EFTA00128641.pdf

(Roy. 10-01-1999) FEDERAL BUREAU OF INVESTIGATION Precedence: ROUTINE Date: 04/07/2002 To: Miami Attn: SA Fort Pierce RA ve/ From: Baltimore Squad 17/Wilmin ton RA Contact: SA Approved By: Drafted By: :dms A4.5 3 1 Case ID #: 196A-MM-93577' (Pending) ye196-BA-0-WILM Title: JOHN RAYMOND MACARI, d/b/a JAMAR ENTERPRISES, INC, SUMMIT ENTERPRISES, INC, CENTURY CAPITAL SA, FOX MOOR HOLDING LIMITED; FBW; FBM; MONEY LAUNDERING Synopsis: Criminal referral from U.S. District Judge Joseph J. Farnan, Jr., District of Delaware, being forwarded to Miami/FPRA for appropriate investigative action. Administrative: Reference telcalls of SA Baltimore Division/Wilmington RA and SA Miami Division/Fort Pierce RA, on 04/04/2002 and 04/05/2002. Enclosure(s): Copy of letter, with attached correspondence, from U.S. District Judge Joseph J. Farnan, Jr., District of Delaware, addressed to U.S. Attorney Colm F. Connolly, District of Delaware, dated 12/28/2001, in reference to Winstar Communications, Inc, et al., Chapter 11 Bankruptcy case. Details: As discussed between SA Baltimore Division/Wilmington RA and SA Miami Division/Fort Pierce RA during referenced telcalls, it appears that the enclosed criminal referral rom U.S. District Judge Joseph J. Farnan, District of Del are, relates captioned case involving subject John Raymond care, d/b/a C tury Capital, S.A. The Chapter 11 Bankruptcy case involving debtor W star Communications Inc. (Winstar) is currently before Judge F- nan's court. In December 2001, there was a proposed acquisit' n of 19 .L.1- a a3 8A - o-i4)) /7 0P41- EFTA00128641 To: Miami From: Baltimore Re: 196A-MM-93577, 04/07/2002 Winstar by another company, W tel 'Telecom Holdings Inc. (Wintel), 600 Madison Avenu , 25th Floor, New York, NY, telephone In order t finance Wintel's pr osed acquisition, Wintel's principal, Laurence S. mmerman, attempted to obtain a $23 mlialo ollar bridge loan om a private funding source, Jeffrey E. stein, 457 Madison Avenue, 4th Floor. New York, NY, telepho (212)750-9895, until permanent financing could be arranged with The Bank of New York. Zimmerman offered Epstein $15 million worth of U. S. Treasury Bonds as collateral for the $15 million dollar bridge loan. As proof of Wintel's rights in the U.S. Treasury Bonds, Zimmerman provided Epstein with a copy of a Bloomberg screen printout relating to $15,514,000 of U.S. Treasury Bonds, bearing CUSIP Number Zimmerman also provided Epstein with an Institutional Custodial Safekeeping Receipt, an Institutional Receipt and a Special Addendum to the Institutional Custodial Safekeeping Receipt, relating to $20 million of U.S. Treasury Bonds (hereinafter "collateral instruments"). These co ateral instruments were purportedly issued by fiduciary Wi ams Management and Capital Group, Ltd, 5721 178th ce, Suite 05, Lynnwood, Washington, telephone ( and were purpor e• y sa ne Mar S liams and Charles C. K q, as the com•an 's President and -1 e •ectivel Fu ther, the co atera instruments indicated that Century Capital S.A. was the beneficiary of the $20 million of U.S. Treasury Bonds, with Wintel designated as the assignee. The aforementioned collateral instruments also contain the purported signature and official bank stamp of Bank Officer Kevin "Keon" of Wells Fargo Bank, Lynnwood, Washington. When Epstein contacted Wells Fargo Bank in his effort to verify the authenticity of the collateral instruments, he learned that the signature of Kevin "Keon" was a forgery, as there was no Kevin "Keon" employed at the Lynnwood Branch of Wells Fargo Bank. There was a Kevin "Keo" employed at the Monroe Branch of the bank, but he had no knowledge of the collateral instruments in question. Epstein did not fund the $15 million dollar bridge loan to Wintel after his discovery of the fraudulent collateral instruments. It does not appear that Epstein suffered any financial loss in connection with the proposed loan transaction. As discussed during referenced telcalls bet and SA mom U.S. Treasury Bond CUSIP Number (above) is one of the many CUSIP Numbers that John Macari has, in the past, claimed ownership of in furtherance of the various fraud schemes identified in captioned case. Miami Division made contact with the U.S. Treasury Department, Bureau of Public Debt .