{"id":36551,"date":"2019-07-12T08:20:44","date_gmt":"2019-07-12T12:20:44","guid":{"rendered":"http:\/\/www.rightwinggranny.com\/?p=36551"},"modified":"2019-07-12T08:20:44","modified_gmt":"2019-07-12T12:20:44","slug":"a-question-that-should-have-been-asked-long-ago","status":"publish","type":"post","link":"https:\/\/www.rightwinggranny.com\/?p=36551","title":{"rendered":"A Question That Should Have Been Asked Long Ago"},"content":{"rendered":"

According to Michelle Clarier.com:<\/a><\/p>\n

Michelle Celarier is an award-winning journalist who writes about the world of money and power for New York <\/em><\/span>magazine, Fortune<\/em><\/span> magazine, Institutional Investor<\/span>, Worth<\/span><\/em> and Slate<\/em><\/span>. She has reported on hedge funds and the men who run them for over a decade, including a four-year stint as a tabloid scribe with the New York Post<\/em><\/span>. She was previously the editor of Absolute Return<\/span> and its successor Absolute Return + Alpha (AR<\/em>)<\/span>, which won several magazine awards under her leadership.<\/strong><\/p>\n

Ms. Celarier recently posted an article at New York<\/a> magazine about Jeffery Epstein.<\/p>\n

The article notes:<\/p>\n

Long before Jeffrey Epstein pleaded guilty to prostitution charges in Florida more than a decade ago, his fellow Palm Beach resident and hedge-fund manager Douglas Kass was intrigued by the local gossip about his neighbor.<\/strong><\/p>\n

\u201cI\u2019m hearing about the parties, hearing about a guy who\u2019s throwing money around,\u201d says Kass, president of Seabreeze Partners Management. While stories about young girls swarming Epstein\u2019s waterfront mansion and the sex parties he hosted for the rich and powerful were the talk of the town, Kass was more focused on how this obscure person, rumored to be managing billions of dollars, had become so wealthy without much of a track record.<\/strong><\/p>\n

Kass was well-connected on Wall Street, where he\u2019d worked for decades, so he began to ask around. \u201cI went to my institutional brokers, to their trading desks and asked if they ever traded with him. I did it a few times until the date when he was arrested,\u201d he recalls. \u201cNot one institutional trading desk, primary or secondary, had ever traded with Epstein\u2019s firm.\u201d<\/strong><\/p>\n

When a reporter came to interview Kass about Bernie Madoff shortly before that firm blew up in the biggest Ponzi scheme ever, Kass told her, \u201cThere\u2019s another guy who reminds me of Madoff that no one trades with.\u201d That man was Jeffrey Epstein.<\/strong><\/p>\n

\u201cHow did he get the money?\u201d Kass kept asking.<\/strong><\/p>\n

For decades, Epstein has been credulously described as a big-time hedge-fund manager and a billionaire, even though there\u2019s not a lot of evidence that he is either. There appears little chance the public is going to get definitive answers anytime soon. In a July 11 letter to the New York federal judge overseeing Epstein\u2019s sex-trafficking case, Epstein\u2019s attorney offered to provide \u201csealed disclosures\u201d about Epstein\u2019s finances to determine the size of the bond he would need to post to secure his release from jail pending trial. His brother, Mark, and a friend even offered to chip in, if necessary.<\/strong><\/p>\n

The article notes some unusual things about Jeffery Epstein’s investment success:<\/p>\n

To begin with, there is much skepticism among the hedgies Intelligencer spoke with that Epstein made the money he has \u2014 and he appears to have a lot, given a lavish portfolio of homes and private aircraft \u2014 as a traditional money manager. A fund manager who knows well how that kind of fortune is acquired notes, \u201cIt\u2019s hard to make a billion dollars quietly.\u201d Epstein never made a peep in the financial world.<\/strong><\/p>\n

Epstein was also missing another key element of a typical thriving hedge fund: investors. Kass couldn\u2019t find any beyond Epstein\u2019s one well-publicized client, retail magnate Les Wexner \u2014 nor could other players in the hedge-fund world who undertook similar snooping. \u201cI don\u2019t know anyone who\u2019s ever invested in him; he\u2019s never talked about by any of the allocators,\u201d says one billionaire hedge-fund manager, referring to firms that distribute large pools money among various funds.<\/strong><\/p>\n

The article notes one very believable theory on how Jeffrey Epstein became a billionaire:<\/p>\n

Given this puzzling set of data points, the hedge-fund managers we spoke to leaned toward the theory that Epstein was running a blackmail scheme under the cover of a hedge fund.<\/strong><\/p>\n

How such a scheme could hypothetically<\/em> work has been laid out in detail in a thread on the anonymous Twitter feed of @quantian1<\/a>. It\u2019s worth reading in its entirety, but in summary it is a rough blueprint for how a devious aspiring hedge-fund manager could blackmail rich people into investing with him without raising too many flags.<\/strong><\/p>\n

Kass and former hedge-fund manager Whitney Tilson both emailed the thread around in investing circles and both quickly discovered that their colleagues found it quite convincing.\u00a0\u201cThis actually sounds very plausible,\u201d Tilson wrote in an email forwarding the thread to others.<\/strong><\/p>\n

\u201cHe somehow cajoled these guys to invest,\u201d says Kass, speaking of hypothetical blackmailed investors who gave Epstein their money to invest, but managed to keep their names private.<\/strong><\/p>\n

The fact that Epstein\u2019s fund is offshore in a tax haven \u2014 it is based in the U.S. Virgin Islands \u2014 and has a secret client list both add credence to the blackmail theory.<\/strong><\/p>\n

The article concludes:<\/p>\n

In the 2015 filing, Giuffre claimed that Epstein \u201cdebriefed her\u201d after she was forced into sexual encounters so that he could possess \u201cintimate and potentially embarrassing information\u201d to blackmail friends into parking their money with him. She also said photographic and video evidence existed \u2014 an assertion that looms especially large now that federal investigators have found a trove of images in Epstein\u2019s home safe.<\/strong><\/p>\n

There are other theories about how Epstein made his money–a Ponzi scheme, work for the intelligence community, money laundering, and offshore tax schemes. Now that Epstein’s New York City residence has been cleared of evidence by authorities, it will be interesting to see who is involved in his financial dealings (and other activities).<\/p>\n

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According to Michelle Clarier.com: Michelle Celarier is an award-winning journalist who writes about the world of money and power for New York magazine, Fortune magazine, Institutional Investor, Worth and Slate. She has reported on hedge funds and the men who … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[12216,1527,1992,11376,9643,12217,6329,125,3021,11982,737],"class_list":["post-36551","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-blackmail","tag-hedge-fund","tag-investment","tag-investor","tag-jeffrey-epstein","tag-michelle-celarier","tag-money-laundering","tag-new-york-city","tag-ponzi-scheme","tag-the-new-york-magazine","tag-wall-street"],"_links":{"self":[{"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=\/wp\/v2\/posts\/36551","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=36551"}],"version-history":[{"count":1,"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=\/wp\/v2\/posts\/36551\/revisions"}],"predecessor-version":[{"id":36552,"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=\/wp\/v2\/posts\/36551\/revisions\/36552"}],"wp:attachment":[{"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=36551"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=36551"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=36551"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}