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Jeffrey Epstein

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Jeffrey Epstein
Epstein (right) with associate Ghislaine Maxwell (left) in 1993
Born
Jeffrey Edward Epstein

(1953-01-20)January 20, 1953
New York City, U.S.
Occupations

Jeffrey Edward Epstein (/ˈɛpstn/ EP-steen;[1] January 20, 1953 – ) was an American financier Born and raised in New York City, Epstein began his professional life as a teacher at the Dalton School despite lacking a college degree. After his dismissal from the school in 1976, he entered the banking and finance sector, working at Bear Stearns in various roles before starting his own firm.

Early life

Epstein's childhood neighborhood of Sea Gate, Brooklyn

Jeffrey Edward Epstein was born on January 20, 1953, in the Brooklyn borough of New York City. His parents Pauline "Paula" Stolofsky (1918–2004) and Seymour George Epstein (1916–1991) were Jewish and had married in 1952 shortly before his birth.[2] Pauline worked as a school aide and was a homemaker.[2][3][4] "Paula was a wonderful mother and homemaker, despite the fact that she had a full-time job," according to a former childhood friend of Epstein's.[5] Seymour worked for the New York City Department of Parks and Recreation as a groundskeeper and gardener.[2][4] Jeffrey was the older of two siblings; he and his brother Mark grew up in the working-class neighborhood of Sea Gate, a private gated community in Coney Island, Brooklyn. Epstein was referred to as "Bear" by his parents while Mark was known as "Puggie". Neighbors described the Epstein family as being, "so gentle, the most gentle people".[3]

Epstein attended local public schools, first attending Public School 188, and then Mark Twain Junior High School nearby and usually earned money by tutoring classmates. Acquaintances considered Epstein "sweet and generous", although "quiet and nerdy", and nicknamed him "Eppy". "He was just an average boy, very smart in math, slightly overweight, freckles, always smiling," a female friend later said.[3] In 1967, Epstein attended the National Music Camp at the Interlochen Center for the Arts.[6] He began playing the piano when he was five, and was regarded as a talented musician by friends.[7] He graduated in 1969 from Lafayette High School at age 16, having skipped two grades.[8][9] Later that year, he attended advanced math classes at Cooper Union until he changed colleges in 1971.[8] From September 1971, he attended the Courant Institute of Mathematical Sciences at New York University studying mathematical physiology, but left without receiving a degree in June 1974.[8][9]

Career

Teaching

Epstein started working in September 1974 as a physics and mathematics teacher for teens at the Dalton School on the Upper East Side of Manhattan.[8][10] Donald Barr, who served as the headmaster until June 1974,[11][12][13] was known to have made several unconventional recruitments at the time, although it is unclear whether he had a direct role in hiring Epstein.[10][14][15] Three months after Barr's departure, Epstein began to teach at the school, despite his lack of credentials.[15][10] Epstein was known for having a charismatic personality and treating his students more like friends than their teacher.

However, he also allegedly showed inappropriate behavior toward underage female students at the time, paying them constant attention, and even showing up at a party where young people were drinking, according to a former student.[14] Other former students also often saw him flirting with female students. Eventually, Epstein became acquainted with Alan Greenberg, the chief executive officer of Bear Stearns, whose son and daughter were attending the school. Greenberg's daughter, Lynne Koeppel, pointed to a parent-teacher conference where Epstein influenced another Dalton parent into advocating for him to Greenberg.[12] In June 1976, after Epstein was dismissed from Dalton for "poor performance",[10][16][17] Greenberg offered him a job at Bear Stearns.[7][18]

Banking

Epstein joined Bear Stearns in 1976 as a low-level junior assistant to a floor trader.[19] He swiftly moved up to become an options trader, working in the special products division, and then advised the bank's wealthiest clients, such as Seagram president Edgar Bronfman, on tax mitigation strategies.[9][20][21] Jimmy Cayne, the bank's later chief executive officer, praised Epstein's skill with wealthy clients and complex products. In 1980, four years after joining Bear Stearns, Epstein became a limited partner.[19] In 1981, Epstein was asked to leave Bear Stearns for, according to his sworn testimony, being guilty of a "Reg D violation".[22][9][7] Even though Epstein departed abruptly, he remained close to Cayne and Greenberg and was a client of Bear Stearns until its collapse in 2008.[19]

