EFTA01265973.pdf

CA11517 - JEFFREY EPSTEIN
REFERRAL DETAILS:
Case Creation Date: 07/08/2019
Notification Source: Financial Crimes Risk Management- AML Media Review Team
Referring Concern:
Incident report opened due to negative media for JEFFREY EPSTEIN. he has been charged with one count of sex trafficking
of minors, and one count of conspiracy to engage in sex trafficking of minors. FCI Media is in the process of exiting the client
Previous or Related Compliance Cases (in the prior 24 months':
• N/A - No previous related Compliance cases were identified as of 07/10/2019
o SELS query on the Compliance/TPA/Investigations tabs & Oracle ECM
INVESTIGATION NOTES:
Sublect(s): Customer ID(sl:
• JEFFREY EPSTEIN
• SOUTHERN TRUST COMPANY INC.
• SOUTHERN FINANCIAL LLC
• SOUTHERN COUNTRY INTERNATIONAL LTD
• RICHARD KAHN
JEFFREY EPSTEIN (66 years old) established a relationship with Schwab in April 2019 maintaining three active accounts for which
he maintains a role as an internal control person and beneficial owner. These roles do not grant him any authority to act on an
account, however, he is included within this investigation due to the negative media surrounding Mr. Epstein. His disclosed
suitability is employed as an executive/senior management at Southern Trust Company, Inc.
RICHARD KAHN (46 years old) established a relationship with Schwab in April 2019 maintaining three active accounts for which he
maintains an agent role granting him the authority to conduct activity within the three corporate accounts. His disclosed suitability
is an executive/senior management of HRBK ASSOCIATIONS INC.
Transaction Summary:
This investigation encompassed the period between account inception and 07/10/2019.
" (all accounts established within April/May 2079) (see individual subpages in the Transaction Summary tab)**
The following activity was identified:
Credits Debits
Account Funds received via check/wires from: Foreign wire sent to:
SOUTHERN TRUST COMPANY LLC SOUTHERN TRUST COMPANY .2.250.000 MARC LEON (MOROCCO)
Agent: KAHN 06/26/19 -12.708.324.00 Client requested returr
TOA of stocks from Merryl Lynch
Internal Control: KAHN & EPSTEIN 07/10/19 -14.950.000.00 Client canceled wire
Beneficial Owner: EPSTEIN (100%)
FX Returned Wire Credit of: SHARES Transferred to #14332170
412,070,506.60 Date Shares Symbol
Client assumed loss of-$113,527.80
06/27/19 10,000 XOM
06/27/19 10,000 ILMN
06/27/19 1,000 GS
Credits Debits
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Account Funds received via check/wires from: CASH Transferred to
SOUTHERN FINANCIAL LLC Total -$547,543.36
SOUTHERN FINANCJAL LLC +S35,27840
Agent: KAHN
COATUE ENTERPRISES LW .39,000.00
Internal Control: KAHN & EPSTEIN SHARES Transferred
DARREN/ea:ME& AftWELLE SOO:14ER .42200.00
Beneficial Owner: EPSTEIN (?%) SHARES SYMBOL SHARES SYMBOL
TOA of stocks from TD Ameritrade
3,000 GOOG 25.000 CVNA
263,157 APO 7.000 AMZN
Account Balance $0.00
1.000 GS 25.000 KPO
Credits Debits
Account Funds received via check from: CASH Transferred to
SOUTHERN COUNTRY Total -$17,505,911.64
SOUTHERN TRUST COMPANY .250.000
INTERNATIONAL INC.
TOA of Fixed Income & Stocks from:
Agent: KAHN
TD Ameritrade
Internal Control: KAHN & EPSTEIN
Beneficial Owner: EPSTEIN (100%) SALE of Investments • I7.255.875.48
Investigation Research:
Negative Media - EPSTEIN:
EPSTEIN was arrested and charged on 07/08/2019 with sex trafficking of minors and conspiracy to comment sex trafficking
to minors, the first federal charged brought against him. The indictment alleges the acts took place between 2002 through
2005, through engaging in acts in exchange for money.
JEFFREY EPSTEIN, 66, is charged with one count of sex trafficking of minors, which carries a maximum sentence of 40
years in prison, and one count of conspiracy to engage in sex trafficking of minors, which carries a maximum sentence
of five years in prison.
He is currently in jail, but on 07/15/2019 he will appear in court for his bait hearing. Articles indicate urges to not grant bail
to EPSTEIN as they worry he is a flight risk due to the extent of EPSTEIN's wealth.
OTHER INFORMATION REGARDING REMITTERS OF FUNDS:
COATUE ENTERPRISES LLC
• Actively registered in the state of NY with agent listed as HBRK ASSOCIATES INC. (KAHN'S company)
DARREN K INDYKE
• Lawyer in New York
• Per CLEAR, connected to EPSTEIN (see CLEAR subpage in the Client Profile tab)
• Per PRABOOK.com - worked at EPSTEIN & Company
• Per an article (The Daily Beast) posted on 03/12/2019 indicates DARREN INDYKE is EPSTEIN's attorney
RICHARD KAHN
• Linked in various business connections to EPSTEIN and INDYKE.
FX WIRE RESEARCH:
Per notes in MyQ the purpose of the outgoing wire to MARC LEON on 06/26/2019 for -$12,708,324.00 was for real estate
purposes. The client was sending euros in which trades were placed. The following day, 06/27/2019, Richard Kahn called
into Schwab asking if it's possible to stop and terminate the wire.
Why does he want to cancel?
Kahn states "for a concentrated real estate transaction, and uh, what uh, terms we were told we had on uh an
agreement, were uh, not, were reneged on this morning. So uh we are hoping it still can be a deal, but at this point
the terms that I accepted are not agreeable to him I want to retract the wire ..."
Schwab agrees to attempt to recall the wire on a best efforts basis with the understanding that there might be financial
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consequences and Richard Kahn agreed to assume any losses.
Schwab successfully recalled the wire, converting the EU back into USD, the loss Richard Kahn absorbed was -$113,527.80
• Additional calls identified the following statements:
• Wire was sent prematurely, but will need to send a wire for even more to a different escrow account
• If the EU goes in our benefit, do we get the profit?
• Kahn asked on 07/10/2019 if the wire request requires more than one signature ... asked to check as he needs to send
a few more wires out.
? WHO IS MARC LEON:
Google search of MARC LEON identified a real estate company, KENSINGTON MOROCCO, where MARC LEON is listed
as a partner, working for pharmaceutical, real estate businesses, etc.
The address provided on the outgoing wire matches with the address listed on Kensington Morocco's website.
Appears customers have the ability to research luxury properties in the countries MOROCCO and FRANCE.
On 07/04/2019 a secondary wire request was submitted for a -$14,950,000.00 wire to be remitted to a different account for
the benefit of MARC LEON.
However, on 07/09/2019, Richard Kahn secure messaged Schwab asking to have the wire canceled.
The wire request form was signed by both KAHN and EPSTEIN on 07/05/2019.
Proposed Decision:
Investigator determined to file a SAR reporting the outgoing international wire attempts for real estate purposes in light of
the negative media in which articles indicate EPSTEIN is a possible flight risk. While source of funds do not appear of
concern, the narrative will detail how the funds came to Schwab.
MEETING NOTES:
All meeting notes related to this AML Investigation can be identified within the Oracle ECM "Audit" tab within the respective case.
• Notes should reflect supporting points of the case review decision, and if applicable, can be updated after case review.
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