EFTA00128666.pdf

ti • • FD-302 (Rev. 10-6-95) - 1 - FEDERAL BUREAU OF INVESTIGATION Date of transenpton 0 5/ 0 8/2002 JEFFREY E. EPSTEIN, date of birth , social security account number occupation financial consultant, business address The Villard House, 457 Madison Ave, 4th Floor, New York, NY 10022, telephone number was interviewed at his office. Also present at the interview was EPSTEIN'S attorney JEFFREY SCHANTZ. After being advised of the identity of the interviewing agents and the nature of the interview, EPSTEIN provided the following information: EPSTEIN owns homes in Aspen, CO, Palm Beach, FL and the Virgin Islands. EPSTEIN stated that LAURENCE S. ZIMMERMAN also owns homes in Aspen and Palm Beach. EPSTEIN was introduced to ZIMMERMAN and they occasionally met or saw each other at social events. In approximately October 2001, ZIMMERMAN asked EPSTEIN for a ride on EPSTEIN'S private plane from New York to Palm Beach. EPSTEIN stated that ZIMMERMAN told him that he was involved in various financial deals, including deals in the telecommunications industry. ZIMMERMAN asked EPSTEIN if he could contact him with any financial deals that he felt EPSTEIN might have an interest. EPSTEIN told ZIMMERMAN that he could contact him as he is always looking for opportunities to make money and EPSTEIN was aware that many people in the Aspen area had made significant money investing in the telecommunications industry. In December 2001, EPSTEIN was contacted by ZIMMERMAN about an investment that he was making in WINSTAR COMMUNICATIONS INC. (WINSTAR). ZIMMERMAN told EPSTEIN that WINSTAR was a publicly traded company that was presently in bankruptcy proceedings. ZIMMERMAN was putting together a deal through his company, WINTEL TELECOM HOLDINGS INC. (WINTEL) to acquire WINSTAR for approximately $100 million. ZIMMERMAN stated that the assets of WINSTAR were: worth $1 billion. ZIMMERMAN was seeking a $15 million bridge.: loan_filom_EES.TEIN-as -a-down- payment-on--the ---purChase of WINSTAR from the bankruptcy court until he was able to secure a $100 million loan from a bank. ZIMMERMAN offered to put up $15 million of U.S. Treasury Bonds as collateral for the loan. In addition, ZIMMERMAN offered his personal guarantee liwestigmknon 05/08/2002 at New York, New' nm# 196A -MM -93577 Cp c.\7 ca,„. n“( r/ O!7- This document contains neither recommendations nor conclusions of the FBI. It Is the prope e FBI and As loaned tc?yourigic 1 it and Its contents are not to be distributed outside your agency. EFTA00128666 FD-302a (Rev. 10-6-95) 196A-MM-93577 Continuation of FD-302 of JEFFREY E. EPSTEIN .0n 05/08/2002 ,page 2 secured by his homes in Aspen and in New York. In consideration of the $15 million bridge loan, ZIMMERMAN agreed to pay EPSTEIN an interest rate of 15% on. the loan and a $500,000 fee. In addition, ZIMMERMAN would give EPSTEIN 3% of the equity (stock) of WINSTAR. EPSTEIN questioned ZIMMERMAN as to why he didn't just borrow against the U.S. Treasury Bonds with a bank since he could borrow nearly dollar for dollar on this collateral. ZIMMERMAN explained to EPSTEIN that his partner had $130 million U.S. Treasury Bonds in an off-shore restricted account. The Bonds could not be repatriated to the U.S. for tax reasons but could be pledged. Due to the time constraints for making the $15 million down payment, going to a bank for the down payment was not an option as he needed the funds as soon as possible. Although EPSTEIN thought the explanation concerning the bonds to be a little unusual he was intrigued about the opportunity to make a significant return on the bridge loan and was interested in ZIMMERMAN'S Aspen home if the deal fell apart. On December 12, 2001, EPSTEIN received a fax from JAMES P. WHITTIER of LANDTEL, 600 Madison Ave, 25th Floor, New York, NY 10022, telephone numbej . The fax included a term sheet which formalized the conversations that EPSTEIN had with ZIMMERMAN concerning the $15 million bridge loan. After reviewing the term sheet, EPSTEIN noticed that there were already current mortgages on the New York and Aspen properties that were to be pledged as collateral. EPSTEIN performed a check of ZIMMERMAN on the Internet and found that there had been two instances of foreclosure on properties owned by ZIMMERMAN in the past. EPSTEIN then contacted ZIMMERMAN and requested supporting documentation regarding all of the loan collateral. EPSTEIN also requested that ZIMMERMAN contact his attorney, JEFFREY SCHANTZ, in all future dealings regarding_the_bridg?