Epstein

by Dylan Howard

  Harry Evans once described his wife, Tina Brown, as being cunning like a desert rat. That was a compliment. I think Epstein was, too. He had enough knowledge that he could talk for five minutes about anything, and for six minutes about none.

  I had no reason to disbelieve his fantastic stories. I was not then a novelist. On the other hand, I was interested in confirming.

  He sometimes helped dictators hide their money. He sometimes helped Americans recover the money that dictators had. It seemed cheerfully amoral, and that is what interested me and make me want to write about him. I said, “Jeffrey, let me see you work.”

  I saw him in two places. One, he had this vast office that used to be at Random House. It was largely empty, and you couldn’t tell what work was being done there.

  Another time, we arranged to meet in the lobby of a Park Avenue building, and we took the elevator up to a law office, where Jeffrey was going to serve a subpoena. He didn’t get past the receptionist, and I found the whole event puzzling. On the one hand, you’re recovering millions and millions of dollars. On the other hand, you’re doing what a process server does.

  Those incidents rattled Kornbluth, and he began to doubt if Epstein really was the man he claimed to be. But there was one disturbing interaction that truly ended their relationship once and for all.

  I was about to be married to an extremely beautiful historian, who had just published a book of military history.

  The night before we were to be married, we had separate phones, and he called her on hers and said, “Since you’re going to be married tomorrow, this is your last night of freedom. Why don’t you can come over and sleep with me?” At first, she didn’t take it seriously. It was just the sort of flip thing that any number of friends would have said. But no, he was actually serious. That was a major tell.

  Then, a few days later, days after our marriage, someone purporting to be me called a number of women, including some of our friends saying, “It’s Jesse Kornbluth. I’d love to go out with you.” They called us to say, “Somebody, Jesse, is impersonating you.” Who would do that?

  My wife’s theory is, “It had to be Jeffrey.”

  Meanwhile, Epstein was growing ever more desperate—and reckless—in his pursuit of money and influence.

  In early 1981, one of Epstein’s colleagues at Bear Stearns tipped off management that Epstein was testing the boundaries of the law. After an investigation, Epstein admitted he had loaned $20,000 to a friend, Warren Eisenstein, who then used the money to invest in stocks, with Epstein’s insider knowledge guiding him. It was unethical, and potentially illegal. Epstein wasn’t fired, but he was fined $2,500 and passed over for a partner promotion.

  That was humiliating in itself, but a few days after that there was an even more painful blow. The US Securities and Exchange Commission (SEC) opened an investigation into Epstein’s client Edgar Bronfman, and Epstein was accused of illegal securities violations.

  Depending on who you ask, Epstein was either unceremoniously fired at that point, or quit in a blaze of glory. Either way, it left the unabashed social climber in a very undesirable position.

  No longer a Wall Street wunderkind, Epstein was jobless, homeless, and running out of funds. He had to get creative.

  Desperate Epstein bent the rules even further and began taking on controversial black-market clients, like Saudi Arabian businessman Adnan Khashoggi, the man who had been implicated when the Iran-Contra Affair became public in 1986.

  (The Iran-Contra Affair was a secret US arms deal in 1985 that traded missiles and other arms to Iran. Officially, the deal was struck to free Americans hostages held by terrorists in Lebanon. Secretly, however, the American government had sold the weapons and used the proceeds to support armed conflict in Nicaragua. The controversial scheme—and the ensuing political scandal—threatened to bring down the presidency of Ronald Reagan. The hub of much of the Contra activity was in Arkansas, while Bill Clinton was governor.)

  Epstein’s involvement was to help Khashoggi broker global armament deals, which was more than just old guns in crates; it included the sale of major weaponry like the AWACS (Airborne Warning and Control System) aircraft.

  Meanwhile, according to a US Defense Intelligence Agency report, Khashoggi was also one of the biggest drug traffickers doing business in Colombia in the 1980s and 1990s.

  But Adnan Khashoggi was not only an arms dealer; he also worked with and for the CIA. During this period, Epstein was known to boast that he was a CIA agent as well. Khashoggi was not his only link. Epstein’s old Dalton connection Donald Barr had worked for the OSS before becoming a headmaster. Barr’s son William Barr would later work for the CIA as well.

