EFTA Document EFTA01334040

EFTA01334040 Jean" Epstein in \en 1ock. 2001. /AA F:psitin% nint••@art. 5/.9110-squart- rwn Ryan houµ. Ile also 01011 a 7.5Iniaiere ranch in \en Mole/La house in Palm Reach, and a Caribbean island. Lately, Jeffrey Epstein's high-flying style has been drawing oohs and at: the bachelor financier lives in New Xork's largest private residene, claims to take only billionaires as clients, and flies celebrities including Bill Clinton and Kevin Spacey on his Boeing 727. But pierce his air of mystery and the picture changes. VICKY WARD explores Epstein's investment career, his ties to retail magnate Leslie Wexner, and his complicated past EFTA01334041 I n Manhattan's Upper Eaft Side, home to some of the most expensive real estate on earth. exists the crown jewel of the city's residential town houses .Mth its I5-foot-high oak door, huge arched windows, and nine floors. it sits on—or. rather. commands—the block of 71st Street between Fifth and Madison Avenues. Almost ludicrously out of pro- portion with its four- and fiw-story neigh- bors. it seems more like an institution than a house. This is perhaps not surprising— until 1989 it was the Birch Wathen private school. Now it is said to be Manhattan's largest private residence. Inside. amid the flurry of mensenants attired in sober black suits and pristine white glows. you feel you have stumbled into someone's private Xanadu. This is no mere rich person's home, but a high- walled, eclectic. imperious fantasy that seems to have no boundaries. The entrance hall is decorated not with paintings but with row upon row of indi- vidually framed eyeballs: these. the owner tells people with relish. were imported from England. where they were made for in- jured soldiers. Next comes a marble foyer. which does have a painting, in the man- ner of Jean Dubuffet ... but the host coyly refuses to tell visitors who painted it. In any case. guests are like pygmies next to the nearby twice-life-size sculpture of a naked African warrior. Despite its eccentricity the house is curi- ously impersonal, the statement of someone who wants to be known for the scale of his possessions. Its occupant. financier Jeffrey Epstein. 50, admits to friends that he likes it when people think of him this may. A good- looking man, resembling Ralph Lauren. with thick gray-white hair and a weathered face, he usually dresses in jeans, knit shins, and loafers. He tells people he bought the house because he knew he "could never live anywhere bigger." He thinks 51.000 square kit is an appropriately large space for some- one like himself, who deals mostly in large concepts--especially large sums of money. 302 : VANIIY 'AIR Guests are invited to lunch or dinner at the town house—Epstein usually refers to the former as "tea," since he likes to eat bite- size monads and drink copious quantities of East Grey. (He does not touch alcohol or to- bacco.) Tea is served in the "leather room;' so called because of the cordovan-colored fabric on the walls. The chairs are covered in a leopard print, and on the wall hangs a huge, Oriental fantasy of a woman holding an opium pipe and caressing a snarling li- onskin. Under her gaze. plates of finger sandwiches are delivered to Epstein and guests by the menservants in white glows. Upstairs, to the right of a spiral stair- ane, is the "office." an enormous gallery spanning the width of the house. Strangely. it holds no computer. Computers belong in the "computer room" la smaller room at the back of the house). Epstein has been known to say. The office features a gilded desk (which Epstein tells people belonged to banker 1. P Morgan). 18th-century black lacquered Portuguese cabinets, and a nine- foot ebony Steinway "D" grand. On the desk, a paperback copy of the Marquis de Sade's The illi.giutones of rinue was re- cently spotted. Covering the floor. Epstein has explained. "is the largest Persian rug you'll ever see in a private home—so bia. it must have come from a mosque." Amid such splendor, much of which reflects the work of the French decorator Alberto Pin- to. who has worked for Jacques Chirac and the royal families of Jordan and Saudi Ara- bia. there is one particularly startling oddi- ty: a stuffed black poodle. standing atop the grand piano. -No decorator wouki ever tell you to do that." Epstein brags to visi- tors. "But I want people to think what it means to stuff a dog:' People can't help but feel it's Epstein's way of saying that he always has the last word. In addition to the town house. Epstein lives in what is reputed to be the largest private dwelling in New Mexico. on an 518 million. 7.500-acre ranch which he named "Zorro." "It makes the town hence look like a shack:' Epstein has said. He also owns Little St. James. a 70-acre island in the U.S. Virgin Islands. where the main house is currently being renovated by Edward Tut- tle, a designer of the Amanresorts. Them is also a S6.8 million house in Palm Beach, Flcaida, and a fleet of antral): a Gulfitroun IV. a helicopter. and a Boeing 7:7. replete with trading room, on which Epstein re- cently flew President Clinton. actors Chris Tucker and Kevin Space), supermarket magnate Ron Burkk. Lew• Wasserman's grandson, Casey Wasserman. and a kw oth- er. on a mission to explore the problems of AIDS and economic development in Africa. Epstein is charming. but he doesn't let the charm slip into his eyes. They are steely and calculating, giving some hint at the steady whir of machinery running behind them. "Let's play chess," he said to me, af- ter refusing to give an interview for this ami- de. "You be white. You get the first mow." It was an appropriate metaphor for a man who seems to feel he can win no matter what the advantage of the other side. His advantage is that no one really seems to know him or his history completely or what his arsenal actually consists of. Ile has care- fully engineered it so that he remains one of the few truly baffling mysteries among New York's moneyed world. People know snippets. but few know the whole. "He's wry enigmatic: says Rosa Monck- ton, the tbrmer C.E.O. of Tiffany & Co. in the C.K. and a close friend since the early 1980s. "You think you know him and then you peel off another ring of the onion skin and there's something else extraordinary underneath. He never reveals his hand.... He's a classic iceberg. What you see is not what you get.- ven acquaintances sense a curious dichotomy: Yes. he lives like a "modern ma- haraja:' as Leah Kiernan, one of his an dealers. puts it. Yet he is fastidiously, al- most obsessively private—he fists himself in the phone book under a pseudonym. He rarely attends society gath- erings or weddings or funerals: he considers eating in restaurants like "citing on the sub- way"—i.e.. something he'd never do. There are mum• women in his lik. mostly young. but there is no one of them to whom he has been able to commit. He describes his most public companion of the last decade. Ghislaine Maxwell. 