Mogul says Epstein siphoned off $68m

Leslie Wexner, the billionaire behind Victoria’s Secret, said his former money manager misappropriated $68 million from him.

Leslie Wexner, right, and his wife Abigail in 2014.

Leslie Wexner, the billionaire behind Victoria’s Secret, said his former money manager Jeffrey Epstein misappropriated more than $US46 million ($68m) of his fortune, revealing for the first time some of the financial fallout from his relationship with the disgraced financier.

In a letter on Wednesday, the founder and chief executive of L Brands wrote to members of his Wexner Foundation that the missing funds were uncovered after Mr Wexner decided in 2007 to sever ties with Mr Epstein. Mr Wexner began the separation process after allegations against Mr Epstein surfaced involving sexual abuse of underage girls.

“We discovered that he had misappropriated vast sums of money from me and my family,” Mr Wexner wrote in the letter, which was reviewed by The Wall Street Journal. “This was, frankly, a tremendous shock, even though it clearly pales in comparison to the unthinkable allegations against him now.”

In January 2008, Mr Epstein transferred $US46m worth of investments to a Wexner charitable fund, tax records show. Mr Wexner said the transfer was only a portion of the funds that his money manager had allegedly misappropriated. “All of that money — every dollar of it — was originally Wexner family money,” he wrote.

A lawyer for Mr Epstein couldn’t be reached for comment. A spokesman for Mr Wexner declined to comment on whether Mr Wexner reported the matter to authorities.

Last month, Mr Epstein pleaded not guilty to sex-trafficking charges stemming from what federal prosecutors alleged was a year-long scheme to procure and sexually abuse dozens of girls. He faces up to 45 years in prison if convicted. Mr Epstein has been denied bail and is in custody.

Mr Epstein’s two-decade relationship with Mr Wexner, which extended into the 81-year-old’s retail companies, charities and personal life, became crucial to Mr Epstein’s eventual wealth and prominence. In 1991, Mr Wexner gave him sweeping control over his financial and legal matters through a power-of-attorney document. The Wall Street Journal has reported that Mr Epstein made more than $US200m from Mr Wexner.

In the letter, Mr Wexner explained why he gave Mr Epstein so much control. He wrote that several friends “vouched for and recommended him as a knowledgeable financial professional”. He said Mr Epstein claimed he had many well-known clients. When allegations emerged against Mr Epstein in Florida a decade ago, the money manager “vehemently denied” them, according to Mr Wexner.

Still, Mr Wexner decided in 2007 that Mr Epstein should be removed from his role as personal money manager, he wrote in the letter. The unwinding of their financial ties involved a legal intermediary. It was during this process that Mr Wexner discovered Mr Epstein had misappropriated funds.

Rabbi B Elka Abrahamson, the Wexner Foundation’s president, in a statement posted online last month said the charity had received emails from its community voicing concern about the relationship between Mr Wexner and Mr Epstein. She said the foundation, like Mr Wexner, had cut ties with him more than a decade ago and is “sickened by Epstein’s behaviour”.

“I am embarrassed that, like so many others, I was deceived by Mr Epstein,” Mr Wexner wrote. “I know now that my trust in him was grossly misplaced and I deeply regret having ever crossed his path.”

Working in an office in Midtown Manhattan with a few lawyers, accountants and admin­istrative staff, Mr Epstein helped with the retail mogul’s taxes, managed his investments and ran his charities and trusts.