Accused Sex Trafficker Jeffrey Epstein Asks to Be Freed on Bail
July 11, 2019, 6:11 PM GMT+2 Updated on July 11, 2019, 8:48 PM GMT+2 Bloomberg
By Voris and David Voreacos / 6-8 minute Read
Accused child sex trafficker Jeffrey Epstein asked a federal judge to free him ahead of his trial, offering to put up his Manhattan mansion as security, ground his private jet and pay for 24-hour armed guards.
In a 16-page court filing Thursday, lawyers for the 66-year-old fund manager outlined a series of “highly restrictive conditions” that would ensure he doesn’t flee, following his arrest Saturday on charges of sex trafficking and conspiracy.
Under Epstein’s proposal, he would be freed from the Manhattan jail where he’s being held on a “substantial bond” secured by the mansion, which has been valued in the tens of millions of dollars. He also offered to wear a GPS ankle bracelet and be confined to his home.
A release on bail would make it easier for Epstein to coordinate his defense and give him a measure of leverage in negotiating a possible guilty plea with the government. Likewise, his continued detention would give prosecutors a
strategic advantage.
Epstein was accused Monday of abusing dozens of girls as young as 14 and has been confined since Saturday night, when he was arrested on returning to New York from Paris in his private jet.
He is being held in the Metropolitan Correctional Center in lower Manhattan, the same high-security facility where Paul Manafort, President
Donald Trump’s former campaign chief, is detained while he faces state fraud charges. The Mexican drug lord Joaquin “El Chapo” Guzman is there as well.
Read Epstein’s bail request here
“The indictment does not allege that Epstein committed any crime in the 14-year interval between the end of the alleged conduct and the initiation of this case,” his lawyers wrote in the filing, referring to a “spotless” record.
In addition, Epstein has “potent legal defenses” to the sex-trafficking charge, they told U.S. District Judge Richard Berman in New York. “The principal conduct underlying the indictment is Mr. Epstein’s payment of money for massages that purportedly escalated to alleged sex acts. Mr. Epstein’s conduct, however, is akin to consumer or purchaser behavior” and shouldn’t be prosecuted under the trafficking law, the lawyers wrote.
Under Epstein’s proposed bail package, the defendant would also consent to extradition from other countries. A “trustee” would be appointed to live in the mansion and report any violations of the bail requirements. Epstein’s brother and a friend would guarantee the bond.
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“Mr. Epstein stands ready and willing to pay for 24-hour armed guards should the court deem it necessary or appropriate,” Epstein’s lawyers said.
The lawyers acknowledged that in 2016 Berman rejected a similar request by Turkish-Iranian gold trader Reza Zarrab, saying it would “foster inequality and unequal treatment in favor of a very small cohort of criminal defendants who are extremely wealthy.”
Still, they noted that such proposals had been granted in other cases and suggested the arrangement “as a fallback, asking the court to revisit its propriety despite the reservations expressed in Zarrab.”
Among the wealthy defendants granted such conditions of release are Ponzi schemer Bernard Madoff; Dominique Strauss-Kahn, former head of the International Monetary Fund, who was accused of sexual assault; and Marc Dreier, the New York law firm founder who was charged in a $400 million fraud.
Prosecutors later dropped charges against Strauss-Kahn. Madoff and Dreier pleaded guilty and are serving long sentences.
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Prosecutors argued Monday that Epstein, who could spend the rest of his life behind bars if convicted, has the motive and means to flee. In a court filing, they cited the mansion on East 71st Street, two residences in the U.S. Virgin Islands -- one on his own private island -- and homes in Paris, New Mexico and Palm Beach, Florida. They listed 15 cars, including a Range Rover and a Mercedes-Benz.
They also argued that Epstein is a danger to the public, telling the court that federal agents found a “vast trove of lewd photographs” in a search of his New York home at the time of his arrest. Some were found in a safe along with compact discs with labels including “Girl pics nude,” they said.
In an earlier investigation in Florida, Epstein intimidated several witnesses or their relatives, with his private investigator forcing the father of one figure off the road, the U.S. said. That probe was resolved in a 2007 non-prosecution agreement with the federal government and a state-court guilty plea to soliciting prostitution.
The agreement has long been under fire as inadequate. Epstein served 13 months in jail, from which he was released most days to ply his trade in high finance.
“The defendant, a registered sex offender, is not reformed, he is not chastened, he is not repentant,” the U.S. argued. “Rather, he is a continuing danger to the community and an individual who faces devastating evidence supporting deeply serious charges.”
Prosecutors have until Friday at 5 p.m. in New York to respond to Epstein’s arguments and bail request. Berman will hold a bail hearing on Monday.