•4. 2 EFTA00128642 a To: • Miami From: Baltimore • Re: 196A-MM-93577, 04/07/2002 and established the Macari's ownership of these bonds is fictitious. As further evidence of John Macari's involvement in the attempted $15 million bridge loan fraud, Macari's name appears as a copy recipient on a letter which was sent by Mark S. Williams of Williams Management and Capital Group, Ltd, addressed to Laurence Zimmerman, dated 12/18/2001, wherein Williams withdrew his company's participation in the proposed transaction between Zimmerman's group and Century Capital, S.A. Copies of all documents referred to in this communication are included as attachments to the enclosed letter from U.S. District Judge Farnan to U.S. Attorney Colm F. Connolly, District of Delaware, dated 12/28/2001. This information is being provided to Miami for investigative action deemed appropriate inasmuch as it relates to captioned case. There does not appear to be any investigative leads within the Baltimore Division, and therefore, Baltimore will take no further action unless advised to do so by Miami Division. 3 EFTA00128643 To: • Miami From: Baltimore • Re: 196A-MM-93577, 04/07/2002 LEAD(s): Set Lead 1: MIAMI AT FORT PIERCE, FL Review enclosed letter with attached correspondence containing criminal referral from U.S. District Judge Joseph J. Farnan, Jr., District of Delaware, and take appropriate investigative action. •• 4 EFTA00128644 •4 • • UNITED STATES DISTRICT COURT DISTRICT OF DELAWARE CHAMBERS OF LGCKBOX 27 JOSEPH J. FARRAH, JP- 844 MG STREET JUDGE US. COURTHOUSE WILMINGTON, DELAWARE I MI 002)5734155 December 28, 2001 Colm F. Connolly United States Attorney U.S. Attorney's Office P.O. Box 2046 Wilmington, DE 19899-2046 RE: In Re Winstar Communications, Inc., et al. Chapter 11 Case No. 01-1430 JJF Dear Mr. Connolly: I refer the attached correspondence to you for whatever action you deem appropriate. Sincerely, JOSEPH J. FARNAN, JR. JJFjr:sb Enclosure cc: Jeffrey E. Epstein (w/o encl.) Mark J. Shapiro, Esquire (w/o encl.) David Bird, Clerk, U.S. Bankruptcy Court (w/encl.) EFTA00128645  • • DEC 28 2007 JEFFREY E. EPSTEIN The Villard House 457 Madison Avenue Fourth Floor New York, New York 10022 Telephone Telecopier December 19, 2001 VIA TELECOPIER ( ) AND FIRST CLASS MAIL Hon. Joseph J. Farnan, Jr. United States District Court District of Delaware I. Caleb Boggs Federal Building 844 N. King Street Room 6325, Lockbox 27 Wilmington, DE 19801 Re: Winstar Communications Inc. Dear Judge Farnan: I am writing in regard to the proposed acquisition (the "Acquisition") of Winstar Communications Inc. by Wintel Telecom Holdings Inc. ("Wintel"). 1 feel it necessary to advise the Court and Debtor's counsel of questionable conduct which I have observed in connection with an attempt by Wintel's principals to obtain $15,000,000 of bridge financing from me for the Acquisition. Approximately ten days ago, I was approached by Mr. Laurence Zimmerman who requested that I provide Wintel with immediate bridge financing in the amount of $15,000,000 for the Acquisition. Mr. Zimmerman claimed that becauSe of the requirement by the Court of an immediate $15,000,000 earnest money deposit by the winning bidder, there was insufficient time for him to close a loan for the money he required for the Acquisition. He claimed to be negotiating this loan with The Bank of New York. EFTA00128646  • • In order to induce me to make the $15,000,000 bridge loan to him, he offered to post as collateral, among other things, $15,000,000 worth of 10 year US Treasury Bonds (the "Bonds"). A copy of the proposed term sheet for the $15,000,000 bridge loan, which he faxed to me on December 12, 2001, is attached. As indicated in that term sheet, Mr. Zimmerman initially advised me that the bridge loan had to be funded by no later than 