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A Comprehensive Analysis of The Jeffrey Epstein Case (#GotBitcoin)

Financier’s business relationships with investment banks sometimes turned sour, ending in lawsuits. A Comprehensive Analysis of The Jeffrey Epstein Case (#GotBitcoin)

Jeffrey Epstein worked closely with some of the world’s largest investment banks to build a fortune of more than $500 million. But he cut a course through Wall Street that was marked by disagreements, lawsuits and acrimony.

A Comprehensive Analysis of The Jeffrey Epstein Case (#GotBitcoin?)

On the heels of his suicide, lawyers and others involved in the case expect the sex-trafficking investigation to expand into Mr. Epstein’s lengthy financial dealings. Federal investigators have obtained Mr. Epstein’s financial records from at least one bank, and a close look at his finances may help answer murky questions unresolved after his death: How did he make his money? Who worked with him and when?


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Mr. Epstein left Bear Stearns Cos. in the early 1980s. He struck out on his own but used the firm for dozens of transactions, former Bear Stearns executives said. For years, Mr. Epstein enjoyed a close bond with James Cayne, these people said. Mr. Cayne, who became the chief executive in 1993, sometimes called underlings to ask that they “take care of” Mr. Epstein, one former executive recalls. Mr. Cayne didn’t respond to requests for comment.

When he traded with his own money, Mr. Epstein transacted at prices that produced profits for both himself and his former employer. But he changed his tune after he started investing for Leslie Wexner, then an up-and-coming Ohio retail magnate whose company controlled Abercrombie & Fitch. Mr. Epstein drove a hard bargain with Bear Stearns, becoming a difficult client, according to a former employee who worked on several of the transactions.

“He wanted the best deal in the entire world anyone has ever seen,” the former employee said, calling him “ferocious” and “a tiger” in his conduct.

Mr. Epstein’s relationship with Bear Stearns came apart as the firm did. He had put his own money into two Bear Stearns hedge funds and owned shares in the bank itself. He lost $57 million in the funds, and his firm still held 100,000 shares when Bear Stearns was sold for $2 a share to JPMorgan Chase & Co. in March 2008.

As the bank’s problems deepened in August 2007, Mr. Epstein sold more than 56,000 shares at a price of $101. He intended to sell more, he later said in a lawsuit filed in the Virgin Islands, but in a series of phone conversations, Mr. Cayne insisted that Mr. Epstein retain the rest of his shares, arguing that the firm’s problems were contained, Mr. Epstein’s complaint said.

Mr. Epstein also filed a complaint before the Financial Industry Regulatory Authority against former Bear Stearns Co-President Warren Spector. A judge in the Virgin Islands ordered the transfer of Mr. Epstein’s lawsuit to the Southern District of New York for its inclusion in a class-action suit filed against the bank. The lawsuit was ultimately dismissed.

Mr. Epstein had a relationship with what became Citigroup Inc. C +1.57% that turned combative. In 1987, Mr. Epstein began dealing with the big bank on behalf of Mr. Wexner, according to people close to the matter and a lawsuit later filed by Mr. Epstein against the bank. By 1993, Mr. Epstein was working closely with Dayle Davison, then a vice president in the firm’s private-banking division, according to the people and the lawsuit. She and her colleagues would visit Mr. Epstein’s Upper East Side residence, which doubled as his office, according to the lawsuit.

By 1999, Mr. Epstein himself was a client of Citigroup’s private bank. That year and in 2000, Ms. Davison helped Mr. Epstein receive two $10 million loans that he used to invest in a debt-related vehicle called a collateralized bond obligation as well as in an investment fund, both managed by outside parties, according to the lawsuit.

By 2002, the investments were in trouble. Mr. Epstein defaulted on both loans, even after Citigroup extended their repayment deadlines, the bank later claimed. Mr. Epstein filed a lawsuit in District Court of the Virgin Islands claiming Citigroup had defrauded him and misrepresented information related to the investments, which he said had been made on the recommendation of Ms. Davison, who “aggressively solicited my participation.” Through a spokeswoman, Ms. Davison declined to comment.

Citigroup filed its own suit in the Southern District of New York for repayment of the loans. Both parties dropped their suits in 2005. Mr. Epstein’s relationship with Citigroup was severed in 2006, according to people close to the matter, around the time Mr. Wexner stopped working with Citigroup, the people say. A spokesman for Mr. Wexner declined to comment.

