Erika Kellerhals

Erika Kellerhals KELLERHALS FERGUSON FLETCHER KROBLIN LLP October 25, 2012 Ms. Margarita A. Greenidge-Benjamin Director of Applications U.S. Virgin Islands Economic Development Authority 5055 Norm Gade St. Thomas, VI 00802 Re: Southern Trust Co., Inc. Dear Ms. Benjamin: 9100 HAVENSIGHT PORT OF SALE SUITE 15-16 ST. THOMAS. VI 00802 FAX 8811.11 KFFKLAW.COM In response to your letter of October 17, 2012, please find attached the following information that is intended to supplement the Southern Trust Company, Inc. ("STC") application for benefits from the Economic Development Commission ("EDC"): • The Truth Statement and Release Authorization, a copy of which was previously provided to the EDC. • A bank reference letter for Mr. Jeffrey E. Epstein, a copy of which was previously provided to the EDC. • A revised management-training plan that details the use of the $10,000 per annum budget. Please note that the budget of $10,000 has been incorporated into the revised five-year projection under the line item "Training". • Revised five-year projection with assumptions. • Breakdown of local versus non-local purchases for capital investment. • Executed Form 8821 STC will provide all full-time employees with life insurance in the amount of $50,000. In addition, STC will comply with the provisions of Section 5 of Act No. 7301. Finally, I have been in contact with Mr. Randleman and Ms. Nugent-Hill regarding the submission of Mr. Epstein's tax returns. As discussed with Mr. Randleman, we will make copies of Mr. Epstein's tax returns available for inspection at your convenience in our offices. In addition, I will forward a completed set of Mr. Epstein's tax returns in a sealed envelope to Mr. Handleman with the understanding that these documents will be treated as confidential under the provisions of Title 3, section 881 and shall not be released by the EDC unless otherwise ordered by a court or by the lawful custodian of the records. TAMPA U.S. VIRGIN ISLANDS NEW YORK EFTA01110849 TRUTH STATEMENT On the basis of information presented in this application and the accompanying attachments, applicant requests the Industrial Development Commission grant to the applicant, Economic Development Commission benefits provided by the title 29 chapter 12 of the Virgin Islands Code as amended. "Under penalties of perjury I hereby terrify that all the above I:formation, as welt as accompanying docitmcnm, are true and complete to the best of my knowledge, Worn:anon and belie V information submitted changes I understand that I am obligated to Inform the Economic Development Commission." NAME OF APPLICANT AUTHORIZED SIGNATURE \\ 1/4. TITLE President DATE ql4k) i t 2- Subset* and swam before me this 26 6. day of COllemb" 20 PI-- HARRY!. BELLER Seal or Authority of Notary : tau:: ti:t soubdie nf blots: kili t.410: 4y Y°11 , Nary Public Commission Expires Fab. 17, 20L:f RELEASE AUTHORIZATION To All Courts, Probation Departments, Selective Service Boards, Employers, Educational Institutions, Banks, Financial and Other Such Institutions, and All Governmental Agencies — federal, state and local, without exception, both foreign and domestic. On Behalf of Southern Ttust Company, Inc., I, Jeffrey E. Epstein, have authorized the Virgin Islands Economic Development Commission or its designee to conduct a full investigation into the background of the said enterprise. Therefore, you arc hereby authorized to release any and all information pertaining to the mid enterprise, documentary otherwise, as requested by any employee or agent of the Virgin Islands Economic Development Commission or its designees, provided that ho or she certifies to you that said enterprise has an application pending before the Economic Development Commission or that said enterprise is presently a licensee or registrant requirement to be qualified under the provisions of Title 29 VIC Chapter 12 701726. 71fis authorization all supersede and countermand any prior request or authorization to the contrary. A photontatic coptof this authorization will be considered as effective and valid as the original. .-:17"----tt-- AUTHORIZED SIGNATURE \ TITLE President DATE ? bCi ii3..—. Subscribed arom to before me this 2 o& day of SY/0AL 20 t1—. iid Signature -7 7 .7; HARRY I,BELLER Notary Public. State of NowYork No. 010E4853924 Oualified In Rockland County tt, Commission Expires Feb. 17.20'_3.. EFTA01110850 J.P Morgan Mr. Percival Clouden Chief Excutive Officer Economic Development Authority 116 King Street Frederiksted, St. Croix U.S. Virgin Islands 00840 Dear Mr. Clouden, At the request of Jeffrey Epstein, we are pleased to inform you that JPMorgan Private Bank has maintained a banking relationship with him fbr 20 years. The Bank's relationship with him has been satisfactory. The information in this letter is provided as an accommodation to the addressee. The information provided herein is furnished on the condition that it is strictly confidential, that no liability or responsibility whatsoever in connection herewith shall attach to the Bank or any of its officers, employees, or agents, that this letter makes no representations regarding the general condition of the subject or his future ability to meet his obligations, and that any information provided is subject to change