Financial consulting

Epstein in an advertisement published in the July 1980 issue of Cosmopolitan magazine

In August 1981, Epstein founded his own consulting firm, Intercontinental Assets Group Inc. (IAG),[23] which assisted clients in recovering stolen money from fraudulent brokers and lawyers.[7] Epstein described his work at this time as being a high-level bounty hunter. He told friends that he worked sometimes as a consultant for governments and the very wealthy to recover embezzled funds, while at other times he worked for clients who had embezzled funds.[7][24] Spanish actress and heiress Ana Obregón was one such wealthy client, whom Epstein helped in 1982 to recover her father's millions in lost investments, which had disappeared when Drysdale Government Securities[25][26][27][28][29] collapsed because of fraud.[30]

Epstein also stated to some people at the time that he was an intelligence agent.[31] During the 1980s, Epstein possessed an Austrian passport that had his photo, but with a false name. The passport showed his place of residence as Saudi Arabia.[32][33] In 2017 "a former senior White House official" reported that Alexander Acosta, the U.S. Attorney for the Southern District of Florida who had handled Epstein's criminal case in 2008, had stated to Trump transition interviewers: "I was told Epstein 'belonged to intelligence' and to 'leave it alone'", and that Epstein was "above his pay grade".[34][35]

During this period, one of Epstein's clients was the Saudi Arabian businessman Adnan Khashoggi, who was the middleman in transferring American weapons from Israel to Iran as part of the Iran–Contra affair in the 1980s.[36] Khashoggi was one of several defense contractors that he knew.[7][31] In the mid-1980s, Epstein traveled multiple times between the United States, Europe, and Southwest Asia.[32][33] While in London, Epstein met Steven Hoffenberg. They had been introduced through Douglas Leese, a defense contractor, and John Mitchell, the former U.S. Attorney General.[7]

Towers Financial Corporation

Steven Hoffenberg hired Epstein in 1987 as a consultant for Towers Financial Corporation (unaffiliated with the company of the same name founded in 1998, and acquired by Old National Bancorp in 2014),[37] a collection agency that bought debts people owed to hospitals, banks, and phone companies.[38][39] Hoffenberg set Epstein up in offices in the Villard Houses in Manhattan and paid him US$25,000 per month for his consulting work (equivalent to $67,000 in 2023).[7]

Hoffenberg and Epstein then refashioned themselves as corporate raiders using Towers Financial as their raiding vessel. One of Epstein's first assignments for Hoffenberg was to implement what turned out to be an unsuccessful bid to take over Pan American World Airways in 1987. A similar unsuccessful bid in 1988 was made to take over Emery Air Freight Corp. During this period, Hoffenberg and Epstein worked closely together and traveled everywhere on Hoffenberg's private jet.[7]

In 1993, Towers Financial Corporation imploded when it was exposed as one of the biggest Ponzi schemes in American history, losing over US$450 million of its investors' money (equivalent to $949,136,000 in 2023).[7] In court documents, Hoffenberg claimed that Epstein was intimately involved in the scheme.[40][41] Epstein left the company by 1989 and was never charged for involvement in the massive investor fraud committed. It is unknown if Epstein acquired any stolen funds from the Towers Ponzi scheme.[7]

Financial management firm

The Limitless moored in Palma de Mallorca

In 1988, while Epstein was still consulting for Hoffenberg, he founded his financial management firm, J. Epstein & Company.[39][23] The company was said by Epstein to have been formed to manage the assets of clients with more than US$1 billion in net worth, although others have expressed skepticism that he was restrictive of the clients that he took.[9]

The only publicly known billionaire client of Epstein was Leslie Wexner, chairman and CEO of L Brands (formerly The Limited, Inc.) and Victoria's Secret.[7][42] In 1986, Epstein met Wexner through their mutual acquaintances, insurance executive Robert Meister and his wife, in Palm Beach. A year later, Epstein became Wexner's financial adviser and served as his right-hand man. Within the year, Epstein had sorted out Wexner's entangled finances.[9][43] In July 1991, Wexner granted Epstein full power of attorney over his affairs. The power of attorney allowed Epstein to hire people, sign checks, buy and sell properties, borrow money, and do anything else of a legally binding nature on Wexner's behalf.[44] Epstein managed Wexner's wealth and various projects such as the building of his yacht, the Limitless.[7]

