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being so brutal as to be “irresponsible.” One reporter, in fact, received three threats from Epstein while preparing a piece. They were delivered in a jocular tone, but the message was clear: There will be trouble for your family if I don’t like the article. On the other hand, Epstein is clearly very generous with frends. Joe Pagano, an Aspen-based venture capitalist, who has known Epstein since before his Bear Stearns days, can't say enough nice things: “I have a boy who’s dyslexic. and Jeffrey’s gotten close to him over the years.... Jeffrey got him into music. He bought him his first piano. And then as he got to school he had difficulty ... in studying ... so Jeffrey got him interested in taking flying lessons.” Rosa Monckton recalls Epstein telling her that her, daughter. Domenica, who suf- fers from Down syndrome. needed the sun, and that Rosa should feel free to bring her to his house in Palm Beach anytime. Some friends remember that in the late 80s Epstein would offer to upgrade the air- line tickets of good trends by affixing first- class stickers: the only problem was that the stickers turned out to be unofficial. Some- umes the technique worked. but other times it didn't. and the unwitting recipients found themselves exiled to coach. (Epstein has claimed that he paid tor the upgrades, and had no knowledge of the stickers.) Many of those who benefited trom Epstein’s largesse claim that his generosity comes with no strings attached. “I never felt he wanted anything from me in return.” says one old friend. who received a first-class upgrade. psiein is known about town as a man who loves wom- en—lots of them. mostly young. Model types have been heard saving they are full of gratitude to Epstein for flying them around. and he is a familiar face to many of the Victo- ria’s Secret girls. One voung woman recalls being summoned by Ghislaine Maxwell to a concert at Epstein’s town house. where the women seemed to outnumber the men by far. “These were not women you'd see at Upper East Side dinners.” the woman recalls. “Many seemed foreign and dressed a little bizarrely.” This same guest also at- tended a cocktail party thrown by Maxwell that Prince Andrew attended, which was filled. she says, with young Russian mod- els. “Some of the guests were horrified.” the woman says. “He’s reckless,” says a former business associate, “and he’s gotten more so. Mon- ey does that to you. He’s breaking the oath he made to himself—that he would never do anything that would expose him in the M *07/96/17° °° media. Right now, in the wake of the pub- licity following his trip with Clinton, he must be in a very difficult place.” ccording to S.E.C. and other legal documents un- earthed by Vanity Fair, Epstein may have good reason to keep his past cloaked in secrecy: his real mentor. it might seem. was not Leslie Wexner but Steven Jude Hoffen- berg, 57, who, for a few months before the S.E.C. sued to freeze his assets in 1993. was trying to buy the New York Post. He is cur- rently incarcerated in the Federal Medical Center in Devens. Massachusetts. serving a 20-vear sentence for bilking investors out of more than $450 million in one of the largest Ponzi schemes in American history. When Epstein met Hoffenberg in Lon- don in the 1980s. the latter was the char- ismatic, audacious head of the Towers Financial Corporation. a collection agency that was supposed to buy debts that peo- ple owed to hospitals. banks. and phone companies. But Hoffenberg began using company funds to pav off earlier investors and service a lavish lifestvle that included a mansion on Long Island. homes on Man- hattan’s Sutton Place and in Florida. and a fleet of cars and planes. Hoffenberg and Epstein had much in common. Both were smart and obsessed with making money, Both were from Brook- lyn. According to Holfenberg. the two men were introduced by Douglas Leese. a de- fense contractor. Epstein has said they were introduced by John Mitchell. the late attor- ney general. Epstein had been running International Assets Group Ine. (LA.G.). a consulting company. out of his apartment in the Solo building on East 66th Street in New York. Though he has claimed that he managed money for billionaires only, in a [989 dep- osition he testified that he spent Sv per- cent of his ume helping people recover stolen money from fraudulent brokers and lawyers. He was also not above entering into risky, tax-sheltered oil and gas deals with much smaller investors. A lawsuit that Michael Stroll, the former head of Wil- liams Electronics Inc.. filed against Epstein shows that in 1982 I.A.G. received an in- vestment from Stroll of $450,000. which Epstein put into oil. In 1984, Stroll asked for his money back: four years later he had received only $10.000. Stroll lost the suit, after Epstein claimed in court, among oth- er things, that the check for $10,000 was for a horse he'd bought from Stroll. “My net worth never exceeded four and a half mil- lion dollars.” Stroll has said. Page 35 of 151 DOJ-OGR- 00032074 Hoffenberg, says a close friend, “really liked Jeffrey. ... Jeffrey has a way of getting under your skin, and he was under Hof- fenberg’s.” Also appealing to Hoffenberg were Epstein’s social connections; they in- cluded oil mogul Cece Wang (father of the designer Vera) and Mohan Murjani, whose clothing company grew into Gloria Van- derbilt Jeans. Epstein lived large even then. One fnend recalls that when he took Cana- dian heiress Wendy Belzberg on a date he hired a Rolls-Royce especially for the oc- casion. (Epstein has claimed he owned it.) In 1987, Hoffenberg. according to sources. set Epstein up in the offices he still occu- pies in the Villard House. on Madison Av- enue. across a courtyard from the restaurant Le Cirque. Hoffenberg hired his new pro- tégé as a consultant at $25.000 a month. and the relationship flourished. “They trav- eled everywhere together—on Hoffenberg’s plane. all around the world, they were al- ways together,” savs a source. Hoffenberg has claimed that Epstein confided in him. saying. for example. that he had left Bear Stearns in 1981 after he was discovered ex- ecuting “illegal operations.” Several of Epsteins bear Steams contem- poranes recall that Epsiein lett the compa- ny very suddenly. Within the company there were rumors also that he was involved in a technical infringement. and it was thought that the executive committee asked that he resign after his two supporters. Ace Green- berg and Jimmy Cayne. were outnumbered. Greenberg says he cant recall this: Cayne denies it happened. and Epstein has de- nied it as well. “Jeftre: Epstein left Bear Stearns of his own volition.” says Cayne. “[t was never suggested that he leave by any member of management. and manage- ment never looked into any improprieties by him. Jeffrey said specifically. “I don't want to work for anybody else. [ want to work for myself” Yet. this is not the story that Epstein told to the S.E.C. in 1981 and to lawvers in a [989 deposition involving a civil business case in Philadelphia. In 1981 the S.E.C.s Jonathan Harris and Robert Blackburn took Epstein’s testimony and that of other Bear Stearns employees in part of what became a protracted case about insider trading around a tender offer placed on March II, 1981. by the Seagram Company Lu! for St. Joe Minerals Corp. Ultimately several Italian and Swiss in- vestors were found guilty. including Italian financier Giuseppe Tome. who had used his relationship with Seagram owner Edgar Bronfman Sr. to obtain information about the tender offer. After the tender offer was announced, the S.E.C. began investigating trades in- volving St. Joe at conTINVED OS PAGE f43 Public Records Request No.: 17-295