12:00 pm on December 14, 2001. As documentary evidence of Wintel's rights in and to the Bonds, on December 13, 2001, Mr. Zimmerman faxed to me a copy of a Bloomberg screen printout relating to $15,514,000 ofUS. Treasury Bonds. On December 17, 2001, he also faxed to me copies of an Institutional Custodial Safekeeping Receipt, an Institutional Receipt and a Special Addendum to the Institutional Custodial Safekeeping Receipt, relating to $20,000,000 of US Treasury Bonds, each of which instrument purported to be issued by Williams Management and Capital Group, Ltd. on December 13, 2001 and was purportedly signed by Mark S. Williams and Charles C. King, as the President and Counsel, respectively, of Williams Management and Capital Group, Ltd. (the "Collateral Instruments"). The Collateral Instruments indicated that Wintel was the assignee of Century Capital, S.A., which was purportedly the beneficiary of the Collateral Instruments. On each of the Collateral Instruments there appeared a space for a "Bank Officer Verification and Bank Stamp". Each such space was purportedly signed on behalf of Wells Fargo Bank NA by Kevin "Keon" of the Lynwood, Washington branch of the bank, and was stamped with what appeared to be Mr. Keon's official bank stamp. Copies of the screen printout and the three Collateral Instruments are attached. On December 17, 2001, Mr. Zimmerman's associate, James P. Whittier faxed to me wire transfer instructions for the loan, and another associate Jay Phillip Parker faxed to me a form letter to the Court, pursuant to which I was to confirm the commitment to • immediately fund $15,000,000 to an account designated by Wintel. Mr. Parker instructed me to sign and return the letter to Mr. Whittier. Copies of these faxes are attached. In an effort to independently verify the authenticity of the Collateral Instruments, I personally called the Lynwood, Washington branch of Wells Fargo Bank N.A. At that time, I was advised that there is no person by the name ofKevin "Keon" who works in the Lynwood, Washington branch of the bank, but there is a person named Kevin "Keo" who works in the Monroe branch of the bank. I spoke with Mr. Keo, personally, who advised me that he never signed any of the Collateral Instruments purporting to be signed by Mr. "Keon", that the bank never received or reviewed any of the foregoing instruments and that his supervisor advised him that the bank was investigating other questionable conduct of Williams Management and Capital Group, Ltd. On December I8, 2001,1 received the attached correspondence from Mr. Zimmerman. Needless to say, I will not be funding the $15,000,000 bridge loan, and, consequently, there seems to be little reason for me to further investigate this matter. EFTA00128647  • i Nevertheless, in light of Winstar Communication Inc.'s current status, I thought that the Court and Debtor's counsel might find these events particularly relevant. Sin Jeffrey E. Epstein cc: Mark J. Shapiro, Esq. Shearman & Sterling 599 Lexington Avenue New York, NY 10022 Fax: EFTA00128648 _12/12/01 14:25 FAX -• 001 LandTel T 2123504570 600 Madison Avenue F 211750.6322 2st^MIX New York, NY 10022 To: Jeffrey Epstein From: James P. Whittier E-mail: LANDTEL Fa= (212 Pages: 2 Phone: Date: December 12,2001 Re: Winstar Bridge Loan Dear Jeffrey: To formalize conversations you had with Laurence this morning concerning a bridge loan for Winstar, please find attached a term sheet for your review and acceptance, Upon receipt of this term sheet, please call Laurence for any clarification that may be needed. Sincerely, ames P. Whittier EFTA00128649  • 12/12701 14:26 pa • -- - 01002 TERM SHEET WINSTAR BRIDGE LOAN • Loan - $15 million • Term - Date of closing of Winstar acquisition on or prior to January 10, 2002 • Consideration - • Interest rate -15% • Equity - 3% of outstanding equity at closing (Founder's Stock) • $500,000 Fee Security - $130 million in U.S. Treasuries is presently being held at Williams Management & Capital Group Ltd. for the benefit of Wintel Telecom