Mike Jeffries, ex-Abercrombie CEO, charged with sex trafficking models

Michael Jeffries, the former CEO of Abercrombie & Fitch, was arrested and is being charged with two others in the operation of a secretive, international sex trafficking scheme that lasted for years, cost millions of dollars and involved dozens of victims, prosecutors said Tuesday.

Jeffries, who served as CEO of the clothing company from 1992 to 2014, and Matthew Smith, 61, of West Palm Beach and James Jacobson, 71, of Wisconsin, were charged with sex trafficking and engaging in interstate prostitution, Breon Peace, the U.S. Attorney for the Eastern District of New York, said at a news conference.

The operation involved transporting young, aspiring male models to events in New York and other places around the world and coercing them into having sex. The men believed participating in the events would lead to modeling opportunities and further their careers.

“To anyone who thinks they can exploit and coerce others by using this so-called casting couch system this case should serve as a warning, prepare to trade that couch for a bed in federal prison,” Peace said.

Mike Jeffries allegations:Ex-CEO of Abercrombie & Fitch accused of sexually exploiting young men

Brian Bieber, Jeffries' attorney said in a statement to USA TODAY that they will respond to the allegations "after the Indictment is unsealed, and when appropriate, but plan to do so in the courthouse – not the media."

Legal representation for Jeffries, 80, has previously "vehemently denied" any wrongdoing, according to the BBC.

Abercrombie said last year it was "appalled and disgusted" and hired a law firm to investigate allegations in a BBC report that Jeffries recruited young men for sex. The company declined to comment on Jeffries' arrest and did not immediately respond to questions about the status of the independent investigation into the allegations against him.

Jeffries and Smith appeared in federal court in West Palm Beach on Tuesday and face extradition to the Eastern District of New York. U.S. Magistrate Judge Bruce Reinhart apprised them of the charges and potential penalties they face.

Per an agreement between federal prosecutors and Jeffries’ attorneys, Reinhart set Jeffries' bond at $10 million, secured by a New York property he owns with his wife, Susan Hansen Jeffries. The bond secured, Jeffries will remain under house arrest in his property in Palm Beach. The judge ordered Jeffries to wear a GPS monitor and limit his travel strictly to South Florida and eastern New York.

Prosecutors made no such bond agreement with Smith, referred to once during the hearing as Jeffries’ “life partner.” Reinhart instead ordered Smith to remain in custody, a decision the judge said can be revisited later by attorneys in New York. Neither Smith nor his lawyers objected. Peace noted at his news conference that Smith is a dual citizen of the United States and the United Kingdom, making the risk of flight "particularly acute" with him.

Jacobson, who was taken into custody in Minnesota, was released on a $500,000 bond. Jacobson also will be arraigned in New York on Friday.

If convicted of the sex trafficking charge, the defendants each face a mandatory minimum sentence of 15 years and a maximum sentence of life imprisonment, according to a John Marzulli, a spokesperson for Peace's office. The interstate prostitution charges carry a maximum sentence of 20 years’ imprisonment.

Peace said the indictment alleges in graphic and disturbing detail that while Jeffries was CEO of Abercrombie and Fitch he used “his power, his wealth and his influence to traffic men for his own sexual pleasure and that of his romantic partner, Smith.” The 16-count indictment lays out a sprawling investigation and charges the three defendants with exploiting young men in New York City, the Hamptons and at hotels around the world, including in England, France, Italy, Morocco and St. Barts.

Jeffries and Smith employed Jacobson as a “recruiter” to find men and pay them to engage in sex acts, Peace said. Smith would personally select men to be flown to the couple’s homes or hotels “to engage in commercial sex,” Peace said.

Heterosexual men were intentionally recruited, some of whom had previously worked for Abercrombie, according to the indictment. The indictment alleges the defendants tricked some of the men into believing they were meeting Jeffries and Smith for the purpose of receiving a modeling opportunity with Abercrombie.

"Many of the victims, at least one of whom was as young as 19 years old, were financially vulnerable and aspired to become models in the fashion industry, a notoriously cutthroat world," the indictment said.