By 1995, Epstein was a director of the Wexner Foundation and Wexner Heritage Foundation. He was also the president of Wexner's Property, which developed part of the town of New Albany outside Columbus, Ohio, where Wexner lived. Epstein made millions in fees by managing Wexner's financial affairs. Although never employed by L Brands, he frequently corresponded with the company executives. Epstein often attended Victoria's Secret fashion shows, and hosted the models at his New York City home, as well as helping aspiring models get work with the company.[43][44]

In 1996, Epstein changed the name of his firm to the Financial Trust Company[9] and, for tax advantages, based it on the island of St. Thomas in the U.S. Virgin Islands.[9] By relocating to the U.S. Virgin Islands, Epstein was able to reduce federal income taxes by 90 percent. The U.S. Virgin Islands acted as an offshore tax haven, while at the same time offering the advantages of being part of the United States banking system.[45]

Media activities

In 2003, Epstein bid to acquire New York magazine.[46] Other bidders included advertising executive Donny Deutsch, investor Nelson Peltz, media mogul and New York Daily News publisher Mortimer Zuckerman, and film producer Harvey Weinstein. The ultimate buyer was Bruce Wasserstein, a longtime Wall Street investment banker, who paid US$55 million.[46]

In 2004, Epstein and Zuckerman committed up to US$25 million to finance Radar, a celebrity and pop culture magazine founded by Maer Roshan. Epstein and Zuckerman were equal partners in the venture. Roshan, as its editor-in-chief, retained a small ownership stake. It folded after three issues as a print publication and became exclusively an online one.[47]

Liquid Funding Ltd.

Epstein was the president of the company Liquid Funding Ltd. between 2000 and 2007.[48][49] The company was an early pioneer in expanding the kind of debt that could be accepted on repurchase, or the repo market, which involves a lender giving money to a borrower in exchange for securities that the borrower then agrees to buy back at an agreed-upon later time and price. The innovation of Liquid Funding, and other early companies, was that instead of having stocks and bonds as the underlying securities, it had commercial mortgages and investment-grade residential mortgages bundled into complex securities as the underlying security.[48]

Liquid Funding was initially 40 percent owned by Bear Stearns. Through the help of the credit rating agenciesStandard & Poor's, Fitch Ratings and Moody's Investors Service – the new bundled securities were able to be created for companies so that they got a gold-plated AAA rating. The implosion of such complex securities, because of their inaccurate ratings, led to the collapse of Bear Stearns in March 2008 and set in motion the financial crisis of 2007–2008 and the subsequent Great Recession. If Liquid Funding were left holding large amounts of such securities as collateral, it could have lost large amounts of money.[48][50]

Investments

Hedge funds

Between 2002 and 2005, Epstein invested $80 million in the D.B. Zwirn Special Opportunities Fund, a hedge fund that invested in illiquid debt securities.[51][52] In November 2006, Epstein attempted to redeem his investment after he was informed of accounting irregularities in the fund.[53] By this time, his investment had grown to $140 million. The D.B. Zwirn fund refused to redeem the investment. Hedge funds that invest in illiquid securities typically have years-long "lockups" on their capital for all investors and require redemption requests to be made in writing 60 to 90 days in advance.[51] The fund was closed in 2008, and its remaining assets of approximately $2 billion, including Epstein's investment, were transferred to Fortress Investment Group when that firm bought the assets in 2009.[51][52] Epstein later went to arbitration with Fortress over his redemption attempt. The outcome of that arbitration is not publicly known.[51]

The U.S. government began negotiation with Epstein for a plea agreement in mid-2007, as the Bear Stearns hedge fund began to collapse.

