Where is Jeffrey Epstein’s money going?
When Jeffrey Epstein died, he left behind an estate worth an estimated $600 million. There were vast financial holdings, a private jet, and lavish properties, including an island hideaway, a grand Manhattan mansion, and a 7,600-acre ranch in New Mexico.
But taxes, property upkeep and temperature-controlled storage of his art collection — plus $121 million in settlements to more than 135 women who accused him of sexually abusing them when they were young – have since reduced the size of Mr. Epstein’s estate. . It is now worth around a third of its value when the financier, 66, hanged himself in a Manhattan jail cell while awaiting trial on sex trafficking charges two and a half years ago.
The biggest ongoing expense is legal fees: $30 million so far for law firms brought in to clean up Mr. Epstein’s cases. Lawyers helped hand out settlements, liquidate assets and sift through the complicated holdings of a man who set up his own offshore bank.
The work won’t be finished any time soon. The estate has yet to resolve a civil fraud lawsuit, brought by the Virgin Islands attorney general, who claims Mr. Epstein used the territory to facilitate a criminal enterprise by extracting more than $70 million in tax revenue from it. And Ghislaine Maxwell, the former associate of Mr Epstein who was convicted of sex trafficking last month, sued the estate to recover her legal costs.
Only when all of this is over will the estate distribute whatever remains, under the terms of a secret trust that Mr Epstein created and named in a will drawn up just two days before his death.
Details of the trust are not public. But Karyna Shuliak, Mr Epstein’s girlfriend and the last person he spoke to on the phone before killing himself, will be one of the main beneficiaries, The New York Times previously reported. Ms Shuliak, originally from Belarus, is a dentist who shared a practice on the island of St. Thomas with Mr Epstein’s Southern Trust Company. A lawyer for Ms Shuliak declined to comment.
The estate paid $9 million to attorneys who established and oversaw the victims’ restitution fund, and $21 million to at least 16 law firms for services and expenses, according to a review of quarterly financial statements filed by succession to the Superior Court of the Virgin. He is.
Five companies – Troutman Pepper, Hughes Hubbard & Reed, White & Case, McLaughlin & Stern and Kellerhals Ferguson Kroblin – each collected fees exceeding the nearly $900,000 average award paid to victims by the compensation fund. A lawyer for nine accusers who submitted claims disputed the size of those legal bills.
“It’s appalling that the lawyers who split the estate of Jeffrey Epstein benefit more than his victims,” said Florida attorney Spencer Kuvin, who has been seeking compensation for some of Mr Epstein’s accusers for more than a year. decade.
Understanding the Ghislaine Maxwell trial
After days of deliberation, a jury found Ms Maxwell guilty of all but one charge in the sex trafficking case against her.
Daniel Weiner, a lawyer for Hughes Hubbard, who billed the estate more than $6 million, said comparing legal fees and settlement amounts was wrong. He said the estate’s executors, Darren Indyke and Richard Kahn, had placed no limits on the amount of money paid out of the restitution fund, overseen by an independent trustee.
Victims who participated, he added, were able to avoid legal costs that could have reduced the amount they received. (Victims’ attorneys are paid on prize money; a one-third share is typical.)
Mr. Weiner said he would not discuss whether Mr. Indyke and Mr. Kahn, who were longtime advisers to Mr. Epstein, would ultimately receive the proceeds of the estate through the trust.
“The trust created by Mr. Epstein prior to his death has not been and will not be funded, if ever, until every claim against the estate has been resolved,” Mr. Weiner said in a statement. “Public curiosity about potential beneficiaries who may never receive anything from this trust cannot justify the violation of their legitimate privacy interests.”
Although estate legal costs continue to rise, William LaPiana, a New York Law School professor and trust and estates expert, said the costs have, so far, been fairly typical.
Mr LaPiana said it was not unusual for legal fees in complex estates that involved numerous disputes to approach 5% of the initial value of the estate. Legal fees not related to the compensation fund currently represent approximately 3.5% of the initial estate valuation.
“I don’t believe a court would yet decide that the fees, admittedly high, are excessive,” he said.
The fees are just one of a long list of costs that have eaten away at the fortune Mr. Epstein has built primarily by providing financial and tax advice to a small group of wealthy men. Among them were two billionaires: Leon Black, founder of private equity firm Apollo Global Capital, and Leslie Wexner, founder of a retail empire that once included Victoria’s Secret.
The estate’s tax bill alone was about $180 million. Property maintenance—two tropical islands, the ranch, and a Parisian apartment are still unsold — cost millions more. The estate also pays about $15,000 a month to store Mr. Epstein’s art collection in a temperature-controlled warehouse in Long Island City, according to court documents. More common expenses include about $390 a month to Verizon for phone services and about $154 a month to Dish for satellite TV services, according to filings.
The money came as assets were sold: $66 million from the sale of Mr. Epstein’s former homes in Manhattan and Palm Beach, Florida, though that was well below their asking prices. A Gulfstream jet, one of three planes owned by Mr Epstein, was sold in late 2020 for $10 million, about $7 million less than the estate appraised it.
In August, the estate sold its half interest in a yacht club in St. Thomas for $4.6 million. A few months earlier, he sold his Sikorsky helicopter, generating $1.5 million. Other asset sales brought in more modest sums: In September, the estate secured $985 for an “Ikea green shag rug” and outdoor furniture from Mr. Epstein’s island home.
The estate’s value is now around $185 million, and litigation with the Virgin Islands could wipe out much of that.
Denise George, the territory’s attorney general, filed a civil fraud complaint against the estate two years ago, claiming that Mr. Epstein had wrongfully received a tax benefit allowing him to fund sex trafficking. This has wrongfully deprived the territory – where the poverty rate is roughly double the national average – of much-needed income, Ms George said. She is seeking to recover tens of millions of dollars in lost revenue, as well as punitive damages.
Ms George’s office retained the services of a law firm, Motley Rice, to handle much of its investigation. Motley Rice’s compensation will ultimately be based on any judgment or recovery in the case, the attorney general’s office said.
The two sides began settlement talks last year, although the sides are not close to an agreement, said two people briefed on the matter, who spoke on condition of anonymity because the talks are confidential.
Sandra Goomansingh, spokeswoman for Ms George, declined to say whether the parties were engaged in settlement negotiations. Mr. Weiner also declined to comment on the settlement talks.
The size of any settlement depends, in part, on how much money Mr. Epstein’s two islands off St. Thomas can fetch for sale. His estate valued the properties at around $20 million, according to the latest quarterly report. But a local estate agent said they could opt for much more.
The agent, April Newland, who specializes in selling high-end properties, said she showed the islands to a number of interested buyers, including several cryptocurrency investors. Ms Newland said getting both for just $20million would be a ‘steal’.
“There is a market for private islands,” she said. “And once they start marketing them, they will leave.”