Ex-Abercrombie CEO used power, wealth and influence to target vulnerable men, prosecutors say

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

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

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

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

He has approached a lawyer of Mr. Smith for further comments. 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 exploited and sexually abused men at events they hosted at their New York residences and hotels around the world .

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

On Tuesday, the U.S. attorney for the Eastern District of New York, Breon Peace, alleged that Mr. Jeffries used his wealth, power and status as A&F’s chief executive “to treat men for his own pleasure sexual” and for the pleasure of his partner, Mr. Smith.

Outlining the prosecutors’ allegations, Peace alleged the couple employed Mr Jacobson as a recruiter who would conduct “trials” with men from around the world engaging in sexual acts in exchange for money.

Once Jeffries approved the men, they would be moved to his home in New York where they were “budgeted to consume alcohol, Viagra and muscle relaxants,” Peace claimed.

Prosecutors also alleged that Mr. Jeffries and Mr. Smith directed other people or “personally injected men with an erection-inducing substance” when they were unable or unwilling to participate.

The former CEO “spent millions of dollars on a massive infrastructure to support this operation and keep it secret,” prosecutors said, which included international travel, hotel stays, paid staff and security for events.

Prosecutors said there were 15 victims named in the indictment, but alleged the operation “involved dozens and dozens of men.”

After a court appearance on Tuesday, Mr Jeffries was released on $10m (£7.7m) bail, while Mr Jacobson was released on $500,000 bail. They will appear in court next Friday.

Mr. Smith was arrested.

Peace, the federal prosecutor, confirmed at a news conference Tuesday that authorities were initially tipped off by media reports.

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

The suit also accused Abercrombie & Fitch of funding a sex-trafficking operation run by its former CEO during the two decades he was at the helm.

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

“The BBC’s unprecedented reporting, along with the lawsuit our firm brought to detail the operation, are to the credit of 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 led by Jeffries, 80, and fellow Briton Smith, 61, between 2009 and 2015.

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

Then last month more men came forward. Some of Mr Jeffries’ alleged assistants had injected what they said was liquid Viagra into their penises.

Jacobson, 71, previously told the BBC in a statement through his lawyer that he was offended by the suggestion of “any coercive, deceptive or forceful behavior on my part” and was “not aware of any conduct by this type by others.”

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

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

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

David Bradberry, then 23 and an aspiring model, said he made it “clear” to her that without oral sex with Mr. Jacobson, she would not meet with A&F CEO Mr. Jeffries.

“It was like I was selling fame. And the price was the compliment,” Bradberry told the BBC.

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

He said the “isolated” location and the presence of Mr. Jeffries, dressed in A&F uniforms, overseeing the events, meant that he “didn’t feel confident saying ‘no’ or ‘I’m not comfortable with this'”.

After the BBC’s initial investigation was published last year, A&F announced it was launching an independent investigation into the allegations raised. When we recently asked when that report would be completed – and if the findings would be made public – the company did not respond.

Like Jeffries and Smith, the brand has been trying to have the civil lawsuit against it dismissed, arguing that it had no knowledge of “the alleged sex-trafficking enterprise” run by its former CEO, which it has been accused of funding.

Earlier this year, a US court ruled that A&F must cover the cost of Mike Jeffries’ legal defense as he continues to fight civil charges of sex trafficking and rape. The judge ruled that the allegations were linked 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 filed in court, A&F said its current leadership team was “previously unaware” of the allegations until contacted by the BBC, adding that the company “abhors the “sexual abuse and condemns the alleged conduct” of Mr. Jeffries and others.

In 2014, Jeffries stepped down as chief executive after declining sales and walked away with a retirement package valued at around $25m (£20.5m), according to company filings at that 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 spending and complaints about his partner’s unofficial influence. Matthew Smith, inside A&F.

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