41 the daughter of the late. disgraced media baron Roben Max- well. as simply his "best friend." He says she is not on his payroll, but she seems to organize much of his lik—recently she was making telephone inquiries to find a California-based yoga instructor for him. (Epstein is still close to his two other long- term girlfriends, Paula Heil Fisher, a for- mer associate of his at the brokerage firm Bear Stearns and now an opera producer, and Eva Andersson Dubin. a doctor and onetime model. He tells people that when a relationship is over the girlfriend "moves up. not down." to friendship status.) Some of the businessmen who dine with him at his home—they include newspaper publisher Mort Zuckerman, banker Louis Ranieri. Revlon chairman Ronald Perelman. real-estate tycoon Leon Black. former Mi- crosoft executive Nathan Myhrvold. Tom Pritzker (of Hyatt Hotels). and real-estate MARCi1 2001 $0.0. I SDNY_GM_02764638 SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA 00251480 EFTA01334042 personality Donald Trump—sometimes seem not all that clear as to what he ac- tually does to earn his millions. Certainly, you won't find Epstein's transactions writ- ten about on Bloomberg or talked about in the trading moms. "The trading desks don't seem to know him. It's unusual for animals 'hat big not to leave any footprints in the ;now." says a high-level investment manager. Unlike such fund managers as George Soros and Stanley Druckenmiller, whose client lists and stock maneuverings act as their calling cards. Epstein keeps all his deals and clients secret, bar one client: bil. lionaire Leslie Wexner, the respected chair- man of Limited Bran/Is. Epstein insists that ver since he left Bear Stearns in 1981 he as managed money only for - • ho depend on him for discretion. "I was tine only person crazy enough. or arrogant enough, or misplaced clietal,. to make my limit a bil- lion dollars or more,- he tells peo- ple freely. According to him, the flat fees he receives from his clients. combined with his skill at playing currency markets "with very I ..ge sums of money.- have afforded I .m the lifestyle he enjoys today. Why do billionaires choose him as their trustee? Because the prob- lems of the mega-rich. he tells peo- ple. are different from yours and mine, and his unique philosophy is cntral to understanding those problems: " :ery few people need any more money v ten they have a billion dollars. The key h not to have it do harm more than any- thng else.... You don't want to lose your money. e has likened his job to that of an architect—more specifically, one who spe- cializes in remodeling, "I always describe fa billion- aire] as someone who started out in a small home and as he became wealthier had add- ons. He added on another addition, he built a room over the garage ... until you have a house that is usually a mess.. . . It's a large house that has been put together over time where no one could foretell the financial fu- tut: and their accompanying needs." Ic makes it sound as though his job combines the roles of real-estate agent. ac- countant, lawyer, money manager, trustee, and confidant. But, as with lay Gatsby, myths and rumor swirl around Epstein. Here are some of the hard facts about Epstein—ones that he doesn't mind people knowing: He—grew Lip middle-class in Brcoklyn. His father worked for the city's '3 4 ,.C2t 2003 parks department. His parents viewed educa- tion as "the way out" for him and his young- er brother, Mark, now working in real estate. Jeffrey started to play the piano--for which he maintains a passion—at five, and he went to Brooklyn's /thymic High School. He was good at mathematics. and in his early 20s he got a job teaching physics and math at Dalton. the elite Manhattan pri- vate school. While there he began tutoring the son of Bear Stearns chairman Ace Greenberg and was friendly with a daugh- ter of Greenberg's. Soon he went to Bear Stearns. where. under the mentorship of both Greenberg and current Bear Stearns C.E.O. James Cayne. he did well enough to become a limited partner—a rung be- neath full partner. Ile abruptly departed in 1981 because. he has said, he wanted to run his own business. Thereafter the details recede into shad• ow. A few of the handful of current friends who have known him since the early 1980s recall that he used to tell them he was a UNREAL rZSTATE From rop. the "leather room" in Epstein's house. where -tea- is served to guests: Epstein at his Zorro ranch in 1991 with his "best friend?' Ghislainc Maxwell Epstein in 1979. "bounty hunter:' cling lost or stolen mon- ey for the government or for very rich people. He has a license to carry a firearm. For the last /5 years. he's been running his business, J. Epstein & Co. Since Leslie Weiner appeared in his life—Epstein has said this was in 1986: others say it was in 1989. at the earliest— he has gradually, in a way that has not generally made headlines. conic to be ac- cepted by the Establishment. He's a mem- ber of various commissions and councils, he is on the Trilateral Commission, the Council on Foreign Relations. the New York Academy of Sciences, and the Insti- tute of International Education. His current fan club extends to Cayne. /lent). Rosovsky, the former dean of Har. vard's Faculty of Arts and Sciences. and SDNY_GM_02764.639 SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA_0025 1481 EFTA01334043 Il SPOILS OF SUCCESS From kr Epstein's 70. acre island. Link Sr James. in the G.S. Virgin Islands—he now calls it Link St. kir: Epstein with President Clinton in Brunei. 