Real Hedge-Fund Managers Have Some Thoughts on What Epstein Was Actually Doing

[Clash City Rocker]

http://nymag.com/intelligencer/2019/07/hedge-funders-have-some-thoughts-on-what-epstein-was-doing.html

To summarize: no one knows how Epstein came by the fortune he clearly has. He wasn’t born with it. He didn’t graduate from college. He worked for Bear Stearns, rose through the ranks quickly, and then was fired. He then founded his own firm, where he claims to do all the investing himself while his employees all work separately in a back office. Only one person is known to be an investor of his, the rest are all incognito. And it’s very hard to make that much money as a traditional hedge fund manager. So some are speculating that he’s running a blackmail ring. It’s an interesting article.

[JDC]

1. Or money laundering

[DFW]

2. Conceivable but difficult

To make a billion dollars by money laundering, you first have know people with way more than that, all illegally gained, and who trust you with those kind of sums. You don‘t just walk up to the Medellin Cartel or the Mafia and hand them a recommendation.

On the other hand, if you have some compromising photos of a few billionaires, with copies in the hands of accomplices who will go to the press if you experience a sudden mishap, you might quickly find some generous „investors“ with a temporary habit of forgiving large debts.

[JDC]

3. Perhaps he doesn't have billions.

Maybe his "investment portfolio" is his lifestyle. Homes, planes, luxury items. He buys tangible things he can use, give the appearance of personal wealth, yet have "investment" value.

[DFW]

6. That could well be.

But the concept remains. Because of the trust factor, people with enough dirty money to warrant the trouble of transforming it into clean cash or assets don‘t trust just anyone to do it. Big outfits like the cartels have their own specialists. They don‘t need an Epstein to do it for them.

In Germany, where I am, drug cartels simply set up chains of taxi companies or video game parlors, do practically no turnover, but report (and turn in) hundreds of thousands of euros every week in small (5-10-20-50) bills of drug money. The politicians turn a blind eye because the governments collect 20% VAT. They then say they are banning €500 bills „to combat money laundering.“ Total BS but it makes for good headlines. It works because it‘s all done „in house,“ and anyone found skimming has his body parts scattered as animal feed in France or Poland or as shark food in the North Sea.

[JDC]

7. I'd say you are right. They wouldn't need Epstein

[oldsoftie]

16. This is another reason we need a VAT in the US. Only 1 candidate supports it

We cannot fund the programs we want by merely taxing the "rich". EVERYONE must pay. But its a fact that will continue to be ignored.

Here, local gaming stores & convenience stores, mostly run by Indians & Pakistanis, do much the same as you describe. One of the companies i do work for provides ATM services for these locations. They never have a shortage of cash to load machines with. Once the money is pulled from a machine, an electronic deposit is made. Effectively cleaning the cash. "Sales" are reported to the lottery, as required, but only the state tax is collected. So a 4% tax is well worth it to move the money. The chain stores dont run gaming, so its just the "small" owner. And in this part of the country, 90% of local owners are foreigners. When one gets caught in the cheat, they just transfer ownership license to another family member. Its a long story, but i've watched it for 20 years.

[DFW]

24. I don't support a national VAT in the USA either.

Last edited Sun Jul 14, 2019, 02:23 PM - Edit history (1)

For one thing, keep in mind that EVERY state and DC has either their own sales tax, or at least the option to impose one. No such thing exists for the départements of France or the Bundesstaaten of Germany. I rather like the idea of each state being responsible for its own finances. That way, poorly run states (Kansas is the most glaring recent example), usually by Republicans, show up the party responsible. Wiping out that option with a nationwide VAT would give Republicans the Federal government to hide behind, and the "taker states," usually Republican run, could get away with even more theft from the "giver states" than they do now. Indeed, the Republicans could institutionalize the practice. In Europe, there are serious separation movements in Bavaria (Germany) and Catalunya (Spain) for exactly this reason.

