Preface: This was written in collaboration with Gemini.

In 1982, Epstein left Bear Stearns and launched his first major independent venture, Intercontinental Assets Group(IAG). I thought it was just a grand name, but he actually managed assets intercontinentally, and that is, by helping some people hide money offshore. At IAG, he marketed himself as a specialist in recovering lost or stolen assets.  He claimed he could track down money that had been embezzled or hidden in complex offshore tax havens. Most investigators believe he wasn’t just “finding” money, he was learning how to hide money through figuring out the path it took to stay hidden. He was essentially a consultant for capital flight, helping people move large sums of money across borders without attracting the attention of governments or tax authorities. 

In the world of high-stakes fraud, there is a fine line between "tracking down" hidden money and "learning how to hide it better." Epstein’s claim that he was recovering embezzled funds was the perfect "Trojan Horse" to get into the offices of billionaires and heads of state. According to Gemini, the pitch could have been something like: “I know how the bad guys hide money because I’m a math genius who understands offshore flows. Hire me to find your missing assets.” Once he was hired, he gained full access to the client’s most sensitive financial data. Instead of just “finding” lost money, he would show the client how to restructure their current wealth using the same offshore loopholes he claimed to be investigating. 

By gaining access to sensitive financial data, information such as how the client used to avoid taxes, or who’s embezzling money from the company, where the money comes from, hidden offshore real estates, things you wouldn't want your wife to know, he got to see all the loopholes of all kinds of banks, such as Morgan Stanley, and how these banks oversaw offshore accounts.  

According to Steven Hoffenberg, Epstein’s former business partner and the mastermind behind the Towers Financial Ponzi scheme, Epstein’s true business at IAG was not finding money, but ‘finding dirt.’ This is further corroborated by investigative journalist Vicky Ward, who described Epstein as an ‘Intelligence Broker’ who used financial forensic skills to gain leverage over the powerful.  If he found that a client’s business partner was skimming money, he didn't necessarily report it. Instead, he would "befriend" the partner and let them know he knew. Now, that person was "in his pocket." According to Vicky Ward, a powerhouse in the world of investigative journalism and a New York Times bestselling author, Epstein realized early on that information is more valuable than cash. Cash can be tracked; a secret gives you permanent control over a powerful person. Epstein targeted people who had everything to lose. In the 80s, the biggest "dirt" was financial fraud or tax evasion. By the 90s, he added social and sexual scandals to his "portfolio" of leverage. He operated in the space where legal and illegal meet. He knew which politicians were funded by which offshore accounts. This made him a "broker"—someone who could connect people, but also someone who could keep people quiet. 

I’m curious about just how these people were able to hide money, so I went into a little investigation. Apparently, hiding money offshore isn't just about putting cash in a suitcase and flying to Switzerland; it’s about creating a mathematical and legal maze that makes it impossible to prove who owns what. The foundation is the Shell Company, a company that exists only on paper. You set up a company in a jurisdiction like the British Virgin Islands(BVI) or Panama. You don’t put your name on it, you use nominee directors. These are local lawyers or professional directors who get paid a small fee to put their names on the registration. On the public record, the company is owned by, let's say “John Doe” in Tortola. In reality, you hold the physical certificates that way whoever holds this paper owns the company. 

Let’s say a US company “buys” consulting services from a BVI company, which results in money leaving the US legally as a business expense. The BVI company “invests” that money into Cayman Island Trust. The Cayman Island Trust “loans” the money to a Luxembourg Holding Company. By the time a government investigator looks at the Luxembourg company, they would have got court orders from three different countries, each with strict bank secrecy laws, just to see where the money came from. Most investigators simply give up. 

However, small offshore banks couldn’t move money globally on their own. They needed big “correspondent Banks” like JPMorgan or Deutsche Bank. A small bank in the Caribbean has one big “master account” at JPMorgan in New York. When Epstein moves money from a client, it looks to JPMorgan like the Caribbean Bank is moving money. JPMorgan doesn’t necessarily see the thousands of individual subaccounts inside that Caribbean bank. The money is sitting in a top-tier NY bank, but it’s “cloaked” under the name of the offshore entity. 

In order to move “clean” money out of a high-tax country (like the US) into a zero-tax country, Epstein would have his clients’ offshore company send a bill to the US business for “Intellectual Property Rights” or “Marketing Consulting”, something obscure and hard to define, for 10 million. The US business pays the bill, reducing its taxable profit by 10 million. The 10 million arrives in the offshore accounts as “income”, where the tax rate is 0%. No laws were broken, but $10 million just vanished from the IRS’s reach. Pretty smart, huh? It seems to me that Mr. Epstein was always ahead of laws and legislation, if we were to look at laws, technically, he didn’t “break” any laws, but was it moral? Probably not. I guess it takes me to be a billionaire to understand, but just how much money do these people want? I guess to be a billionaire, you gotta have some sort of abnormal appetite or greed for power and money, 99% people aren’t motivated enough to do that. It takes a lot of work, a lot of greed, a lot of self-discipline, and like I said , a questionable moral compass. There is a point where too much money is bad, it crosses the line of how much you’ve taken and perhaps, stolen from other people, when they could have had those resources. I personally don’t believe in billionaires doing philanthropic work, like, how about just paying taxes? Or how about just blatantly giving up your money? No? Then your “philantropy work” is probably just a fancy way to avoid taxes, and make you look good, even though to the people that know you are doing, it makes you look very bad and hypocritical.

Anyways, on top of all those “neat” maneuvers, there’s also this thing called “back-to-back” loan. I know you are probably very confused with all the terminologies now, but this is very important for everyone to know. If you are having a hard time with the economy right now, you don’t gotta know this, just keep your head high and stay strong. But to anyone that isn’t struggling, and is living a relatively relaxed life, please read on. Do what you wish with this information, it shouldn’t be privileged information to billionaires. Also, you can ask Gemini for anything you want, and a lot of these are somewhere out on the internet, feel free to do your own research and correct me if I’m wrong. 

So anyways, the “back-to-back” loan is when you don’t withdraw the money (which would be taxed), instead you use your $10 million offshore as a collateral for a loan from an international bank. The result is that the bank “lends” you $10 million in the US. Since loan proceeds aren’t taxable income, you have the cash to spend. You even get to deduct the interest you pay on the loan from your US taxes. You are essentially paying yourself interest to use your own hidden money. 

Epstein weaponized all these techniques. He didn’t just do this for himself, he did it to bind people to him. If he set up a “back-to-back” loan for a politician or a CEO, he held the keys to that person’s destruction. If the “loan” was ever exposed as a sham, that person would go to prison for tax fraud. From journalist Vicky Ward’s view, Epstein wasn’t just a banker, he was an intelligence broker, he was the guy who knew exactly which “ghost” companies belonged to which powerful people. That knowledge was his real currency.

(continued in the next post)  ☀️