2.002: Leslie Weiner with his future wik. at the 1990 C.F.D.A. Fashion Awards. in New York. 1991. Larry Summers, Harvard's current presi- dent. Harvard law professor Alan Dersho- witz says. "I'm on my 20th book.... The only person outside of my immediate Ramify that I send drafts to is kffrey." Real-estate developer and philanduopist Marshall Pone• who has worked with Epstein on projects in New Albany, Ohio. for Weiner. says. "He digests and decodes the information very rapidly, which is to me terrific because we have shorter meetings" Also on the list of admirers are former senator George Mitchell and a gaggle of distinguished scientists. most of whom Epstein has helped fund in recent years. They inditcle Nobel Prize winners Gerald 204 i VANIIY r, to "Jeffrey [knows] when he is winning.... He will yo4:e,hoose your weapon; says Wexner Edelnun and Murray Gd- Mann. and mathematical biologist Martin Nowak. When these men describe Epstein. they talk about "energy" and "curiosity: as well as a low for theoreti- cal physics that they don't ordinarily find in laymen. Gell-Mann rather sweetly mentions that "there arc al- ways pretty ladies around" when he goes to dinner the: Epstein. and he's under the impression that Epstein's clients include the Queen of En- gland. Both Nowak and Dershowitz were thrilled to find themselves shaking the hand of a man named "Andrew" in Epstein's house. "Andrew" turned out to be Prince Andrew, who subsequently arranged to sit in the back of Dershowitis law class. Epstein gets annoyed when anyone sug- gests that Weiner "made him: "I had real- ly rich clients before." he has said. Yet he does not deny that he and Wexner have a special relationship. Epstein sees it as a partnership of equals. "People have said it's like we have one brain between two of us: each has a side." "I think we both possess the skill of seeing patterns," says Wexner. "But Jef- frey sees patterns in politics and finan- cial markets, and I see patterns in lifestyle and fashion trends. My skills are not in in- vestment strategy, and, as everyone who knows Jeffrey knows, his are not in fash- ion and design. We frequently discuss world trends as each of us sees them:' y the time Epstein met Wexner. the latter was a retail legend who had built a S3 billion em- pire—one that now in- cludes Victoria's Secret. Express, and Bath & Body Works—from 55.000 lent him by his aunt. "Werner saw in Jeffrey the type of person who had the potential to real- ize his [Jeffrey's) dreams?' says some- one who has worked closely with both men. "He gave Jeffrey the ball. and Jeffrey hit it out of the park: Wexner, through a trust. bought the town house in which Epstein now lives for a reported S 13.2 million in 1989. In 1993. Wex- ner married Abigail Koppel. a 31-year-old lawyer. and the newlyweds relocated to Ohio: in 1996. Epstein moved in- to the town house. Public documents suggest that the house is still owned by the trust that bought it. but Epstein has said that he now owns the house. Wexner trusts Epstein so completely that he has assigned him the power of fidu- ciary over all of his private trusts and awn- dations says a source close to Wexner. In 1992. Epstein even persuaded Wexner to put him on the board of the Weiner Foun- dation in place of Weiner's ailing mother. Bella Wexner recovered and demanded to be reinstated. Epstein has said they settled by splitting the foundation in two. Epstein does not care that he comes be- tween family members. In fact, he sees it as his job. He tells people. "I am thew to represent my client, and if my client needs protecting—sometimes even from his own family—then it's often better that people hate me. not the client: "You've probably heard I'm vicious in my representation of my clients," he tells .1 people proudly: Leah Kleiman describes his haggling over art prices as something like a scene out of the movie Mad Max: Be- wend Thunderdome. Even a former mentor s says he's seen "the dark side" of Epstein, and a Bear Stearns source recalls a meet- ; ing in which Epstein chewed out a team making a presentation for Wexner as - mAICH 2003 C a h. d. M SDNY GM 02764640 SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA 00251482 EFTA01334044 being so brutal as to be "irresponsible." One repone; m fart, received three threes from Epstein while preparing a piece. They were delivered in a jocular tone, but the message was clear: There will be trouble for your family if I don't like the article. On the other hand, Epstein is clearly wry generous with friends. Joe Pagano. an Aspen-based venture capitalist. who has known Epstein since before his Bear Stearns days. can't say enough nice things: "I have a boy who's dyslexic. and Jeffrey's gotten close to him over the years.... Jeffrey got him into music. He bought him his first piano. And then as he got to school he had difficulty ... in studying so Jeffrey got him interest$ in taking flying lessons." Rosa Monckton recalls Epstein telling her that her.daughter. Domenic-a. who sub fess from Down syndrome. needed the sun. and that Rosa should feel free to bring her to his house in Palm Beach anytime. Some friends remember that in the late 80s Epstein would offer to upgrade the air- line tickets of good friends by affixing first- class stickers: the ooh' problem was that the stickers turned out to be unofficial. Some- times the technique worked. but other times it didn't. and the unwitting recipients found themselves exiled to coach. (Epstein has claimed that he paid for the upgrades. and had no knowledge of the stickers.) Many of those who benefited from Epstein's largesse claim that his generosity comes with no strings attached. "I never felt he wanted anything from me in return." says one old friend. who received a first-class upgrade. media. Right now, in the wake of the pub- hefty following his trip with Clinton, he must be in a very difficult place." A ccording to S.E.C. and other legal documents un- earthed by Vanity Fair, Epstein may have good reason to keep his past cloaked in secrecy: his real mentoc it might seem, was not Leslie Mk:trier but Steven Jude Hoffen- berg. 5' who. for a few months before the S.E.C. sued to freeze his assets in 1993, was trying to buy the New York Post. He is cur- rently incarcerated in the Federal Medical Center in Devens. Massachusetts. serving a 20-year sentence for bilking investors out of more than 5450 million in one of the lamest Ponzi schemes in American history. When Epstein met HotTenberg in Lon- don in the 1980s. the latter was the char- ismatic, audacious head of the Towers Financial Corporation. a collection agency that was supposed to buy debts that peo- ple owed to hospitals. banks. and phone companies. But Hoffenberg began using company funds to pay off earlier investors and service a lavish lifestyle that included a mansion on Long Island. homes on Man. hanan's Sutton Place and in Florida. and a fleet of cars and planes. Hoffenberg and Epstein had much in common. Both were smart and obsessed with making money. Both were from Brook- lyn. Acconling to Holknberg. the two men were introduced by Douglas Leese. a de- fense contractor. Epstein has said they were IFI pstein is known about tor introduced by John Mitchell. the late attor- as a man who loves amok 71 new general. en—lots of them. moult,' Epstein had been running International young. Model types have *Assets Group Inc. tl.A.G.). a consulting been heard saying they aigi company. out of his apartment in the Solo full of gratitude to Eps4E building on East 66th Street in New York. for flying them around. and Though he has