The US Department of Justice’s release of millions of previously confidential documents relating to Jeffrey Epstein has only enhanced the deceased paedophile’s reputation as the Zelig of high finance.  

Take a major trend or central player in financial markets over the last few decades. There’s decent odds you can now at least partly trace their origins to a convicted sex offender frenetically sending typo-strewn emails from his private Caribbean island.

Here Epstein is in 2012, seemingly tutoring Ian Osborne about the potential of Spacs, long before the British PR-man-turned-tech-mogul teamed up with Chamath Palihapitiya to fuel a mania for shell companies formed for carrying on an undertaking of great advantage.

Then in 2016, we see Epstein emailing Apollo’s longtime lawyer-of-choice Brad Karp, explaining that private equity’s future “cannot be built around deals”, but instead asset management at “huge scale”. He describes Warren Buffett’s Berkshire Hathaway, with its bulwark of insurance capital, as the “north star” in this regard. Over the ensuing decade, Apollo has indeed transformed itself from a swashbuckling buyout firm to a nearly $1tn alternative asset manager, through its merger with life insurance affiliate Athene.

And over the weekend, the FT set out how Epstein secretly advised a key Rothschild family bank on many of its pivotal decisions in the 2010s — a notion that would have been branded conspiracy theory a little over a week ago. 

But long before the files dropped, one of the enduring financial legends surrounding Epstein is that he inadvertently knocked over the first domino in the subprime mortgage bond meltdown.

It has long been known that Epstein was an investor in funds stuffed with toxic collateralised-debt obligations at his old employer Bear Stearns, which first took a chance on a former teacher from Brooklyn without a college degree in the 1970s, beginning Epstein’s unlikely journey to the upper echelons of international finance. This included a substantial holding in the now notorious “Enhanced Leverage” subprime fund, whose gating and liquidation in June 2007 is seen as one of the first harbingers of the global financial crisis. 

The widely accepted version of the story has grown a little taller in the telling over the years, however. After spending a good chunk of the weekend trawling through the Epstein files, FT Alphaville can now reveal that a lot of what has been written about Epstein’s CDO fiasco is untrue.

WikiLeaks

At this point, we’re going to copy a huge chunk from Epstein’s Wikipedia page — not least because it will hopefully be substantially changed after this article is published — but you can skip over it for a TL;DR version:

Liquid Funding and the Bear Stearns explosion (2000–2008)

Epstein was the president of the Bermuda-incorporated company Liquid Funding Ltd. between 2000 and 2007. The company was an early pioneer in expanding the kind of debt that could be accepted on repurchase, or the repo market, which involves a lender giving money to a borrower in exchange for securities that the borrower then agrees to buy back at an agreed-upon later time and price. The innovation of Liquid Funding, and other early companies, was that instead of having stocks and bonds as the underlying securities, it had commercial mortgages and investment-grade residential mortgages bundled into complex securities as the underlying security.

Liquid Funding was initially 40 percent owned by Bear Stearns. Through the help of credit rating agencies—Standard & Poor’s, Fitch Ratings and Moody’s Investors Service—the new bundled securities were able to be created for companies so that they received a gold-plated AAA rating. The implosion of complex securities, because of their inaccurate ratings, led to the collapse of Bear Stearns in March 2008 and set in motion the 2008 financial crisis and the subsequent Great Recession. If Liquid Funding were left holding large amounts of such securities as collateral, it could have lost large amounts of money.

In August 2006, a month after the federal investigation of him began, Epstein invested $57 million in the Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage hedge fund. The SEC filings for the Bear Stearns fund show that Epstein’s Financial Trust Company controlled the votes of a 10-percent share. This fund was highly leveraged in mortgage-backed collateralized debt obligations (CDOs).

On April 18, 2007, an investor in the fund, who had $57 million invested, discussed redeeming his investment. At this time, the fund had a leverage ratio of 17:1, which meant for every dollar invested there were 17 dollars of borrowed funds; therefore, the redemption of this investment would have been equivalent to removing $1 billion from the thinly traded CDO market. The selling of CDO assets to meet the redemptions that month began a repricing process and general freeze in the CDO market. The repricing of the CDO assets caused the collapse of the fund three months later in July, and the eventual collapse of Bear Stearns in March 2008. Losses to investors in the two Bear Stearns funds were estimated to exceed $1.6 billion.

