BILUNG

BILUNG 1) Currently George Delson bills a retainer of 10,000 a month or 120,000 per annum to you personally. He then attempts to bill another 130.000 in lumps of 60.000 and 70,000 per his understanding of a 250,000 annual agreement. (see attached billing history) 2) Open billing items for your meeting with Larry Delson: a) 65,000 they attempted to bill FTC per 250,000 annual agreement which relates to tax year 2010. b) March 2012 monthly retainer (to date we have paid $20,000) For 2011 tax year at this point their work has only been 1099's filed for 4 entities and approximately 20 tax return extensions due March 15. c) We currently have 250.000 (paid 6/112007) on your personal JEE balance sheet coded as George Delson - Escrow. We never expensed which I assume George never picked up as income. How should we handle? 3) Alan Dlugash will bill us quarterly (January, April, July & October) based on hourly rates. Rates from initial meeting (which I need to confirm) are as follows: Alan - Partner $550 per hour Manager - $300-350 per hour Lower Level $150 per hour 4) I project that Alan's cost should be between $125.000 - $150,000 per annum. We should talk about which entities he will bill to ensure we maximize dedcution for accounting fees QUESTIONS / ISSUES 1) David Mitchell Investments - NYS Tax Filing requirements a) Current condo project - Lofts 21 - Are we required to file NYS & NYC Tax Returns based on NY Real Property Investment? b) Potential Investment - 183 Columbia Heights -Are we required to file NYS & NYC Tax Returns based on NY Real Property Investment? I have some concerns about 183 Columbia Heights that t will send under a separate email and would like to discuss when you are in NY next week 2) Entities to dissolve? a) Nine East 71st Street Corp - used to hold title to 71st street b) NYSG LW - must deal with JEE Loan Payable 4,273,011 & DKI Loan Receivable 1,135,000 c) Freedom Air - once Bell 407 is sold? d) Zorro Trust - used to hold title to Zorro - dose once leases are transferred e) COUQ - Cash 191 f) Epstein Interests - Cash 111,000 3) Aviation Entities a) Accounting method - currently all aviation entities take depreciation yet never received benefit due to accounting method of zeroing everything out b) Do entities with current accounting method satisfy 1031 requirements? c) Bell 430 - can we transfer to Plan D so that no entity holds more than 1 asset 4) Do USVI S Corps that hold title to property in Florida, New Mexico & NY have state filing requirements? 5) Property Taxes - Should we pay from operating entity or title company (currently no banking has been setup tor title companies) a) New Mexico - Zorro Trust used to pay - should it be Zorro Development (operating co) or Cypress (title) b) New York - NES LLC currently pays - should it be NES LLC (operating co) or Maple (title) c) LSJ - LSJ LLC used to pay - should it be LSJ Employees LLC (operating co) or Nautilus (title) d) Florida - JEE used to pay - should it be Neptune LLC (operating co) or Laurel (title) 6) JEE Days - Will new accountant track as well as Lesley? EFTA01118648 ENTITY George Delson Accounting Fee Analysis 2006 - 2012 2006 2007 2008 2009 2010 2011 2012 Totals JEE - Monthly retainer 60,000 60,000 120,000 120,000 120,000 120,000 20,000 620,000 JEE - Additional fees 100,000 65,000 30,000 195,000 JEE - Escrow (paid 6/1/2007) 250,000 250,000 NYSG LLC paid 12/19/2005---> 200,000 30,160 230,160 COUQ 20,054 9,147 29,201 Enhanced Education 9,047 7,500 16,547 Epstein Interests 15,139 4,126 19,265 FTC 75,000 105,176 65,078 60,000 305,254 JEGE 15,000 15,000 Hyperion Air 8,020 5,007 20,000 33,027 GM - Aircraft Transactions - July 2011 65,000 65,000 Zorro Development Corp - 7,054 3,022 10,076 TOTALS 260,000 