Three years after Jeffrey Epstein served nearly 13 months in prison in a sweetheart plea deal, the self-admitted pedophile was able to rake in over $200 million in revenues through a DNA data-mining company he established in 2012, according to the New York Times.
His start-up, Southern Trust, reported more than $200 million in revenues over the next five years, according to a review of previously unreported financial statements filed in the Virgin Islands.
Despite a name that calls to mind a financial services firm, the fledgling company with a handful of employees said it was developing a DNA data-mining service. Southern Trust was trying to gauge customers’ predisposition to cancer by “basically organizing mathematical algorithms,” Mr. Epstein told Virgin Islands officials as he sought a lucrative tax break in 2012. -New York Times
According to documents for Southern Trust and Epstein's earlier business, Financial Trust, the latter "peaked at the end of 2004, when it reported $563 million in assets and net income of $108 million." Southern Trust, meanwhile, reported $175 million in retained earnings in 2017.
What isn't made clear from the documents is where all that money came from, or as the Times notes: "Nor do they offer an explanation for why customers would hand over money to a man who had apparently switched from financial services to DNA research."
Perhaps rumors that Epstein was running an international blackmail scheme involving sex-trafficked minors aren't so far fetched.
In 2012, Mr. Epstein asked the Virgin Islands Economic Development Authority to note that Financial Trust no longer managed money, so it would not have to register with federal securities regulators as required under the Dodd-Frank Act. Later that year, Financial Trust was replaced by Southern Trust, which Mr. Epstein told territorial officials would still maintain a “financial arm.”
The single-page unaudited financial statements for both companies — obtained through a public-records lawsuit against the territory’s Division of Corporations and Trademarks — are littered with curious line items. -New York Times
The Financial Trust documents reveal that the company had less than twelve employees, with investment expenses varying from $1.3 million in 2000 to $16 million in 2004, and $42 million in 2005. The year Epstein was charged in Florida for soliciting prostitution from a minor, Financial Trust funneled $117 million into an unnamed subsidiary with an unknown purpose. It was then transferred to Southern Trust in 2013 - and greaw to over half the company's $391 million in assets by the end of 2017. Moreover, Southern Trust took out a $30.5 million loan that year of unknown origin.
Meanwhile, Epstein "paid himself handsomely" according to the report - pocketing $400 million in dividends and other payments since 1999, the first full year after he shifted his operations from New York to the Virgin Islands.
Epstein was arrested in July after having been charged with sex-trafficking underage girls. The criminal case against him came to an immediate halt after he was found dead in his Manhattan jail cell. While it was ruled a suicide, an unfortunate camera malfunction and the fact that his cellmate was transferred out shortly before the incident means that there are no witnesses.
Two days before he died, Epstein signed a will which placed an estimated $500 million into a trust, listing Darren K. Indyke and Richard D. Kahn, two longtime associates, as executors.
The financial statements and accompanying documents reviewed by The Times were signed at various times by Mr. Indyke, a lawyer who incorporated dozens of Mr. Epstein’s companies, and Mr. Kahn, a New York accountant. Mr. Indyke served as president of Financial Trust for two years, which included the period that Mr. Epstein was serving a prison sentence in Florida after his 2008 guilty plea. -New York Times
According to documents obtained from the Virgin Islands Economic Development Authority, Epstein was rarely questioned on his dealings - granting him massive tax exemptions which allowed him to pay as little as 10% effective corporate tax rate. The breaks are typically granted to companies which agree to minimum hiring requirements, and at least a $100,000 investment in an industry which advances the region's "economic well-being." Southern Trust was one of 71 such companies receiving this type of benefit.
"Rich people have tried to make it their residence and do business there," said Washington lawyer Jack Blum, who has led corruption investigations for several Senate committees. "The idea was to keep it all out of the hands of the I.R.S."
Mr. Epstein set up shop in the Virgin Islands in 1998, calling himself a “financial doctor” who had decided to settle there after “vacationing up and down the world,” according to a transcript of a hearing the next year as he sought tax incentives that were ultimately granted. During his extensive remarks — an official interrupted Mr. Epstein’s soliloquy at one point to remind him he had only 15 minutes to make a presentation — he discussed working at Bear Stearns and opined about that “electronic mail” was rendering the fax machine obsolete.
He also boasted about managing money for Leslie H. Wexner, the longtime chief executive of the company that runs Victoria’s Secret, who recently said Mr. Epstein had misappropriated large sums of money from him.
The end of their association is evident in the income statements of Financial Trust. The company reported fee income — money charged to clients for services, rather than gains from investments — of $66 million in 2006. In 2007, the year that Mr. Wexner said he had cut ties with Mr. Epstein, Financial Trust’s fee income was just shy of $4 million. In 2008, it was $100,000.
Until and unless more comes to light, this may be the best glimpse we will get into Epstein's complicated finances. As they say, dead men tell no tales.