Once a federal government sees how easy it is to be awash in that kind of discretionary funds, it usually spends more and more on an uncaring bloated bureaucracy as well. I've seen this in EVERY country in Europe. And they NEVER have enough. They ALWAYS increase the VAT, never diminish it. It hits lower income people hardest, of course, and a federal government will be harder to persuade than a state government that poorer people need a break when buying food, clothes, medicine, etc. It started out at or under 10%. Now it's at or over 20% in most EU countries. It is government heroin. They are addicted to it and never have enough. I'm glad ours never got hooked. Better (and easier) to shut down the drug money related video parlors.

[oldsoftie]

25. In that case, nothing will change here either. There's never enough money for government.

And a VAT taxes the dozens, if not hundreds, of occupations that do not have W2 or 1099 reported income. Everyone automatically thinks of the "underground economy", but the fact is there are many self report occupations out there. We miss hundreds of billions, if not even trillions, of taxable income just simply because people dont report it. I'm one of them. I can write down anything i want on my 1040. None of my income is reported by anyone I get it from.

And our government has shown that regardless of which party is in control, they will always spend too much on everything.
I wouldnt mind dedicating a VAT to paying down the debt.
Unfortunately too many people think we can pay the debt, balance the budget, and add new programs simply by taxing the rich at a higher rate. We CANNOT. It will not work. it isnt even CLOSE to being enough money.

[DFW]

44. Though I agree that merely taxing the rich" is just another gesture

I do not think „nothing“ can change in the States without a VAT. Clinton and Obama both had solid budget plans. Subsequent Republican regimes put us in the hole again, but not for lack of a VAT. I see the far more efficient solution as being to rid ourselves of Republican majorities. That HAS worked for us where confiscating the net worth of Bill Gates would net every US citizen something like $158.

European countries except Germany all run deficits despite their VAT. Germany does not simply because they spend less, something some of their parties would love to change (as long as only THEY do the spending, of course!)

[Blue_true]

31. You just turned a light on in my head.

Despite having a business, I could not figure out how some businesses that seem to be struggling getting customers stay open. Your explanations caused me to make a connection that I had not made.

The businesses sell what they sell and report that to the state as revenue for sales and income tax purposes. But they deposit much more into bank accounts and take an agreed upon "fee" to keep their business running and allow them to live a good life. The money gets washed by the deposit and the criminals get paid out in service or other fees and expenses. It all works as long as the business does not cheat on taxes and have a tax examiner look into them. The banks could care less, all they see is they are dealing with legitimate business. The government does not care as long as taxes get paid in full and on time.

[DFW]

43. Oh, they always pay their taxes

I‘m sure they have accountants to make sure they are squeaky clean. That is what enrages me about European politicians making themselves out as heroes by headline-grabbing moves such as ceasing to produce the €500 bill or limiting cash transactions to €2000. They criminalize the guy who wants to sell his used car from an ad because the guy who answers the ad and wants to drive away with it can‘t do it if he wants to pay cash. The seller of course can‘t let a guy he has never seen drive off with his car, either, just on the promise that „my check is good.“ I think a lot of cars worth €8000 will be reported as sold for €1999 starting next year. Meanwhile, the empty video arcades will continue to do €350,000 a week and no politician of any party will say a word.

[Blue_true]

46. Do you remember when the US Treasury first set the $10,000 cash transaction limit?

It was a nightmare for legitimate business people that needed to pull $10,000 out of an account. But the drug dealers simply found other ways to move money around. That is how laws work, they trully only impact the law abiding.

[DFW]

47. And that was over 30 years ago

In 1985, $10,000 was serious money. In 2019, €2000 is a joke. A few years ago, the government of Cyprus found themselves in a budget bind. They just went into every bank account by internet and took 10% of every account with a balance of over €100,000. What if Trump, with his huge deficits, decides he needs 75% of every private American bank account over $1,000? Who will stop him?

If he gives the order, you had better believe Mnuchin will have it a done deal by the close of business the next day.

[Blue_true]

53. Wow. Your raised some scary stuff. Essentially, if it wants to, the government can trim people's

bank balances without their consent. Man, I hope that can't happen here, but before Trump, I thought that a lot of what he does now and gets away with was illegal.

[DFW]

54. It CAN happen here

But there would be an outcry that would even make Trump quake in his boots. Confiscatory governments in Europe don't confront populations that are armed to the teeth. American politicians do. But our government certainly is in a position to do anything the government of Cyprus did. Hell, the technology and software were probably set up by the same people. As for Trump, he has shown that in his eyes, he IS the law.