In August 2006, Epstein, a month after the federal investigation of him began,[54] invested $57 million in the Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage hedge fund.[51][55] This fund was highly leveraged in mortgage-backed collateralized debt obligations (CDOs).[55]

On April 18, 2007, an investor in the fund, who had $57 million invested, discussed redeeming his investment.[56] At this time, the fund had a leverage ratio of 17:1, which meant for every dollar invested there were seventeen dollars of borrowed funds; therefore, the redemption of this investment would have been equivalent to removing $1 billion from the thinly traded CDO market.[57] The selling of CDO assets to meet the redemptions that month began a repricing process and general freeze in the CDO market. The repricing of the CDO assets caused the collapse of the fund three months later in July, and the eventual collapse of Bear Stearns in March 2008. It is likely Epstein lost most of this investment, but it is not known how much was his.[56][55]

By the time that the Bear Stearns fund began to fail in May 2007, Epstein had begun to negotiate a plea deal with the U.S. Attorney's Office concerning imminent charges for sex with minors.[51][54] In August 2007, a month after the fund collapsed, the U.S. attorney in Miami, Alexander Acosta, entered into direct discussions about the plea agreement.[54] Acosta brokered a lenient deal, according to him, because he had been ordered by higher government officials, who told him that Epstein was an individual of importance to the government.[34][35] As part of the negotiations, according to the Miami Herald, Epstein provided "unspecified information" to the Florida federal prosecutors for a more lenient sentence and was supposedly an unnamed key witness for the New York federal prosecutors in their unsuccessful June 2008 criminal case against the two managers of the failed Bear Stearns hedge fund. Alan Dershowitz, one of Epstein's Florida attorneys on the case, told Fox Business Network "We would have been touting that if he had [cooperated]. The idea that Epstein helped in any prosecution is news to me."[58][51][59]

Israeli startup

In 2015, the Israeli newspaper Haaretz reported that Epstein invested in the startup Reporty Homeland Security (rebranded as Carbyne in 2018).[60][61][62] The startup was connected with Israel's defense industry. It was headed by former Israeli Prime Minister Ehud Barak, who was also at one time the defense minister, and chief of staff of the Israeli Defense Forces (IDF). The CEO of the company is Amir Elihai, a special forces officer, and Pinchas Bukhris, a director of the company and former defense ministry director general and commander of IDF cyber unit 8200.[63] Epstein and Barak, the head of Carbyne, were close, and Epstein often offered him lodging at one of his apartment units at 301 East 66th Street in Manhattan.[64][65] Epstein had past experience with Israel's research and military sector.[66] In April 2008, he went to Israel and met with a number of research scientists and visited different Israeli military bases.[66]

Personal life

Previous long-term girlfriends of Epstein include Eva Andersson-Dubin[67][68] and publishing heiress Ghislaine Maxwell.[7] Epstein dated Andersson-Dubin for an 11-year period[69] mostly in the 1980s and the two later remained friendly well after her marriage to Glenn Dubin.[67][68] Epstein met Maxwell, daughter of disgraced media baron Robert Maxwell, by 1991.[70][71][72] Epstein had Maxwell come to the United States in 1991 to recover from her grief following the death of her father.[73] Maxwell was later implicated by several of Epstein's accusers as procuring or recruiting underage girls in addition to once being Epstein's girlfriend.[74][70][72]

In 1995, Epstein renamed one of his companies the Ghislaine Corporation in Palm Beach, Florida; the company was dissolved in 1998.[75] In 2000, Maxwell moved into a 7,000-square-foot townhouse, less than ten blocks from Epstein's New York mansion. This townhome was purchased for $4.95 million by an anonymous limited liability company, with an address that matches the office of J. Epstein & Co. Representing the buyer was Darren Indyke, Epstein's longtime lawyer.[76] In a 2003 Vanity Fair article, Epstein refers to Maxwell as "my best friend".[7]

Epstein owned a private Boeing 727 jet and traveled in it frequently, logging "600 flying hours a year ... usually with guests on board".

In a profile of Epstein in New York magazine in 2002 Donald Trump remarked: "I've known Jeff for fifteen years. Terrific guy. He's a lot of fun to be with.