Holdings, Inc. evidenced by a custodial safekeeping receipt A segregated portion of these securities, in the amount of $15 million, will be held for the benefit of Jeffrey Epstein or his designate. Personal guarantee by Laurence S. Zimmerman secured by the following: 515 Park Avenue, 27th & 28s Floors, New York, New York - Appraised value $23,500,000 by Cushman & Wakefield (as of Nov. 2001) - 0124 Coldstream Lane, Aspen, Colorado - Purchase price $10,900,000 (acquired Dec. 1998) Current mortgage against 515 Park Avenue is $8.6 million Current mortgage against Aspen property is $5.5 million ▪ Repayment - Proceeds of loan from the Primary lender (i.e.. BONY) secured by the safel,ce :"Mg wit representing $130 million in U.S. Treasuries • Funding Requirement - $15 million must be funded no later than December 14, 2001, no later than 12:00 P.M. Agreed to and accepted by: nee S. Zirraneman J Date Jeffrey Epstein Date EFTA00128650  12/13/01 14:25 FAX IN01/002 LandTel 600 Madison Avenue 25th Floor New York NY 10022 To: Jeffrey Epstein From: Laurence S. Zimmerman E-mail: LANDTEL 9' Fax Pages: Phone Date: December 13, 2001 Re: Jeff: As per the executed term sheet, attached please find the collateral that will be used for the bridge loan. If you have any questions, please feel free to call me. Laurence EFTA00128651 __„12/13/01 _14:25 FAX • • 2002/002 C[1:,FIBEETila Pane POE& Guvt DES SECURITY DISPLAY US TREASURY N/B t 5 5e 02/15/05 105-3+ /105-4+ C 4.35 134) BGH 914;59 -ISSOrk EMPTION INFO sgfigTrigillffláTTO9F- `RML- WIREA 11/D MAI lkITY DT 2/15/111,i i CPN FRO 2 TYPE US GOVT NATIONAL NEXT CALL DT CPN TYPE FIXED WORKOUT DT 2/15/06 MTY/REFOND TYP NORMAL InntiFirmnom*t RISK FACTOR 4.14 r CALC TYP C IJSIBEET CONVENTION CUSIP DAY MIKE llACT/ACT MLKOM SlingE INN MARKET ISS US GOVT ShDOL 1 ISSUE DATE Z/15/ COUNTRY/CORR USA/ DOL dERTPAP INT ACCRUES 2/15/96 SECURITY TYPE USN ISIN 1ST CPN DT 9/15/96 AMT ISSUED 15514(11) PRC e ISSUE 99.919 AMT OUTSTAND 19514CMM1 MIN PIECE 1000 T€7lirkS RcaTTED: 15:1AUWE---- _ISTED: NYSE/AMEX. 4`7,24 2,2'elg'2&,~ el MI itNolg, es 21i. grg. 41 211233ag EFTA00128652 12/17/01 12:51 FAX Zen • • LandTel 72127504370 600 Madison Avenue F 212.750 6322 25n Floor New York, NY 10022 To: Jeffrey Epstein From: Laurence S. Zimmerman LANDTEL Pages; a 7 Fax: Phone: Date: December 17, 2001 Re: Dear Jeff: Confirming our telephone conversation this morning, attached please find executed copies of the safekeeping receipt. Please find below the name and phone number of the contact to verify that the Treasuries have been segregated against the attached safekeeping receipt. Mark S. Williams Phone: Please be sure to tell him you are calling at the request of Jim Whittier and Mario Turrisi, Mr. Williams will not take the call if he does not hear Jim and Mario's names. If you have any questions, please contact my office. Sincerel e S. Zimmerman EFTA00128653 12/17/01 12:51 FAX 2q002 zerq by: LI1U uommumzotIons, IIIIU.; 001 dab UOUU; InC•111 (:14rMi rage WU TROM ,LUILLIMME, CAPITAL OROUFL PHONS : 425 774 0453 nee. i3 228.1 92!,53pm P2 iffenagrment anti Capital &coup, 3t.tb. 5721 17ath FL. sw, Suite 105. Lynnwood, Withiretton9&037 Tctcpbstie: IttairruioNiu. CUSTODIAMFEKEEPINQ RECEIPT Reference Number: ' Amount; Twenty Million United States Dollars ($20,000,000.00 USD) Date of Issue: December 13, 2001. ' 'Beneficiary: • CENTURY CAPITAL, SA. In Favour of Assignee: WINTEL- TELECOM HOLDINGS. TNC. Amount Code Number: CUSIP Number: ISIN Number: Fiduciary: an agerent & Capital Group, Ltd. We, Williams Management. & Capital Group, Ltd., faceted at the address set forth herein on our official letterhead, with authorized signatures appearing below, under stamp and seal, heroby ackhowtociga with full institutional responsibility and hound honate ac fiduciary (with ail obligations lawfully associated therewith), are in receipt of debt securities ("Treasury Bonds") issued by the Department of the Treasury of the Government of the United States of America having a face value, in total, TWenty Million United States