without notice. Best Regards, Gina Magliocco Client Service Associate 500 Stanton Choist Jana Road. Newark. Delaware 19/13.7107 J.P. Morgan &vette& inc. as agent for Jelaotgan Chase Rank. NA EFTA01110851 APPENDIX 47 MANAGEMENT TRAINING PLAN An important element of the Applicant's sustainability and success is the development of leadership and management capacity throughout the Applicant's organization. Successful staff development requires that the Applicant provide a structured training plan which involves management and/or professional development in the area for which the staff members are employed, such as general management, finance, research, legal, accounting and clerical, while at the same time ensuring that staff members are each fulfilling a clearly defined role within the Applicant's organization. Trainees will be appointed to an established position, and over the period of their development program will be expected to undertake all the work for that position. They will receive 'on the job' training and their review process will include the setting of work objectives against which their progress can be monitored. The number of roles identified as being suitable for management trainees, as compared to other general administrative or technical roles, is expected to be limited. Recruitment to management trainee roles is open to all qualified staff members. A process will be followed to identify and appoint those individuals who display the attributes and competencies required to achieve their expected potential through the acquisition of a core set of transferable skills and professional competencies. The attributes and competencies for management training are as follows: • A high degree of initiative, resourcefulness, flexibility and a self-motivating approach to achieve both business objectives and personal success in order to succeed as a senior manager. • Conceptual and innovative thinking that informs an analytical approach to complex problems and comprehension of practical options and solutions. • The ability to communicate clearly and effectively through oral and presentational skills as well as excellent writing skills. • Potential to develop a successful career as a professional or manager and a leader. • The ability to acquire the requisite professional and technical skills to succeed as a manager. EFTA01110852 • Taking personal responsibility for one's own development and having a commitment to study towards further academic and or professional qualifications. • The ability to motivate and encourage others to achieve targets and the ability to work towards common goals. • Good team working skills. The normal expectation is that each individual chosen for a management trainee role will have a degree, which provides a platform to demonstrate the individual's intellectual ability and the potential to progress as a senior manager. However, it is recognized that in some specialist roles other forms of professional qualifications with a combination of relevant experience and a successful record of career progression could provide a similar indication. Management trainees will demonstrate progress by actually doing their assigned duties and fulfilling their assigned tasks at the same time they are undertaking their development program. Identifying Opportunities Approval for management trainee positions will be through a process conducted by the President and Chief Executive Officer. The President and CEO will construct a "business case" (as described below) and will have final approval prior to proceeding with recruitment. This will allow for a consistent approach towards future development and training as well as ensure compliance with employment laws. The business case should, among other things: • Describe the role the trainee will be filling with the Applicant. • Explain why a trainee role is being proposed; • Demonstrate the need to recruit staff with aptitude, potential and desire to progress and succeed - Strengthen team expertise and / or specialist knowledge; • Allow other employees to experience different work through role rotation • Provide for succession planning; • Identify the need for new managers to progress in these areas given the strategic requirements; • Explain the opportunities arising through restructuring; • Explain how the trainee's role fits with the Applicant's objectives; • Include an outline of a development plan, including examples of typical on the job training; EFTA01110853 • Identify appropriate additional qualifications which the trainee would be required to obtain as part of the development plan; • Identify clear objectives and expectations of the position, as well as any immediate tasks and responsibilities; and • Identify effective supervision and/or management in place to develop the management trainee, in line with the development plan, to meet the expectations required for career progression. It is expected that those chosen as management trainees will be encouraged and supported by the President and CEO in attending and participating fully in appropriate development courses, such as those provided by: • The University of the Virgin Islands • Accredited E- Learning Courses and Webinars • And other professional development bodies. In some cases it may be