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Wealth of Jeffrey Epstein's Brother Is Also a Mystery

The Wall Street Journal. logo The Wall Street Journal. 8/12/2019 Gretchen Morgenson
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Jeffrey Epstein claimed a net worth of $550 million when he was asking to be released on bail from the jail where he was found dead from an apparent suicide on Saturday.

Lawyers for women who say the New York financier sexually abused them believe there is more money hidden away. They will likely look to offshore bank accounts, Mr. Epstein’s close associates and to his only surviving close relative, his brother Mark Epstein, for additional assets as they explore potential civil cases against Jeffrey Epstein’s estate.

“We’re just getting started,” said Lisa Bloom, a lawyer for some of the alleged victims, in a tweet Saturday after the 66-year-old Mr. Epstein was found dead.

Mr. Epstein last month pleaded not guilty to sex-trafficking counts stemming from what federal prosecutors alleged was a yearslong scheme to procure and sexually abuse dozens of girls. He faced up to 45 years in prison if convicted.

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During a March 2010 deposition in a civil lawsuit brought by two alleged sex-abuse victims, Jeffrey Epstein declined to answer a question about whether he transferred assets to defraud potential creditors, citing his Fifth Amendment right not to incriminate himself, court documents show.

The sources behind Jeffrey Epstein’s vast wealth have long been a mystery, and his assets have been housed in partnerships that sometimes obscure ownership. Mark’s wealth appears to be tiny by comparison, an asset search shows, but also hard to assess. A lawyer for Jeffrey Epstein didn’t respond to an email seeking comment.

Last month, when Jeffrey Epstein was seeking bail, his brother offered to put up a Florida condo valued at a modest $100,000. Yet last fall, Mark Epstein and at least one co-owner donated an 80-foot luxury yacht once valued at nearly $1 million to a small nonprofit.

At the time of the donation, Mr. Epstein was facing a $67,261 federal tax lien, records show. The lien’s disposition has not been recorded. As he was facing other liens a decade earlier, he donated at least $500,000 to the Cooper Union for the Advancement of Science and Art, his alma mater, where he became chairman of the board of trustees. Tax liens can be signs of financial distress or of strategies rejected by tax authorities.

The brothers are linked financially through a 200-unit condominium on Manhattan’s Upper East Side once owned by Jeffrey Epstein’s most lucrative client, retail magnate Leslie Wexner. The company that bought the building in the early 1990s is a former affiliate of J. Epstein & Co., Jeffrey Epstein’s investment firm, real-estate records and New York state filings show. Mark Epstein was once listed in corporate records as president of that company.

Asked to discuss his financial interests and how they intersected with his brother’s, Mark Epstein, 65 years old, declined. “I don’t have time to talk about it and I don’t see any purpose in talking about it with anybody,” he told The Wall Street Journal on Thursday.

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The Journal also sent him a list of questions, which he declined to answer. In a subsequent email, Mr. Epstein said: “As a private independent businessman I don’t feel the need to share any of the information.” In email messages sent after his brother died, he declined to comment.

Mark Epstein told Crain’s New York Business in an article last month that he bought the 16-story condo building on East 66th Street from Mr. Wexner based on a tip from his brother in the early 1990s. At the time, records show, the building carried a mortgage of $7.24 million. A current valuation of the building is almost impossible without knowing the terms of the building’s rent rolls, said Jonathan Miller, president and chief executive of Miller Samuel Inc., an appraisal firm in New York City.

Real-estate records show the building and mortgage were transferred from an Ohio limited partnership affiliated with Mr. Wexner, the founder of retailer L Brands Inc.

The Journal could find no documents detailing Mark Epstein’s purchase of the building. Records show the condominium’s owner since 1991 as Ossa Properties. At that time, Ossa was an affiliate of J. Epstein & Co. according to a New York state charter-school filing and a former employee. In the Crain’s article, Mark Epstein said that a New York state document erred in stating that J. Epstein & Co. and Ossa Properties were affiliated.

But Jonathan Barrett, a managing director at investment firm Luminus Management, who worked at J. Epstein and Ossa from 1992 through 1996, told the Journal through a spokesman that Ossa and J. Epstein & Co. were affiliated. New York City work permits show Anthony Barrett, of Ossa Properties, as owner of 301 E. 66 Street. Anthony Barrett, who is Jonathan’s brother, didn’t return calls seeking comment.

Jeffrey Epstein used some units at the East 66th Street building to house his employees, according to court records. His address book, posted online, included about 25 blacked-out phone numbers for different people in various apartments in the building, which was marked as “Apt. for models.” An entity that owned Jeffrey Epstein’s East 71st Street mansion used an apartment in the East 66th Street building as its mailing address, real-estate records show. “Other than the obvious relationship of being brothers, the only other relationship between Jeffrey and I is as landlord/tenant,” Mark Epstein said in an email.

In 2006, Mark Epstein was cited in a Dun & Bradstreet report as an executive at Ossa Properties. The same year, New York state imposed a lien on Mark Epstein for $8,794; it was subsequently paid. Two years later, federal tax authorities imposed a lien for $18,775 on Mr. Epstein; it was later released.

By 2010, New York City work permits show, the ownership structure of the East 66th Street condominium changed from a partnership to a corporation, a structure than can protect investors from liabilities generated by other shareholders, among other benefits.

Mark Epstein started a number of businesses, including a silk-screen T-shirt company, called Izmo, that he created in 1986, incorporation records show. There was Atelier Enterprises Inc., a charter/leasing company he headed in 1984; Epstein Acquisitions, set up in 1987 and dissolved in 2015; and Saint Model and Talent, incorporated in 2005. He has previously said he began investing in New York real estate in the early 1990s.

By the late 2000s, he became a major donor to Cooper Union, the New York art, architecture and engineering college from which he graduated in 1976. By 2009, he had donated between $500,000 and $999,000 to the school, according to a donor report published by the college. That year, he was named chairman of its board of trustees; he resigned from the board in 2015, following the board’s controversial decision to drop the school’s longstanding policy of full tuition scholarships for all students.

A Cooper Union spokeswoman responded to an email seeking comment about Mr. Epstein by reciting his history with the institution.

The 80-foot yacht,dubbed Izmo, co-owned by Mark Epstein and other partners that were unidentified in an online listing, was docked in Miami until last fall when it was donated to a small marine-science nonprofit.

The yacht, which has three staterooms, an owner’s cabin and spacious decks, according to online promotional listings, was put up for sale in December 2012 for $990,000. An online advertisement posted last May listed it at $600,000. No sale occurred, and Mr. Epstein began offering the yacht to charities, according to a blast email sent out to organizations reviewed by the Journal.

The recipient ended up being the Marine Science and Nautical Training Academy of Charleston, S.C., which is known as Manta. In a Nov. 13, 2018, email, its president, Russell Day, said the nonprofit had been chosen over “many amazing and deserving organizations.” Transformed into a marine-research vessel for high-school and college students, the yacht would ply the waters of the British Virgin Islands, Mr. Day wrote. The Little Saint James, an island owned by Jeffrey Epstein, is in the nearby U.S. Virgin Islands.

Mr. Day, Manta’s president, didn’t return phone calls seeking comment.

Write to Gretchen Morgenson at gretchen.morgenson@wsj.com

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