The Billionaire and the Sex Offender

(Bloomberg) -- The year after Jeffrey Epstein was first arrested, in Palm Beach, his Boeing 727 touched down in a less glamorous city: Columbus.

The jet’s manifests show the Ohio capital had been a regular destination before that flight in 2007. The singular reason was Leslie Wexner, the retail mogul behind Victoria’s Secret.

Epstein, the disgraced millionaire charged in New York with sex-trafficking minors, owes more to Wexner than perhaps any other business figure. Starting in the 1980s, Wexner opened doors to the rich and powerful for the younger man, their relationship giving him credibility and adding to his mystique as having a vast pool of money to invest.

How much Epstein actually ever managed for Wexner over the course of their 20-year relationship isn’t known. It was a mystery, just as Epstein was a subject of fascination, at L Brands Inc. headquarters in Columbus, where he served as a sort of charge d’affaires for Wexner, the chairman and chief executive officer, on matters ranging from suburban planning to yacht design.

“It’s highly questionable what was going on,” said Robert Morosky, a former vice chairman and chief financial officer of the Limited, L Brands’ precursor.

After Epstein’s arrest on July 6, Wexner said through a spokeswoman that he severed ties with Epstein almost 12 years ago, around the time of the financier’s arrest in Florida on charges he had sex with a minor. But they were not, apparently, severed completely then.

Mansion Deed Transfer

In 2008, a charitable trust of which Wexner’s wife was a director received $46 million in contributions from a company and a charity controlled by Epstein. In 2011, the deed to the Manhattan mansion Wexner once owned and Epstein has long called his own was transferred from the company Wexner used to buy it to an Epstein company in the U.S. Virgin Islands.

Epstein, 66 -- who federal prosecutors said on Friday is worth $500 million -- pleaded not guilty to the criminal counts that could send him to prison for the rest of his life. His bail hearing is scheduled for Monday. Wexner, 81, hasn’t been accused of wrongdoing in the case charging Epstein of molesting girls from 2002 to 2005.

But recently, in a civil lawsuit, Wexner’s name appeared. A woman accusing Epstein of sexual assault said in an April 12 affidavit that he and his companion Ghislaine Maxwell attacked her in Wexner’s 60,000 square-foot home in Ohio in 1996 and that Wexner’s security staff initially refused to let her leave the property. Wexner declined to be interviewed for this story. A lawyer for Epstein didn’t respond to requests for comment.

‘Guilty By Association’

Wexner, and possibly L Brands, simply may not be able to escape the taint.

“You’re known by the company you keep,” said Lida Citroen, who owns a reputation management and branding firm. “You can be guilty by association even if you have nothing to do with what happened. That toxicity can bleed into your business.”

And today in the era of #MeToo -- more than a decade after a secretive plea deal enabled Epstein to avoid similar trafficking charges in Florida -- “our tolerance for anything that appears toxic has got very, very low.”

The two men met when the Brooklyn-born Epstein, who had started a money-management firm after a stint at Bear Stearns, was hustling for clients in Palm Beach in the 1980s. Wexner, who founded L Brands in 1963 and later bought Victoria’s Secret, was very rich. Epstein wasn’t in the same league, staying in hotels instead of, like the tony set, his own waterfront complex.

‘Never Heard Of Him’

But he was already known for touting his investment firm as catering only to billionaires -- though he also told people that his main business was helping the wealthy recover misappropriated assets.

A few years after that first encounter in Palm Beach, Epstein was representing Wexner in a real estate deal, according to Jessica Rohm, a retired Manhattan realtor. She said she was in the process in 1991 of selling a Wexner property on 74th Street to the German government.

“All of a sudden I get this call from Jeffrey Epstein, who said he was a good friend of his neighbor Wexner, who had put him in charge of the transaction,” she said. “I’d never heard of him before. He swept in at the last minute -- and pocketed half my commission.”

By 1995, Epstein was a director of the Wexner Foundation and Wexner Heritage Foundation and president of Wexner’s N.A. Property Inc., which developed the town of New Albany outside Columbus where Wexner lives. Epstein also played a role in building Wexner’s super yacht, “Limitless,” attending meetings at the boat’s design firm’s London studios.