In 2002, a spokesman of Bill Clinton lauded Epstein as "a committed philanthropist" with "insights and generosity".[77] At the time Epstein was on the board of Rockefeller University, a member of the Trilateral Commission and the Council on Foreign Relations, and was a major donor to Harvard University.[9] Epstein visited the White House while Clinton was president on four known occasions.[78] In 1993, he went to a donor event at the White House with his companion Ghislaine Maxwell. Around the same time, he also met with President Clinton's aide Mark Middleton on at least three occasions at the White House. In 1995, financier Lynn Forester discussed "Jeffrey Epstein and currency stabilization" with Clinton.[78] Epstein, according to his own accounts, was heavily involved in the foreign exchange market and traded large amounts of currency in the unregulated forex market.[7][9] In 1995, Epstein also attended a small political fundraiser dinner for Bill Clinton which included fourteen other people including Ron Perelman, Don Johnson, Jimmy Buffett, and dinner organizer Paul Prosperi.[79]

From the 1990s to mid-2000s, Epstein often socialized with Donald Trump.[80] Author Michael Wolff wrote that Trump, Epstein, and Tom Barrack were at the time like a "set of nightlife musketeers" on the social scene.[36][81] Epstein and Trump socialized both in New York City and Palm Beach, where they both had houses.[82][80] In April 2003, New York magazine reported Epstein hosted a dinner party in his Manhattan residence to honor Bill Clinton, who did not attend, although Trump did attend.[83] According to The Washington Post, one person who knew Epstein and Trump during this time noted that "they were tight" and "they were each other's wingmen". In November 2004, Epstein and Trump's friendship ran into trouble when they became embroiled in a bidding war for a $40 million mansion, Maison de L'Amitié, which was being auctioned in Palm Beach. Trump won the auction for $41 million, and successfully sold the property four years later for $95 million to the Russian billionaire Dmitry Rybolovlev. That month was the last time Epstein and Trump were recorded to have interacted.[84]


Residences

Epstein's private island of Little St. James in the U.S. Virgin Islands

Epstein owned the Herbert N. Straus House on 9 East 71st Street in the Upper East Side of Manhattan in New York City.[85][86] It was originally purchased for $13.2 million in 1989 by Epstein's mentor, Les Wexner, who renovated it completely.[87][88][89] Epstein moved into the mansion in 1995 after Wexner married and moved with his wife to Columbus, Ohio, to raise their family.[9][88] He took full possession of the mansion in 1998, when he paid Wexner $20 million for it.[39] The house was valued in 2019 by federal prosecutors at $77 million, while the city assessed its value at $56 million.[85] The mansion is reputedly the largest private residence in Manhattan at 21,000 sq ft (2,000 m2).[87][85] Hidden under a flight of stairs, there is a lead-lined bathroom fitted with its own closed-circuit television screens and a telephone, both concealed in a cabinet under the sink. The house also has its own heated sidewalk to melt away the snow.[90] The entrance hall is lined with rows of individually framed prosthetic eyeballs that were made in England for injured soldiers.[7]

The financier's other properties include a residence in Palm Beach, Florida, purchased in 1990;[91] seven units in an apartment building near the Arc de Triomphe at 22 Avenue Foch in Paris, France;[85] a 7,500-acre (30 km2) ranch named Zorro Ranch near Stanley, New Mexico, purchased in 1993;[88][92][93] a private island near Saint Thomas in the U.S. Virgin Islands called Little Saint James, which includes a mansion and guest houses, purchased in 1998; and the neighboring island of Great Saint James purchased in 2016.[94][95] Epstein was building a compound on the latter including an amphitheater and "underwater office & pool" but ran into problems when a stop-work order was issued in late 2018; work continued despite the order.[96]

Epstein, previous to his final Manhattan home, lived in a spacious townhouse, which was a former Iranian government building that had been taken over by the State Department during the Iranian revolution, at 34 East 69th Street for a rate of $15,000 a month from 1992 to 1995.[97] He also previously owned a mansion outside Columbus, Ohio, near Wexner's home from 1992 to 1998 which he purchased from his mentor.[44] Before the Herbert Straus house was purchased, Wexner purchased in 1988 the adjacent townhouse at 11 East 71st Street. Like in the case of the 9 East 71st Street house, Epstein was on the deed of the 11 East 71st Street house as the trustee. The townhouse was sold in 1996 to the Comet trust which holds part of the assets of the de Gunzburg/Bronfman family.[98]