An American government hasn't dared anything that drastic since FDR called in the circulating gold in 1933 and declared the bank "holiday." At the height of the Great Depression, there was a far more dire need for drastic action than any time since, and we had a Democratic president who dared to take it. But he was a benevolent president, quite the opposite of what we have now. If Trump decides to wipe out the deficit he created by similar action, orders members of Congress and his Cabinet exempted, and the bank accounts of the rest of us peons are set to be raided by "executive order" overnight, who is going to stop him? Nancy Pelosi? The Senate? The Supreme Court? U.S. Marshals? The Secret Service? DU? Who? The only ones that can thwart such a scheme are the ones ordered to program it and carry it out. If they each get promised a tax free billion for their trouble (with a third up front and wired on to numbered accounts in the Caymans--they won't be idiots), do you think they'll all refuse out of patriotic solidarity with "the American People?"

Now all that is a simplistic doomsday scenario suited more to Hollywood or James Paterson than probability. But it's not something out of science fiction, either. Not any more.

[paleotn]

21. Then my question is...

how did he get the money to buy the lifestyle? How did he set up his little enterprise? Not by himself, I'd wager. Sure, he was a Bear Sterns guy, but apparently he's not a very good investor. Lots of those on Wall Street. They talk a great game, but aren't all that good at investing, and in reality, don't have a lot of liquidity. I'd bet he initially had big money backer(s) also interested in cashing in on his new business model.

[Blue_true]

33. One guy pointed out how.

All he had to do was invest in an S&P 500 index fund. Does not take a big brain to find those. Over the last 40 years, he would have made a killing.

The blackmail idea sounds plausible. Even legitimate large money management firms regular send an appealing young person of the opposite sex to "talk" to wealthy people about the bank's products. If some male billionaire is caught in a photo or on film boinking a 14 year old boy or girl, he would likely be willing to invest lots of money with the person or persons holding the evidence.

[Lars39]

45. iirc, Epstein is known to be very friendly with

the daughter of the head of the Russian mob, Semion Mogilevich.

[Blue_true]

30. Very, very difficult to do that without leaving footprints. Even if the laundering is done offshore.

Another point is that criminals would not want to see their launderer living as large as them.

[nycbos]

4. When you mange BIG money like super wealthily people, public pension funds, foundations etc...

... there is a long paper trail. Lots of translations both buying and selling. The fact that no knows how he got money is telling.

[TruckFump]

5. Blackmail ring?

Now there's an interesting thought.

He sure has a lot of "interesting" people -- to wit, males who like the young stuff -- hanging around him.

Could be.

[dalton99a]

8. Kick

The fact that Epstein’s fund is offshore in a tax haven — it is based in the U.S. Virgin Islands — and has a secret client list both add credence to the blackmail theory.

So what did Epstein do with the money he did have under his management, setting aside the questions of how he got it and how much he had? One hedge-fund manager speculates that Epstein could have just put the client money in an S&P 500 index fund, perhaps with a tax dodge thrown in. “I put in $100 million, I get the S&P 500 minus some fees,” he says, speaking of a theoretical client’s experience. Over the past few decades, the client would have “made a shitload” — as would Epstein. A structure like that wouldn’t have required trading desks or analysts or complex regulatory disclosures.

Kass has kicked around a similar idea: Maybe Epstein just put all the client money in U.S. treasuries — the simplest and safest investment there is, and the kind of thing one guy actually can do by himself.

If the blackmail theory sounds far-fetched, it’s worth keeping in mind that it was also floated by one of Epstein’s victims, Virginia Roberts Giuffre. “Epstein … also got girls for Epstein’s friends and acquaintances. Epstein specifically told me that the reason for him doing this was so that they would ‘owe him,’ they would ‘be in his pocket,’ and he would ‘have something on them,’” she said in a court affidavit, according to the investigative series in the Miami Herald that brought the case back to the public’s attention late last year.

