Prosecutor Says Executors of Jeffrey Epstein’s Estate Enabled His Abuse
How much of Jeffrey Epstein’s remaining fortune will go to his victims?
A year and a half after his death, that is the question at the heart of a bitter court fight between the top law enforcement official in the U.S. Virgin Islands and the two men Mr. Epstein chose to oversee an estate once worth $600 million.
After months of quiet, hostilities resumed over the past week. Denise N. George, the territory’s attorney general, accused the executors of mismanaging the estate when they couldn’t come up with more money for an independent victims compensation fund. The executors, Darren Indyke and Richard Kahn, said it was partly her fault the estate was having trouble raising cash.
But late Wednesday, the fight escalated: Ms. George said the two men tying up the purse strings had not merely been Mr. Epstein’s longtime business associates, but had for years enabled his sexual abuse of teenage girls.
Mr. Indyke and Mr. Kahn were “the indispensable captains of Epstein’s criminal enterprise, roles for which they were richly rewarded,” Ms. George’s office said in an amended complaint to a civil racketeering lawsuit she first filed a year ago. The suit, which started out seeking tens of millions in damages from the estate, now asks a judge in the Virgin Islands to place the estate’s remaining assets into a receivership.
According to the complaint, the two men controlled secret payments to some of Mr. Epstein’s victims and facilitated at least three sham marriages, sometimes between victims, as part of his predatory activities. They performed and secured legal and accounting work that enabled fraudulent marriages “that would further bind Epstein’s victims to him and enable Epstein to continue to control and abuse these victims sexually,” the complaint said.
As high-ranking officials in just about every company Mr. Epstein set up in the territory — his home base for two decades — the men were deeply entwined with the businesses that financed Mr. Epstein’s abuse, the complaint said.
A lawyer for the executors, Daniel H. Weiner, denied Ms. George’s allegations, saying neither man “had any involvement in any misconduct by Mr. Epstein of any kind, at any time.”
“It is enormously regrettable that the attorney general chose to level false allegations and to unfairly malign the coexecutors’ reputation without any proof or factual basis to do so,” he said.
No hearing has been scheduled to hear Ms. George’s renewed complaint. William LaPiana, a professor at New York Law School and a trust and estates expert, said judges tended to give people wide latitude in choosing who will manage their estates. The attorney general, he said, would have to go beyond her allegations to prove that “the executors are a threat to the safety of the estate assets.”
The accusations were just the latest maneuver in the jockeying over the considerable sums remaining from the fortune Mr. Epstein left when he killed himself in a Manhattan jail cell in 2019 while facing federal sex-trafficking charges. The estate still has assets worth about $240 million after expenses, which include $190 million in federal taxes and $85 million in contributions to the victims’ compensation fund.
About 150 women have registered with the fund, a number “far exceeding expectations,” according to the fund’s independent administrator, Jordana Feldman. So far, the fund has paid out $55 million, and applicants have until March 25 to submit claims.
But last week, Ms. Feldman said she would stop the process of determining the payments for other victims until the estate could provide additional funds she had requested. The reason, the estate said, was cash flow: It has had a difficult time selling off some of Mr. Epstein’s assets, including two private islands.
But Ms. George, who had pushed for more safeguards for the fund, blamed mismanagement, saying the estate was paying millions of dollars in legal bills and other expenses. She asked a judge to bar the estate from making further payments, except to the victims’ compensation fund. Lawyers for two dozen accusers joined the attorney general in her request.
The executors countered that Ms. George was partly responsible for the delays in selling properties, including Mr. Epstein’s island hideaway off St. Thomas, because of liens she has put in place.
“If the attorney general actually had in mind the best interests of Mr. Epstein’s victims, she would grant the coexecutors’ repeated requests that she immediately release her liens on the two Virgin Islands properties owned by the estate and allow the coexecutors to sell those properties,” Mr. Weiner said in a statement Wednesday night.
The sprawling legal case started in January 2020, with Ms. George taking aim at the complicated web of businesses Mr. Epstein once operated out of the territory. Ms. George said she wanted to protect the rights of Mr. Epstein’s victims as well as those of the people of the Virgin Islands, who she contended were defrauded by Mr. Epstein as he ran a sex-trafficking operation out the territory.
In particular, Ms. George pointed to Southern Trust Company, an entity Mr. Epstein started in 2012 that was his primary moneymaker in the last decade of his life. Mr. Epstein received a lucrative tax break for Southern Trust after telling officials there that the company was a data-mining operation that would do both genetic and financial data research.
Instead, Ms. George said, it was a vehicle for Mr. Epstein to receive payments for tax and estate advisory services he provided to a handful of wealthy clients, most notably Leon Black, the billionaire co-founder of the private equity firm Apollo Global Management.
Mr. Black paid more than $158 million to Mr. Epstein over a five-year period, according to an outside review conducted by Apollo. The review found that Mr. Black had no knowledge of Mr. Epstein’s sexual misconduct.
Ms. George’s amended complaint doesn’t name Mr. Black but refers to a client who paid $158 million as the “single source” of income for Southern Trust and Mr. Epstein. A person familiar with the case confirmed that Mr. Black was the client to whom the complaint referred.
Trying to show that Southern Trust was a sham business is at the heart of Ms. George’s case because she contends Mr. Epstein effectively swindled the Virgin Islands by receiving the tax break.
The complaint said Mr. Indyke and Mr. Kahn “organized, controlled, and directed almost every aspect” of Mr. Epstein’s business empire, including Southern Trust, which “fraudulently obtained” tax breaks worth more than $80 million.
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