EFTA00208244.pdf

U.S. Department of Justice United States Attorney Southern District of Florida 500 South Australian Ave., Suite 400 West Palm Beach, FL 33401 (561) 820-8711 Facsimile: (561) 820-8777 April 22, 2008 VIA FEDERAL EXPRESS la, Counsel Office of Professional Responsibility U.S. Department of Justice Washington, DC 20530-0001 Re: Self-Report of Allegation of Conflict of Interest Dear Mr. I write to advise you that I have learned that lawyers for a target of one of my investigations, Jeffrey Epstein, have raised ethical concerns regarding my involvement in his potential prosecution in the Southern District of Florida. Specifically, I understand that Epstein's attorneys have notified Assistant Attorney General Alice Fisher and/or her staff that I have an actual conflict of interest. As part of pre-indictment plea negotiations, the parties agreed that Epstein's victims would be allowed to collect civil damages from Epstein and that Epstein would provide counsel for the victims. I provided Epstein's counsel with a series of possible attorneys, , who is a friend of my boyfriend, '). At as a friend of a "good friend." Epstein's attorneys rejected the other suggestions and selected After conferring with the First Assistant and the U.S. Attorney, we decided that, despite the terms of the non-prosecution agreement, the Office should not be responsible for selecting the attorney to represent the victims, and that a Special Master, working pro bono, should make the selection. Accordingly, the matter was submitted to a Special Master, and was not selected as the attorney for the victims. Despite this resolution, Epstein's counsel continue to allege that my suggestion of to serve as counsel for the victims represents a conflict of interest and that I should be removed from prosecuting the case and/or disciplined. Therefore, I am self-reporting this allegation for review by the Office of Professional Responsibility. including the time, I identified Background of Investigation Operation Leap Year is a child exploitation investigation where the main target, Jeffrey Epstein, used his personal assistants and others as "recruiters" who would find high school girls, most of whom were minors, to travel to his home in Palm Beach, where the would erform "sexual massages." The sexual behavior ranged from fondling the girls, placing them, performin and engaging in minor females. More than twenty-five minor victims have been identified. The case was originally investigated by the City of Palm Beach Police Department and was presented to the Palm Beach County State Attorney's Office. Epstein immediately hired "high-powered" attorneys -F1 with connections to the State Attorney and pressured the State Attorney's Office to forego on them asking them to engage in sexual achy' with Epstein's girlfriend, with them. In all cases, Epstein in the presence of the EFTA00208244 filing charges. As part of their presentation to the State Attorney's Office, Epstein's attorneys raised allegations of misconduct on the part of the lead investigator from the Palm Beach Police Department. They also presented information from the "MySpace" pages of several victims that portrayed them as drug and/or alcohol abusers and liars. The Palm Beach Police Department, seeing that the State Attorney's Office was likely to do nothing about E stein, approached the FBI, who, in turn, approached me. We met with the police detective, and discussed the investigation. When the State Attorney's Office presented the case to a grand jury (an extremely unusual step for a non-murder case) and obtained an indictment charging only three counts of solicitation of adults to engage in prostitution, we decided to open an investigation. The investigation was lengthy and extensive. Because I was aware of the allegations of wrongdoing by the police department, the FBI and I consciously decided to undertake an independent investigation, which involved an independent review of the audio and videotaped interviews of the victims, subsequent interviews by FBI agents, and obtaining and reviewing extensive documentary evidence. From the start, Epstein's attorneys tried to convince me to stop the investigation and defer to the state prosecution. As part of this, they presented the same allegations of wrongdoing by the police detective and by the victims that they had presented to the State Attorney's Office. I assured them that we would do an independent review of the evidence before making a decision. As part of the investigation, I asked the FBI to follow up on the allegations of wrongdoing by the police detective. They did so, and determined that, with the exception of one error in a police report, the allegations were false. We also reviewed the "MySpace" pages and considered how they would affect the prosecution of the case. When it became evident that I would not stop the investigation, Epstein's attorneys complained to others in my chain of command that I was harassing Epstein, violating various rules, and was simply trying to advance my career. In the press, his counsel even suggested that he was being persecuted based upon his religion or because he was wealthy. Epstein also began to hire additional attorneys with connections to our Office (a series of former Assistant U.S. Attorneys and a former U.S. Attorney) to try to influence the Office's decision. The Pre-Indictment Plea Negotiations I prepared an indictment package for review by the Office. B this time, Epstein's counsel had already met with the head of the West Palm Beach office and I, and was demanding the opportuni to meet with the Chief of the Criminal Division and the First Assistant . The four of us met with counsel for Epstein and rejected their proposed resolution of the case, which involved no jail time. A counter-proposal was made by the Chief of the Criminal Division, which included a plea to a state charge that carried a sex offender registration requirement, a jail term, and the payment of damages to the victims pursuant to a federal law that would have been implicated if we had proceeded