The case is U.S. v. Epstein, 19-cr-00490, U.S. District Court, Southern District of New York (Manhattan).
(Updates with further arguments for Epstein’s release and judge’s previous bail ruling.)
ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero
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Tyler Durden Thu, 07/11/2019 - 10:38 TDB's blog 6-8 minute Read
Jeffrey Epstein's wealth has long been a topic of discussion since becoming known as a 'billionaire pedophile' and other similar monickers. Described by prosecuitors this week as a "man of nearly infinite means," a
2011 SEC filing has provided a window into the registered sex offender's elite Wall Street links, according to the
Financial Times.
Epstein, who caught a lucky break tutoring the son of Bear Stearns chairman Alan Greenberg before joining the firm, left the investment bank in 1981 to set up his own financial firm. While he reportedly managed money for billionaires for decades, most of Epstein's dealings have been done in the shadows.
A 2011 SEC filing reveals that Epstein's privately held firm, the
Financial Trust Company, took a 6.1% stake in Pennsylvania-based catalytic converter maker Environmental Solutions Worldwide (ESW) backed by
Leon Black, the billionaire founder of Apollo Global Management.
ESW itself has a checkered past. In 2002, its then-chairman Bengt Odner was accused by the SEC of participating with others in a $15 million "pump and dump" scheme with ESW stock. The case was settled a year later according to
FT, with Odner ordered to pay a $25,000 civil penalty. Of note,
ESW accepted Epstein's investment several years after he had registered as a sex offender in a controversial 2008 plea deal in Florida.
Epstein's connection to Black doesn't stop there - as the financier served as a director on the
Leon Black Family Foundation for over a decade until 2012 according to IRS filings. A spokeswoman for the foundation claims that Epstein had resigned in July 2007, and that his name continued to appear on the IRS filings "due to a recording error" for five years. A 2015 document signed by Epstein provided to the
Financial Times appears to confirm this.
Epstein also built his wealth with
Steven J. Hoffenberg and Leslie H. Wexner, the former of whom was convicted of running a giant Ponzi scheme, and the latter a clothing magnate.
"I think we both possess the skill of seeing patterns," Wexner told
Vanity Fair in 2003. "But Jeffrey sees patterns in politics and financial markets, and I see patterns in lifestyle and fashion trends."
Those around Wexner were mystified over Wexner's affinity for Epstein.
"
Everyone was mystified as to what his appeal was," said Robert Morosky, a former vice chairman of The Limited. "I checked around and found out he was a private high school math teacher, and that was all I could find out. There was just nothing there."
As the
New York Times noted on Wednesday,
Epstein's "infinite means" may be a mirage, as while he is undoubtedly extremely rich, there is "little evidence that Mr. Epstein is a billionaire."
While Epstein told potential clients he only accepted investments of $1 billion or more,
his investment firm reported having $88 million in capital from his shareholders, and 20 employees according to a 2002 court filing - far fewer than figures being reported at the time.
Epstein was hit hard by the financial crisis a decade ago, while allegations of sexual abuse of teenage girls caused many associates - such as Wexner - to sever ties with him.
Bear Stearns — the bank that had given Mr. Epstein his start — was still among his investments when the crisis hit. According to a lawsuit he later filed against the bank, Mr. Epstein controlled about 176,000 shares of Bear Stearns, worth nearly $18 million, in August 2007.
Mr. Epstein sold 56,000 shares at $101 each that month. He sold the remaining 120,000 shares in March 2008 as the firm was collapsing — 20,000 at $35 and the rest at $3.04, losing big. He also lost about $50 million in one of Bear’s hedge funds.
By the time Bear Stearns came apart, Mr. Epstein was at the center of his first abuse case. He pleaded guilty to prostitution charges in 2008, receiving a jail sentence that allowed him to work at home during the day but also required him to register as a sex offender. -
New York Times
In trying to determine what Epstein is actually worth,
Bloomberg notes that "
So little is known about Epstein’s current business or clients that the only things that can be valued with any certainty are his properties. The Manhattan mansion is estimated to be worth at least $
77 million, according to a federal document submitted in advance of his bail hearing."
He also has properties in New Mexico, Paris and the U.S. Virgin Islands, where he has a private island, and a Palm Beach estate with an assessed value of more than
$12 million. He shuttles between them by private jet and has at least 15 cars, including seven Chevrolet Suburbans, according to federal authorities. -
Bloomberg
Deutsche Bank, meanwhile, severed ties with Epstein earlier this year - right as federal prosecutors were preparing to charge him with operating a sex-trafficking ring of underage girls out of his sprawling homes in Manhattan and Palm Beach, according to
Bloomberg, citing a person familiar with the situation. It is unknown how much money was involved or how long Epstein had been a client.
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