Former Abercrombie & Fitch CEO Mike Jeffries was arrested on sex trafficking charges

Mike Jeffries, the former CEO of Abercrombie & Fitch, was arrested on sex trafficking and interstate prostitution charges, prosecutors announced Tuesday.

Jeffries was arrested in West Palm Beach, Florida. Two employees, Matthew Smith of West Palm Beach and James Jacobson of Wisconsin, were also arrested in connection with sex trafficking allegations.

Jeffries and Smith made their first court appearance in West Palm Beach on Tuesday afternoon.

Jeffries, who was the popular clothing brand's controversial CEO from 1992 to 2014, was released later in the day on a $10 million bond. U.S. Magistrate Judge Bruce E. Reinhart ordered him to remain in home confinement with GPS monitoring, not to travel without authorization and to surrender his passport.

Smith submitted to custody in the same courtroom until the matter is heard in New York state. Jacobson was scheduled to appear with Jeffries in federal court in Islip on Friday for arraignment.

Jeffries, Smith and Jacobson each face a single count of sex trafficking and 15 counts of interstate prostitution in connection with 15 alleged victims.

In court Tuesday, Jeffries, wearing a blue polo shirt and white shorts, was handcuffed in a jury box as he conferred with his attorney, Brian H. Bieber.

A federal indictment accuses Jeffries – along with Smith, his romantic partner – of and Jacobson, who was described as a recruiter — operated an “international sex trafficking and prostitution business” from 2008 to 2015.

It is alleged that they organized “sex events” in England, France, Italy, Morocco, St. Barts, New York City and the Hamptons for Jeffries, Smith and “others.” They “used coercive, deceptive and fraudulent tactics in recruiting, hiring, promoting, obtaining, retaining, soliciting and paying men for commercial sex,” it said.

The indictment alleges that the men who attended the events were led to believe that doing so could lead to modeling opportunities or advance their careers, or that “failure to comply with requests to perform certain acts during the sex events could harm their careers.”

The youngest of the alleged victims was 19 years old, prosecutors said in a memo to the court on Tuesday.

“Many of the victims, at least one of whom was as young as 19, were financially vulnerable and aspired to become models in the fashion industry, a notoriously brutal world,” the memo said. “In fact, some of the men they recruited had previously worked in Abercrombie stores or modeled for Abercrombie.”

The men were required to sign nondisclosure agreements and surrender their wallets and cellphones during the events, prosecutors said.

Jeffries, Smith and Jacobson are also alleged to have recruited, hired and paid an exclusive group of household staff to “facilitate and monitor the sexual events.”

The employees provided Jeffries, Smith and the men present with, among other things, alcohol, muscle relaxants called “poppers,” lubricants, Viagra and condoms, the indictment says. Either Jacobson or the employees paid the men to take part in the sex events, they say.

The trio hired a “full-service security company” to manage nondisclosure agreements, conduct background checks, and monitor and, if necessary, intimidate victims, prosecutors said in their arrest memo.

“When witnesses threatened to expose or sue them, Jeffries and Smith relied on the services of a security company to monitor and intimidate these individuals to ensure their silence,” it said.

The trio used burner phones to communicate, the memo said.

Breon Peace, the U.S. attorney for the Eastern District of New York, said at a news conference that Jeffries and Smith spent millions on the sex trafficking enterprise – from paying employees to travel expenses to paying for secrecy.

The arrest memo states that some victims were paid directly in cash, totaling “hundreds of thousands of dollars.”

Peace said the operation used a referral system and interview process in which the men alleged to have been victims were not informed of the details of the sex events before taking part. During these “mock tests” of potential candidates, Jacobson typically first had the candidates perform commercial sexual acts on him, the indictment says.

At the events, men were pressured to drink and consume poppers, and “on more than one occasion when men did not or could not consent, Jeffries and Smith violated the physical integrity of these men by subjecting them to invasive procedures “exposed or continued to expose” sexual and violent contact through body parts and other objects,” said Peace.

Jeffries and Smith ordered their associates to inject some victims with “a prescription erection-inducing substance to induce the men to engage in sexual acts that they would otherwise be physically unable or unwilling to perform,” the arrest memo states.

According to the document, prosecutors said they had “dozens of witnesses” who could testify.

“For too long, powerful individuals have trafficked and abused young people with few resources for their own sexual pleasure with the dream of securing a successful career in fashion or entertainment,” Peace said. He warned people who believe they can exploit or coerce the “so-called casting couch system” to “prepare to trade that couch for a bed in federal prison.”

Peace said his office became aware of the allegations through media reports.

The BBC published an explosive report a year ago that said Jeffries had been accused of exploiting men at sex parties he hosted. The report said that 12 men said they attended or organized events where Jeffries and his partner Smith had sex, and that these events took place between 2009 and 2015. Some of the men who spoke to the BBC said they had been exploited or had not taken part voluntarily.

Bieber, Jeffries' attorney, told NBC News at the time that Jeffries would not comment on reports about his personal life. Abercrombie & Fitch said it was “horrified and outraged” by the allegations in the BBC report.

Jeffries led as Abercrombie expanded its retail presence and began posting a 10-figure annual profit. The increase was followed by a decline as fast fashion stores offered competing products at much lower prices. And Abercrombie was shunned for using wiry, mostly white models and selling T-shirts that were clearly racist. During Jeffries' reign, the company also faced several discrimination lawsuits.

Bieber said in a statement Tuesday in response to Jeffries' arrest: “We will respond to the allegations in detail after the indictment is quashed and as appropriate, but we plan to do so at the courthouse – not in the media.”

Shortly after this report, Abercrombie & Fitch and Jeffries were sued over allegations that they turned a blind eye to the allegations against Jeffries. That civil lawsuit alleged that he sexually abused numerous men after luring them with the promise of coveted modeling contracts, CNBC reported.

“Today’s arrests are monumental for the aspiring male models who were victims of these individuals,” attorney Brittany Henderson, who represents alleged victims in this class action lawsuit, said in a statement Tuesday.

“Your fight for justice does not end here,” the statement said. “We look forward to holding Abercrombie and Fitch liable for enabling this terrible behavior and ensuring that something like this cannot happen again.”

Asked whether sex trafficking may have continued after 2015, Peace said the investigation was ongoing and urged all victims and witnesses to come forward.