on the federal charges, 18 U.S.C. § 2255. Epstein's counsel asked to meet with the U.S. Attorney (Alexander Acosta) and the Chief of the Child Exploitation and Obscenity Section at the Department of Justice. After that meeting, Epstein's counsel was again informed that we intended to proceed. At that point, Epstein's counsel asked for the opportunity to "appeal" the decision to Washington, D.C. The U.S. Attorney agreed to give them two EFTA00208245 weeks for that appeal. At the same time, Epstein's counsel asked to begin negotiations to resolve the dispute in accordance with the terms set forth by the Chief of the Criminal Division. At the Office's request, I began crafting an agreement containing those terms. Epstein's counsel expressed concerns about Epstein's safety while incarcerated, and asked if there was a way to plead to a federal charge that would bring about the desired outcome. I, therefore, undertook drafting two separate sets of documents: (1) a Non-Prosecution Agreement setting forth a plea to state offenses; and (2) a federal Plea Agreement with a federal Information to be filed with the Court. The negotiations were difficult and tedious. Whenever Epstein's attorneys and I reached an impasse, they would "appeal" to the powers above me, starting with the head of the West Palm Beach office, then to the Chief of the Criminal Division, then to the First Assistant and the U.S. Attorney. Although the U.S. Attorney continued to defer to Mr. and me, Epstein's counsel would constantly ask the U.S. Attorney to intervene. As mentioned above, with respect to the terms of the Non-Prosecution Agreement, Fz from the Office's perspective, there were three necessary terms: (1) a sentence of eighteen months' imprisonment [reduced from twenty-four months after negotiations with the defense]; (2) a plea to one state offense that required sex offender registration [reduced from pleading to three separate state offenses that each required sex offender registration]; and (3) an agreement to pay damages to the victims in accordance with federal law. Because of the state component of the agreement, (also from our Office), and I met with the State Attorney for Palm Beach County and an Assistant State Attorney, and three of Epstein's lawyers, Jack Goldberger, Gerald Lefcourt, and Jay Lefkowitz. F3 At that meeting, we discussed the issue of sex offender registration, and Jack Goldberger said that Epstein was willing to plead guilty to procuring minors to engage in prostitution, one of the three charges for which sex offender registration was required. Goldberger specifically noted that this charge required registration but was still acceptable to the defense. After several weeks of negotiations, Epstein's attorneys began to complain about the sex offender registration requirement and, in some drafts, tried to "slip in" a citation to a different state offense that did not require registration. When I inquired why there was a sudden objection to a term that had been agreed upon several weeks before, I learned that, when Goldberger made that representation and throughout the first few weeks of negotiations, the defense believed that procuring minors to engage in prostitution did not require sex offender registration. When they learned that my research was correct, and that the charge did require registration, they then tried to avoid that term, first by trying to "slip in" the change to the agreement, and then by re-arguing the point with me, and the U.S. Attorney. Their arguments were rejected, and the term remained in the Agreement. With respect to the second term, regarding a jail sentence, we later learned that Epstein's attorneys had been trying to arrange with the State Attorney and the Palm Beach Sheriff's Office to allow Epstein to serve his term on "work release," which would allow him to be out of custody all day, just returning to a "halfway house" to sleep at night. With respect to the third term, there were also intense negotiations. Epstein's attorneys wanted us to bind the victims to a set settlement amount or pool of funds, bar them from litigating any issues, and require them to waive their federal claims in lieu of a state restitution fund. All of these requests were refused for several reasons, including, first, that the Office did not have the power to bind the victims to any contractual terms; and second, that the federal statute presumed damages in an amount not less than $150,000, so binding them to a state restitution fund would greatly decrease their opportunity to recover. Under the federal damages statute, 18 U.S.C. § 2255, a victim's attorney was entitled to recover attorney's fees from the defendant. This, however, would require the victims to find EFTA00208246 their own attorneys. The defense wanted to avoid this to keep from having to litigate against several different attorneys at the same time, and as a way to keep the terms of the agreement from widespread disclosure. I considered it in the victims' best interests to provide a way for them to have an attorney who was competent to represent them and to negotiate on their behalf without each victim having to run the gauntlet of finding a plaintiffs' attorney. F4 I therefore developed a list of criteria for the attorney who should be appointed to represent the victims. I also began thinking about possible attorneys to serve in that position. Virtually all of the drafts of the Non-Prosecution Agreement contained an agreement that the United States would move for the appointment of a Guardian ad Litem to represent the victims in the U.S. District Court, using the following language: Upon the execution of this agreement, the United States will file a motion with the United States District Court for the Southern District of Florida for the appointment of a guardian ad litem for these persons [referring to the victims]. On September 24, 2007, for the first time, Epstein's attorney, Jay Lefkowitz, revised the paragraph regarding the Guardian ad Litem to the following: Upon execution of this agreement, the United States will