WASHINGTON _ Jeffrey Epstein is gone, but the fight over his estate _ involving lawyers, creditors, victims and the U.S. Virgin islands, to name a few _ is far from settled, and getting more complicated all the time.
The attorney general of the U.S. Virgin Islands has asked a judge to let her get involved in the decision-making in the settlement of the estate of the disgraced financier. She has also objected to the creation of a victims' compensation fund _ at least one that would be run out of New York.
Among the recent claims on the estate was a legal bill totaling nearly $600,000. It is considered an interim tab.
Sorting out Epstein's financial affairs and divvying up the proceeds were made more difficult when Epstein rewrote his will two days before he was found dead in his cell last August at a New York lockup, where he was awaiting trial on sex trafficking charges.
He was arrested on federal sex trafficking charges last July, eight months after The Miami Herald published Perversion of Justice, a series of stories examining the extraordinary plea deal 10 years earlier that absolved him of trafficking allegations.
Denise George, the attorney general, filed a motion to intervene before the Superior Court of the Virgin Islands, arguing that the government must protect its interests as executors make decisions about how Epstein's creditors are paid and his accusers are compensated.
"Intervention is particularly necessary given the potential conflict of interest of the Executors in administering the Estate and, in particular, proposing to hire and compensate 'Designers' to administer a voluntary fund to compensate victims trafficked by Jeffrey Epstein," George argued in a complaint filed on Jan. 23 but made public on Monday.
A parallel motion was also filed by George on Jan. 23 opposing a plan offered by executors of the estate to create the New York-based victims' compensation fund.
Also made public this week was a court request by the estate's executors to pay a whopping $581,000 in legal bills to the Virgin Islands law firm of Erika Kellerhals, which helped create Epstein's shell companies and did the legal work on his controversial purchase of Great St. James island from a buyer who did not want to sell to him.
George brought a multi-count indictment in a civil enforcement action against the Epstein estate on Jan 15, effectively staking a huge claim on Epstein's estate.
The little-known attorney general, who took office last April, wants the Virgin Islands to take back both local islands that Epstein had developed, Great St. James and Little St. James, worth more than $80 million. On Jan. 16, she filed a criminal lien on the estate.
The attorney general argues that Epstein used his two islands to support his sex trafficking scheme. George's indictment alleges direct sexual abuse of minors, some as young as 12, by Epstein on his islands.
Some of it happened in 2018, she alleged, a full decade after his non-prosecution agreement in Florida that gave him immunity from federal sex trafficking charges and allowed him to plead guilty to minor offense with limited jail time.
Epstein updated his will two days before he was found dead at the Metropolitan Correctional Center in Manhattan last Aug. 10. That update included adding his two islands to a trust that makes it harder for his accusers to get at his assets _ which were valued at the time of his detention at $550 million or more.
Five days after his death, Epstein's longtime lawyers Darren Indyke and Richard Kahn moved to be declared executors who would settle the estate.
They were involved in the financial structures that George alleges were created to hide Epstein's ownership of and activities on his two islands. And that's why, almost half a year after Epstein's death _ which was labeled a suicide despite suspicions by his brother and others _ the government of the Virgin Islands is trying to intervene.
"The Executors of Epstein's Estate, Darren K. Indyke and Richard D. Kahn, were and are involved in various Epstein business entities that are alleged to share liability in Epstein's civil and criminal violations in the Virgin Islands and elsewhere," George wrote at the conclusion of her intervention motion, signed by the head of the civil division, Ariel M. Smith. "Therefore, there is no means, absent intervention, to ensure Government's interest in its claims and in enforcing the laws of the Virgin Islands are protected."
In their filing seeking to pay the lawyers for Kellerhals, Ferguson, Kroblin PLLC, the executors explained why they sought to pay them at the rate of $500 an hour for their work. Virgin Islands courts generally have allowed reimbursement rates between $150 to $400 an hour, executors acknowledged.
When Epstein was alive, the executors wrote, the Kellerhals law firm began handling matters for him in 2008, and these duties ranged from "his owned entities, trusts, and foundations, and representation in all civil litigation in the U.S. Virgin Islands involving the Decedent's interests."
They also spelled out what is at stake in the fight over the estate, and why it is already so complicated. Epstein used trusts to protect his wealth and his investments were those of the ultra-wealthy, not available to ordinary investors.
In justifying the high compensation, the executors said the Kellerhals law firm had intimate knowledge of Epstein's complex holdings, which included "significant sums of cash, multiple entities, fixed income investments, equities, ownership interests, hedge funds, and private equity investments, valuable personal property, and real and personal property, held in or through various corporate holding and operating entities."
