Jeffrey Epstein’s Dark Facade Finally Cracks

By Lisette Voytko
Forbes
July 12, 2019

https://www.forbes.com/sites/lisettevoytko/2019/07/12/jeffrey-epsteins-dark-faade-finally-cracks/#cb2074529cf1

Dark Capital is a series that explores the intersection of business, wealth and crime. It’s featured on Sundays.

It’s only been a week since Jeffrey Epstein’s arrest on two federal charges of sex trafficking and conspiracy burst onto cable news chyrons and across social media, a decade-long wrong, in many observers' minds, finally righted. The mysterious Manhattan financier, who maintains his innocence, had become a pariah from the wealth and power enclaves he inhabited before his arrest and eventual plea bargain in 2008 on two reduced, state-level felony charges of prostitution.

In recent years, even as his profile dimmed, a certain outrage stirred. Long gone were the wealthy and famous figures in his life, such as Donald Trump, Bill Clinton, Harvard law professor Alan Dershowitz, Saudi Crown Prince Mohammed bin Salman, Prince Andrew, Woody Allen and, perhaps most importantly, longtime friend and early patron Leslie Wexner, the billionaire retail magnate. In 2003, Wexner spoke highly of Epstein. “[He’s] very smart with a combination of excellent judgment and unusually high standards. Also, he is always a most loyal friend.” This week, a spokesperson told Forbes, “Mr. Wexner severed ties with Mr. Epstein more than a decade ago.”

Post-#MeToo, the Miami Herald’s Julie K. Brown revisited the Epstein case in a five-part series to examine what might have protected him after prosecutors had built what seemed to be a powerful, 53-page indictment, with lurid allegations of Epstein’s abuses—that he would receive massages from 36 identified underage girls, with the knowledge that some were as young as 14, and in some instances rape them.

Prosecutors credited that series with helping the government relaunch its own investigation, which set into motion a rapid-fire series of events: the seizure of his Manhattan mansion, including possibly thousands of nude photos of underage girls (many reportedly stored on CDs); an appeals court order to unseal documents related to the Florida case; Trump’s public distancing from Epstein; calls by Nancy Pelosi and prominent politicians for the resignation of Labor Secretary Alexander Acosta, the prosecutor who cut Epstein that deal ten years before; Acosta’s much-criticized public defense of the deal; Epstein’s attempt to secure bail by offering up his private jet and mansion as collateral; accusations from prosecutors that Epstein tried to buy off witnesses; and finally, the first head to roll: Acosta, who resigned his post.

But while the investigation pried open some vivid details of Epstein’s enigmatic life—like the interior decor in his various homes, replete with framed nude photographs of underage girls, a female figure hanging from a chandelier and a custom chess set with the pieces dressed suggestively, carved in the likeness of his female staff—his footprints are still virtually undetectable across the Internet and public records databases.

For all the intense coverage, perhaps the most surprising aspect is how little we still know for sure. These are some of the questions we might finally get answers to:

Just how rich is he?

A news database search shows that first reference of Epstein as a billionaire appeared in a March 2001 Daily Mirror article. The story wasn’t even about Epstein—it focused on Ghislaine Maxwell, British socialite and daughter of disgraced businessman Robert Maxwell—but the title seemed to stick. Before long, the Associated Press, the New York Post, the New York Daily News, Newsday, the Boston Globe, and even the Miami Herald had all referred to Epstein as a billionaire, offering scant evidence.

Investigating that assertion in 2004 and 2005, Forbes looked into Epstein's business, and two billionaires who knew Epstein told us separately they didn't think he was anywhere near billionaire status. One also alleged that the money he managed only belonged to Wexner. (Epstein's bail memo, released Friday, indicated he has $500 million tied to a single, unnamed financial institution, and makes at least $10 million annually.) Forbes found no other evidence to suggest he was near billionaire status.

But Epstein’s lawyers, at least, still claimed Epstein was a billionaire, according to Adam Horowitz. Horowitz, a Fort Lauderdale lawyer, represented at least seven Jane Does who sued Epstein in Florida civil cases seeking punitive damages, after his 2008 plea bargain. And, as Horowitz explained in an interview with Forbes, when seeking punitive damages, courts generally need to know a defendant’s net worth in order to rule. So Horowitz submitted net worth requests to Epstein’s legal teams.

