Ever since the release of the movie “All the President’s Men,” journalists and investigators have taken to heart the advice Bob Woodward got from his famous source Deep Throat: “Follow the money.” But few people have made that as difficult as Jeffrey Epstein, who today sits in jail, accused of sex-trafficking underage girls.
(Disclosure: My wife, who runs a small public relations firm, is representing a number of Epstein’s accusers. Her work does not touch upon Epstein’s finances.)
Instructed by the court to list his assets, Epstein turned in a financial disclosure form claiming a net worth of more than half a billion dollars. He listed $379 million in cash and investments, and valued his six (yes, six) properties at $181 million. There were no further details. At Monday’s bail hearing, U.S. District Judge Richard Berman described the document as “cursory” and unhelpful.
In the short term, the judge and the government need a full accounting of Epstein’s wealth as part of the bail determination. As Assistant U.S. Attorney Alexander Rossmiller put it during Monday’s hearing, “The first question for a defendant of this tremendous means is how much money does he have, where is it, what are the accounts, is it in foreign accounts, how much is in diamonds and art.” He added, “These are all details that would be necessary for the court to consider” in the bail application.
Plainly, the government will need to dig deep to gain a complete understanding of Epstein’s wealth. Under the criminal forfeiture statute, it has the right to take any asset that can be connected to a crime — in Epstein’s case, his properties, if it is proved that underage girls were abused there. It will also want to know if he acquired any of his wealth from trafficking. That money could also be taken away by the government.
Finally, the accusers will want to know the details of Epstein’s wealth because many of them will undoubtedly seek money damages via lawsuits. Paul Cassell, a lawyer representing one of the victims, told the Washington Post that “it’s easy to foresee 160 victims in this case and possibly more.” He added that Epstein’s “exposure” from such lawsuits could exceed $1.5 billion.
How difficult will it be to dissect Epstein finances if he doesn’t cooperate? Pretty hard. His primary charitable foundation, the J Epstein VI Foundation — which made grants to scientists, including the $6.5 million he donated in 2003 to support Harvard mathematician Martin Nowak — does not appear to have ever filed a financial disclosure form with the Internal Revenue Service, as most foundations are required to do. His company, the blandly named Financial Trust Co., is equally invisible. It has no website, no record of any transactions, and no filings with the Securities and Exchange Commission.
The lack of an SEC registration strongly suggests that Epstein never managed money for billionaires (or anyone else) as he long claimed. But after making phone calls for the last few days, I’m pretty sure he did do something useful for the superwealthy. He was a tax and estates adviser — the kind who has a knack for finding loopholes to help clients minimize their taxes. And he was said to charge a small fortune for his services.
Still, how many tax advisers do you know who have a net worth of more than $500 million, no matter how wealthy their clientele? Thus, the mystery of how Epstein became rich enough to own six properties, plus a private jet, plus all the rest of it remains just that: a mystery.
I’ve spent the last few days scouring federal disclosure documents to see what they might tell us about Epstein’s finances. Although he never registered his biggest foundation with the IRS, he routinely filed annual IRS forms — so-called 990s — for two smaller foundations. Because he was a trustee or co-trustee on a number of trusts affiliated with Leslie Wexner, the billionaire chairman of L Brands, his name shows up in virtually every L Brands 13D up until 2007, when Epstein went to prison as part of a plea deal on state prostitution charges in Florida. Although the documents offer fewer answers than one would hope for, they raise a host of questions worth pursuing. I’ve contacted Epstein’s team for a comment, but they have not responded.