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Case 22-1426, Document O16. 3536038, Page18 of 258 Case 1:20-cr-00330-AJN Document 204-3 Filed 04/16/21 Page 16 of 348 Il. THE FBI AND THE USAO INVESTIGATE EPSTEIN, AND THE DEFENSE TEAM ENGAGES WITH THE: USAQ ccssnsnnssmssvenanemennsamamaenamsrexans 16 A. May 2006 — February 2007: The Federal Investigation Is Initiated, and the USAO Opens a Case File... ceseeeseeceeeeeeeeeesceeeeeeeeneeeseeeneeaeeeseseneeaeees 16 1. The PBPD Presents the Matter to the FBI and the USAO.... ee 17 2 May 2006: The USAO Accepts the Case and Opens a Case File............. 18 3s July 14, 2006: Villafafia Informs Acosta and Sloman about the Case......18 4 Late July 2006: The State Indicts Epstein, and the USAO Moves Forward with a Federal Investigation ...........ccsscecsseceesecetetereeeeeees 20 5. October 2006 — February 2007: Epstein’s Defense Counsel Initiate Contact with Villafafia, Lourie, and Sloman, and Press for a Meeting ....... ec ceececeeecesceserceeceeseeeeeeeceeaeceneeacecseceeseacecseceneseneeaseees 22 6. February 2007: Defense Counsel Meet with Lourie and Villafafia and Present the Defense Objections to a Federal Case.............. 24 B. February — May 2007: Villafafia and the FBI Continue to Investigate; Villafafia Drafts a Prosecution Memorandum and Proposed Indictment for USAO Managers to ReEVICW........ceesscessssreseeceseeseeecececeseseneeacesseeeneeaeeeseseneeaeees 24 G. May — June 2007: Miami Managers Consider the Prosecution Memorandum and Proposed Charges..........scsscssssssceseeseeeseceeeescececeeeeseecaeseeeeseecaeesaeeenecaaeeseeenesaeees 2 D. Defense Counsel Seek a Meeting with Senior USAO Managers, which Villafafia Opposes... ec seessecessceeseseeessceeseeeeesacessesenesscesaeseneeacesseseneeaceeaeeeneeaeeeaeeees 30 E, June 2007: Villafafia Supplements the Prosecution Memorandum............:0ee 33 F. The June 26, 2007 Meeting with Defense Counsel ..........e ce ccceeeeseeeeceeceeeeeeecereeeees 33 IV. ACOSTA DECIDES TO OFFER EPSTEIN A TWO-YEAR STATE PLEA TO RESOLVE THE FEDERAL INVESTIGATION ..o0. cee ceesseecseeseeseeseseeececesenecsaeaeeeenaeas 35 A. June — July 2007: The USAO Proposes a State Plea Resolution, which the Defense Rejects 0... .eessecesseeseseresceeseeeeesaceseseneeaceeaeeeneeaceeaeeeneeaeeeaeeees 36 1. Acosta’s Explanation for His Decision to Pursue a State-based Resolution... ecsesssessessessesseesessesescescesceseseeseraeeseeseeaesaneeeees 37 2. July 2007: Villafafia and Menchel Disagree about the Proposed State RESOlUHOM 3 asc axes am mene care ava mien axe ane ae need 40 B. Villafafia Attempts to Obtain the Computer Equipment Missing from Epstein’s Palm Beach Home, but the Defense Team Opposes Her Efforts........... 45 C. July 2007: The Defense Continues Its Efforts to Stop the Fédéral [AVES ti Sat OF nccecspsaccoawswaneswarcauseaneun cenausn wean eonauee saves cusevax once nspauneanrenee cue’ 47 D. Acosta Decides on a Resolution That Includes a Two-Year Term of TA CARCELAUON, weccconenmenessnaersmensmsunncomeencyenetaeneavatuem ast tex emuesemesus em enateet estes enrenemen sree 48 1. The July 26, 2007 Meeting in Miami... eee seceeeceeeceeeeeecseceneeeneeaeeees 48 xiv DOJ-OGR-00021190