Wealth: The mystery of Jeffrey Epstein’s fortune
The public finally got “a limited glimpse into the secretive money manager’s wealth” in a court filing from accused sex trafficker Jeffrey Epstein, said Kadhim Shubber in the Financial Times—and there’s less of it than many have believed. While Epstein has frequently been called a billionaire, his lawyers—seeking bail for the financier—disclosed total assets of about $560 million, including his many properties and $195 million in hedge funds and private equity. Much of Epstein’s fortune “appears to be an illusion,” said James Stewart in The New York Times. He touted himself as “a financial wizard who used arcane mathematical models” to bolster the investments of billionaire clients. But his firm, Financial Trust Co., “has released no audited financial statements or performance reports.” His first client, Steven Hoffenberg, was “a notorious fraudster later convicted of running a $460 million Ponzi scheme.”
Hoffenberg has claimed that Epstein was in on that fraud and shared in the profits, “using the ill-gotten gains to launch his investment company,” said Davis Richardson in Observer.com. It’s not the only suspicion of fraud that has swirled around Epstein, said Matt Stieb in New York magazine. “Multiple red flags,” including his secrecy regarding his client list and his claim to be doing all the investing himself while 150 employees worked in the back, point to a possible Ponzi scheme. Another “vital question” about Epstein’s business: If Epstein was really managing a lot of money, how did his “one-man show” weather the 2008 financial crisis, which hit just as Epstein was serving his short stint in jail?
One important source of Epstein’s wealth seems to be the bond that he forged with the retail magnate Leslie Wexner “at the perfect time,” said Gregory Zuckerman and Khadeeja Safdar in The Wall Street Journal. Wexner, who bought Victoria’s Secret for $1 million in 1982, was “riding the boom in shopping malls with brands such as Abercrombie & Fitch, Limited, Express, and Lane Bryant.” Epstein became Wexner’s “chief personal finance adviser,” presenting him with a variety of investments—and advice on many other aspects of life, from how to secure the right nanny to “input on which women Victoria’s Secret should select as models.” In 1998, Epstein bought Wexner’s 21,000-square-foot Manhattan townhouse. But Wexner “cut off ties” with Epstein after his 2008 conviction on sex charges; since then it “isn’t known” how much more investing Epstein did.
Epstein’s businesses are registered in the Virgin Islands, said Jonathan Levin in Bloomberg.com, but if you go to the address “in a commercial plaza that’s also home to a Sami’s Mini-Mart and the Happy Nails salon,” you won’t find any sign of them. However he got his money, he did seem to spend it freely in the Virgin Islands. On his 70-acre island in the Caribbean, Little St. James—Epstein nicknamed it St. Jeff’s; others have called it Orgy Island and Pedophile Island—he spent “many millions” on roads and several villas. He had one ironclad rule for the staff: “Epstein could never catch sight of them.” ■