485,000 370,603 245,427 222,500 185,000 20,000 1,788,530 EFTA01118649 Entity_Name JEE PERSONAL Jeffrey E. Epstein Jeffrey E. Epstein Jeffrey E. Epstein Jeffrey E. Epstein Jeffrey E. Epstein Year Extension Due with Type State Tax ID St End Due Ext Ownership 1040 USVI [SSN REDACTED] 31-Dec 15-Apr 31-Dec Estimated Taxes (if applicable) 709 - Gift Tax Paris Wealth Tax Return FBAR (Form TD F 90-22.1) 15-Apr 15-Jun 15-Sep 15-Jan 31-Dec 15-Apr 31-Dec 31-Dec 31-Aug 31-Dec 30-Jun Notes JE K-1 from American Yacht Harbor JEE INVESTMENTS/OTHER Financial Trust Company, Inc. S Corp USVI 66-0567418 31-Dec 15-Mar 15-Sep JE Other FTC Assets a) JPM Trading Account b) Environmental Solutions Stock c) Equities In JPM Account Jeepers, Inc. Qualified Subchapte USVI 66-0629193 N/A N/A N/A JE S Subsidiary FT Real Estate, Inc. C Corp USVI 66-0695228 31-Dec 15-Mar 15-Sep JE CDE, Inc. S Corp USVI 66-0765504 31-Dec 15-Mar 1 r Srp JE 2011 & 2012 exemption is $5rnm so no tax should be due F.-M. RICHARD et Associes - French acc firm Contact: Yves-Andre GEISMAR To I : 01 53 93 60 70 Fax : 01 45 63 88 34 [email protected] Accounts a) BNP Paribas b) Volartis - closed Jan 2012 c) new accounts ?? Owns the following partnerships: a) AP Technology b)AP SHL Investor c) Tudor Futures d) Highbridge HB Multistategy e) ML Hertz f) Prentice Capital Residual Interest g) Renaissance h) Bear Stearns Asset Backed formed 8-18-03 subsidiary of FTC and owns investment in DB Zwim - approx 76,000,000 settlement Business Activity& Service -Title Holding Capital Loss Carryover 105,626 Merrill Lynch Account: 83,300 Invested 920,500 - David M - NYC Real Estate Advancestar LLC a Delaware LLC and Lofts 21, a NY LLC Officers: JE-Pres; DI-Secretary; RK-Treasurer Formed to take title to Little Saint James Island Erika Kellerhals is Agent Directors are JE, RI< and DI Incorporated April 28, 2011 EFTA01118650 Year Extension Due with Entity Name Type State Tax ID # End Due Ext Ownership Notes Financial Infomalics, Inc. C Corp USVI 66-0779861 Yes 15-Mar 15-Sep JE RT Park Financial Ballistics Trust USVI ?? 31-Dec 15-Apr 31-Dec JE April 15th extension due - EDC Applicant Financial Ballistics, LLC Single Member LLC USVI 66-0779863 N/A N/A N/A JE Sole owner of Financial Ballistics Trust Poplar, Inc. S Corp USVI 66-O77687O,31-Dec 15-Mar 15-Sep JE Unsure of business purpose PROPERTIES USVI Nautilus, Inc. S Corp USVI 66-0776990 31-Dec 15-Mar 15-Sep JE holds title for Little Saint James (St Thomas) LSJ, LLC Single Member LLC Delaware 66-0557951 N/A N/A N/A JE Disregarded for tax purposes Former operating company LSJ Employees LLC Single Member LLC USVI 66-0776615 N/A N/A N/A JE Disregarded for tax purposes Pays all operating expenses and cap improve Lafayette Contractors, L.L.C. Single Member LLC USVI 66-0689340 N/A N/A N/A JE Construction entity - sole employee Bill Adams formed 1-19-07 Michelle's Transportation Company Single Member LLC. USVI 66-0698781 NIA N/A N/A JE Owns Barge Formed May 9, 2007 Island Grounds Inc. C Corp USVI 66-0678241 31-Dec 15-Mar 15-Sep IGO LLC USVI Corp owned by IGO Company, LLC Payroll entity for hourly labor formed 7-6-06 IGO Company, L.L.C. Single Member LLC USVI 66-0689625 N/A N/A N/A JE Owns 100% of Island Grounds Inc. NEW MEXICO Cypress. Inc. S Corp USVI 66-0776879 31-Dec 15-Mar 15-Sep JE holds title for New Mexico Property Zorro Development Corp. S-Corp N/A 85-0409324 31-Dec 15-Mar 15-Sep JE Pays all operating expenses and cap improve Zorro Trust Trust Ohio 13-7013884 31-Dec 15-Apr 15-Oct JE Grantor trust - no income Pays Property Tax which flows thru JEE BLM/State /Federal leases in Zorro Trust name are being transferred to Cypress Inc. Zorro Ranch, LLC Single Member LLC-Iew Mexio 75-3099183 N/A N/A N/A JE formed 12-27-2002 