Lawyers admit it was a 'mistake' to claim Alan Dershowitz had sex with an underage girl tied to a notorious financier

One of America's most famous lawyers, Alan Dershowitz, has settled a drawn-out legal battle with two lawyers who alleged he had sex with an underage girl who was allegedly being exploited by one of his clients.

The original allegations were made in 2014, as part of a lawsuit filed by lawyers Brad Edwards and Paul Cassell on behalf of women who said they were sex trafficked as minors by the financier Jeffrey Epstein - a former Dershowitz client.

Dershowitz wasn't named as a defendant, but a motion in the suit said a girl described as Jane Doe No. 3 had been forced to have sex with "powerful people," including Dershowitz.

That allegation spurred Dershowitz to file a motion calling Jane Doe No. 3 a "serial liar" and to tell various media outlets, including this one, that he wanted Cassell and Edwards disbarred. In turn, the two lawyers slapped Dershowitz with a defamation suit claiming he'd waged "a public media assault" against them.

As part of a settlement announced Friday, Dershowitz agreed to drop his claims that the lawyers had behaved unethically. For their part, Edwards and Cassell said they'd drop their defamation suit and even acknowledged that Dershowitz shouldn't have been implicated in the Epstein case in the first place.

"Edwards and Cassell acknowledge that it was a mistake to have filed sexual misconduct accusations against Dershowitz," the lawyers said in a joint statement.

Edwards and Cassell - a well-respected former federal judge - represented women who sued the federal government in 2008 for striking a plea agreement with Epstein that gave him 18 months in prison in exchange for pleading guilty to child-sex crimes. The women (known only as Jane Doe) claimed the government violated the Crime Victim Rights Act by failing to notify them of the deal for Epstein, who was a financial adviser to billionaires.

In 2014, Edwards and Cassell filed a motion asking the court to add two more Jane Does to the case - including so-called Jane Doe No. 3, who made the Dershowitz claims.

That motion claimed Epstein forced Jane Doe No. 3 to have sex with Dershowitz "not only in Florida but also on private planes, in New York, New Mexico, and the US Virgin Islands."

In an interview with Business Insider early last year, Dershowitz said he could account for all of the time during which he was alleged to have had sex with Jane Doe No. 3.

"There is no conceivable possibility that it could have happened," he said.

A federal judge ended up striking the claims made in that motion from the court record last year, as Bloomberg BNA reported.

Meanwhile, Edwards and Cassell noted in their statement Friday that Dershowitz had produced travel records to establish he couldn't have been present during the supposed misconduct, in addition to other allegations to refute the claims against him.

"The parties believe it is time to take advantage of the new information that has come to light on both sides during the litigation and put these matters behind them," the lawyers said in their joint statement.

For his part, Epstein started an 18-month prison sentence for soliciting prostitution in July 2008. Dershowitz had worked on his defense in a case accusing the high-flying financier of soliciting sexual massages from girls who were aged 15 or younger, as The New York Times reported.

While prosecutors had evidence suggesting Epstein had paid dozens of girls for sexual services, Dershowitz was able to get a deal requiring the financier to plead guilty to a single count of soliciting prostitution and one count of procuring a person under 18 for prostitution, according to The Times.

Epstein got out after serving just 13 months and still owns several luxury properties, according to the New York Daily News - including a 40-room mansion on the Upper East Side and a 78-acre island in the US Virgin Islands.