Billionaire Wexner Says Epstein Swindled Him Out of ‘Vast Sums’
The billionaire behind Victoria’s Secret, said Jeffrey Epstein misappropriated “vast sums of money” from him.
(Bloomberg) -- Jeffrey Epstein’s entry into the life of Leslie Wexner spurred a myriad of questions among some of the fashion titan’s closest confidantes and associates.
What did Wexner, a billionaire who built a fashion empire from scratch, see in Epstein, a college dropout with no obvious background as a money manager or tax expert?
In recent weeks, revelations about the wealth Epstein amassed during his decades-long relationship with Wexner and his repeated alleged abuse of underage girls during that period have complicated that picture. On Wednesday, the saga took another twist as Wexner wrote to members of the Wexner Foundation that his former money manager had “misappropriated vast sums of money from me and my family.”
The deception, uncovered in 2007 around the time Epstein gave up his role managing the billionaire’s fortune, was a “tremendous shock,” Wexner said in the letter. “I am embarrassed that, like so many others, I was deceived by Mr. Epstein.”
Addressed to the “Wexner Foundation Community,” the letter portrays the L Brands Inc. founder as being in the dark about Epstein’s alleged wrongdoing. It didn’t address why he hadn’t previously disclosed it and a spokesman declined to comment beyond the contents of the message.
Their relationship has been under scrutiny in recent weeks, prompting L Brands to hire a law firm to probe any ties between the company and Epstein.
Epstein, a convicted sex offender who served 13 months in jail a decade ago after pleading guilty to two counts of solicitation, was arrested in July and charged with sex trafficking. Days later, Wexner sent an email to L Brands employees admitting that Epstein had managed his financial affairs, but saying he had no knowledge at the time of Epstein’s crimes.
Epstein, who’s in jail at the Metropolitan Correctional Center in Manhattan, has pleaded not guilty to the sex trafficking charges. Three of his lawyers didn’t respond after regular business hours to requests for comment on Wexner’s allegations.
Born in 1953 and raised in Brooklyn, Epstein attended Cooper Union and NYU’s Courant Institute but left both without a degree. He taught calculus and physics at Manhattan’s exclusive Dalton School in the 1970s, and later joined Bear Stearns. In 1981, he left to set up his own money management firm, claiming to work only for billionaires.
Wexner, who’d founded the predecessor to L Brands in 1963, had apparently amassed a fortune beyond that threshold by the late 1980s, after the company’s stock multiplied during the prior years, according to a person familiar with the matter. He had met Epstein “through friends who vouched for and recommended him as a knowledgeable financial professional,” according to the letter.
Among them was Robert Meister, then a vice chairman of insurance giant Aon, who counted Wexner as a client. At the time, Wexner seemed much more focused on running his company than expanding his net worth, according to people close to him.
Around 1990, Wexner appointed Epstein as the head of Wexner Investment Co., his de facto family office. The decision effectively demoted Harold Levin, who’d then been in charge of Wexner’s personal finances for seven years, and came as a surprise to several people who worked with the fashion CEO at the time.
Some wondered what Wexner saw in Epstein, whom they described as charismatic but also arrogant and without much formal education in money management.
“It was highly questionable what was going on,” said Robert Morosky, a former vice chairman and chief financial officer of the Limited, L Brands’ precursor.
Daniel Finkelman, a former senior vice president at L Brands, described Wexner as a man of strong moral character with a high sense of integrity.
“You never know until you know, I guess,” Finkelman said in a telephone interview. “You can’t peer into anyone’s marriage, and you can’t peer into anyone’s friendship.”
In 1991, Epstein was granted power-of-attorney over Wexner’s assets. Within a few years, he was also a director of the Wexner Foundation and Wexner Heritage Foundation, and was involved in developing the town of New Albany outside Columbus, Ohio, where Wexner lives.
The pair were so close that Wexner sold his Manhattan townhouse to Epstein in the 1990s. The Boeing 727 used by Epstein to shuttle luminaries like President Bill Clinton on several overseas trips was previously owned by a Wexner company. Epstein even played a role in building Wexner’s super yacht, “Limitless,” attending meetings in the London studios of the boat’s design firm.
Wexner’s letter didn’t specify how much money Epstein is alleged to have misappropriated. How the financier amassed assets worth more than $500 million, a figure cited by federal prosecutors, remains shrouded in mystery.
Wexner Investment Co. invested in several real estate deals during the 1990s. In some cases, Epstein took a cut of the proceeds once the transactions were finalized, a person familiar with the matter said. Epstein also served as trustee of several trusts, foundations and corporations tied to Wexner. Between 1994 and 2002, such entities sold an aggregate $1.5 billion of L Brands stock, regulatory filings show.
In his Wednesday note, Wexner said that some of the money had been repaid. In 2008, two entities tied to Epstein transferred $46 million to a charitable foundation overseen by Wexner’s wife Abigail, mostly in Apple Inc. shares. “All of that money -- every dollar of it -- was originally Wexner family money,” the letter said.
But it didn’t address the real-estate deal that took place more than three years after they supposedly cut ties. Epstein long resided in the opulent mansion on Manhattan’s 71st Street that Wexner had initially bought and later sold to his money manager for about $20 million, according to a person familiar with the deal. In 2011, years after Epstein’s guilty plea, the deed for the property was transferred from the entity Wexner had used to purchase it to an Epstein company in the U.S. Virgin Islands. Epstein signed for both sides of the transaction.
Unlike some of Wexner’s employees and associates, the billionaire trusted Epstein because he told the older man he had various well-known and respected individuals as his clients and in his inner circle.
“Based on positive reports from several friends, and on my initial dealings with him, I believed I could trust him,” Wexner wrote.
--With assistance from Joe Schneider, Tom Metcalf and Caleb Melby.
To contact the reporters on this story: Anders Melin in New York at amelin3@bloomberg.net;Katherine Burton in New York at kburton@bloomberg.net;Sophie Alexander in New York at salexander82@bloomberg.net
To contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Steven Crabill
©2019 Bloomberg L.P.