Dollars (52O,000,000,00 USD), which shall be held by this Institution in accordance with the thrmc, of the Letter of Fiduciary undertaking etteched bonito and hereby made a part hereof, with Transaction Code and dated December 13, 2001. We confirm that this Safekeeping Receipt has been Issued lawfully under ruff institutional faith and trust and that this instrument Is freely available to the named bonoticiary hereof to obtain letters or linos of credit, and may bo acquired. We further confirm teal this Safekeeping Receipt may be instilled by responsible InStftutional inquiry and Will be confirmed by us by dedicated facsimje, courier, and/or KTT(Tetex transfer touch institution as designated In witting by the Beneficiary/Assignee, and that a certifiad orlainal copy of this same Safekeeping Receipt shall be delivered vie courier tothe some Institution. This institution also declares that this Safekeeping Ftecelpt shall not bo changed, altered,. appended to Or amended without the Benc-ficiary'aiAssigneieic exprosaad consent or request In duly executed writing. Page 1 of 2 EFTA00128654  12/17/01 .12;52 FAX 0002 FPROM3. 1JILLIANIS CCAPITALGROPL • PHONE NM 425 774 s2b4 Dec. 13 2001 02:54PM P3 Institutional Custodial Safekeeping Receipt December 13, 2001 This Institutional Custodial Safekeeping Receipt is an operative, fully conforming and confirmed Instrument' and is subject to the Uniform and Customs Practices of Documentary Credit (1993 plus ultimate revIelon) of the International Chamber of Commerce (I.C.C), Paris, France, Publication Number 500 and engages us In accordance with the terms hereof. Dated this 131h day ofDecember, 2001 For and on behalf of Williams Management & Capital Group, Ltd. gnature) l ,crlii, \c ae;/C- 1 (Signature) Aut 1) puithlorized Officer (2) ad 1)1, .44S.. ar Printed Name) r_le ts f-lio•Clc Ins (PrIMed Name) oiCersza":0, (Official Title) fe-se-) (Official-TWO) %he's tiont ; Bank Officer erlficationiand Bank Stamp WILL RIAS SEAL: . CAPITAL 6811112 1.103 KtrlY pato9 "1; at, s' WELLS FARGO BANK NA CU/IWO/II WA Alltlie2 Page 2 of 2 EFTA00128655  12/17/01 .12:52 FAI FROM: • • WILLIAM CAPITAL GROUPL PHONE NO. 4e 774 3253 • iZ1004 Deo. 13 2001 02:57PM P9 Williams Xanagement anbor-aPital Group, Etb• 5721 1780r sW'Sa 04 111.....r 0 imod Washita 98037 Telephone: INSTITUTIONAL REPORT Reference Number. Amount: • Twenty Million United States Dollars ($20,000,000.00 USD) Date of Issue: December 13, 2001 Beneficiary: CENTURY CAPITAL, SA. In Favor Of/Assignee: WINTEL - TELECOM HOLDINGS. INC. Account Code Number: ' CUSIP Number: ISM Number. Fiduciary: iliams anagement & Capital Group, Ltd. We, INIlliarris Management & Capital Group, Ltd., located at the address set forth hereinabove on our official letterhead, with authorized signatures appearing belmi, under stamp and seal, hereby acknowledge with full Inifitutional responsibility and bound hereto as Fiduciary .(with all obligations lawfully associated therewith), our receipt of debt securities ("Treasury Bonds") issued by the Department of the Treasury of The Government of the United States of America having a stated face value, in total, Twen Million United States ars 000,000.00 USD), Transaction Code Number Reference Number nd received on December 13. 2001, which spea CENTURY CAPITAL, S.A., as Beneficiary, CUSIP Number. -(ISIN Number. DATESthis 13th day of December, 2001 WILLI ANS ,CAELLIA L 61011E For and an behalf of Williams Management & Capital Group, Ltd. 13.0E1 (Signature) Printed Name) (71W4m1(7 k (Printed Name) a s szgdzkezzal,,„,,(Official Title) e kat se k (Officlal1100). I ife Bast; of cert lfrerification and Bank Stamp SEAL: Key's KERN 03958 A767751530 P042101I WELLS FAA50 BANK MA ivne.Onno VA AUll. 6882 EFTA00128656  12/17/01 12:52 FAX PRZI)WILLIPPIS CAPITAL GRCIUPL • PHON2 NO. : 425 774 3253 • Dec. 13 2201 02:5SPM PS sin 4 , • felartagetnent anb Capital Group, 5721 176th Pi., Telephone; • SPECIAL ADDENDUM INSTITUTIONAL CUSTODIAL KEEPING RECEIPT Reference Number: Amount: Twenty Million United States