  After Epstein’s death, the FBI would find he’d used an Austrian passport with a fake name to enter the United Kingdom, Saudi Arabia, and Spain during that period. His lawyers have insisted it was to avoid an anti-Semitic attack—not to avoid the attention of the authorities in the United States.

  Despite his growing social network, Epstein certainly was spiraling further and further away from the exclusive circles of proper society that he’d always wanted to inhabit.

  Then in 1987, he got what seemed like a lucky break, meeting Steven Hoffenberg of Tower Financial Corporation, a leading debt collection and corporate raiding agency at the time. Hoffenberg recalled that heady period in a series of exclusive interviews with our team.

  “Towers Financial was a publicly traded company involved in accounts receivable collection and financing and asset financing and was raising money on Wall Street in the capital markets,” Hoffenberg told reporter Doug Montero.

  Jeffrey Epstein applied to Towers Financial for a position in investment banking via an introduction from his employer in Europe named Douglas Leese who was very unhappy with Jeffrey Epstein’s behavior. . . . Epstein submitted expenses for hundreds of thousands of dollars that were inappropriate. They wanted to discharge Jeffrey Epstein.

  They realized, though, that he had a great ability on Wall Street and this company was partners overseas with Towers Financial. They asked me if I would interview him and consider him for the investment banking division of Towers Financial. That’s what occurred. That’s how I met him.

  The time frame of our first meeting in New York City at Towers Financial’s headquarters was in the eighties, probably more like ’86, ’87. Jeffrey Epstein had worked in Europe. . . . He was very heavily involved in the illegal side of the business, of the money laundering, the spying, the arms sales. I’m sure there was some legitimate components that wouldn’t be criminal, but the majority of his work product was criminal.

  At this late hour of many years later, I like being concise and I don’t want to misquote, but I can tell you that they sold armament throughout the Middle East and around the world. There was a sale of aircraft, I believe. The AWACS or the air force protective planes for spying, they were involved in that . . . and they were involved in all types of armament being sold. They did work a partnership with Adnan Khashoggi’s group in Saudi Arabia regularly and selling armament with Adnan Khashoggi’s folks in Saudi Arabia and throughout the Middle East.

  Nevertheless, Hoffenberg said:

  I was very impressed with the unbelievable personality and unbelievable ability of Jeffrey Epstein to become a friend and the uncanny ability that he had as a mastermind criminal on Wall Street.

  Jeffrey Epstein was a brilliant, brilliant Wall Street mastermind in criminality for securities fraud. I was greatly impressed with his demeanor, his ability to understand complex securities underwritings and sales to investors. He was also broke. He was literally without funds because he got into trouble in Europe and had gotten into trouble at Bear Stearns.

  He was extraordinarily gifted. Very talented, very personable, very able to get to be liked at once by people, and a mastermind of criminality on Wall Street. He was so unusual as an executive and had so much ability. It was just very surprising how gifted he was.

  His ability to sell you se
curities when you weren’t looking to acquire securities was remarkable. He would end up convincing you to buy securities in Towers Financial and you weren’t even considering that. He had that gift and that ability.

  He was a master manipulator.

  But Epstein’s manipulations weren’t always done through legal means. By the early nineties, the authorities had set their sights on Towers—and Epstein—for operating a multimillion-dollar Ponzi scheme.

  Hoffenberg explained:

  The securities violations at Towers Financial was branded as a Ponzi crime. You raise money from one investor to pay another investor. That’s the simple definition of Ponzi. Jeffrey Epstein participated full time and was a mastermind in that part of the Towers Financial crimes.

  Towers Financial got into an awful lot of legal problems and litigations and ended up going into bankruptcy. Trustees were appointed to operate the company . . .

  Jeffrey Epstein had a very strong relationship with the lawyers that the trustee hired. Actually, the trustee in bankruptcy at Towers Financial, a man named Alan Cohen, hired one of Jeffrey Epstein’s best friends and lawyers, Indyke and Kahn, to investigate Jeffrey Epstein at Towers Financial, which is remarkable.