claimed that he managed he is a kmiliar face to many of the View- money kr billionaires only. in a 1989 dep- ria's Seem girls. One young woman recalls being summoned by Ghislaine Maxwell to a concert at Epstein's town house. where the women seemed to outnumber the men by far. "These were not women you'd see at Upper East Side dinners." the woman recalls. -Many seemed foreign and dressed a little bizarrely." This same guest also at- tended a cocktail party thrown by Maxwell that Prince Andrew attended. which was filled, she says. with young Russian mod- els. "Some of the guests were horrified." the woman says. "He's reckless." says a former business associate. "and he's gotten more so. Mon- ey does that to you. He's barking the oath he made to himself—that he would never do anything that would expose him in the MAtCH '00) osition he testified that he spent 80 per- cent of his time helping people recover stolen money from fraudulent brokers and lawyers. He was also not above entering into risky, tax-sheltered oil and gas deals with much smaller investors. A lawsuit that Michael Stroll, the former head of Wil- liams Electronics Inc.. filed against Epstein shows that in I9811 I.A.G. received an in. vestment from Stroll of 5450.000. which Epstein put into oil. In 1984. Stroll asked for his money back: four years later he had received only 510.000. Stroll lost the suit, after Epstein claimed in court, among oth- er things, that the check for 310.000 was for a horse he'd bought from Stroll. -My net worth never exceeded four and a half mil- lion dollars." Stroll has stud. Hoffenberg, says a close friend, "really liked Jeffrey.... Jeffrey has a way of getting under your skin, and he was under Hof- fenberg's." Also appealing to Hoffenberg were Epstein's social connections; they in- cluded oil mogul Cece Wang (lather of the designer Vera) and Mohan Murjani, whose clothing company grew into Gloria Van- derbilt Jeans. Epstein lived large even then. One friend recalls that when he took Cana- dian heiress Wendy Belzberg on a date he hired a Rolls-Royce especially for the oc- casion. (Epstein has claimed he owned it.) In 1987. Hoffenberg. according to sources. set Epstein up in the offices he still occu- pies in the Villard House. on Madison Av- enue. across a courtyard from the restaurant Le Cirque. Hoffenberg hired his new pro- tege as a consultant at 525.000 a month. and the relationship flourished. "They trav- eled everywhere together—on Hoffinberg's plane. all around the world. they were aF ways together." says a source. Hoffenberg has claimed that Epstein confided in him. saying. for example. that he had left Bear Stearns in 1981 after he was discovered ex- ecuting "illegal operations: Several of Epsteirf, Lew Steams comm• poaries recall that Epstein left the compa- ny very suddenly nithin the company there were rumors also that he was involved in a technical infringement. and it was thought that the etecutive committee asked that he resign after his two supporters. Ace Green- berg and Jimmy Car. were outnumbered. Greenberg says he can't recall this: Cayne denies it hanpened. and Epstein has de- nied it as well. "Jeffrey Epstein left Bear Steams of his own volition." says Caw eve. "It was never suggested that he leave by any member of management. and manage- ment never looked into any improprieties by him. Jeffrey said specifically. 'I don't want to work for anybody else. I want to work for myself:" Yet. this is not the story that Epstein told to the S.E.C. in 1981 and to lawyers in a 1989 deposition involving a civil business case in Philadelphia. In 1981 the S.E.C.'s Jonathan Harris and Robert Blackburn took Epstein's testimony and that of other Bear Steams employees in part of what became a protracted case about insider trading around a tender of placed on March II. 1981. by the Seagram Company Ltd. for St. Joe Minerals Corp. Ultimately several Italian and Swiss in- vestors were found guilty. including Italian financier Giuseppe Tome. who had used his relationship with Seagram owner Edgar Bronfman Sr. to obtain information about the tender offer. After the tender offer was announced. the S.E.C. began investigating trades in- volving St. Joe at cnNti veto cry P‘Of 'I' VAI*1 •, IA as SDNY GM 02764641 SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA 00251483 EFTA01334045 contains a parody of Affleck and Matt Da- mon making Good Will Hunting II. Affleck says to Damon, "What do f keep telling you? You gotta do the safe picture, then you do the art picture. Then sometimes you gotta do the payback picture because your friend says you owe him. Then sometimes you got- ta go back to the well." "Sometimes you do Reindeer Games," Damon says derisively. "That's just mean," Affleck whines. But it's a pretty accurate description of his area to date. "Ben takes these franchise properties so he can go and experiment," says Haney Weinstein. 'He believes in trying to stretch himself and notlkeep doing the same thing," ob- sena Bruce Willis, who started with Affleck in Armageddon. -He's an awesome actor, and I think he's going to do great things." Several years ago, in a televised interview on Inside the Actors Studio. Affleck said that his goal was to make big commercial movies. He has since revised his ambitions. "That's an adolescent aspiration, in a way. I'd rather be in movies like Magnolia, which I think is a towering achievement. Ill con- tinue to act, but I won't act in a way that requires me to hang my name out there and do a lot of publicity. I'll do character roles and focus on writing and directing. It doesn't require the same kinds of sacri- Ike, in terms of quality of life and person- al life. and it's a more holistic approach to the process. It's become increasingly this- [rating for me to have my role in the story- telling process limited to one character. You hate to be respectful and judicious about your input when it's somebody else's project." Affleck has always impressed colleagues with his voracious appetite for information and skills. "He has made it a point to learn everything he can about how the business works—not just the craft of acting, but from the producing standpoint, from the studio standpoint." says Jon Gordon, exec- utive vice president of production at Mira- mar. "He knows how deals work. ft's what sets him apart. If he wanted to run a studio at some point, he could. He's about as sharp as they come." A file& is already juggling his acting with screenwriting and such other commit- ments as Project Greenlight. the contest he and Damon started to help launch the ca- reen of young filmmakers. Aftleck's friends are certain hell be directing soon. "There's no question," Weinstein says. "Both