Peace said there was no indication that Jeffries used Abercrombie resources for his alleged crimes and the incidents did not occur on company grounds.

The defendants allegedly employed a “secret staff” to operate events where victims would be supplied with drugs and alcohol and coerced into sexual activity. The staff allegedly helped keep the events secret by ensuring the men handed over their phones and signed nondisclosure agreements.

Peace said they led the men to believe not complying with their demands would hurt their careers, and when they did not or could not consent, Jeffries and Smith would forcefully subject them to violent sexual contact.

Peace said the illegal operation lasted from at least from 2008 to 2015 and required millions of dollars to support its massive infrastructure and maintain secrecy. In addition to paying the men for sex, they allegedly spent prolific amounts on the staff to run it.

Though only 15 men are identified in the indictment as John Does, Peace said prosecutors believe “dozens and dozens” of victims were involved. He thanked the victims for coming forward and encouraged any others to contact the FBI.

“Prosecutions like this are really impossible without the bravery of victims who are willing to report what happened to them to law enforcement,” Peace said.

The news comes after a group of once-aspiring Abercrombie & Fitch male models filed a class-action lawsuit last year against Jeffries and Abercrombie alleging the retailer looked the other way while Jeffries ran a sex-trafficking ring and sexually assaulted numerous young men.

Brad Edwards, an attorney who represents the men in the case, said "all four of the defendants, including Abercrombie and Fitch, have tried everything possible to delay our lawsuit from proceeding, presumably because they knew it would lead to criminal arrests."

The proposed class action filed by former model David Bradberry in Manhattan federal court claims Jeffries forced models to take drugs and engage in sexual acts with him and others for the chance to be featured in Abercrombie's provocative catalogs. The lawsuit alleged that company officers knew about the conduct and Abercrombie paid settlements to people who accused Jeffries of sexual abuse or harassment.

"In exchange for providing the position of power and unfettered access to corporate funds necessary for Jeffries to sexually terrorize aspiring male models, Abercrombie knowingly and intentionally benefited and received things of value from Jeffries and his sex-trafficking operation, including the value Jeffries himself brought to the brand," the lawsuit said.

Brittany Henderson, another attorney representing some of the aspiring models, called Tuesday's arrests "monumental" in a statement to USA TODAY.

"Their fight for justice does not end here," Henderson said. "In addition to supporting the criminal prosecution, our clients look forward to holding Abercrombie and Fitch liable for facilitating this terrible conduct and ensuring that this cannot happen again."

Late last year, Jeffries sued his former employer because it refused to cover his costs from the lawsuit. A judge earlier this year ruled that the allegations were tied to Jeffries' corporate role and the retailer must cover the cost of his legal defense, the BBC reported.

Jeffries became president and CEO of Abercrombie in 1992 when the small, money-losing chain formerly known for selling sporting equipment and clothes was part of Leslie H. Wexner's retail empire called The Limited at the time. Jeffries became chairman in 1996 and The Limited spun off the chain into an independent company in 1998.

Jeffries was credited with turning around the retailer into a successful teen apparel maker known for its cologne-filled stores and ads featuring semi-nude models. Jeffries became one of the highest paid CEOs in the U.S., earning a pay package estimated at more than $140 million at one point.

But the company stirred up controversy under his leadership.

Abercrombie produced a hybrid magazine-catalog with partially nude models that featured articles such as "Drinking 101," made T-shirts with phrases that insulted various groups, and went years without selling larger-size clothes as a way to cultivate an image.

An age-discrimination lawsuit in 2012 revealed the existence of an aircraft-standards manual dictating how the models and actors serving Jeffries on the company jet were to dress and behave. The men were to be clean-shaven and wear boxer briefs, flip-flops and a spritz of the chain’s signature cologne.

He abruptly retired in 2014 at the age of 70, after seemingly losing his touch with the retailer's teen audience amid several years of weakening sales.

Contributing: Reuters

(This story has been updated to add new information.)