By the time the Bear Stearns fund began to fail in May 2007, Epstein had begun to negotiate a plea deal with the US Attorney’s Office concerning imminent charges for sex with minors. In August 2007, a month after the fund collapsed, the US attorney in Miami, Alexander Acosta, entered into direct discussions about the plea agreement. Acosta brokered a lenient deal, according to him, because he had been ordered by higher government officials, who told him that Epstein was an individual of importance to the government.

As part of the negotiations, according to the Miami Herald, Epstein provided “unspecified information” to the Florida federal prosecutors for a more lenient sentence and was supposedly “Unnamed investor #1” for the New York federal prosecutors in their unsuccessful June 2008 criminal case against Cioffi and Tannen, two of the managers of the failed Bear Stearns hedge fund.

To summarise Wikipedia’s version of history:

• Jeffrey Epstein was the man behind Liquid Funding, a key conduit in Bear Stearns’ securitisation machine

• He also invested $57mn in Bear Stearns’ Enhanced Leverage fund in 2006

• An investor with $57mn in the fund (presumably Epstein) discussed a redemption in spring 2007, shaking its foundations at a delicate juncture 

• After the fund blew up, Epstein — the $57mn man — agreed to testify against the Bear Stearns fund managers in an unsuccessful criminal case

• This was linked to Epstein’s 2007-08 deal with prosecutors in his own criminal case, in which he plead guilty to soliciting sex from a minor in exchange for a lenient sentence

At this point, it is worth noting that Wikipedia’s editors have added their own flourishes that are not reflected in the underlying source material. For example, Julie K Brown — the journalist who almost single-handedly brought renewed scrutiny to the outrageously lenient deal Epstein cut with prosecutors in 2007-08 — references the indications that Epstein may have played the role of state’s witness in the Bear Stearns case in her landmark 2018 Miami Herald article, but carefully notes: “It is not known what role, if any, the case played in Epstein’s plea negotiations.”

The basic narrative of “lol, Epstein’s $57mn redemption requests helped trigger the collapse of the Bear subprime fund” has persisted, however.

For the financially literate, it’s merely an amusing anecdote. The Enhanced Leveraged fund contained the biggest bag of odorous excrement ever assembled in the history of capitalism; it was doomed whether Epstein attempted to redeem his money or not.

In the less-hinged corners of the internet, however, you will find works of financial fan-fiction in which Epstein is cast as the puppet master behind the 2008 crash, simultaneously fuelling the boom and profiting from the bust.

Thanks to the US DoJ’s “Epstein library” we now have a fuller picture of the financier’s disastrous dalliance with subprime CDOs, from extensive legal filings to fund subscription documents. The newly released Epstein files reveal that the deceased paedophile was more bystander than prime mover in the downfall of the Bear Stearns CDO fund. They show that:

• Epstein had much less than $57mn invested in the Bear Stearns ABS vehicles, with just $20mn in the notorious Enhanced Leverage fund

• He did not execute a redemption notice (although he claims to have come close)

• Liquid Funding probably had nothing to do with his Enhanced Leverage investment and was a seemingly minor part of Epstein’s investment empire

• Epstein had no interaction with prosecutors trying to convict the Bear Stearns portfolio managers and certainly wasn’t the $57mn investor

• The investor with $57mn in the fund was someone else entirely — and the man allegedly linked to this firm is very interesting indeed

Join us on a financial crisis nostalgia tour and we’ll explain all.

Sucker or speculator?

Epstein’s holding in the stricken Bear Stearns funds was so widely known about that it was contemporaneously reported during the 2007 meltdown, in reputable news sources such as the New York Times’ DealBook and Bloomberg News.

Epstein took legal action against Bear Stearns over the fiasco — after its 2008 rescue by JPMorgan — and the two sides’ claims and counterclaims set out a handy chronology of his investments. As Epstein’s claim was brought before a Financial Industry Regulatory Authority arbitration panel and later settled, his allegations were never heard in open court and have remained private until now.