either file a motion under seal with the United States District Court for the Southern District of Florida for the appointment of a representative who is: (a) a lawyer; (b) independent; (c) selected by a federal judge; and (d) paid for by the federal court or, in consultation with Epstein's counsel, the United States shall select a representative who shall be paid for by Epstein. September 24, 2007 was the final deadline that had been set for the signing of the Non-Prosecution Agreement (it had been extended several times over several months at the request of Epstein's lawyers), so this significant change needed to be dealt with quickly. I explained to Lefkowitz that, unless a case was pending, there was no basis for the United States to file such a motion and there was no basis for the federal court to pay for the attorney, especially since the statute at issue called for the defendant to pay for attorneys' fees. Lefkowitz then suggested that we drop the first half of the sentence and just have the attorney selected by the United States in consultation with Epstein's attorneys. I agreed, and the final language was the following: Upon the execution of this agreement, the United States, in consultation with and subject to the good faith approval of Epstein's counsel, shall select an attorney representative for these persons, who shall be paid for by Epstein. The agreement was completed and signed that day, September 24, 2007. The Selection of the Attorney Representative As mentioned above, I had given some thought to the attributes of the attorney appointed to represent the victims, which I had planned to include in the motion for appointment of a guardian ad litem. These attributes included experience representing plaintiffs and defendants, employment with a firm large enough to handle multiple lawsuits simultaneously, federal trial experience, tenacity, honesty, and a person at a place in his or her career where he or she could put the interests of the victims first and not be concerned about currying favor with Epstein's high-profile attorneys or the press. EFTA00208247 Although I had never met him, I was aware of == a friend of my boyfriend, F5 eras a seasoned trial attorney who had represented both plaintiffs and defendants and who had litigated against other high profile attorneys under difficult circumstances. I knew that and another mutual friend of= and i found him very trustworthy and I felt that he could be trusted to protect the victims' interests. I asked whether he thou ht was suitable for and would be willing to accept the assignment and he said he thought so. ommended that I give a call and provided me with his contact information. I then called and told him a little bit about what I was looking for under the terms of the agreement. I told that I had gotten his contact information from= but I did not tell him about m relationship with M. To avoid any claim that I had disclosed grand jury information to him, I told that if he wanted detailed information about the case, he could "Google" Epstein's name and find all the public sources of information about the case. and I corresponded by e-mail and he ran a conflicts check to insure that he was able to accept the appointment, if it was made. After the agreement was signed, I mentioned name to Lefkowitz. I told him that he was mutual friends with two people whom I respected. I also told Lefkowitz that worked at the Shook, Hardy, and Bacon firm, and that he had worked with Guy Lewis, another of Epstein's attorneys. Later, Lefkowitz called me and said that he had checked on and he sounded like a good choice, but he asked to be provided with additional names from which to choose. On September 25, 2007 (the day after the agreement was signed), I sent Lefkowitz a list of four additional attorneys. In that e-mail, I wrote: "Just so you know, I have never met , but a good friend in our appellate section a l and one of the district judges in Miami are good friends with him and recommended him." The following morning, I asked Lefkowitz to disregard two of the names, one of whom was partners with the husband of an Assistant U.S. Attorney in West Palm Beach because of the Department's conflict of issue rules. On September 26th, Lefkowitz provided me with two names to consider. I researched their backgrounds and determined that they were both retired state court judges who were of advanced age who were no longer practicing law full-time. I declined those names, writing: "Meaning no disrespect to these distinguished gentlemen, one of my criteria is that, if negotiations with you don't work out, they have the stamina to take you all to trial, so I politely decline suggestion." Lefkowitz later told me that he had considered the other names and decided thaa was the best choice. I then started to try to work out the details of the representation so that the girls could be told about their attorney and they could start deciding how they wanted to proceed. On September 27th, I corresponded both with Lefkowitz and about how the re resentation would be paid for, and with Lefkowitz about what information I could share with I tried to schedule a conference call to discuss the matter, but Lefkowitz was unwilling to meet. Late that afternoon, I spoke with the First Assistant, who had been out of the office during the last week of negotiations. He expressed concern about our Office selecting any individual attorney and wanted to refer the matter to a Special Master to make the selection. I informed about this new development and told him that I would get back to him when I knew the Office's final decision about how to proceed. I then began working with Lefkowitz to select a Special Master and to create procedures for how the Special Master would select the attorney and, once chosen, how the attorney would proceed with representing the victims. Immediately, Lefkowitz and other attorneys for Epstein began to seek delays and objected to things already contained in the Non-Prosecution Agreement — an attempt to re-open the plea negotiations that had been