he and Matt. I think they're going to rewrite the rules. These guys can fix anything. There'll be home runs in both instances:* But there are other thoughts tickling the back of Affleck's mind as well. A passion- ate liberal. he campaigned for Al Gore. cares deeply about evlitval issues and is extremely well informed. He entertains him- self by writing imaginary. political speeches in his head. He would rather discuss AIDS in Africa than his movie career. When Lopez goes to Afflecles mother's house for dinner. aeinstein reports. "J.Lo told me that the conversation at the table is always about politics—about government initiatives, educational initiatives. what's go- ing an in the day." So. is Affleck planning to N,.. .,nne the lib- erals answer to Ronald Frown' Ile admits that he entertains the thought of someday running kr Congress, alma: think there's a real nobility to public service. It would be fun to run on a platform I really hci: in, without any of the kind of comprou people make—without being beholden • the win-at-all-costs mentality." And the invasion of privacy would nothing new. "What are you going to sac about me that hasn't already been said? I don't cheat, I don't drink. I don't do drugs. I live a clean fife," Affleck says, his eyes twinkling. "He's only 30 years old," says Jennifer Todd, who on-produced Roder Room. "He gill has an enormous amount of time to do things." Time. and drive. 1 think he's incredibly hungry," says Sean Bailey. who founded the media and production company Live- Planet with Affleck. Damon, and Chris Moore. "I think the guy has very grand aspirations. I don't think he's going to be content with just being a movie star. He knows he has the potential to do very big things." Such ambitions could he derailed by am number of miscalculations. including a ph- tate life that generates too many sensational headlines, but Aftleck has a clear idea of the ultimate goal. "On my deathbed. I have to be one who looks back and feels I lived a good and substantial and meaningful lik:' he says. In the meantime. howe.a. there's a wed- ding to plan. Jeffrey Epstein co‘rtst to room nor los Bear Stearns and other firms. Epstein resigned from Bear Steams on March 12. The S.E.C. was tipped otT that Epstein had information on insider trading at Bear Steams. and it was theatre obliged to question him. In his S.E.C. testi- mony, given on April I. 1981, Epstein claimed that he had kund "offensive" the way Bear Stearns management had handled a disci- plumy action following its discovery that he had committed a possible "Reg D" viola- tion—evidently he had lent mann to his clos- est friend. (In the 1989 deposition he said that he'd lent approximately S20.000 to War- ren Eisenskin. to buy stock.) Such an action could have been considered improper. al- though Epstein claimed he had not realized this until afterward. According to Epstein. Bear Steams man- agement had questioned him about the loan around March 4. The questioners. Epstein said, were Michael (Mickey) Tarnopol and molten 2003 SUBJECT TO PROTECTIVE Alvin Einbentler.ln his 1989 deposition Ep- stein recalled that the partner who had made an "issue" of the matter was Marvin David- son. On March 9. Epstein said. he had met with Tarnow/ and Einbender again, and the two punnets told hint that the menthe com- mittee had weighed the offense. together with previous "carelessness- over expenses. and he would be fined 52.500. "There was discussion whether. in fact. I had ever put in an airline ticket for some- one else and not myself and I said that it was possible. ... since my secretary han- dles my expenses." Epstein told the S.E.C. In his 1989 testimony he stated that the "Reg D" incident had cost him a shot at partnership that year. What the S.E.C. seemed to be especially interested in was whether there was a con- nection between Epstein's leaving and the alleged insider trading in St. Joe Minerals by other people at Bear Stearns: Q: Sic are you aware that certain rumors may have been circulating around your flint in con- ORDER nettion with your reasom for leaving the firm? A: I'm aware that there were many rumors. Q: What were the rumors you hard? A: Nothing to do with St. Joe. Q: Can you relate %chat you heard? A: It was having to do with an illka affair with a secretary. Q: Have you heard any other rumors suggest- ing that you had made a presentation or com- munication to the Executive Committee con- caning alleged improprieties by other mem- bers or employees of Bear Stearns? A: I. in fact, have heard that =we but ifs been from Mr. Harris in our comersation last week. Q: Have you heard it from armane else? A: No. A little later the interview focuses on James Cayne: Ct: Did you ever hear while you were at Bear Stearns that Mr. Cayne may have trader or it • sider information in connection with Si ' • Minerals Corporation? A: No. Q: Did Mr. Cayne ner have any comenation with you about St. Joe Minerals? A: No. Q: Did you happen to overhear any comersa- vA%• " , .4,1 343 SDNY_GM_02764642 PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA_00251484 EFTA01334046 'Jeffrey Epstein lions between Mr. Cayne and anyone else re- garding St. Joe Minerals? A: No. And still later in the questioning comes this exchange: Q: Have you had any type of business deal- ings with Mr. Cayne? A: There's no relationship with Bear Stearns. Q: Pardon? A: Other than Bear Steams. no. Q: Have you been a participant in any type of business venture with Mr. Cayne? A: No. Q: Do you have any expectation of participat- ing inpny business venture with Mr. Cayne? A: Nd. Q. Have you had any business participations with Mr. Therarn? A: No; nor do I anticipate any. Q: Mr. Epstein. did anyone at Bear Stearns tell you in words or substance that you should not divulge anything about St. Joe Minerals to the staff of the Securities and Exchange Com- mission? A: No. Q: Has anyone indicated to you in any way. either directly or indirectly. in words or sub- stance. that your compensation for this past year or any future monies canting to you front Bear Stearns wall be contingent upon your not divulging information to the Securities and Exchange Commission? A: No. Despite the circumstances of Epstein's leaving. Bear Stearns agreed to pay him his annual bonus—which he anticipated as be- ing approximately S100.000. The S.E.C. never brought any charges against anyone at Bear Stearns for insider trading in St. Joe. but its questioning seems to indicate that it was skeptical of Epstein's answers. Some sources have wondered why, if he was such a big producer at Bear Stearns. he would hate given it up over mere S2.500 tine. Certainly the years alter Epstein kft the firm were not obviously