was opening an independent investigation into the allegations raised. When we recently asked when this report would 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 trying to get the civil lawsuit against it dismissed, arguing it did not know “the supposed sex-trafficking venture” led by its former CEO – which it has been accused of having funded.

Earlier this year, a US court ruled that A&F must cover the cost of Mike Jeffries’ legal defense as he continues to fight the civil allegations of sex trafficking and rape. The judge ruled the allegations were tied to his corporate role after he sued the brand for refusing to pay his legal fees.

The brand said it did not comment on legal matters. However, in its defense submitted to court, A&F said its current leadership team was “previously unaware of” the allegations until the BBC contacted it, adding the company “abhors sexual abuse and condemns the alleged conduct” by Mr Jeffries and others.

In 2014, Mr Jeffries stepped down as CEO following declining sales and left with a retirement package valued at around $25m (£20.5m), according to company filings at the time.

Once one of America’s highest-paid CEOs, he was a controversial figure who faced claims of discrimination against staff, concerns about his lavish expenses, and complaints about the unofficial influence of his life partner, Matthew Smith, inside A&F.