appropriate for the trainee to undertake further academic or professional qualifications during the period of the training program. Identifying Employee Training Needs It will be necessary for the Applicant to conduct a job task analysis of the employee (or group of employees) identified as having training needs. In order to provide effective training, it's necessary to know exactly what the expectations are for the job. Some of this information can be gathered by observation and by asking employees to provide verbal or written descriptions of what their jobs entail. The Applicant should compare employee performance to the job expectations and identify the areas in which there are discrepancies. The Applicant should also identify whether the discrepancy is due to work process issues, such as not knowing how to complete a specific task, or personnel issues, such as not wanting to complete a specific task. Work process issues can be addressed with employee training. The Applicant should schedule a meeting with all of the employees involved, asking them to bring with them lists of what they consider to be the top five areas in which they feel more training is needed. The lists, as well as supervisory staffs own observations, should be shared. The Applicant will prioritize training needs as a group, taking into account that those that have an immediate effect on business performance or employee safety are the most important. The Applicant will cause its President and CEO EFTA01110854 and supervisors to discuss the Applicant's goals with employees. Knowing the desired outcome can assist employees to express what they need to know in order to help the Applicant achieve its goals. Key Elements of a Management Trainee Development Plan The Key Elements of a Management Trainee Development Plan ("TDP") include the following: Employee Profile - name, position title, office, grade/pay scale, as well as: • Career goals — short and long-term goals with estimated and actual completion dates • Pre-Planning • Employee / Meetings • Evaluation of Outcomes • Preparation of the TDP • Implementation of the TDP Development objectives — linked to work mission/goals/objectives and the employee's development needs and objectives. Training and development opportunities — specific formal classroom training, workshops, rotational assignments, shadowing assignments, on-the-job training, self-study programs and professional conferences/seminars that the employee will pursue with estimated and actual completion dates. Summary of Training Process The objective of the Management Training Program is to develop employees into strong operational and financial managers. The program is designed to ease the transition from the trainee's current position into a new position. Month 1: Assigned to a manager where trainee will complete his/her initial training Introduced to the Applicant's staff as a management trainee Rotate through areas throughout company to gain an understanding of the complexity of the operation. Months 2-7: Complete training program for assigned area EFTA01110855 Train and work as an employee in the area Participate in management meetings Learn management responsibilities for the position. Complete management projects as assigned . Performance evaluation given at 90 days by the President and CEO Assigned a Mentor to assist with career development Complete at least sixty hours of in class or on-line course work associated with trainee role. Months 7-12: Transfer to a new area for training. Complete training program for assigned area. Train and work as an employee in the area. Participate in management meetings. Learn management responsibilities for the position. Complete management projects as assigned. Complete at least sixty hours of in class or on-line course work associated with trainee role. Review Process The President and CEO will undertake quarterly reviews of progress. These reviews will focus on the extent to which the trainee is progressing in the role, review progress within the agreed training and development program, and monitor progress towards and achievement of agreed objectives. Budget Applicant has established a budget of $10,000 per year for training. These amounts will be expended on in class and online course work in addition to self- study programs and professional conferences. EFTA01110856 APPENDIX 37 FIVE YEAR PROJECTION ASSUMPTIONS Fee Income: Assumes a growth rate of 20% - Year 2, 25% - Year 3, 30 % - Year 4. 30% - Year 5 Labor Costs: Based on 6 employees - Year 1 and 2, 7 employees - Year 3, 8 employees - Year 4, 10 employees - Year 5. Assumes an annual salary and employee benefit cost increase of 5%. Local Purchase of Goods and Services : Assumes an annual cost increase of 4 % where applicable. Occupancy costs: Based on 3,000 square foot office space at $38 a square foot. Charitable and other contributions: Based on $50,000 of annual contributions, $3,000 BOE and $2,500 Section 5 of Act No. 7301. EFTA01110857 REVENUES: Fe. income Investmem income. net TOTAL REVENUES Income and Expense Statements Five Year Projection Year 1 TRW 2 Tear 3 Vara 3#0.000 1.403,003 $ 000,0:0 10.000 $ IMMO $ WNW $ SSW* HOS $ moms 6,106,000 3,701.000 OPERATING EXEIRSES: Labor Cosrs(Fsll•Bee Employment) Salaries and wages Payroll