In his 2009 amended statement of claim, lawyers for Epstein wrote that investment vehicles linked to the financier had poured over $40mn into two Bear Stearns funds holding subprime CDOs, including the Enhanced Leveraged fund that got wiped out after it allegedly “recklessly gorged itself on certain illiquid securities”. Epstein claimed total damages in excess of $45mn. (In a 2010 email to JPMorgan’s then investment bank chief Jes Staley, Epstein told his close confidant that his total investment was around $41mn, with the rest of the claim attributable to “interest calculations”.) 

Bear Stearns’ lawyers, unsurprisingly, vociferously disputed not only Epstein’s version of events (claiming that the “stated investment objective” of Epstein’s Financial Trust Company was “speculation” and these were indeed “speculative” funds), but also the size of his total exposure. Thankfully for us, when it came to Enhanced Leverage — or the Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage fund to give it its full title — the two sides were in agreement on the size and chronology of his investment.

Epstein’s FTC invested $15mn in an earlier iteration of the Bear Stearns subprime mortgage bond strategy, rather paradoxically known as the “High-Grade Fund” in 2004.

By 2006, this holding had swelled to $20mn and, in Epstein’s telling, the silver-tongued salesmen at Bear Stearns persuaded him to switch over to the even racier Enhanced Leverage fund. Bear Stearns lawyers put the onus of the decision instead on Epstein, claiming that, “ever the speculator”, he actively chose to transfer “seeking even higher returns”. But they agreed on the essential point that he rolled $20mn from High-Grade to Enhanced Leverage in August 2006. (For completeness, Bear Stearns Asset Management’s confirmation of FTC’s $20,155,344.25 investment in the fund on August 1, 2006 is also included in the files).

Already, we’ve slain one Epstein shibboleth: that he had $57mn squirrelled away in the doomed Bear Stearns Enhanced Leverage fund. Now on to some others.

A shot at redemption

Did Epstein attempt to redeem his Enhanced Leverage investment?

In his telling, he got close.

Rather than the fund’s managers, the financier primarily reserved his ire for Bear Stearns’ former president and co-chief operating officer Warren Spector, who resigned in the wake of the fund blow-up in August 2007 and was named as a co-defendant in Epstein’s claim. Epstein made a number of allegations about Spector’s conduct in allegedly soliciting his investment in the funds, which the former Bear Stearns executive’s lawyers strongly denied (they attributed Epstein’s accusations to his “haste to find a scapegoat”, describing them as “puzzling at best”. All of Epstein’s claims against Spector were ultimately dismissed under the terms of the settlement).

In the telling of the financier’s lawyers, “Epstein tried to redeem FTC’s entire investment in the Enhanced Fund” in spring 2007, but Spector talked him round across multiple conversations in which he misleadingly stated “that the situation was under total control”. The last of these calls was placed in mid-May 2007, after which “Epstein decided at least to delay FTC’s redemption based on his conversations with Spector.” Weeks later, on June 7, Enhanced Leverage suspended redemptions and the fate of Epstein’s punt on subprime was sealed.

Spector’s lawyers agreed that “sometime in the late spring, Epstein contacted Spector and expressed concern that the Enhanced Fund was recording losses”, but denied his claims the then Bear Stearns executive misled him through false statements. Instead, Spector stuck to “approved talking points” relayed to every investor, acknowledging the fund’s losses and the wider difficulties facing the market.

Either way, it is clear that Epstein did not go to the extent of actually filing a redemption request, so he can’t be blamed for creating additional pressure that caused the fund to gate. Another Epstein myth debunked.

Ace in the hole

It has previously been reported that Epstein received a roughly $9mn settlement from Bear Stearns’ new owner JPMorgan — a fact that is confirmed in the files.

The signed settlement agreement from August 2011 sets out that the defendants had agreed to pay $9.2mn to the claimants. Further emails contained in the files suggest that this included compensation for further losses incurred on Bear Stearns stock; however, Epstein’s attempts to wrap in further ABS fund investments beyond Enhanced Leverage were unsuccessful.

The prior month, Epstein emailed JPMorgan’s wealth management chief, Mary Erdoes, after a call in which she apparently outlined that the bank was offering to pay out around one-third of his $20mn investment in Enhanced Leverage and “10 cents on the dollar for the stock claim”. Epstein, who had been a longtime client of JPMorgan’s wealth management division, thanked Erdoes “for the good faith shown by your side”.