prosperous ones. His luck didn't seem to chance until he met Holknberg. rieve of Epsteiffs first assignments for Hof- fenberg was to mastermind doomed bids to take over Pan American Wald Airways in 1987 and Emery Air Freight Corp. in 1988. Hofknberg claimed in a 1993 haring before a grand jury in Illinois that Epstein tame up with the idea of financing these bids through Towers's acquisition of two ailing Illinois insurance companies. Associated Life and United Fire. "He was hired by us to work on the securities side of the insurance companies and Towers Financial. supposedly to make a profit for us and for the companies." Hoffen- berg reportedly told the grand jury. He also alleged that Epstein was the "technickuL" touting the schemes, although, having no broker's license, he had to rely on others to make the trades. Much of Hoffenberg's sub- sequent testimony in his criminal case has proven to be false. and Epstein has claimed he was merely asked how the bids could be accomplished and has said he had nothing to do with the financing of them. Yet Rich- ard Allen, the former treasurer of United Fire, recalls seeing Epstein two or three times at the company. He and another ex- ecutive say they had direct dealing with Ep- stein over the finances. And in his deposition of 1989. Epstein stated that he was the one who executed "all" Hofkriberg's instructions to buy and sell the stock. He called it "mak- ing the orders." He could not recall whether he had chosen the brokers used. To win approval from the Illinois insur- ance regulators for Towers's acquisition of the companies. Hofknberg promised to in- ject S3 million of new capital into them. In fact. in his grand-jury testimony Holknberg claimed that he. his chief operating officer. Mitchell Bitter, and Epstein came up with a scheme to steal 53 million of the insurance companies' bonds to buy Pan Am and Em- en stock. "Jeffrey Epstein and Mitch Brater arranged the various brokerage accounts for the bonds to be placed with in New York. and I think one in Chicago. Rodman & Ren- shaw: Hoffenberg reportedly said. Then. said Hofknberg, while making it appear as though they were investing the bonds in much safer financial instruments. they used them as collateral to buy the stock. -Ep- stein was the person in charge of the trans- actions. and Mitchell Limier was assisting him with it in coordination on behalf of the insurance companies* money." Holknberg claimed at the time. At one point, according to Holknberg. a broker forged the documents necessary for a SI..8 million check to be written on insurance- company funds. The check was used to buy more stock in the takeover targets. Mean- while. in order to throw the insurance regula- tors off. the 51.8 million was reported as being safely invested in a money-market account. United Fire's former chief financial officer Daniel Payton confirms part of Hollinarg's account. He says he recalls making one or two telephone calls to Epstein tat Moffett- berg's direction) about the missing bonds. "He said, 'Oh, yeah. they still exist: But we found out later that he had sold those assets leveraged them ... [and] used some mar- gin account to take some positions in ... Emery and Pan Am." says Payton. Epstein's extraordinary creativity was. ac- cording to Hoffenberg. responsible for the purchase by the insurance companies of a 5500.000 bond, with no money down. '-Ep- stein created a great scheme to purchase a 5500.000 treasury bond that would not be shown ... [as) margined or collateralized." he rtvut redly told the gnmd jury. "It looked like it was free and clear but it actually wasn't," he said. Epstein has denied he ever had any deal- ings with anyone from the insurance com- panies. But Richard Allen says he recalls talking to Epstein at Hoffenberg's direction and telling him it was urgent they retrieve the missing bonds for a state examination. According to Allen. Epstein said. "Well get them back: He had "kind of a flippant atti- tude: says Allen. "They never came back." E pstein. according to Hollenberg, also came up with a scheme to manipulate the price of Emery Freight stock in an at- tempt to minimize the losses that occurred when Hoffenberfs bid went wrong and the share price began to fall. This was alleged to have invoked multiple clients' accounts con- trolled by Epstein. Everiuzilly. in 1991, insurance regulators in Illinois sued Holknberg. He settled the case. and Epstein. who was only a paid consul- tant, was never deposed or accused of any wrongdoing. Barry Gross. the attorney who was handling the suit for the regulators. says of Epstein. -He was very' elusive.... It was hand to really track him down. There were a substantial number of checks for significant dollars that were paid to him. I remem- ber.... He was this character we never got a handle on. Again we presumed that he was involved with the Pan'Am and Emery run that HaTenberg made, but we never got a chance to depose him." "From the government's discovery in the main sentencing against Hoffenberg it would seem the paemment was Pk:titans a bee hat:- says David Lewis. who represented Mitchell Bracer. "Thev went for what they knew they. could get ... and that was the fraudulent promissory notes the much larger and unrelated pan of Hoffenberg's fraud, based in New York State,. What they couldn't get. they didn't bother with." Another lawyer involved in the criminal prosecution of HotTenberg says. "In a crim- inal investigation like that. when there is a guilty plea. to be quick and dirty about it. discovery is always incomplete.... They don't have to line up witnesses: they don't have to learn every fact that might come out on cross-examination." E pstein was involved with Holknberg in other questionable transactions. Finan- cial records show that in 1988 Epstein in- vested S1.6 million in Riddell Sports Inc., a company that manufactures football helmets. Among his co-investors were the theater mogul Robert Nederlander and attorney Leonard Toboroff. A source close to this transaction claims that Epstein told Neder- lander and Toboroff that he had raised his share of the money from a Swiss banker. R Ca tear SCINY_G M_02764643 SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA 00251485 EFTA01334047 d e • 4 0 0 • • ■ ; whose identity they could not be allowed to know. But Hoffenberg has claimed the mon- ey came from him, and Towers's financial statements for that year show a loan to Ep- stein of 5400.000. (Epstein has said he can't remember the details and has dis- puted the accuracy of the Towers financial reports.) Around the same time. Nederlander and Toboroff let Epstein come in with them on a scheme to make money out of Pennwalt, a Pennsylvania chemical