to hold title yet never used The properties Permits are held in Zorro Ranch ZORRO RANCH, LW HAS A 75% UNDIVIDED INTEREST IN LV'S PROPERTY ALSO name for: a) Well 4 b) Bulk Storage c) Dischan and are being transferred to Cypress Inc. FLORIDA Laurel, Inc. S Corp USVI 66-0776877 31-Dec 15-Mar 15-Sep JE holds title for Florida property Neptune LLC Single Member LLC Deleware 45-4093384 N/A N/A N/A JE Pays all operating expenses and cap improve EFTA01118651 Year Extension Due with Entity Name Type State Tax ID # End Due Ext Ownership Notes NEW YORK Maple, Inc. S Corp USVI 66-0776891 31-Dec 15-Mar 15-Sep JE holds title for NYC property Nine East 71° Street Corp. S-Corp NY 31-1278054 31-Dec 15-Mar 15-Sep NES LLC Holds title to 71st street - no activity NES, LLC Single Member LLC 13-4146141 N/A N/A N/A JE Disregarded for tax purposes PARIS NY LLC Filing 28-Feb Property tax flows thru to JE retum Pays all operating expenses and cap improve Sole Stockholder of Nine East 71st Street Corp Paris-SCIJEP French Limited Company JEE owns 999 shares & DKI owns 1 share Employees paid by JEE personally Mort, Inc. S Corp USVI 66-0765963 31-Dec 15-Mar 15-Sep JE JEE - president RK - Treasurer DKI - Secretary AVIATION Formed April 12, 2011 Purpose - acquire 1 share of SCIJEP from DKI JEGE, Inc. S-Corp Delaware 51-0405649 31-Dec 15-Mar 15-Sep JE JEE - President DKI - Secretary Hyperion Air, Inc. S-Corp Delaware 13-3621632 . 31-Dec 15-Mar 15-Sep JE JEE - President DKI - Secretary Freedom Air International, Inc. S-Corp Delaware 13-4109791 31-Dec 15-Mar 15-Sep FSF LLC JEE - President DKI - Secretary & VP Thomas World Air, LLC Single Member LLC USVI ?? N/A N/A N/A JE Port Authority Hanger Lease & Operations Freedom Air Petroleum, LLC Single Member LLC• USVI 66-0776988 N/A N/A N/A JE operations of ISO fuel tank FSF LLC Single Member LLC USVI ?? N/A N/A N/A JE Owns stock of Freedom Air Plan D, Inc. S Corp Delaware 32-0201294 31-Dec 15-Mar 15-Sep JE formed 4-12-07 FOUNDATIONS Cash: 6,000 and no other assets Epstein Interests NY Trust 1041 13-3643429 31-May 15.Oct 15-Jan JE JEE & DKI Trustees Private Foundation Cash - 111,000 C.O.U.O. Foundation, Inc. Private Foundation Delaware 13-3996471 28-Feb 15-Jul 15-Oct JE •JEE-pres DKI-VP RK-Treasurer Not for Profit Corp 990-PF Delaware Corp qualified to do business in NY Cash - 191 J. Epstein Virgin Islands Foundatior Private Foundation USVI 66-0585379 31-Dec 15-May 15-Aug JE DKI-pres Cecile-VP Jeanne-Sec & Treasurer Inc. aka Enhanced Education Not for Profit Corp 990-PF Cash - 6,740,000 EFTA01118652 Year Extension Due with Entity Name Type State Tax ID # End Due Ext Ownership Notes TRUSTS Butterfly Trust 1041 USVI 26-6639711 31-Dec 15-Apr 15-Oct JE JEE - Grantor and Trustees DKI & RK Pourover Trust Cash - $8,043 formed 12-27-2006 Haze Trust 1041 USVI 13-7185414 31-Dec 15-Apr 15-Oct JE JEE - Grantor & Trustee a) JPM Bonds & Cash $5,100,000 c) Hedge Funds DKI I RK ENTITIES 1) King Street Capital 2) Highbridge Multistategy Lynn & JoJo LLC Single Member LLC N/A N/A N/A JE owns title to 18 Teneyck Ave, Valley Stream NY DKI is nominee for JE / Cash: 22,762 KCAC LLC 1065 NJ 30-0251011 31-Dec 15-Apr 15-Oct JE / MS 60% JE / 40% Michelle Saipher Capital AC - JEE 1,047,000 Capital AC - MS 763,000 New York Strategy Group, LLC S-Corp NY 13-4097417 31-Dec 15-Mar 15-Sep DKI Loan Payable JEE - 4,273,011 Loan Receivable DKI 1,135,000 Cash: 165,000 NJ Tax Rate: 8.97% HBRK Associates C Corp NY 30-0503838 31-Dec 15-Mar 15-Sep RK / HB Owned by HB 50% and RK 5070 , . Employees:Rich, Bella, Hany and Marc Dober DKI PLLC Professional Limited NY 30-0503845 31-Dec 15-Apr 15-Oct DKI Pays annual UBT Tax of approx 50,000 Liability Company Employees: DKI, Lesley. Harry NY LLC Filing 28-Feb EFTA01118653