concluded. They also began to object to my attempts to abide by our EFTA00208248 legal obligations to inform victims about the outcome of investigations and prosecutions. In early October, I took an unpaid leave of absence to deal with a number of health issues. I attempted to resolve the Special Master issue before I left, but was unable to because of the defense objections. On October 5th, I again asked Lefkowitz to meet with me via telephone to finalize the decision regarding a Special Master. In that e-mail, I gave Lefkowitz the list of attorneys whom we intended to provide to the Special Master for his selection: Fs "As far as the five attorney names that we will be providing, I propose Bert MI Katherine Ezell at Podhurst Orseck, Stuart Grossman, Ed Rogers, and Walter Cobath." While I was on leave, First Assistant negotiated an Addendum to the Non- Prosecution Agreement that called for a Special Master to select one or more attorneys to represent the victims. Those negotiations were almost as difficult as the ones leading to the Non-Prosecution Agreement, and the Addendum was not sial until October 29, 2007. In mid-October, after I learned of the Office's final decision, I informed that the decision to use a Special Master had been made and told him the name of the Special Master. In addition, I stated: "I will leave it to you whether you or someone in your firm wants to contact Judge Davis. I apologize that this process has become so cumbersome. It has reminded me why government bureaucracy moves so slowly. Thatil , c ou for your willingness to ste up and undertake this difficult project." I next had contact with on October 29th, when sent me an e-mail asking whether Judge Davis had been selected as the Special Master. I responded that Judge Davis had been selected. Following that exchange, I have had no further contact with and I still have never met him face-to-face. At some time after these events, told about our relationship, but I do not know exactly when that occurred. I understand from Epstein's attorneys that did contact Judge Davis about serving as the attorney for the victims. Judge Davis selected a different firm (ironically, one of the firms I had included in my October 5th list, which the defense rejected at the time). After pressure from Epstein's attorneys, the firm chosen by Judge Davis declined the appointment and no other firm has been Si lted or selected. Several of the victims have since obtained private counsel. No one has selected to be her attorney and when victims have asked me to recommend an attorney, I have simply declined, stating that I could not provide them with that advice. Despite the existence of the Non- Prosecution Agreement, Epstein's counsel and several private investigators have tried to contact the victims, greatly upsetting some victims. On the advice of other child exploitation prosecutors, I contacted a national crime victims' organization, which was able to appoint pro bono attorneys for those victims who wanted representation regarding the state and federal criminal cases. Conclusion At this time, none of the terms of the Non-Prosecution Agreement have been followed or enforced. In light of Epstein's failure to abide by the terms of the Agreement, the Office intends to proceed to prosecute Epstein. I wanted to bring this allegation to the attention of the Office of Professional Responsibility, and to provide your Office with any other information that is needed. Please advise me if any further information or action is needed. Thank you for your assistance with this matter. Sincerely, R. Alexander Acosta United States Attorney By: EFTA00208249 Assistant United States Attorney cc: R. Alexander Acosta, U.S. Attorney Mn connection with the state litigation, Epstein hired Guy Fronstin and Jack Goldberger from West Palm Beach, television legal commentators Roy Black and Gerald Lefcourt, and author and Harvard Law Professor Alan Dershowitz. In connection with the federal investigation, Epstein added former Independent Counsel Kenneth Starr and Jay Lefkowitz from Kirkland and Ellis, former U.S. Attorney Guy Lewis, former Assistant U.S. Attorneys Lilly Ann Sanchez and Michael Tien, and Massachusetts defense attorney Martin Weinberg. nit note that for at least the first two weeks of the negotiations, Epstein's counsel shifted back and forth between a plea to state charges and a plea to federal charges, so I was drafting both a Non-Prosecution Agreement and a plea agreement. The federal plea agreement did not go through because Epstein's counsel were concerned that Epstein would not be eligible to serve his term in a "prison camp" and because the Office was concerned about finding appropriate federal charges that would "cap" Epstein's sentence at the agreed eighteen months. May Lefkowitz handled the majority of the negotiations with me. a lThe agreement provided that the girls would not be required to use the attorney, he or she would simply advise the victim of her rights and she could then decide to stay with that attorney or find another attorney on her own. UYera is also an Assistant U.S. Attorney in the West Palm Beach office. He is assigned to theiglate Section. Contrary to allegations raised by Epstein's attorneys, has no business relationship with they have been friends since law school. F A number of documents related to the state investigation were available at TheSmokingGun.com and other websites. I know that, after he did this, contacted to thank him for the referral and he mentioned that he had found out information about the case and that this was the type of case he would be willing to do pro bono. During that conversation, did not tell about the personal relationship between us. EThe "good friend in our appellate section" refers tc. M. Reading this now, it is a bit unclear because the recommendation came only from , not from their mutual friend, the district judge, who was never asked for and who never provided a recommendation. a lPlease note that, in the final version, no list of attorneys was provided to the Special Master. EFTA00208250