_ loan__and.-the- issue -of -- - --- - supporting- documentatfori-fOr the loan collateral. On December 13, 2001, EPSTEIN received a fax from ZIMMERMAN with a LANDTEL coversheet. The fax included a copy of a BLOOMBERG screen printout relating to $15,514,000 of U.S. Treasury Bonds identified with CUSIP #912827W81. EPSTEIN was a EFTA00128667 • maxAmmlaersm 196A-MM-93577 Continuation of FD-302 of JEFFREY E. EPSTEIN .0'105/08/2002 Page 3 little annoyed with ZIMMERMAN since this BLOOMBERG screen did not provide any information to him. EPSTEIN contacted ZIMMERMAN and told him that he was not satisfied with the collateral since it did not provide him any information regarding the Bonds. EPSTEIN stated that ZIMMERMAN also provided an appraisal on the New York property that he was putting up as collateral. On December 17, 2001, EPSTEIN received a fax from ZIMMERMAN. The fax included an Institutional Custodial Safekeeping Receipt, an Institutional Receipt and a Special Addendum Institutional Custodial Safekeeping Receipt all making reference to $20 million of U.S. Treasury Bonds. All three documents received by EPSTEIN were on WILLIAMS MANAGEMENT AND CAPITAL GROUP, LTD. (WMACGL) stationery. The address for WMACGL was listed as 5721 178th Place, SW, Suite 105, Lynnwood, Washington 98037, telephone number . The Beneficiary listed on the documents was CENTURY CAPITAL, S.A. and the Assignee was listed as WINTEL TELECOM HOLDINGS, INC. All three documents included a Bank Officer Verification and Bank Stamp signed and stamped by KEVIN KEON, WELLS FARGO BANK, NA, Lynnwood, WA. Later on December 17, 2001, EPSTEIN received two more faxes from ZIMMERMAN. One fax included WINTEL'S bank wire instructions for the bridge loan. The second fax was a "form" commitment letter to the Bankruptcy Court in Delaware regarding EPSTEIN'S intent to immediately fund $15 million to WINTEL which EPSTEIN was instructed to fill out, sign and return to ZIMMERMAN. EPSTEIN telephonically contacted WELLS FARGO BANK, NA, located in Lynnwood, WA and requested to speak with KEVIN KEON. EPSTEIN was advised that there was no one by that name at that branch. EPSTEIN was further advised that a KEVIN KEO used to work at the branch but had moved to the Monroe_branch_of_WELLS______ FARG07 EPSTEIN- contacted KEO and was advised that it was not his signature on the Safekeeping Receipts. ME° advised that the safekeeping receipts with the name KEVIN KEON were not received or reviewed by WELLS FARGO. KEO advised EPSTEIN that WMACGL was currently under investigation by WELLS FARGO regarding other questionable conduct. EFTA00128668 • • FD-302a (Rev. 10-6-95) 196A-MM-93577 ContinuaUon of FD-302 of JEFFREY E. EPSTEIN .On 05/08/2002 Page After finding out this information EPSTEIN was angry and contacted ZIMMERMAN. EPSTEIN confronted ZIMMERMAN with the forged Safekeeping Receipts and informed him that the deal was off. EPSTEIN also wrote a letter to the Bankruptcy Court in Delaware detailing the chain of events concerning the $15 million bridge loan. EPSTEIN stated that he never had a conversation with ZIMMERMAN'S associates, JAY PHILLIP PARKER or JAMES P. WHITTIER. Various faxes that were received by EPSTEIN from LANDTEL had WHITTIER'S or PARKER'S name on them. EPSTEIN never spoke with MARK WILLIAMS or anyone at WMACGL. All of EPSTEIN'S dealings regarding the bridge loan were with ZIMMERMAN. Approximately two weeks ago EPSTEIN'S secretary received a call from a JOHN MACARI. MACARI was very aggressive and pushy on the phone and demanded that he speak with EPSTEIN. The secretary was very upset with MACARI'S conduct on the phone but would not connect him with EPSTEIN. EPSTEIN has not returned the call to MACARI.and does not intend to