In the 2015 filing, Giuffre claimed that Epstein “debriefed her” after she was forced into sexual encounters so that he could possess “intimate and potentially embarrassing information” to blackmail friends into parking their money with him. She also said photographic and video evidence existed — an assertion that looms especially large now that federal investigators have found a trove of images in Epstein’s home safe.

[oldsoftie]

17. And that trove of information needs to be dissected. Name the names. I'm sick of this shit.

Preying on children.

[Bettie]

9. If hedge fund managers think you're shady

then you are REALLY shady, because they are certainly not the most honest people around.

[NCjack]

10. A vertical blackmail operation. Provide secret access to fast turnover of young females

in exchange for insider corporate financial information. Blackmail his guest CEOs and investment company managers that handle IPOs, mergers and acquisitions, earnings reports, bankruptcies. Maintain the information and money gain system by blackmailing his own guest lawyers, politicians, SEC investigators and tax court judges.

[UpInArms]

11. Bernie madoff?

Kinda sounds like that MO to me.

[2naSalit]

12. Well, it seems to me

that if you're marketing child sex under the radar you not only get lots of secret money (unknown origins and untaxed anywhere) AND the advantage of knowing who engages in such activity, you can stay well funded as long as you don't tell on them. It's the pressure of knowing who can destroy whom and how.

[oldsoftie]

18. Seems like it could also get a bullet to your head.

If you have THAT much money & are afraid, it would seem Epstein would have a target on his back for the last several years

[Mme. Defarge]

29. Not unless he devised a way

for the incriminating materials to become public in the event of his untimely death.

[Blue_true]

34. I don't care how much money or power a person has, he or she can't check every claim.

Epstein could have strung men out everyway to Sunday on how he kept the compromising evidence on them. All a rich man would know is that Epstein has photos of him on a 13 or 14 year old, an article stated that Epstein considered 17 and 18 year old girls "old", it stands to reason that a 16 year old to him was getting on in years.

[TeamPooka]

48. If I was a blackmailed billionaire pedophile I would have had Epstein killed right after the first

blackmailing.
because no one gets a billion dollars without getting dirty.

[oldsoftie]

51. Thats why i wonder about the blackmail issue.

[TeamPooka]

52. of course good blackmailers have back-ups for protection etc

[2naSalit]

55. that's a possibility too...nt

[MineralMan]

13. Oh, I think there's much more to Epstein than we know.

I also think, though, that we may never know most of it. There may be enough important people who would be damaged from all of the information becoming public that it all gets quashed, while Epstein gets a long, long prison term. If Epstein was blackmailing people, which isn't out of the question, he may see those tables turned on him since he is now the loser and others could easily make him an even bigger loser.

People who are being blackmailed can sometimes flip the equation on the blackmailer. Even without their names becoming known publicly in many cases, if they are powerful enough.

[Blue_true]

35. Until Trump, I would have thought that what you just claimed was not possible.

Certainly I thought, someone would leak the truth out. But the only leaks today are by right-wingers trying to embarrass governments. There are no honest people leaking stuff in support of the public knowing the truth.

So it is entirely possible that if enough powerful men are caught up in that web, Epstein will get two choices, keep his mouth shut and go to prison for life, or mysteriously die right away.

[crazytown]

14. Epstein was an asset

Laundering is my best guess.

[MBS]

15. this is a really important article. Thanks for posting. n/t

[Greybnk48]

19. The post-sex debriefing of the young girls looking for details

of each of their sexual partners is pretty telling, along with the fact that the other "hedgies" don't know anyone he's actually traded with ever! Money laundering could be in the mix along with blackmail.

[Blue_true]

36. Since Epstein owned the places that the young girls met the men at,

the places were likely loaded up with video and picture taking equipment. He really didn't care about the girls, once they turned 16 their value to him was almost nothing, so them getting photographed or videotaped without them knowing likely meant nothing to him.

[paleotn]

20. An advanced blackmail ring.....

Sort of a Club Pedophile. Members "join". Some may voluntarily. Epstein provides his "special services" and everyone's happy or at least it keeps them off the sex offender roles. As I've said before, I don't want this scum bag to be some sacrificial lamb to end further inquiry into this web of slime. If he goes to jail, I want all, and I mean all of his "clients" in jail. I don't give two shits who they are.

