EFTA01660001.pdf

U.S. Department of Justice United States Attorney Southern District of Florida 500 South Australian Ave., Suite 400 West Palm Beach, FL 33401 (561) 820-8711 Facsimile: December 9, 2008 VIA UNITED STATES MAIL Palm Beach Sheriff's Office Corrections Division 3228 Gun Club Road West Palm Beach, FL 33406 Re: Work Release Application of Jeffrey Epstein Dear Captain Sleeth: The U.S. Attorney's Office recently learned that Inmate Jeffrey Epstein applied for and was approved for participation in the Palm Beach Sheriff's Office's ("PBSO") work release program. Through a request for public records, I have received a copy of Mr. Epstein's work release file and I wanted to bring a few inaccuracies and omissions to your attention. Eligibility for Participation I understand that Mr. Epstein would be ineligible for participation in the work release program if he committed three violations of F.S.S. 796 within the past five years. Mr. Epstein has been charged with and convicted of a felony violation of F.S.S. 796.07. In order to be convicted of a felony violation of that statute, one must commit "a third or subsequent violation." In other words, Mr. Epstein has committed at least three violations of Section 796.07. In fact, in his "Alternative Custody Program Placement Synopsis," Mr. Epstein's charges are described as "Recommit: Prostitution." In addition to those three violations, Mr. Epstein also has been convicted of violating F.S.S. 796.03, procuring a person under the age of 18 for prostitution. Throughout his paperwork, this violation is referred to simply as "prostitution." The charge is not merely a solicitation of prostitution charge, it is a procurement of a minor to engage in prostitution. Florida courts have defined the offense as "inducing a victim to engage in sexual activity" for money and "persuading, inducing, or prevailing upon a person to do something sexual" for financial gain. In other words, the crime involves the recruiting of minors who were not previously involved in prostitution to engage in sexual activity for commercial gain to a recruiter or "pimp"/"madame." The Florida Legislature has acknowledged the significant difference between solicitation under F.S.S. 796.07 and procurement of minors under F.S.S. 796.03 by requiring persons convicted of violating F.S.S. 796.03 to register as sex offenders. The distinction is especially meaningful to the victims of Mr. Epstein's offenses, who should not be stigmatized as "prostitutes." Inaccuracies and Omission in Work Release Application and Related Documents Throughout the records related to Mr. Epstein's work release placement, he is alternatively referred to as working for "The Florida Science Foundation" or "self-employed," and Mr. Epstein lists his salary as $250,000. Mr. Epstein describes himself as "returning to work" and "eligible for re-employment" at The Florida Science Foundation. However, the only W-2 that Mr. Epstein provided is from Financial Trust Company, Inc., which shows that Mr. Epstein was employed in the U.S. Virgin Islands at a salary of $180,785.62, not $250,000. EFTA01660001  Mr. Epstein provided to you no documentation regarding his pre-incarceration employment with "The Florida Science Foundation" or its corporate alter-ego, "The C.O.U.Q. Foundation, Inc." As you will see, it seems clear that the Foundation, its offices, and Mr. Epstein's purported job schedule were all created on the eve of Mr. Epstein's incarceration in order to provide him with a basis for seeking work release. The Florida Science Foundation was not registered with the State of Florida and had no office space or telephone number until after Mr. Epstein was already incarcerated. The application filed with the State of Florida and signed under penal of e .11 b Richard Kahn lists Mr. Kahn's and the Foundation's telephone number as That is the telephone number of Atterbury, Goldberger and Weiss—one of the law firms representing Mr. Epstein. Richard Kahn is a partner at the law firm of Sullivan and Cromwell in New York and has no association with the Atterbury firm. I have enclosed the IRS returns of "The C.O.U.Q. Foundation, Inc." for fiscal years 1999 through 2006 (which covers the period through 2/28/07). Each and every one of those sworn filings shows that Mr. Epstein worked for the Foundation for only one hour per week and earned no compensation. ( See page 6 of each return.) All of these returns were signed under penalty of perjury by either Mr. Epstein or Darren Indyke, who is listed in Mr. Epstein's work release file as Mr. Epstein's "supervisor." Mr. Epstein's misstatement of his prior work duties and salary violate the salary and employment verification requirements of C.O.P. #926.01(V)(C)(7) and (8). In response to your requirement of "a detailed work schedule," Mr. Indyke has provided the following two sentences: [Mr. Epstein's] duties will require him to work six days a week, Monday through Saturday, at the Foundation's office located at 250 S. Australian Avenue, Suite 1404, West Palm Beach, Florida from the hours of 8:00 A.M. to 8:00 P.M. As President of the Foundation, Mr. Epstein will be responsible for the general oversight and management of the Foundation, and particularly, to seek out, evaluate and determine worthy charitable causes to which the Foundation may make contributions. Mr. Indyke did not disclose that Mr. Epstein only worked one hour per week prior to his incarceration and has provided no explanation of why Mr. Epstein could perform these duties in one hour per week before he was incarcerated but now needs to spend 72 hours each week to do the same job. Again, this is inconsistent with C.O.P. #926.01(V)(C)(7). Mr. Indyke has signed the "Alternative Custody Unit Program Agreement" as Mr. Epstein's "employer." In that