U.S. Virgin Islands

The U.S. Virgin Islands is an unincorporated territory of the United States in the Caribbean, made up of St. Thomas, St. Croix, St. John and smaller islands and cays, with its capital at Charlotte Amalie on St. Thomas. Denmark ceded the islands, then the Danish West Indies, by a convention of 1916 for 25 million dollars in gold. The territory is governed under the Revised Organic Act of 1954 by an elected governor and a unicameral legislature, and federal law bars it from reducing income tax owed to the territory except on income from sources within the islands. Jeffrey Epstein bought Little St. James off St. Thomas in 1998, incorporated his money-management company there the same year, registered there as a sex offender, and received territorial tax benefits later put at about 300 million dollars. Its population in 2020 was 87,146.¹²³⁴⁵

Cession by Denmark

A first convention for the cession of St. Thomas and St. John was signed at Copenhagen on October 24, 1867, in the administration of President Andrew Johnson. A plebiscite on the two islands was "overwhelmingly in favor of the cession" and the Danish parliament approved it, but the United States Senate Committee on Foreign Relations took no action until March 24, 1870, when Senator Charles Sumner reported it adversely. In the account the Secretary of State later gave President Woodrow Wilson, the 1867 treaty grew out of "the need of a naval coaling, supply, and repair station in the Caribbean Sea" learned in the Civil War.¹

The convention of cession was signed in New York on August 4, 1916 by Secretary of State Robert Lansing and the Danish minister, Constantin Brun, and ratifications were exchanged in Washington on January 17, 1917. Article 5 obliged the United States to pay "the sum of twenty-five million dollars in gold coin of the United States" within ninety days, and the United States declared that it would "not object to the Danish Government extending their political and economic interests to the whole of Greenland." The Secretary of State's transmittal described St. Thomas as "the natural point of call for all European trade bound to the West Indies, Central America, or northern South America," the value of "St. Thomas harbor as a naval port, with its circular configuration, ample roadsteads, protection from prevailing winds and seas, and facilities for fortifications," and the importance of "a naval base off the entrance of the Panama Canal." The islands were transferred at a ceremony at 4 p.m. on March 31, 1917, while at the State Department a Treasury warrant for 25 million dollars was handed to Brun.¹⁶

Government

The Revised Organic Act of July 22, 1954 declares the islands "an unincorporated territory of the United States of America," fixes the capital at Charlotte Amalie, and since 1968 places the territory's relations with the federal government "under the general administrative supervision of the Secretary of the Interior." Executive power rests in a governor who, with the lieutenant governor, is elected on a single ballot by majority vote, with a runoff if no ticket wins a majority; the first election was held on November 3, 1970, and no governor elected for two full successive terms may serve again until a full term has passed. Legislative power rests in the unicameral Legislature of the Virgin Islands, whose members are called senators; the act fixed their number at fifteen from 1966 until 2000, when the number was left to territorial law.²⁷⁸

The executive is the Government of the United States Virgin Islands. Its Virgin Islands Department of Justice, headed by the Attorney General, keeps the sex-offender registry, and its Virgin Islands Economic Development Authority runs the tax-incentive program through the Economic Development Commission.⁹

Taxation

Section 934 of the Internal Revenue Code provides that income tax owed to the Virgin Islands "shall not be reduced or remitted in any way, directly or indirectly, whether by grant, subsidy, or other similar payment, by any law enacted in the Virgin Islands," except as to "income derived from sources within the Virgin Islands or income effectively connected with the conduct of a trade or business within the Virgin Islands." Companies certified by the Economic Development Commission receive exemptions of up to 90 percent of income tax and 100 percent of gross-receipts, excise and withholding taxes in exchange for local employment, residency and charitable commitments.³¹⁰

Epstein in the Territory

Epstein bought Little St. James on April 27, 1998 for 7.95 million dollars through L.S.J., LLC, and his Financial Trust Company was incorporated on St. Thomas on November 6, 1998. The Industrial Development Commission granted Financial Trust tax benefits from 1999, and the Economic Development Commission granted his Southern Trust Company a ten-year package from 2013. He registered in the territory as a sex offender in 2010 on the strength of his 2008 Florida conviction, and most of his territorial companies were formed in 2011 and 2012. In 2012 Attorney General Vincent Frazer allowed him to give 24 hours' notice of travel by email instead of 21 days. In January 2016 he bought Great St. James, next to Little St. James. Three governors held office in those years: John de Jongh, whose wife Cecile de Jongh managed Epstein's territorial office; Kenneth Mapp, who in 2016 asked Epstein to lend the territory 275 million dollars; and Albert Bryan, who as chairman had signed Southern Trust's certificate in 2014.^49111213

After Epstein's death in 2019 the territory sued his estate under its Criminally Influenced and Corrupt Organizations Act and sued JPMorgan Chase, recovering about 180 million dollars in settlements after legal fees, including 62.5 million dollars from Leon Black. JPMorgan argued that "the entity that most directly failed to protect public safety and most actively facilitated and benefited from Epstein's continued criminal activity was the plaintiff in this case, the USVI government itself." A 2023 federal suit by six women against the territory and its former officials, alleging that they made the islands a "safe haven" for Epstein's trafficking, was dismissed in 2025 for lack of personal jurisdiction in New York as to all defendants except Delegate Stacey Plaskett, and the claims against her were withdrawn with prejudice later that year.⁹¹⁴

Population

The 2020 census counted 87,146 residents, 18.1 percent fewer than the 106,405 counted in 2010; housing units rose 2.4 percent over the same decade, to 57,257. All three major islands lost population.⁵¹⁵