“Mr. Epstein was a client for a short period of time, before his abhorrent behavior came to light,” a Citigroup spokeswoman said.

From the 1990s through about 2013, Mr. Epstein had a relationship with JPMorgan, one that proved lucrative for the bank. The Wall Street Journal previously reported that JPMorgan gained a stream of private-banking clients and referrals from Mr. Epstein. The bank ended the relationship in the midst of concern about its reputation, the Journal reported, years after a 2007 nonprosecution agreement with the government related to a Florida sexual-misconduct investigation into Mr. Epstein.

A spokesman for the bank declined to comment.

Soon, Deutsche Bank AG DB +0.91% was helping Mr. Epstein move millions of dollars in cash and securities through dozens of private-banking accounts, playing a key role in his financial dealings, the Journal also reported. The German bank severed its relationship with Mr. Epstein this year, the Journal reported.

Deutsche Bank has said it is “closely examining any business relationship with Jeffrey Epstein, and we are absolutely committed to cooperating with all relevant authorities.”

It wasn’t just banks with whom Mr. Epstein had fraught business relationships. Mr. Epstein sued a powerboat company about modifications, was sued by a New York law firm for unpaid bills and fought with an interior designer hired to work on his 70-acre property in the U.S. Virgin Islands. (Mr. Epstein dropped the powerboat suit, was ordered by a judge to pay the law firm and settled with the interior designer.)

“It was a nightmare,” said Juan Pablo Molyneux, the interior designer, who installed a bronze desk for Mr. Epstein, along with velvet, upholstered chairs, terrestrial globes with designs based on a John Ford movie and bronze cabinetry with shapes of marine fauna.

He described Mr. Epstein as an unpleasant client who was very insecure and would constantly change his mind.

“It was dreadful, exhausting and abusive,” Mr. Molyneux said.

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The Jeffrey Epstein Debacle

The results of the investigations need to be made public.

Attorney General William Barr says he’s appalled by the death of sexual offender Jeffrey Epstein in a jail cell Saturday, and he’s not alone. The death by apparent suicide of the politically connected financier couldn’t have been scripted better to undermine trust in law enforcement and the prison and legal systems.

Epstein’s accusers are rightly upset that they won’t get their day in court to prove their claims. Conspiracy theorists are also suggesting that perhaps Epstein was killed in jail so he wouldn’t expose the names of his famous friends who joined him in allegedly exploiting young women and girls for sex. He had pleaded not guilty.

But you don’t have to believe in conspiracy to question the competence of the Federal Bureau of Prisons and Epstein’s prosecutor, U.S. Attorney for the Southern District of New York Geoffrey Berman. Epstein had already been found close to death once from what was either a suicide attempt or an assault.

Epstein was removed for psychological evaluation, but media reports say he was sent back to his cell in late July. Prison officials had to know he was a suicide risk no matter what he told the psychologists, yet press reports say he wasn’t on suicide watch. Why not?

As Nebraska Sen. Ben Sasse said in a letter to Mr. Barr: “Every single person in the Justice Department—from your Main Justice headquarters staff all the way to the night-shift jailer—knew that this man was a suicide risk, and that his dark secrets couldn’t be allowed to die with him.”

Mr. Barr has asked the Justice Department inspector general and the FBI to investigate, and the results need to be made public for the sake of public confidence. This kind of fiasco is why so many Americans mistrust government.


What We’ve Learned About Jeffrey Epstein’s Mysterious Ties to Les Wexner

One of the enduring mysteries of the Jeffrey Epstein case is how, exactly, a former high-school math teacher transformed himself into a financier worth hundreds of millions of dollars. At the center of that conundrum is Les Wexner, the CEO of L Brands, which controls mall staples like Victoria’s Secret, Pink, and Bath & Body Works. Wexner was Epstein’s central client for years; he granted Epstein an enormous amount of trust and authority. But the bond between the two men has always been shrouded in mystery.

“It’s a weird relationship,” one Wall Streeter who reportedly knew Epstein told New York for its profile of Epstein in 2002. “It’s just not typical for someone of such enormous wealth to all of a sudden give his money to some guy most people have never heard of.” That profile also described Wexner as Epstein’s “mentor.”