He was met with a wall of objections. It would be onerous, Epstein’s lawyers reportedly said, and expensive to unravel his finances to determine his true net worth. Still, he says, they insisted he was worth at least a billion in assets—a curious strategy, since the more Epstein was worth, the more he should be able to pay in a settlement. Eventually, Epstein did settle that case without going to trial for an undisclosed amount.

The values of his properties clearly reflect a man with great wealth: His 21,000-square-foot Manhattan mansion ($77 million), the Palm Beach house ($12.4 million), the 7,500-acre New Mexico ranch named “Zorro” ($12 million), the private island, Little Saint James ($8 million), and the Paris pied-a-terre ($4 million). And Horowitz estimates that Epstein settled 20 to 30 civil cases in Florida. That’s supported by the Miami Herald, which reported that 21 of Epstein’s accusers received settlements ranging from $50,000 to $1 million, with the exact amounts kept confidential. Over 100 Jane Does were named in the Florida civil cases, though, so the amount Epstein ultimately had to pay to settle those cases might have climbed into the millions.

If his wealth was able to settle his way out of those cases, though, it’s unclear how far it might be able to stretch to cover any new cases: The Miami Herald now reports that twelve women have since come out with new allegations against Epstein.

Horowitz also vividly remembers his meeting with Epstein. According to Horowitz, Epstein scheduled a meeting with his lawyers and Horowitz; a known tactic of his, Horowitz had learned, was to get to know the plaintiff’s lawyers. During the meeting, Epstein inquired about Horowitz’s other case work. Horowitz, who specializes in sex abuse cases, mentioned that he was representing multiple plaintiffs in sex abuse cases against clergy in the Catholic church. Upon describing those cases to Epstein, Horowitz said Epstein was “startled” and “disgusted.”

“Somehow in his mind, the clergy abuse scandal was so horrific. He couldn’t comprehend how a priest would put his hands on a little boy,” Horowitz said. “It was ironic. He had no self-awareness of what he himself was accused of.”

How, precisely, did he make his money?

Born in Brooklyn to working-class parents and raised in Coney Island, Epstein’s first foray into the world of America’s wealthy happened improbably during his tenure at Manhattan’s tony Dalton School, where he taught math. He was hired by Donald Barr, father of U.S. attorney general Bill Barr, who raised eyebrows last week when he refused to recuse himself from Epstein’s case.

It was through Dalton that he met Bear Stearns chairman Alan Greenberg—the father of a student—who thought Epstein seemed to possess a promising financial mind. He was hired and, with what was considered a penchant for arcane mathematical formulas and a gift for detecting patterns, made a limited partner by 1980. But by 1981, Epstein had left Bear Stearns—a later Vanity Fair report said he was asked to leave for some unknown violation—saying he wanted to strike out on his own. In 1987, he met financier Steven Hoffenberg, whom he reportedly became close to, and the following year he met Wexner, the CEO of L Brands, the retail empire that includes Victoria’s Secret and The Limited in its portfolio. In that Vanity Fair report, writer Vicky Ward portrayed Hoffenberg—who would later go to jail in 1995 for engineering what was then considered by the SEC the largest Ponzi scheme ever—as a key influence over Epstein.

Epstein’s relationship with Wexner, over which much ink has been spilled, was paramount to his climbing the ladder of wealth and success. The totality of the two men’s relationship remained mysterious and unusual. After purchasing Wexner’s Manhattan mansion in 1989 for over $13 million through a corporation the two men jointly controlled, Epstein took possession of the property about a decade later. The New York Times reported Wexner’s $20 million interest in the joint corporation was transferred to one owned by Epstein. The two men additionally held financial interests (and a mansion each) in a luxury Ohio residential community, where Wexner lives full time, and contributed millions to one of two Wexner’s charitable foundations, while acting as a trustee.

It was during the time that these two powerful men were close that Epstein’s success and power seemed to take off. Epstein grew a mystique around his asset management business (first called J. Epstein & Company, later renamed The Financial Trust Company), by telling reporters that he required a $1 billion or greater investment. But through the years Wexner remained his only known client.

Epstein bragged at one point of having 150 employees, but during a deposition in Florida, he revealed the number to be about 20. How much money Epstein really made—and precisely how he made it—remains an enduring mystery that many observers hope will be revealed as investigations continue.