company. The plan was to group together with two other panics to take a substantial declared position in the stock. According to a source, Epstein was supposed tb help Nededander and Toboroff raise $1S million. He seemed to fad to find other investors. say those familiar with the deal. (Epstein has said be was merely an in- vestor.) He invested SI million. which he told his co-investors was his own money. But in his 1989 deposi- (ion he said that he put in only $300.000 of his own money, Where did the rest come from? Hof- fenberg has said it came from him. in a loan that Nededander and Toboroff didn't knot. about. Two things happened that alarmed Nederlander and Toborotf. After the group signaled a possible takeover. the Pennwalt management threatened to sue the would-be nutters. Epstein was reluctant ini- tially to give a deposition about his share of the money. telling Toboroff there were "reasons- he didn't want to. Then. after the opportunity for new investors was closed, co-investors recall Epstein announcing that he'd found one at last: Dick Any'der then C.E.O. of the publisher Simon .S: Scanner. who want- ed to put up approximately $500,000. (Nei- ther Epstein nor Snyder can now recall the investment. Yet in the 1989 deposition Epstein said that he had recruited Sny- der. whom he had met socially. into the deal.) According to a source. Toboroff and Ne- derlander told Epstein (hat Snyder was too late. but. without their realizing it. Hoffen- !.eig has claimed. Snyder wrote a check to Hotrenberg and bought out some of his in- vestment. But then Snyder wanted out. "Nederlander started to get these irate calls from (Snyder.] who wasn't pan of the deal. saying he was owed all this money.- says someone dose to the deal. Toboroff ar.t *derlander were baffled. :•nitially. a source close to Hollenberg s .s.. .yonberg paid Snyder off Ma . )ni rust as Nederlander and Toboroff were growing wary of Epstein. he became in- creasingly invoked with Leslie Wexner. whom he had met through insurance executive Robert Meister and his late wife. Epstein has told people that he met Vibmer in 1986 in Palm Beach. and that he won his confidence by persuading him not to invest in the stock market, just as the 1987 crash was approach- ing. His story has subsequently changed. When asked if Wexner knew about his con- nection to Hoffenberg. Epstein said that he began working for Wexner in 1989. and that 'it was certainly not the same time.- Wherever and whenever it was that Ep- stein and Wexner actually met, there was an immediate and strong personal chem- istry. Wexner says he thinks Epstein is -very smart with a combination of excellent judg- ment and unusually high standards. Also. he is always a most loyal friend:' OFFICE SPACE The -office" in Epucin's house. It has no computers. but it does have a desk that Epstein tells people once belonged to hanker J. P. Morgan. and "the largest Persian rug you'll ever see in a private home." Sources say Epstein proved that Ise could be useful to Wexner as well with "fresh" ideas about investments. "Abner had a cou- ple of bad investments. and Jeffrey cleaned those up right away." says a former associ- ate of Epstein's. Before be signed on with Wexner. Epstein had several meetings vv,th Harold Levin. then head of Wexner Investments, in which he enunciated ideas about currencies that Levin found incomprehensibk. "In Eta:. says some- one who used to work very closely with Wes- ner. -almost everyone at the Limited won- dered who Epstein was: he literally came out of nowhere," -Everyone was mystified as to what his appeal was." says Robert Moreisky. .1 timmer vice-clmirman of the Limited. M uch of Epstein's work is related to clean- ing up, tightening budgets. and efficien- cies. One person who worked for 9tx.ner and who saw a contract drawn up between the two men says Epstein is involved in "every- thing, not just a little here. a little there. Everything!" In addition, he says. "Ykxner likes having a hatchet man. . Whenever there is dirty work to be done he'd stick Jet frey on it. . . . He has a reputation for being ruthless but he gets the job done." Epstein has evidently been asked to fire personal-staff members when needed. "He was that mystenctis person that everyone was scared to death of." says a former employee. Meanwhile. he is also less than popular with souse people onside Wemer's company with whom he now deals. "He 'inserted' himself into the construction process of Les- lie Wexner's yacht. . . . That resulted in liti- gation down the road between Mr. Wexner and the shipyard that eventually built the sts- sel:4 says Lars Forsberg. a law-m- whose firm at he 'inv. Dickerson and y. ;as hired to deal with litigation stemming from the construction of Wexner's Limn/es:— at 315 feet. one of the ktrl.iest private yachts in the world. Evidently. Ep- stein stalled on paying Dickenson and Reily for it, ac-k "Ifs pnimbly once 1 mice in nw le- gal career that I've had to sue a client for poymem of services that he'd re- quested and we'd per- formed .. . without issue on the performance." says Forsberg. In the end the matter was settled. but Ep- stein claims he now has no recollection of it. The incident bort of a number of disputes Epstein has become embroiled in. Sonic arc few sums so tiny as to he baling: for instance. Epstein sued investment adviser Herbert Glass, who sold him the Palm Beach house in 1990, for SB,444- Epstein claimed this was owed him for furnishings removed by Glass. In 1998 the U.S. Attorneys Office sued Epstein for illegally subletting the (triter home of the deputy consul general ol Ir.un to attorney Ivan Fisher and others. Epaein paid S15.000 a month in rent to the Sum: Department, but he charged Fishere : • his colleagues $20.000. Though.tri terms of the agreement arc ta e,.. • . court ruled against Epstein. Wexner offers some inwiThl HMO combative wk. -Many unx-, pox winning and losing. Wexner • o. has the unusual quality SDNY_GM_0276464.4 SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA 00251486 EFTA01334048 Jeffrey Epstein he is winning. Whether in conversations or negotiations. he always stands back and lets the other person determine the style and manner of the conversation or negotiation. And then he responds in their style. Jeffrey sees it in chivalrous terms. He does not pick a fight, but if there is a fight, he will let you choose your weapon." One case is rather more serious. Currently, Citibank is suing Epstein kr defaulting on loans from its private-banking arm for 320 million. Epstein claims that Citibank "fraud- ulently induced" him into borrowing the money kr imenments. Citibank disputes this charge. The legal papers for another case offer a