Two exposés published on Thursday, by the New York Times and the Wall Street Journal, offered more insight into the Epstein-Wexner connection, though they didn’t solve its central mystery. Here are the highlights of what the stories uncovered:

Suspicions About the Relationship Existed From the Beginning

The Times reports that Epstein and Wexner met in Ohio, where the 81-year-old Wexner is based, in the mid-to-late 1980s. They were introduced by insurance executive Robert Meister, a mutual friend. Epstein, who was coming off a stint at Bear Stearns, pitched himself as a tax expert, and Wexner immediately began spending a lot of time with him — though it’s unclear if there was a formal financial arrangement between the two at the time.

Some associates of Wexner were baffled as to why the billionaire would become so enamored of someone who was such an unknown quantity. “I tried to find out how did he get from a high school math teacher to a private investment adviser,” Robert Morosky, the former vice chairman of The Limited, said. “There was just nothing there.”

That did not appear to matter to Wexner, who gave Epstein an increasing share of authority over his finances, to the point that in 1991, he granted his adviser power of attorney, which “enabled Mr. Epstein to hire people, sign checks, buy and sell properties and borrow money — all on Mr. Wexner’s behalf.”

Epstein grew steadily richer over the next few years, but his association with Wexner ended in 2007. Wexner has said he was not aware of Epstein’s alleged criminal activities.

Wexner Prioritized Epstein Over Old Friends

The Times quotes Jim Duberstein, a onetime friend of Wexner’s who had known him for years, as saying that shortly after the Wexner-Epstein bond took hold, Wexner took Epstein’s side over his in a disagreement — then cut him out of his life completely, in what appeared to be a pattern.

“Les Wexner, until the time he quit talking to me, was probably the finest person I ever met in my life,” Duberstein said. He was the most charitable, the most generous, the most understanding. I have nothing but praise for him — until he just cut his umbilical cord.”

Epstein Used His Wexner Connection To Pose As A Victoria’s Secret Scout

Former Victoria’s Secret model Alicia Arden says that Epstein grabbed her and tried to undress her after introducing himself as a talent scout in 1997, a detail that had been previously reported with fewer details. Arden filed a police report, but says that it was not taken seriously.

Two senior executives had also told Wexner around the time of the alleged Arden assault that Epstein was telling people he was a Victoria’s Secret recruiter; it’s not clear if he took any action.

In 1996, Epstein allegedly sexually assaulted Maria Farmer, a woman who was working on an art project Epstein was supervising at Wexner’s Ohio mansion.

Epstein Made Very, Very Good Money From Wexner

The Journal estimates that Epstein’s years controlling Wexner’s finances — including matters like arranging his prenuptial agreement and helping to handle investments, netted him at least $200 million. The Journal puts his entire fortune at more than half a billion dollars.

Wexner Was Not Epstein’s Only Big Client

Though Wexner was the first big fish Epstein handled after he formed his own firm, he wouldn’t be the last; the Wall Street Journal reports that “the bulk of his wealth appears to have come from a small number of very wealthy clients.” Building off his success with Wexner, Epstein began working with Elizabeth Ross Johnson, heiress to the Johnson & Johnson fortune. Once again, Epstein’s life seemed to overlap with a client’s in unusual ways; “Mr. Epstein’s name appears briefly on property records for Ms. Johnson’s home in Vail and several land parcels in Dutchess County, N.Y., north of New York City,” the Journal reports.

Around 1997, Epstein also began working with Leon Black, CEO of the private-equity firm Apollo Management, providing tax strategy to the company’s high-earning clientele. The association appears to have ended about a decade later.

And Epstein made investments in the hedge fund Highbridge Capital, which almost tripled when he directed clients their way.

 Updated: 9-9-2019

MIT Media Lab Director Joi Ito Steps Down Over Epstein Financing (#GotBitcoin?)

Joichi Ito, head of the Media Lab at the Massachusetts Institute of Technology (MIT), has resigned after it was revealed that he and other Media Lab staff had attempted to conceal financial contributions from convicted sex offender Jeffrey Epstein.

The New Yorker reported last Friday that Ito and MIT Media lab – which hosts a number of innovation programs including a Digital Currency Initiative – had accepted donations from Epstein even though the financier was on the university’s “disqualified” donors list and attempted to keep the source of the funds a secret.

Ito had disclosed last Wednesday that he had accepted $525,000 from Epstein for the lab, as well as $1.2 million for his investment funds.

However, the New Yorker published MIT emails sent by Ito that appear to illustrate how he had attempted to veil the donations from the university and the public.

After Epstein funded a researcher at the lab, Ito penned one message that said: “Make sure this gets accounted for as anonymous.”