Agreement, Mr. Indyke promises to "notify the Alternative Custody Unit immediately if the Participant: (1) Fails to appear for work at the scheduled time; and (2) Leaves the place of employment prior to the scheduled time." Both in this form and in Mr. Indyke's letter in support of Mr. Epstein's application, Mr. Indyke neglects to inform the Sheriff's Office of two significant facts. First, Mr. Indyke lives and works in the New York metropolitan area. He is not and will not be present at Mr. Epstein's workplace, so he will not know if Mr. Epstein "fails to appear for work" or "leaves the place of employment." Mr. Indyke also will not be able to supervise Mr. Epstein's actual work to determine whether he is truly doing the work of The Florida Science Foundation. a Second, Mr. Indyke does not "employ" Mr. Epstein. Instead, Mr. Epstein "employs" Mr. Indyke. Mr. Epstein is the President and founder of The Florida Science Foundation and Mr. Indyke is its Vice President. More importantly, Mr. Epstein is also the founder and President of the Financial Trust Company, his for-profit corporation. Mr. Indyke is Mr. Epstein's subordinate at that entity as well. Accordingly, Mr. Epstein has authority over Mr. Indyke's position and salary, which will cloud Mr. Indyke's objectivity regarding his supervision of Mr. Epstein. EFTA01660002  Let me provide two examples of how Mr. Indyke's conflict of interest and absence from Mr. Epstein's workplace will result in insufficient monitoring of Mr. Epstein's activities. I have learned that Mr. Epstein has been noticed for a deposition in connection with one of the civil suits filed by one of his victims. Mr. Epstein's counsel have stated that the deposition need not take place at the Stockade because Mr. Epstein is out on work release. The deposition has nothing to do with The Florida Science Foundation and, accordingly, cannot possibly fall within the scope of his duties. If the deposition were to occur at the office of The Florida Science Foundation, it would violate the ban on Mr. Epstein receiving visitors at his workplace. If the deposition were to occur at the offices of one of the attorneys, it would violate the ban on leaving the workplace. To the extent that Mr. Epstein is using any of his time outside the Stockade to work with his attorneys in connection either with his criminal case or the multitude of civil cases filed against him, it falls outside the scope of his duties to The Florida Science Foundation and would seem to violate the rules of the Work Release Program. As another example, one of Mr. Epstein's attorneys has suggested that Mr. Epstein is using his time on work release to manage investments resulting in investment income of millions of dollars. If that is true, then Mr. Epstein is acting outside of the scope of his employment with The Florida Science Foundation. Instead, that would be in keeping with Mr. Epstein's work for his for-profit corporation, which would inure to the benefit of Mr. Indyke. Because that work would result in a financial benefit to him, and because he is Mr. Epstein's subordinate at that corporation, Mr. Indyke would be reluctant to inform the Sheriff's Office of this violation of the terms of Mr. Epstein's Work Release contract. The "references" listed by Mr. Epstein all have the same conflict of interest. Mr. Epstein did not list any past or present co-workers, supervisors, or even clients. Instead, he has listed four attorneys who are currently retained—and paid handsomely—by Mr. Epstein. Their attorney- client privilege obligations would further restrain them from notifying the Sheriff's Office if Mr. Epstein was not abiding by the work release rules. As I previously mentioned to IMI=r, the decision regarding work release is completely within the discretion of the Sheriff's Office. However, in exercising that discretion, it would seem that the Sheriff's Office needs a complete and accurate picture of Mr. Epstein's offenses and his work situation. Further, Judge Pucillo, who conducted the change of plea and sentencing, heard the factual proffer and imposed Mr. Epstein's sentence. She has not been consulted regarding Mr. Epstein's application for work release. I understand that Judge McSorley's standing order states that she "takes no position with respect to the eligibility of any inmate sentenced in this Division unless specifically stated at time of sentencing." However, because of her absence, Judge McSorley did not conduct the sentencing and, therefore, could not have stated any objections to work release at that hearing. Given that it is unclear whether Judge Pucillo was aware of Judge McSorley's order when she imposed sentence, I respectfully suggest that the appropriate judge be consulted for her position on this issue as well. Request for Notification I would appreciate if you would keep me informed of any changes to Mr. Epstein's release status so that I may fulfill my obligations to keep the victims identified through the federal investigation informed of Mr. Epstein's status. I have informed all of the victims of Mr. Epstein of the change in his incarceration status and that you are the contact person if they have any questions. Some may ask that their locations be amongst the "Exclusionary Zones" programmed into Mr. Epstein's GPS unit. If you need their addresses, please let me know. Please feel free to contact me with any questions or concerns. Sincerely. United States Attorney EFTA01660003  By: Assistant United States Attorney Enclosures cc: Chief, Northern Division I fiOn the application for registration of the Florida Science Foundation with Florida's Department of State, Mr. Indyke lists his true address in Livingston, New Jersey. On today's date, I confirmed that the Indykes still have telephone service at that address. EFTA01660004