  Jeffrey Epstein manipulated that occurrence without question. Absolutely, it was a brilliant manipulation, shockingly.

  The outcome was just as jaw-dropping.

  “Epstein was not punished in the crimes at Towers Financial,” Hoffenberg said. “Jeffrey Epstein’s ability as a master criminal got him out of the penalty box for all of that. That’s what happened continuously in his other criminal charges as well.”

  Hoffenberg, meanwhile, was sentenced to twenty years in prison, a $1 million fine, and $463 million in restitution.

  Epstein didn’t just escape justice, however. Hoffenberg claimed he moved on to new adventures—with millions in his pocket.

  “Epstein was able to fund his criminal enterprise Financial Trust Company and J. Epstein and Company,” Hoffenberg alleged. “There was another. I believe it was International Asset Collections. He was able to fund it with the assets and money from the Towers Financial crimes.”

  Meanwhile, Epstein did have one reputable high-profile client: Les Wexner, founder and CEO of The Limited, a company that includes the lingerie empire Victoria’s Secret. Epstein first crossed paths with the billionaire business tycoon in Palm Beach in the mid-1980s. Epstein reportedly stopped Wexner from investing in the stock market shortly before the 1987 crash, and as a result, Epstein and Wexner became very close, very fast.

  “They had a very deep bond, a very deep friendship and a very deep business relationship for a number of years,” explained Hoffenberg.

  Epstein took a hands-on approach to cleaning up Wexner’s vast holdings. He unloaded bad investments, tightened Wexner’s budgets, streamlined his profitable assets, and even fired deadweight.

  By all accounts, Wexner was impressed—and grateful.

  At the time Epstein began working with Wexner, the State Department was his landlord. According to property records, Epstein rented a posh apartment from the State Department at 34 E 69th Street from 1992 to 1995, for the cool sum of $15,000 per month. The home featured carved oak doors, a white marble foyer, a book-stacked library, a marble central staircase, antique furnishings throughout, and—perfect for Epstein—a steam room.

  Life for Epstein was good, but Wexner could make it even better.

  In 1989, Wexner had purchased the 40-room Herbert N. Straus Mansion at Manhattan’s 9 E 71st Street for a cool $13.2 million. At the time, it was the highest-ever recorded residential real estate sale. The fifty-two-year-old completely gutted and renovated the interior of the 1933 stone masterpiece. He also added security cameras, closed-circuit TVs, telephones, and heated sidewalks to melt the snow.

  When the renovation was finished, Wexner gave it to Jeffrey Epstein. On January 11, 1996, The New York Times reported, “Reached in Florida last week, Epstein said the house was now his.”

  The way that Epstein became lord of that manor has always been something of a mystery. Strangely, that initial property transaction was never recorded in New York City records online. When Epstein transferred the property between two of his own shell companies in 2011, property records recorded no original purchase price. Highly unusual, the document indicates that when Epstein acquired the home from Wexner, the transaction did not involve money.

  The following year in Palm Beach, Florida, Epstein purchased a 14,000-square-foot residence on posh El Brillo Way for $2.5 million, not far from Trump’s sprawling Mar-a-Lago estate.

  For the first time in a decade, Epstein was back on top. Still, there was further he could go.

  In 1991, Epstein convinced Wexner to give him full power of attorney over his business affairs.

  “People have said it’s like we have one brain between the two of us,” Epstein said at the time. “Each has a side.”

  As for Wexner, he said of Epstein, “I think we both possess the skill of seeing patterns. Jeffrey sees patterns in politics and financial markets, and I see patterns in lifestyle and fashion trends.”

  “He is always a most loyal friend,” Wexner continued. “He does not pick a fight, but if there is a fight, he will let you choose your weapon.”

  Epstein’s friendship with Wexner won him some legitimacy among the business world’s elite, but the stories of his sleazy backroom dealings continued. Stuart Pivar, an art collector who was also friends with Epstein at the time, told reporter Andy Tillett that Epstein’s ability to spin the truth was unsurpassed.