[Blue_true]

37. If there are enough powerful men caught up in his web,

as someone pointed out, we may never know anything about others that were involved.

[kentuck]

22. Interesting..

...get photos...threaten to make public unless money is paid...

... that could be a new business model.

[Blue_true]

38. It has happened since the advent of pictures. nt

[jmowreader]

23. I don't buy the S&P 500 or Treasuries theories

I believe his "fund" is cover for his pimping activities.

[Blue_true]

39. Could be.

If a man is worth $3 billion, paying a sleazeball $400 million to avoid being outed as a pedophile becomes plausible.

[onecaliberal]

26. I read somewhere the FBI recovered DVD's with names on them.

[Me.]

27. THat's One Possiblility I Thought Of

money laundering, and the sex trafficking (selling the kids)

[Blue_true]

41. Criminals typically don't like their money launderers living large on their dime.

International child traffickers are a vicious breed, they would likely kill someone like Epstein in 30 seconds that submit to anything that he wanted.

Blackmail sounds most probable to me, IMO. Find rich men that have a taste in very young teen females then find a steady supply of those females, gather compromising information on the men and then collect millions to stay silent.

Epstein's New York townhouse was raided simultaneously with his arrest in New Jersey. But later that same day or early the next week, his Florida mansion was found empty of computers when it was raided. Someone had to pass along information, Fed, New York and New Jersey kept a lid on things, but the Florida raid got compromised somehow.

[GoCubsGo]

28. I have heard others bring up this theory, as well.

It certainly would explain a lot, including the Trump and Acosta situations. (For those who don't know, the Dept. of Labor deals with human trafficking.) I would not doubt that Trump's "falling out" with him was a case of Epstein pointing out that he had the goods on Trump. I have maintained all along that Trump was somehow involved in human trafficking, and that this was what Putin had on him, not the alleged pee tape. It's looking to be the case.

[canetoad]

32. Unrolled Twitter thread I stumbled across

https://threadreaderapp.com/thread/1148303671857491968.html


(1/13) Let's take as our starting points two givens.
(A.) You are a committed, unrepentant pedophile
(B.) Because of your old job in private banking, you are very connected to lots of very, very wealthy people
We'll also assume a goal:
(Z.) You want to become very rich

(2/13) The obvious route is, well, obvious: you could just be a pimp, offering underage prostitute services to very rich people. This has two problems: you're very disposable (see: DC madam), and it's also not super lucrative. You can't charge millions of dollars up front.

(3/13) The second level though follows instantly: You don't need to charge up front, just get them to have underage sex, and then blackmail them afterwards for hush money. Better ROI, but you're still a liability, and producing and receiving big bribe money raises big questions.

(4/13) So, what to do? Well, the second idea has some merits. First, you need to recruit people in. Have lots of massive parties at your spacious home (check), invite top academics, artists, politicians to encourage people to come (check), and supply lots of young women (check)

(5/13) You don't even have to do anything, and most people invited might even be totally unaware of the real purpose of the parties! But, sooner or later, some billionaire will get handsy, she'll escort him to a room with a hidden camera, things happen. Morning after, you strike.

(6/13) You inform him she was really 15, but you offer him a nice, neat way to buy your silence: a large allocation to your hedge fund, which charges 2/20 (check). To ensure nobody else asks questions, you also take the extraordinary step of demanding power of attorney (check)

(7/13) The fund is offshore in a tax haven (check) and nobody will see the client list (check). Of course, you don't really know anything about investing, instead making up some nonsense about currency trading (check), and nobody on Wall Street has ever traded with you (check)

More at link....

[DeminPennswoods]

40. Blackmail makes the most sense to me

given what people in the know about hedge funds and finance report to have found. But what if Epstein never invested any money, he just kept it for himself? The hedge fund could just be a paper entity that served to give everyone a credible cover story.

TBH, Chairman Neal ought to subpoena Epstein's income tax records from the IRS and also from New York State. I doubt Mnuchin is going to protect both a convicted and indicted sex offender.

[RainCaster]

42. DFT knows the best child molesters

[Recursion]

49. He had no traders in his "fund".

None. He wasn't even pretending well.

[ck4829]

50. Kick