Dollars ($20,000,000.00 USD) Date of Issue: December 13, 2001 Beneficiary; CENTURY CAPITAL, S.A, In Favor Of/Assignee: WINTEL - TELECOM HOLDINGS, INC, Account Code Number: CUSP Number: ISIN Number-. Fiduciary: Williams Management & Capital Group; Ltd. While. all of the puthentic.ation and verification files are held by the Institution, the actual Treasury Instrument is physically held, pursuant to all applicable law and for security purposes, at the United States Department of the Treasury. This Special, Addendum, dated December13, 2001 Is hereby attached to the above captioned Institutional Custodial Receipt and Is hereby made a part hereof. iiitutpas For and on behalf of Williams Management & Capital Group, Ltd. CAPITAL MOE 021 (Signature) (Signature) 4er (1 nze IXficer (2) I/ 4,4:4; 3 7/4/ Printed Name) (Printed _Name) A ers./.44, (Official Title.) (Official Tills) Bank Officer Verification and Bank Stamp SEAL: KEVIO KEEN OlgSi 425775 tS38 P6421011 WELLS rAit60 BANK AA EFTA00128657  11001 12/17/01 13:03 FAX • • LandTel 600 Madison Avenue 2511.Floor New York, NY 10022 To: Jeffrey Epstein From: Jay Phillip Parker LANDTEL Fax: Pages: 2 Phon Date: December 17, 2001 Re: Bridge Financing cc: Jeff, in connection with the contemplated Bridge Financing, please execute the attached letter confirming your ability to immediately fund this transaction, and then fax same back to Jim Whittler's attention at the above number, If you have an uestions lease feel free to contact me at the above number or Jim on his mobile Thanks for your time and attention to this matter. Jay Phillip Parker EFTA00128658  a002 12/17/01 13:03 FAX • • [Funding Party Letterhead Here] Monday December 17, 2001 Hon. Joseph J. Faman, Jr. United Statcs District Court District of Delaware I. Caleb Boggs Federal Building 844 N. King Street Room 6325 Wilmington, DE 19801 Dear Judge Faman; In connection with WinTel Telecom Holdings, Inc., ("WinTel"), offer to purchase Winstar Communications, Inc., from Chapter 11 Bankruptcy, this letter shall confirm our commitment to immediately fund Fifteen Million U.S. Dollars ($15,000,000.00 US) (the "Commitment") to an account provided to us by WinTel. The only condition to our funding the Commitment is the authorization from WinTel to proceed with this transaction. The Commitment funds are available on deposit for immediate wire transfer from account # at Should you require confirmation of the terms of this letter, please feel free to contact at 212-= Sincerely, [CORPORATE ENTITY) By: Its: cc. James P. Whinier EFTA00128659  12/17/01 13:10 FAX 001/001 • • - 0- Landrel 600 Madison Avenue 25th Floor New1'00(.1V 10022 To: Jeff Epstein From: James P. Whittier LANDTEL Dear Jeff: Below please find wire instructions for WinTel Corporation: HSBC Bank USA 555 Madison Avenue New York, NY 10022 ABA No. 021001088 For the account of: If you require anything further, please contact my office. Thank you. Sincerely, 4n James P. Whittier EFTA00128660 12/18/,91 15:49 FAX • e00 2 / 004 WInTet Corporation 600 Madison Avenue 250 Floor MEI NewYork, NY 10022 December 18, 2001 VIA FACSIMILE Mr. Jeffrey Epstein 457 Madison Avenue 4th Floor New York, NY 10022 Dear Jeffrey: Attached please find a copy of the term sheet sent to you on December 12 (see Exhibit A). Please note the first and second source of repayment. The first being the Treasuries with the loan only made if the Treasuries were in an acceptable form to WinTel and our bridge provider. This would only be executed if the Treasuries were held in an account that we were able to assign and lien the Treasuries. In my quest to acquire the company and in lieu of verifying the Treasuries' position, I offered to put up a personal guarantee secured by my real estate, as a second source of collateral if the Treasuries were encumbered or the ultimate value of the collateral was deficient. I shared with your in-house counsel, Jeffrey Schantz, that I would only make a personal guarantee if I verify that the Treasuries provided were in fact what was represented to us