rare window into Epstein's finances. In 1995. Epstein stopped paying rent to his landlord. the nonprofit Municipal Ans Society for his office in the 'Allard House. He claimed that they were breaking the terms of the lease by not krona his staff in at night. The case was eventually settled. However. one of the papas filed in this dispute is Epstein's financial state- ment for NS& in which he claimed to be worth 520 million. He listed that he owned 57 million in securities. SI million in cash. zero in residential property (although he told sources that he had already bought the home in Palm Beach). and SI) million in other assets. including his investment in Riddell. A co-inwpor in Riddell says: "The company had been bought with a huge amount of debt. Ind it wasn't public. so it was memingless to attach a figure at that to it ... the price it cost was about 51.2 mil- lion." The co-investors bought out Epstein's share in Riddell in 1995 for approximately 53 million. At that time, when Epstein was asked, as a routine matter, to sign a paper guaranteeing he had access to a kw million dollars in case of any subsequent disputes over the sale price. Wexner signed for hint. Epstein has explained that this wits because the co-investors wanted an indemnity against being sued by Wexner. One of the investors calls this "bullshit$ r pstein's appointment to the board of r..(New York's Rockefeller University in 2000 brought him into greater social promi- nence. Boasting such social names as Nancy Kissinger. Brooke Astor. and Robert Bass. the board also includes such pre-eminent scientists as Nobel laureate Joseph Gold- stein. "Epstein was thrilled to be elected,- says someone who knows him. Mer one term Epstein resigned. Accord- ing to York magazine, this was because he didn't like to wear a suit to meetings. A nkapeme tlz- the Rockefeller board says .•.• • lc : became he had insufficient time 'ri sommi.: a "mar.1 member recalls Mat he 346 I va., Tr 'Alt was "arrogant" and "not a good fit." The spokesperson admits that it is "infrequent" for board members not to be renominated after only one tam. Still, the recent spate of publicity Ep- stein has inspired does not seem to have fazed him. In November he was spotted in the front row of the Victoria's Secret fashion show at New York's Lexington Avenue Ar- mory; around the same time the usual co- terie of friends and beautiful women were whisked off to Little St. James (which he tells people has been renamed Link St. Jell) for a long weekend. Thanks to Epstein's introductions. says Martin Nowak. the biologist finds himself moving from Princeton to Harvard. where he is assuming the joint position of profes- sor of mathematics and professor of Nola- • gy. Epstein has pledged at least 525 million to Harvard to create the Epstein Program kr Mathematical Biology and Erolutionary Dynamics, and Epstein will have an office at the university. The program will be dedi- cated to searching tbr nature's algorithms. a pursuit that is a specialty of Nowak's. For Epstein this nub! be the summit of every- thing he has walked toward: he has been seen proudly displaying Renard president Larry Summers's letter of commitment as if he can't quite believe it is real. He says he was reluctant to have his name attached to the program. but Summers persuaded him. He rang his mentor Wexner about it. and Wexner told him it was all right. An insatiable. restless soul. always on the move. Epstein builds a tremendous amount of downtime into his hectic work schedule. Yet there is something almost programmed about his relaxation: it's as if even plea- sure has to be measured in terms of self- improvement. Nowak says that. when he goes to stay with Epstein in the Caribbean. they'll get up at six and. as the sun rises. have three-hour conversations about theoret- ical physics. -Then he'll 20 of and do some work. re-appear. and well talk some more:' Another person who went to the island with Epstein. Maxwell. and several beautiful women remembers that the women "sat around one night teasing him about the kinds of grasping women who might want to date him. He was amused by the idea.... He's like a king in his own world." Many people comment there is some- thing innocent. almost childlike about Jef- frey Epstein. They see this as ran-shine. given the sophistication of his surroundings. Man Dershowitz says that. as he was getting to know Epstein, his wife asked him if he would still be close to him if Epstein suddenly filed kr bankruptcy. Dershowitz says he replied, "Absolutely. I would be as interested in him as a friend if we had hamburgers on the boardwalk in Coney Island and talked about his ideas" 'C FASHION Cris: Ben AIMck1 Doubk RL T.Pal Irri Doi* PL NYC end LA. or go lo Jawpolocorn: for lea's p)ont. col 800 .I15.4.1.1VI: Debaoh Wotrin Ia An M.0 A94.CY) P.. 14: Odom* {Mork shalom OM, * Meow. NXC. ot <di 2Q-3234107: For Ray.Ban unglaan Gale 888-UJXOMCA Per 123, hew CincoWs Enpale Annani shako" Pinyon° Atmore bo~ nenowndit: Ralph Lauren wipenden from »levied Polo RØ Loren raw: Km Meehan for lNdlen Sceseeler Mawrenent Per m: saur l40:mPeter Cincces; inn b, Thom.. Giorgio Anwar* be by "HY; Sfirtnj con by spool war from *boded Ikon Works Per Hilo tau Garman ono Al... terdbar9 Riled by -ese Herd* hi* 140, SnWdbf aØ Graf lor Enis. Pc. Par 214 Fa June Havoc's GM &none& Dnignr wad. gobs al ~ad en* 031978-499.205 Pan 220: Ortenockett PRders's Donna Karen Nye York dews -2m Donne (wen Nee 'hit wires more ce ond BW9iewl Godroe Nine PS Snill Women car 'om Henn Bendel WC. ond ;enc. L Crewel ~and goes kcal Chad cannceinnenonwde. or col BOO-550.000S; Mortise Rodrigarz saws from Jal KIRK Soria Cod a-0 Copilot OwrIcitte. Li:imbeds«, Twee taboo by rewei orde Lengda" Seeo -on NYC Gleurto kelps irr - Z.e.aid .:• ;a 900.$$7.1584. Per 223: Agnes Bruckner's Tom Ford to. is Sam Lowest tit. Gaucho den bow Kw Sr. Lan« en Gotche betncat NYC. ced Horgan Pan 22Lr Dyan Carden dried by Ind° Mein too andd lasbrwai Delta il G Oak. & Gabbard Badly /41b; PR•dor by Wendy Walker. from Weed LA. iron oy Jimmy Choo. from Saw Bitann HP. Pers 274-77: Rer, Mawr 's Guess sire hen Gums sewn tenoned^ or go aner gans can. Venace bean from *wow bo qÆ iiwklede. or go be avow-woo oem. Or Ltd 81384YERSACE Pare 2711.-79: Da...d• RI. T.sher, 1'0,T Dot& RL NYC ad LA. Of go to innwoolocon Chrome Beads bng .R•Rved der. from Chyme Hewn. NYC... cr y-o 212s -n374-070,7,4„ . la & %9. Per tMI11 21ICA li Tawny HPfiger ilck. iltin dP kwricsibwal ieolle0"10irl onn TC/MMYILL Doaldr RL raw, kan NJ* RL. WC. ard LA. or see lowapcJacom: Ia tars jeans. cot BCC-LISA-LEVI lE3<- SDNY_GM_Ili‘46;1162405' SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA 00251487 EFTA01334049