Will we hear more about his famous friends?

One part of Epstein’s mystique that has quickly evaporated was his seemingly inexhaustible supply of famous friends. A 2002 flight chartered to Africa by Epstein on his Boeing 727, on which former president Bill Clinton and comedian Chris Tucker traveled, established Epstein as a power macher. (Clinton, meanwhile, has strenuously objected to the notion that he had any real relationship with Epstein, telling Forbes and others that he “knows nothing about the terrible crimes Jeffrey Epstein pleaded guilty to in Florida some years ago . . . [h]e’s not spoken to Epstein in well over a decade, and has never been to Little St. James Island, Epstein’s ranch in New Mexico, or his residence in Florida.”)

His other publicized friendships vary broadly, from the world of politics and diplomacy (Clinton, Barr, Saudi Crown Prince Mohammad bin Salman and the United Kingdom’s Prince Andrew), Hollywood (Kevin Spacey, Woody Allen, Chris Tucker and David Copperfield), business (Hoffenberg, Wexner, Ron Burkle, Mort Zuckerman, Ronald Perelman, John Pritzker), law (Alan Dershowitz, Kenneth Starr, Jay Lefkowitz), and academia (mathematician and biologist Martin Nowak, the late physicist Murray Gell-Mann and biologist Gerald Edelman). And that’s just the tip of the iceberg.

Most of those long-ago distanced themselves from Epstein and aren’t eager to speak about him now. Spacey, Allen and Copperfield, for example, did not respond to Forbes requests for comment about Epstein.

Trump, meanwhile, having once told New York magazine that Epstein was a “terrific guy,” even mentioning his predilection for younger, “beautiful” girls, publicly distanced himself while speaking to reporters Tuesday. “I haven’t spoken to him in 15 years. I was not a fan of his, that I can tell you,” said Trump.

Epstein didn’t become persona non grata to everyone. Billionaire Leon Black, founder of Apollo Global Management and chairman of the Museum of Modern Art, kept ties with Epstein, including keeping him as the only non-family director of his family charity through the end of 2012 (which Black now calls a clerical error, saying he stepped down in 2007). And in 2015, Epstein reportedly made an appearance at a pool party thrown by Black, according to the New York Post.

That doesn’t mean any of Epstein’s former friends won’t get dragged back into the spotlight because of him; one pending lawsuit, against Epstein’s close associate Ghislaine Maxwell, already threatens to expose some big names in politics and business to public scrutiny.

How did he manage that plea deal?

Another emerging mystery revolves around how Epstein secured that plea deal, how he avoided being charged in Florida, and if or how his wealth helped keep him out of jail. Conspiracies and guesswork have been floated constantly. Here’s what we do know: During Acosta’s confirmation process for labor secretary, he was pressed by Senator Tim Kaine, D-Va., about the Epstein case, and said, “We decided that a sentence or—how shall I put this—that Mr. Epstein should plead guilty to two years, register as a sex offender, and concede liability so the victims could get restitution.” But according to Vicky Ward, now writing in The Daily Beast, Acosta had told interviewers on the Trump transition team, apparently vetting him for an appointment, that he had “been told” to back off prosecuting Epstein, that he “belonged to intelligence.” The Labor Department has not responded to request for comment.

Through the secret deal, Epstein pleaded guilty to two felony prostitution charges. Though publicly ruinous, it saved him in multiple ways. He never had to register as a sex offender in New Mexico, and the Manhattan district attorney’s office curiously, forcefully “asked a judge to reduce Mr. Epstein’s sex-offender status to the lowest possible classification, which would have limited the personal information available to the public and would have kept him from being listed on a registry of sex offenders for life.” (The judge denied the request.)

It’s unclear whether the Southern District of New York’s prosecuting in the Epstein case will shed light on what sort of outside influence might have swayed previous prosecutors along the way. Prosecutors would not comment on any aspect of it to Forbes. But to observers, including the many women who have claimed to have suffered abuse by Epstein, some answers might be within sight.

Famed attorney David Boies (himself on the rebound after his work on behalf of Harvey Weinstein and Theranos) represents three of Epstein’s alleged victims in different civil cases. As he put it, they “hope that Mr. Epstein and people who worked with him and enabled him are finally brought to justice, and this looks like an important first step in having that happen."