Jul 14, 2019

Jeffrey Epstein and the utility of fake billions

Illustration: Aïda Amer/Axios

It's easier to turn power into money than it is to turn money into power. That said, if you want power, and even if you want money, it helps a lot if people think you're a billionaire.

Driving the news: Jeffrey Epstein, whose pedophilia is now back in the public eye, was almost invariably described as a billionaire even when there was no evidence that he was worth anywhere near that much money.

  • Epstein's conspicuous displays of wealth included owning the largest private residence in New York (9 East 71st, which was originally purchased by one of his clients, Les Wexner) and a $10 million charitable foundation called Gratitude America (which seems to have been funded by another client, Leon Black). They also included private jets and a private island in the Caribbean.
  • Epstein's mysterious yet ultra-opulent lifestyle served two purposes. It helped to seduce both men and women — and it gave him an aura of impunity. By creating a bubble of spectacular privilege, he successfully persuaded everybody — not only his friends, but the underage girls he was accused of having sex with — that he was untouchable. Even after the bubble burst, he got away with an astonishingly light punishment for his crimes.

Epstein is far from being the first fake billionaire. Malaysian fraudster Jho Low similarly attempted to buy himself impunity, with some success: He remains at large.

  • The power of Elizabeth Holmes, of Theranos fame, resided almost entirely in the fact that people thought she was a billionaire.
  • Most intriguingly, press baron Robert Maxwell stole $600 million from his newspapers' pension plans in order to keep his empire together. His daughter Ghislaine went on to become Epstein's closest confidante (and co-defendant).

The bottom line: Some people want to be wealthy; criminals, by contrast, often find it more useful to be perceivedto be wealthy. The genuinely rich tend to care about preserving and growing their wealth. Really big spenders are disproportionately likely to be frauds.

Go deeper

What we know: The life and death of Jeffrey Epstein

A protest group called "Hot Mess" holds signs of Jeffrey Epstein in front of the Federal courthouse on July 8. Photo: Stephanie Keith / Stringer/Getty Images.

Federal prosecutors charged multimillionaire Jeffrey Epstein with sexual abuse and sex trafficking of underage girls in July. On Aug. 10, the 66-year-old was found dead in an apparent suicide at a federal detention center in New York City.

The latest: After alleged victims and their attorneys testified at a hearing on Aug. 27, a federal judge formally closed the criminal sex trafficking case against Epstein Aug. 29. Meanwhile, prosecutors in France opened a preliminary investigation into Epstein, "in connection with possible offenses such as rape, the sexual assault of minors and criminal conspiracy" in late August.

Go deeperArrowUpdated Aug 22, 2019

Jeffrey Epstein's accusers respond to his death

Protestors hold up signs of Jeffrey Epstein in front of a New York City Federal courthouse on July 8. Photo: Stephanie Keith/Getty Images

Registered sex offender Jeffrey Epstein died on Saturday in an apparent suicide, a day after unsealed documents from a 2015 defamation lawsuit detailed what Epstein’s accusers describe as his sex-trafficking operation, and a month after being charged with sex trafficking underage girls.

What's next: The criminal case against Epstein ends with his death, but accusers' lawyers are still seeking justice for their clients. One lawyer for Epstein's accusers, civil rights attorney Lisa Bloom, on Saturday called for the administrators of Epstein’s estate to "freeze all his assets and hold them for his victims who are filing civil cases."

Go deeperArrowAug 10, 2019

Leslie Wexner claims Epstein misappropriated $46M from him: Reports

Financier Jeffrey Epstein. Photo: Rick Friedman/Getty Images

L Brands founder and chairman Les Wexner accused his disgraced former money manager Jeffrey Epstein Wednesday of misappropriating more than $46 million of his fortune, the Wall Street Journal first reported.

Why it matters: Per the WSJ, the allegations by Wexner that Epstein "misappropriated vast sums of money from me and my family" reveal for the first time some of the financial fallout from his relationship with the registered sex offender, who's under indictment for alleged child sex trafficking.

Go deeperArrowAug 8, 2019