ever return the call. EFTA00128669 • • FD-302 (Rev. 10-6-95) - 1 - FEDERAL BUREAU OF INVESTIGATION Date of transcription 05 08 / 2 002 JEFFREY E. STEIN, date o social security account number 0907.1t;3, 4_.oc,c_ .1A. ,a . "anTria.acess The illard House, 452, MadisorcAge, tth-stuut, 14ew—York, NY-70'02Z- eiephone numbgr..421.2*7.54,a89.5,t rag-rifferviewed,4t his office, _Also present at the interview was EPTIflfrgThatf6iriey JEFFREY SCHANTZ. After being advised of the identity of the interviewing agents and the nature of the interview, EPSTEIN provided the following information: EPSTEIN owns homes in Aspen, CO, Palm Beach, FL and the Virgin Islands. EPSTEIN stated that LAURENCE S. ZIMMERMAN also owns homes in Aspen and Palm Beach. EPSTEIN was introduced to ZIMMERMAN and they occasionally met or saw each other at social events. In approximately October 2001, ZIMMERMAN asked EPSTEIN for a ride on EPSTEIN'S private plane from New York to Palm Beach. EPSTEIN stated that ZIMMERMAN told him that he was involved in various financial deals, including deals in the telecommunications industry. ZIMMERMAN asked EPSTEIN if he could contact him with any financial deals that he felt EPSTEIN might have an interest. EPSTEIN told ZIMMERMAN that he could contact him as he is always looking for opportunities to make money and EPSTEIN was aware that many people in the Aspen area had made significant money investing in the telecommunications industry. In December 2001, EPSTEIN was con acteEl by ZIMMERMAN about a' investment that he was making in NSTAR COMMUNICATIONS INC. T ZIMMERMAN told EPSTEIN t at WINSTAR was a publ ly traded company that was present in bankruptcy proceedings. ZIMMERMAN was putting toge her a deal through his company, WINTEL TELECOM HOLDINGS INC. (WINTEL) to acquire WINSTAR for approximately $100 million. ZIMMERMAN stated that the assets of WINSTAR were worth $1 billion. ZIMMERMAN was seeking a $15 million bridge_loan_from_EPSTEIN__as-a-down-payment-on-the---------------- purchase of WINSTAR from the bankruptcy court until he was able to secure a $100 million loan from a bank. ZIMMERMAN offered to put up $15 million of U.S. Treasury Bonds as collateral for the loan. In addition, ZIMMERMAN offered his personal guarantee InvesUgation on 0 5 / 0 8 / 2 0 02 at New York, New York Datedictated 05/08/2002 01-55? ) - 1 (-(2_ This document contains neither recommendations nor conclusions of the FBI. It is the property of the FBI and is loaned to your agency; it and its contents are not to be distributed outside your agency. EFTA00128670 • • FD-302a (Rev. 10-6-95) 196A-MM-93577 Continuation of FD-302 of JEFFREY E. EPSTEIN ,on 05/08/2002 ,Page 2 secured by his homes in Aspen and in New York. In consideration of the $15 million bridge loan, ZIMMERMAN agreed to pay EPSTEIN an interest rate of 15% on the loan and a $500,000 fee. In addition, ZIMMERMAN would give EPSTEIN 3% of the equity (stock) of WINSTAR. EPSTEIN questioned ZIMMERMAN as to why he didn't just borrow against the U.S. Treasury Bonds with a bank since he could borrow nearly dollar for dollar on this collateral. ZIMMERMAN explained to EPSTEIN that his partner had $130 million U.S. Treasury Bonds in an off-shore restricted account. The Bonds could not be repatriated to the U.S. for tax reasons but could be pledged. Due to the time constraints for making the $15 million down payment, going to a bank for the down payment was not an option as he needed the funds as soon as possible. Although EPSTEIN thought the explanation concerning the bonds to be a little unus he was int• gued about the opportunity to make a significa return on e bridge loan and was interested in ZIMME S Aspen ho if the deal fell apart. On Dece er 12, 2001, EPSTEIN received a fax from JAMES P. ITTIER of allEg DTEL, , 25th Floor,. New Yo ;77-72 10 2, teltpho ri r "TiTe'ThSciiiefUVererr'%%.4, Id eet Which f rmalized-I e conversations that EPSTEIN had with ZIMMERMAN co cerning the $15 million bridge loan. After reviewing the term sheet, EPSTEIN noticed that there were already current mortgages on the New York and Aspen properties that were to be