tares Employee benefits TOTAL. LABOR COSTS Loral Purchase of Goads and Services I kranwxy coils Adriarising and mai ker mg Ittsearch and developmair (limitable and other conttibulions Utilities and ickcommunkations Professional services Office supplies and postage u r ante I IX' annual km Dues. subscriptions and themes training I ravel I 1- repairs and maimcnanor TOTAL. LOCAL lIXPENSIS $ 119/703 um.000 64030 54.010 )0.000 51.000 5 30.000 5 mow 5 4.000 10.000 5 %WO 6.0)0 $ 611,000 $ •0,000 5 1104000 $ IMAM S mace 66,000 54.000 S 13000 S sum 5 31.0/0 5 Na 0.002 5 •000 $ MOO 5.000 %coo 769,010 44.000 129023 $ %LOCO Na 162.000 $ 1.249,000 "a $ 1116/707 $ MOO APPENDIX 37 Wass Anent S years $ 7405,000 117.11011 ),122,000 $ 4.11/1,010 3.019,140 910011,0 $ 129.003 WORM 79.0010 56.060 74,000 $1.010 32.000 •0000 SAW 5 10.003 5.000 $ 5.0103 $ Limon $ S S 134.002 100000 *Oro AOC° 79.0:0 42.003 51.000 .03.000 1.000 •.000 10.000 SPOO 5.000 L524000 S S S S S S 139040 100,00:0 294X0 56,000 IVACO 64.030 IS.0$0 40.40) 11003 5.000 10000 5003 5000 5211.000 MOW. $ 129,003 teroaco /6,000 52ACI) 40.00:0 1.000 4.20) 10,0:0 5,00) 181.400 Expenses Other Than I oral Professional subscriptions S 14100 S 2.500 S 2,500 $ 2.500 2,500 Ihms, subset imams and licenses $ 56.000 S 56.000 $ 55.003 $ 5VO:i Professional sm.ices $ 50.010 $ WOO S 50. 00 $ 50,000 50.010 I 0 I AI. NON-I 04'AL EXPENSES serao $ 107.500 $ 502.500 $ 301.$0 $ 107.500 7,54.7 55.03) 50102 101.500 TOTAL. OPERATING EXPlaNSCS lake 1.477.500 $ 3,950,900 $ 1.1165.503 $ 7,701.503 1,126.103 NET PROFIT BEFORE TAXES LIMN 2.214500 MIMS S LOMA° $ 5.512.500 $ 1292.903 E. G rkcivN EFTA01110858 Type of Investment Amount Local Amount Non- Local Total Building & $ - $ - $ - Improvements Leasehold 130,000 $ - 130,000 Improvements Machinery / 150,000 $ - 150,000 Equipment Furniture / Fixtures 55,000 $ - 55 000 Vehicles 65,000 $ 65,_- 000 Total $400,000 $ - $400,000 EFTA01110859 Fpm 8821 (nev. October 20111 Department of the Treastry tete/mei Revenue Service Tax Information Authorization Ile Do not sign this form unless all applicable linen have been completed. Is Do not use this form to request a copy or transcript of your tax return. Instead, us* Form 4506 or Form 4600-T. Pats 1114.1140 For re WOO* Ada,* Name has Maas. 00, 1 Taxpayer Information. Taxpayer(s) must sign and date this form on line 7. Taxpayer names) and oldness (type or prIrb Jeffrey E. Epstein 6100 Red Hook Quarter B3 St. Thomas, VI 00802 Taxpayer identification number Canine t nurrieer Flan number Of ars:dice:fel 2 Appointee. If you wish to name more than one appointee, attach a list to this loam. Name and address CAF No. PTIN Telephone No. Fax No. Check if new: Address O Telephone No. O Fax No. 0 3 Tax matters. The appointee is authorized to inspect and/or rece ye confidential tax information in any office of the IRS for the tax matters listed on this line. Do not use Form 8821 to request copies of tax returns. Director of Legal & Legislative Affairs US Virgin Islands Economic Development Authority 5055 Norte Gade, St. Thomas, VI 00802 (el Type of Tax lb) Tax Form Number (1040.041. 720. etc.) (e) Year(s) or Perlod(S) (see the instructions for line 3) (d) Specific Tax Matters (see Init.) (Income. En~ent, Excise, etc.) or Civil Penally Insane 1040 2012 4 Specific use not recorded on Centralized Authorization File (CAP). If the tax information authorization Is for a specific use not recorded on CAF, check this box. See the instructions on page 4. If you check this box, skip lines 5 and 6 . . 6 Disclosure of tax Information (you must check a box on line 5a or 5b unless the box on line 4 is checked): a If you want copies of tax information, notices, and other written communications sent to the appointee on an ongoing basis, check this box ► Note. Appointees will no longer receive forms, publications and other related materials with the notices. b if you do not want any copies of notices or communications sent to your appointee, check this box ► 0 O 6 Retention/revocation of tax Information authorizations. This tax Information authorization automatically revokes all prior authorizations for the same tax matters you listed on line 3 above unless you checked the box on line 4. If you do not want to revoke a prior tax information authorization, you must attach a copy of any authorizations you want to remain in effect and check this box ► O To revoke this tax information authorization, see the instructions on page 4. 7 Signature of taxpayer(s). If a tax matter applies to a joint return, either husband or wife must sign. If signed by a corporate officer, partner, guardian, executor, receiver, administrator, trustee, or party other than the taxpayer, I certify that I have the authority to execute this form with respect to the tax matters/periods on line 3 above. la IF NOT IONED r DATED, THIS TAX INFORMATION AUTHORIZATION WILL BE RETURNED. NOT p. Eso or SION THM,FORM IF IT IS BLANK OR INCOMPLETE. \ N... . \.. ../ I 10-2-5--ta, I Signoras brie Signature Date Jeffrey E. Epstein Print Nan). Thief sppliCable) Pint NOM* Tele Of aPPLCabird 00000 Pflnurreter for elecbtnlc signature K Onnin PIN number for electrcnec signature For Privacy Act and Paperwork Reduction Act Notice, see page 4. Cat No. 11696P Form 8821 (Red. 10-2011) EFTA01110860