Reportedly, the fact that the links to Epstein were widely known in the lab and he was known as Harry Potter villain Voldemort, “he must not be named,” among staff.

Epstein had also allegedly encouraged other notable figures to back the lab, including Bill Gates and investor Leon Black. When Gates made a $2 million contribution, Peter Cohen, the lab’s then Director of Development and Strategy reportedly said in an MIT email:

“This is a $2M gift from Bill Gates directed by Jeffrey Epstein For gift recording purposes, we will not be mentioning Jeffrey’s name as the impetus for this gift.”

A spokesperson for Gates denied that Epstein had a role in directing any funding by the Microsoft billionaire.

Ito resigned from his role at MIT a day after the New Yorker report. MIT President L. Rafael Reif said in a message to the MIT community:

“Because the accusations in the story are extremely serious, they demand an immediate, thorough and independent investigation. This morning, I asked MIT’s General Counsel to engage a prominent law firm to design and conduct this process.”

Ito is also reported by the New York Times as having stepped down from positions at the MacArthur Foundation, the John S. and James L. Knight Foundation and The New York Times Company, as well as a visiting professorship at Harvard.

It’s not yet clear if the scandal will affect the operations of lab’s various programs, including the Digital Currency Initiative.

Updated: 12-28-2022

How Corrupt Is YOUR Bank? #gotbitcoin

A Comprehensive Analysis of The Jeffrey Epstein Case (#GotBitcoin)

Virgin Islands Sues JPMorgan For Facilitating Epstein Abuse

* JPMorgan Managed Millions for Ghislaine Maxwell Despite Booting Epstein in 2013
* Case: USVI v. JPMorgan Chase Bank, 22-cv-10904-UA, US District Court, Southern District of New York (Manhattan).
* Suit Follows Similar Class Action Filed By Epstein Victims
* USVI Says Bank Turned ‘Blind Eye’ To Epstein’s Sex-Trafficking

The US Virgin Islands is suing JPMorgan Chase & Co. for “turning a blind eye” to former client Jeffrey Epstein’s sex-trafficking on his private island there.

USVI Attorney General Denise George said her suit filed Tuesday in Manhattan federal court was part of an “ongoing effort” to hold accountable those who facilitated Epstein’s activities. Epstein brought many of his victims to his villa on Little St. James, the private island he owned.

“Human trafficking was the principal business of the accounts Epstein maintained at JPMorgan,” the USVI complaint states.

JPMorgan declined to comment.

A Comprehensive Analysis of The Jeffrey Epstein Case (#GotBitcoin)

According to the suit, JPMorgan concealed “wire and cash transactions that raised suspicion of a criminal enterprise whose currency was the sexual servitude” of women and girls in the Virgin Islands. George also claims JPMorgan’s willingness to do business with Epstein unfairly enriched it at the expense of other banks.

Class Actions

A Comprehensive Analysis of The Jeffrey Epstein Case (#GotBitcoin)

The suit is seeking unspecified damages for violating sex-trafficking, bank-secrecy and consumer laws.

George’s suit makes similar claims to proposed class actions filed last month by Epstein victims against JPMorgan and Deutsche Bank AG. A JPMorgan spokesman declined to comment on that suit, while a Deutsche Bank spokeswoman said the case “lacks merit.”

Epstein was found dead in his jail cell in 2019, after being arrested and charged with sex-trafficking by Manhattan federal prosecutors. His former girlfriend, Ghislaine Maxwell, was convicted of similar charges last December. During her trial, a JPMorgan banker testified that Epstein wired her $31 million, money prosecutors characterized as Maxwell’s payment for procuring young girls for the financier.

George said in her suit that her office conducted an investigation into Epstein’s activities and presented the findings to JPMorgan in September. According to the complaint, the USVI probe found that the bank “pulled the levers through which recruiters and victims were paid” and was indispensable to the operation of Epstein’s trafficking enterprise.

Earlier this year, Epstein’s estate reached a $105 million settlement with the Virgin Islands after the US territory filed racketeering claims against it.

Epstein spent decades cultivating ties to US and British elites including several Wall Street figures. Ties to Epstein led to career downfalls for former Barclays Chief Executive Officer Jes Staley, who formerly headed JPMorgan’s private bank and Apollo Global Management co-founder Leon Black. Both have denied knowing about or participating in inappropriate conduct with Epstein.

The case is USVI v. JPMorgan Chase Bank, 22-cv-10904-UA, US District Court, Southern District of New York (Manhattan).


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