pledged as collateral. EPSTEIN performed a check of ZIMMERMAN on the Internet and found that there had been two instances of foreclosure on properties owned by ZIMMERMAN in the past. EPSTEIN then contacted ZIMMERMAN and requested supporting documentation regarding all of the loan collateral. EPSTEIN also requested that ZIMMERMAN contact his attorney, JEFFREY SCHANTZ, _ _in_alt_future_dealings_regarding_tha_bridge_loan_and_the_issue_of_______ supporting documentation for the loan collateral. On December 13, 2001, EPSTEIN received a fax from ZIMMERMAN with a LANDTEL coversheet. The fax included a copy of a BLOOMBERG screen printout relating to $15,514,000 of U.S. Treasury Bonds identified with CUSIP #912827W81. EPSTEIN was a EFTA00128671 FD-302a (Rev. 10-6-95) 196A-MM-93577 Continuatton of FD-302 of JEFFREY E. EPSTEIN ,on 05/08/2002 .page 3 little annoyed with ZIMMERMAN since this BLOOMBERG screen did not provide any information to him. EPSTEIN contacted ZIMMERMAN and told him that he was not satisfied with the collateral since it did not provide him any information regarding the Bonds. EPSTEIN stated that ZIMMERMAN also provided an appraisal on the New York property that he was putting up as collateral. On December 17, 2001, EPSTEIN receive ZIMMERMAN. The fax included an Institutional Safekeeping Receipt, an Institutional Recei Addendum Institutional Custodial Safekeep' reference to $20 million documents received by CAPITAL GROUP, LTD. Vamg—Trt-ecra—gl Walgit4W0A0.31tel?pticTie ' number Ereliciary listed on the do8aMente wa the Assignee was listed as WINTEL TE three documents included a Bank Off' Stamp signed and stamped by KEVIN Lynnwoodtar c f U.S. Treasu STEIN were on CGL) station 8th Place, SW, COM cer V EON, a fax from ustodial and a Special g Receipt all making Bonds. All three ILLIAM MAUGEMENT AND fore-(WVACQJ uite 105, Lynnwood, "The CENTURY CAPITAL, S.A. OLDINGS, INC. All rification and Bank LLS FARGO BANK, NA, and Later on December 17, 2001, EPSTEIN received two more faxes from ZIMMERMAN. One fax included WINTEL'S bank wire instructions for the bridge loan. The second fax was a "form" commitment letter to the Bankruptcy Court in Delaware regarding EPSTEIN'S intent to immediately fund $15 million to WINTEL which EPSTEIN was instructed to fill out, sign and return to ZIMMERMAN. EPSTEIN telephonically contacted WELLS FARGO BANK, NA, located in Lynnwood, WA and requested to speak with KEVIN KEON. EPSTEIN was advised that there was no one by that name at that branch. EPSTEIN was further advised that a KEVIN KEO used to _ work at the branch but had moved to the Monroe branch of WELLS FARGO. EPSTEIN contacted KEO and was advised that it was not his signature on the Safekeeping Receipts. KEO advised that the safekeeping receipts with the name KEVIN KEON were not received or reviewed by WELLS FARGO. KEO advised EPSTEIN that WMACGL was currently under investigation by WELLS FARGO regarding other questionable conduct. EFTA00128672 • • FD-302a (Rev. 10-6-95) 196A-MM-93577 Continuation of FD-30201 JEFFREY E. EPSTEIN On 05/08/2002 ,page After finding out this information EPSTEIN was angry and contacted ZIMMERMAN. EPSTEIN confronted ZIMMERMAN with the forged Safekeeping Receipts and informed him that the deal was off. EPSTEIN also wrote a letter to the Bankruptcy Court in Delaware detailing the chain of events concerning the $15 million bridge loan. EPSTEIN stated that he never had a conversation with ZIMMERMAN'S associates, JAY PHILLIP PARKER or JAMES P. WHITTIER. Various faxes that were received by EPSTEIN from LANDTEL had WHITTIER'S or PARKER'S name on them. EPSTEIN never spoke with MARK WILLIAMS or anyone at WMACGL. All of EPSTEIN'S dealings regarding the bridge loan were with ZIMMERMAN. Approximately two weeks ago EPSTEIN'S secretary received a call from a JOHN MACARI. MACARI was very aggressive and pushy on the phone and demanded that he speak with EPSTEIN. The secretary was very upset with MACARI'S conduct on the phone but would not connect him with EPSTEIN. EPSTEIN has not returned the call to MACARI and does not intend to ever return the call. EFTA00128673