last week as available and unencumbered. Please review again the term sheet provided to you on December 12 to refresh your memory that we were dependent on a third party providing us securities in a good form that would allow us to borrow up to 95% of the availability of the face value. I understand from your comments last night and today you are highly disappointed. Please imagine how we feel, as we were trying to acquire a company in our industry using documentation from a third party, which as of now appears to be clearly fictitious. I apologize for the inconvenience and embarrassment caused to you and your firm. However, please remember my statement that I am not a fixed income expert; I was looking to you for guidance and clarity of the collateral. We were only last week provided the portfolio and yesterday provided documentation to verify the validity of the Treasuries represented by Century Capital S.A. Attached please find a letter just received from Williams Management and Capital Group, Ltd. for your files (see Exhibit B). Since y, at4A-ric---(S ace S. Zmmerman nnan LSZIrm Auachments EFTA00128661 12/18/,01 15:50 FAX • 0003/004 RXHIBIT A TERM SHEET WINSTAR BRIDGE LOAN • Loan - $15 million • Term - Date of closing of Winstar acquisition on or prior to January 10, 2002 • Consideration - • Interest rate -15% • Equity - 3% of outstanding equity at closing (Founder's Stock) • $500,000 Fee Security - $130 million in U.S. Treasuries is presently being held at Williams Management & Capital Group Ltd. for the benefit of Wintel Telecom Holdings, Inc. evidenced by a custodial safekeeping receipt. A segregated portion of these securities, in the amount of $15 million, will beheld for the benefit of Jeffrey Epstein or his designate. Personal guarantee by Laurence S. Zimmerman secured by the following• 515 Park Avenue, 27th & 28th Floors, New York, New York - Appraised value $23,500,000 by Cushman & Wakefield (as of Nov. 2001) 0124 Coldstream Lane, Aspen, Colorado - Purchase price $10,900,000 (acquired Dec. 1998) Current mortgage against 515 Park Avenue is $8.6 million Current mortgage against Aspen property is $5.5 million • Repayment - Proceeds of loan from the Primary lender (i.e., BONY) secured by the safekeeping receipt representing $130 million in U.S. Treasuries • Funding Requirement - $15 million must be funded no later than December 14, 2001, no later than 12:00 P.M. Agreed to and accepted by: Laurence S. Zimmerman Date Jeffrey Epstein Date EFTA00128662  :12/18/01 15:50 FAX • . _ . 1004/004 FROM : WILLIAMS CAPITAL GROUPL PHONE NO. : 425 774 3253 Dec. 18 2001 11:50AM P2_ Tennant% Management sub Capital erring, 11.1. 5721 178th Pl., SW a 98037 Telephone; December 18, 2001 Lawrence Zimmerman, James Whittier, et, al. 600 Madison Avenue 25th Floor New York, N.Y. 10022 FaxNo.: To Whom It May Concern; This is to advise you that this firm is hereby withdrawing its participation in the proposed transaction between your group and Century Capital, S.A. All documentation issued by this firm is declared null and void and shall have no legal authority to commit this fine to any portion o% the transaction. A number of items in confluence have resulted in this decision, not the least of which is the difficulty we have had in obtaining the actual Serial Numbers for the block pro-ration of Beneficiary ownership. The CUSIP represents the entire isse, not the specific ownership amount. The CUSIP Number to be referenced is Your demands for currently confidential information have not helped. Additionally, we have encountered a major problem with an individual who had represented themselves to this firm as an authorized officer of Wells Fargo Bank As it turns out, he was not, in fact, an authorized officer. We have filed a report with the appropriate authorities and have severed all banking relationships with Wells Fargo. We wish you well in your transaction but can no longer be a party to it in any fashion, Respectfully, aa r: - 7 S. William% President MSW/Igo Legal John Macari file EFTA00128663