Epstein rented offices for his business dealings in the Villard House at 457 Madison Avenue.[99] Steven Hoffenberg originally set up the offices for Epstein in 1987 when he was consulting for Tower Financial.[7] Epstein used these offices until at least 2003. Around this time, Michael Wolff saw the financier in his office, which in the past were the offices of Random House.[99] Wolff noted that Epstein's offices were a strange place which did not have a corporate feel at all. Wolff stated that the offices were "almost European. It's old—old-fashioned, unrehabbed in its way." Wolff continued that "the trading floor is filled with guys in yarmulkes. Who they are, I have no idea. They're like a throwback, a bunch of guys from the fifties. So here is Jeffrey in this incredibly beautiful office, with pieces of art and a view of the courtyard, and he seems like the most relaxed guy in the world. You want to say 'What's going on here?' and he gives you that Cheshire smile."[99]

Epstein rented multiple apartment units for his employees, models, and guests since the 1990s at 301 East 66th Street.

Political donations

Epstein shaking hands with President Bill Clinton at the White House, September 1993

In 2002 Epstein said "I invest in people — be it politics or science. It’s what I do".[100] From 1989 until 2003, Epstein donated more than $139,000 to U.S. Democratic Party federal candidates and committees and over $18,000 to U.S. Republican Party candidates and groups.[101] Epstein contributed $50,000 to Democrat Bill Richardson's successful campaign for Governor of New Mexico in 2002 and again for his successful run for reelection in 2006. Also that year, he contributed $15,000 to Democrat Gary King's successful campaign for Attorney General of New Mexico. He later contributed $35,000 to King's 2014 unsuccessful campaign for Governor. Other contributions in New Mexico included Epstein $10,000 toward Jim Baca's campaign to become head of the land commission and $2,000 toward Santa Fe County Sheriff Jim Solano's bid for reelection.


Philanthropy

Epstein donated millions of dollars to Harvard University over the years for different causes.

In 1991, Epstein was one of four donors who pledged to raise US$2 million for a Hillel student building Rosovsky Hall at Harvard University.[102][103] In the 1990s Epstein donated $10,000 to the White House Historical Association.[104] In 2000, Epstein established the Jeffrey Epstein VI Foundation, which funds science research and education. Prior to 2003, the foundation funded Martin Nowak's research at the Institute for Advanced Study in Princeton, New Jersey. In May 2003, Epstein pledged a series of donations totaling US$30 million to create a mathematical biology and evolutionary dynamics program at Harvard which was run by Martin Nowak.[102] According to The Boston Globe, the actual amount received from Epstein was US$6.5 million.[105][102][103] In 2019, Forbes deleted a 2013 article that called Epstein "one of the largest backers of cutting edge science" after The New York Times revealed its author, Drew Hendricks, had been paid $600 to submit it falsely as his own.[68]

According to attorney Gerald B. Lefcourt, Epstein was "part of the original group that conceived of the Clinton Global Initiative"[106] and in 2006 he donated $25,000 to the Clinton Foundation.[107] Epstein co-organized a science event with illusionist and skeptic Al Seckel called the Mindshift Conference.[108] The conference took place in 2010 on Epstein's private island Little Saint James.[108] In attendance were scientists Murray Gell-Mann, Leonard Mlodinow, and Gerald Jay Sussman.[18] The true extent of Epstein's donations is unknown. The Jeffrey Epstein VI Foundation fails to disclose information which other charities routinely disclose. Concerns have been raised over this lack of transparency. In 2015, the Attorney General of the state of New York was reported to be trying to gain information but was refused since the charities were based outside of the state and did not solicit in New York State.[109]

Epstein, besides making donations through the Jeffrey Epstein VI Foundation, also made a number of charitable donations through his three private charities: Epstein Interest, the COUQ Foundation, and Gratitude American Ltd. According to federal tax filings, Epstein donated $30 million between 1998 and 2018, through these three charities.[110] Following his death, a number of scientists and institutions—including Harvard University and Massachusetts Institute of Technology (MIT)—came under criticism for accepting money from Epstein and his foundation, with some individuals offering to give away money donated by Epstein.[111]



References

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Further reading