‘Massive Fight’

People in the finance industry who did business with him in those days said Epstein didn’t seem to have a good handle on how things worked, or just disregarded the norms.

John Rigas, now chairman and CEO of Sciens Capital Management, said that when he dealt with Epstein in the mid-1990s, the word on the street was “that he was managing Leslie Wexner’s tax affairs -- that was his business model as we understood it.”

Epstein invested $5 million in a private equity fund being raised by Sciens, Rigas said, and then a strange thing happened: Epstein asked for his money back three months later. This was odd, considering that, as is typical, the fund had a commitment requirement of more than five years. When Rigas pointed this out, he said, Epstein became angry.

“I got into a massive fight with him,” Rigas said. In the end, Sciens, not having deployed Epstein’s funds, returned them.

Water-Cooler Fodder

The much-buzzed about 71st Street Manhattan mansion transfer took place after this. Wexner had paid about $13 million for it in 1989 and then remodeled it. In 1998, he sold it to Epstein’s NES LLC, according to a person familiar with the matter. There’s no documenting of an ownership change until the deed transfer in 2011, and those records show that Epstein’s Maple Inc. acquired the place for $0 and that Epstein signed for both sides of the transaction.

Broker Dolly Lenz, who worked in the 1990s for the firm handling a possible sale of the mansion, said there were prospective buyers lined up when, suddenly, it was pulled off the market. Wexner was “giving it to his associate Jeffrey Epstein,” Lenz said.

Back in Columbus, this was water-cooler fodder, according to Morosky, the former vice chairman. “It didn’t make any sense. The next thing you know, he fixed it up and it’s gone.”

In the early 2000s, when Wexner and Epstein put more than $20 million into a private equity fund run by the late Canadian investor Sam Belzberg, it wasn’t clear where one man’s money ended and the other’s began, according to a person familiar with the investment. Ryan Chan, CFO for Belzberg’s Second City Real Estate fund, declined to comment.

Victoria’s Secret Models

Over the years, though Epstein was never employed by L Brands, he corresponded and met with company executives. He attended Victoria’s Secret fashion shows; some of the models were guests on his private island, according to a former Epstein employee.

Epstein courted young women through the Miami modeling agency MC2, putting them up in an apartment he owned on 66th Street in Manhattan, a former agency bookkeeper said in a 2010 deposition in a civil case. L Brands has employed models from MC2 over the years. A spokeswoman for L Brands declined to comment on whether any were tied to Epstein.

Models were an Epstein theme, according to William Mook, head of Mok Industries in Columbus. He said he met Epstein after pitching an investment opportunity in September 2005 to Ed Razek, an L Brands executive who helps select Victoria’s Secret models. Epstein invited the two men to the Manhattan mansion and when he and Razek showed up, Mook said, they were welcomed by young women who said they were working as models for Epstein. An L Brands spokeswoman didn’t respond to a request for an interview with Razek.

Much like the mansion, the Boeing 727, on which Epstein shuttled famous friends including Bill Clinton, was also a hand-me-down from Wexner, records show. Epstein had the tags changed to a vanity plate ending in “JE,” according to documents obtained by JetTrack.

Epstein used the jet on at least one occasion in the 1990s to travel to Abigail Plantation in Georgia, a quail-hunting preserve Wexner named for his wife, according to a person familiar with the itinerary. The two men went hunting and Epstein came back empty-handed, the person said.

In Epstein’s infamous “Little Black Book” of contacts, first published by the now-defunct website Gawker in 2015, there are hundreds of names. Dozens of phone numbers are listed for Wexner -- for his home, the plantation, residences in London and Aspen as well as for various vehicles and staff associated with each property, plus more for executives at Wexner’s companies.

These former ties could be liabilities for Wexner, who in a 2003 Vanity Fair article praised Epstein for his “combination of excellent judgment and unusually high standards.” What’s more, Wexner said, “he is always a most loyal friend.”

--With assistance from Amanda Gordon and Tom Maloney.

To contact the reporters on this story: Sophie Alexander in New York at salexander82@bloomberg.net;Caleb Melby in New York at cmelby@bloomberg.net;Tom Metcalf in London at tmetcalf7@bloomberg.net

To contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, ;David Gillen at dgillen3@bloomberg.net, Anne Reifenberg

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