One of JPMorgan’s senior in-house lawyers, Jim Condren, responded, confirming that their $9.2mn “final offer” was split between “$7 million for High Grade/Enhanced Leverage and $2.2 million for Bear stock”. 

Epstein’s separate stock suit against Bear Stearns was filed publicly in US Virgin Islands’ court, so this side of things was well-known long before the release of the Epstein files. Interestingly, in the suit, Epstein claimed that his closeness with his old employer was common knowledge on Wall Street and the root of why Bear Stearns worked hard to make sure he didn’t dump his shares: 

Bear Stearns sought to induce Financial Trust to retain its Bear Stearns stock because, among other reasons, Bear Stearns knew that other large investors would view Financial Trust’s sale of a significant block of shares of Bear Stearns stock as a loss of confidence in Bear Stearns by a company owned and managed by a person seen by such large investors as close to the firm. 

A couple more documents around the settlement in the newly released files do speak to Epstein’s closeness with Bear’s top brass.

Firstly, there’s what appears to be a December 2008 statement of key facts from Epstein’s lawyer to Condren, written before he formally filed his claim (along with an earlier draft apparently written by Epstein, as at times it strays into the first person). 

Firstly, it is asserted that Epstein, a former Wall Street options trader, “had virtually no experience in debt securities”, a fact that he claimed could be backed up by Bear Stearns’ longtime chief executive and chair Jimmy Cayne, “with whom Mr. Epstein has had a close personal and business relationship for almost 30 years.”

The final bullet reads: “Mr. Epstein has never re-negged [sic] on a trade in over thirty years. He has never claimed against a bad trade in thirty years. This can be confirmed with Ace Greenburg [sic].”

Greenberg was the senior Bear Stearns executive who was reportedly instrumental in hiring Epstein in the 1970s, following his template of taking a chance on “PSDs” — those who were Poor, Smart, with a Deep Desire to be rich. Greenberg, who also later served as Bear Stearns’ CEO and chair, passed away in 2014, so we are unable to verify whether he agreed with Epstein’s account.

Perhaps more intriguingly, there are a couple of drafts of sworn affidavits from Cayne, which seem highly supportive of Epstein’s claim to have been misled over the Enhanced Leverage investment by other Bear Stearns executives. One draft includes notes in block capitals about how it could be further improved. 

The documents are unsigned and, as there is no reference to favourable testimony from Cayne in Epstein’s claim, it is unclear whether the former Bear Stearns chief ever seriously agreed to put his name to the statements. It is also a little strange given that Epstein pointed the finger at Cayne too, in his suit related to FTC’s stock losses, claiming that the then-Bear Stearns chief misled him over the bank’s financial stability following the collapse of Enhanced Leverage.

Again, Cayne passed away in 2021, so we are unable to ask him.

Big in the noughties

What about Liquid Funding Limited, the Bermuda-based entity that Wikipedia claims was central to Epstein’s subprime investments?

Liquid Funding was an asset-backed commercial paper conduit for Bear Stearns that also raised money through the repo market. If that sentence means nothing to you, congratulations on being either too young or too uninvolved to pay attention to the nitty-gritty of the financial crisis.

In simple terms, these entities generally sat outside of an investment bank’s balance sheet and allowed it to raise short-term debt against holdings in asset-backed securities. Naturally, Alphaville published a “for dummies” guide to ABCP back in 2007.

As you might imagine, that all worked fine until it, well, didn’t.

Short-term funding seized up, chaos ensued, and banks were forced to bring many conduits back on balance sheet. To get a sense of how head-spinning this could get, Zoltan Poszar’s map of the various flavours of conduits, SIVs and other elements of the “shadow banking” system remains one of the defining pieces of disaster porn produced during the financial crisis.

“Liquid was formed as a capital efficient way for Bear Stearns to participate in the secured funding market,” an old 2007 Fitch Ratings report on the ABCP market helpfully explains, going on to list its use of the usual alphabet-soup of structured bonds that everyone back then thought were virtually indistinguishable from US Treasuries.

Liquid even had its own painfully noughties logo, as shown in this 2006 repo agreement involving CDOs (another thing that was big in the 2000s and now badly out of style).