  “He ruined a lot of people commercially from doing all kinds of terrible rotten deals, because he was basically a terrible, bad man,” Pivar said. “He outgrew his normalcy, let’s put it that way. Jeffrey did things that people don’t do.

  “He liked to fool people. When you walked in [to his apartment] there was a huge Max Beckmann and I went over and said, ‘Jeffrey, wow, that’s magnificent!’ He said, ‘That’s a fake!’

  “He had fooled me and he liked the idea. He likes to fool.

  “Jeffrey would make things up you know, believe it or not. Why did he do that? Just as a game. He liked to keep things interesting . . . a form of practical joke that people don’t do. But Jeffrey did things that people don’t do.”

  In those early days, some questioned whether Epstein’s life of glamour and intrigue was as tenuous as the 1980s financial boom that went bust.

  Laura Goldman mingled with Wall Streeters during that period, and told reporter Marc Lupo that it was clear that no matter how Epstein tried, he didn’t quite fit in.

  “Well, I had some questions when I met Jeffrey Epstein. Of course, he said he was a hedge fund billionaire. But I had some doubts about that because I went to Wharton with some of the leading investors on Wall Street ’til this day. Went to school with Steve Cohen, Gotham Securities, Joel Greenblatt, and none of them were doing business with him.

  “I said to myself, ‘Well, these are some of the greatest investors of all time and Jeffrey Epstein doesn’t have money with them. So does he have as much money as he says?’”

  In any case, it was clear that money wouldn’t be enough to get Epstein where he wanted to go. He needed something else.

  CHAPTER 4

  LADY GHISLAINE

  Jeffrey Epstein continued his messy rise through the ranks of New York society. Across the ocean, British publishing magnate and aristocrat Robert Maxwell was coming to the end of the line.

  The two men—separated by several time zones and a few decades in age—could have been friends in another life.

  Both had risen from humble circumstances to the heights of the elite. While Epstein’s parents lived among Holocaust survivors, Maxwell and his family had fled the Nazis, moving to England from Czechoslovakia before World War II began. Maxwell then served with the exiled Czechoslovak Army, fought on the beach at Normandy, and parlayed his fame as a war hero into a publishing empire. Later an elected Member of Parliament, Maxw
ell traveled over land by helicopter, and by water in his 180-foot yacht Lady Ghislaine—named for his beloved youngest daughter.

  That yacht would ultimately take him to his watery grave.

  At 4:45 a.m. on November 5, 1991, just off the coast of the Canary Islands, Maxwell calmly radioed the members of the Lady Ghislaine crew to lower the heat in his cabin. It was his final order. Just a few hours later, fishermen found the tycoon’s naked body floating in the North Atlantic.

  At the time of his death, no one knew that Maxwell’s businesses were on the precipitous edge of collapse. Within weeks of his demise, a $560-million-dollar hole was discovered in the pension funds of his companies. An embezzler of almost unimaginable scale, he had illegally raided the funds to prop up his empire. As The Guardian noted, when the full extent of his crimes was uncovered, fawning headlines such as “The Man Who Saved The Mirror” were swiftly replaced by epithets like “Maxwell: The Robber.”

  When it comes to the official verdict on how Maxwell died, opinions remain mixed. One conclusion: heart attack. Another: drowning. Worse still: an assassination.

  “He was a man who could not face the ignominy of jail, of being shown to be a liar and a thief—and he very much knew that was coming,” Roy Greenslade, a former editor of one of Maxwell’s newspapers, the Daily Mirror, told The Guardian. “So I am a suicide theorist. I believe Maxwell threw himself off.”

  But Ken Lennox, then the Mirror’s senior photographer, who saw the publisher’s naked corpse shortly after it was pulled from the sea, is convinced: It was an accident.

  “He used to get up at night and pee over the stern of the ship. Everybody knew this. And he weighed about 22 stone [309 pounds] at this time. The railings were wire. So I think he lost his balance, because he was very top-heavy,” Lennox said. “He was Teflon man. I don’t think he committed suicide.”