The Fitch report we referenced contains some big numbers: Liquid had $6.7bn of liabilities in May 2007, just before Enhanced Leverage shuffled off its mortal coil, sharply reducing to $3.7bn by September in what the rating agency euphemistically called a “challenging liquidity environment”.

And it’s these big numbers that have long intrigued Epstein watchers, ever since his chairmanship of Liquid Funding came to light in 2019 though the “Paradise Papers” leak of offshore documents. 

Shortly before Epstein died in federal prison awaiting sex trafficking charges, the International Consortium of Investigative Journalists published documents showing both his role at the investment vehicle and its interest in asset-backed securities such as Collateralised Loan and Bond Obligations.

Asset-backed conduits are not the sort of vehicles that would generally hold stakes in other funds, however, a fact that appears to be backed up in the newly released Epstein files. 

Liquid Funding is not mentioned anywhere in Epstein’s legal claim against Bear Stearns, which alongside his FTC entity was filed on behalf of The COUQ Foundation. This foundation held investments in other ABS funds at Bear Stearns, but the bank alleged that these assets were transferred across to a foundation of the Ohio retail billionaire Les Wexner, one of Epstein’s largest erstwhile clients.

We say “erstwhile” as Wexner severed his ties with Epstein as an investigation into the financier’s sex crimes gathered pace in 2007. Bear Stearns even referred to the then-recent split in its filing, claiming that Epstein had invested an additional $20mn in the ABS funds in his capacity as trustee of The Wexner Children’s Trust II, but “was removed as trustee of the trust in 2008”. (A spokesman for the Ohio billionaire told the NYT last week that “Mr. Wexner terminated Epstein and cut off all ties with him following Mr. Wexner’s discovery of Epstein’s theft and criminal conduct.”)

It is still possible that Enhanced Leverage interacted with Liquid Funding in some way. Epstein’s claim notes that the fund engaged “in buying and selling CDOs and CDO-Squareds with Bear Stearns, itself”. A separate civil claim against the bank alleged that the funds became “dumping grounds for some of the worst, most dangerous securities on Bear Stearns’ books”. Given that both Liquid Funding and Enhanced Leverage engaged in repo transactions, it is not beyond the realms that they transacted with one another.

Either way, the Epstein files suggest that it was not a significant part of the financier’s sprawling investment interests. 

The value of an investment listed as Liquid Funding Holding was marked at just $3.1mn in a 2004 balance sheet for Financial Trust Company, a tiny slice of its $202mn of “investments in partnerships” and practically a rounding error in its owner Epstein’s claimed total assets of $602mn. 

It is always possible that as the subprime securitisation boom gathered pace in 2005 and 2006, Liquid Funding’s value for Epstein swelled. Still, the growth would have had to have been vertiginous for it to matter in the grand scheme of Epsteinworld.

Being the chair of an investment vehicle might also sound important, but in the world of offshore shell companies these roles can be pretty hands-off. It is very plausible that when Bear Stearns was looking to get into the off-balance sheet conduit game in the early 2000s, they turned to their old associate Epstein more for his familiarity with offshore incorporation than asset-backed bonds (particularly if we place any stock in his claim to have been unfamiliar with debt securities, referenced earlier).

Ultimately, Bear Stearns wound down the investment vehicle in 2011, buying out FTC’s share for just $265,303. The document suggests it indeed bore the scars of the US mortgage meltdown, listing a claim in the 2007 bankruptcy of American Home Mortgage Investment Corporation.

The document lists a range of other shareholders with no apparent ties to Epstein, suggesting he was just one of many whose stakes in the vehicle allowed minority shareholder Bear Stearns to class it as off-balance sheet:

What we can say for sure is that Epstein valued his Liquid Funding investment at just $3mn in 2004 and was taken out for a little over $250,000 in 2011. It would seem that the notion he reaped a windfall from the off-balance sheet conduit’s multibillion-dollar funding schemes is probably fanciful.

All roads lead to Roman

There’s one riddle remaining: who was the $57mn investor in Enhanced Liquidity, and why were they confused with Epstein?

Thankfully, the files answer both of these linked questions.

Firstly, the files contain an article published in the New York Post’s legendary gossip column “Page Six” in July 2009, which claimed Epstein was co-operating with prosecutors in their case against Bear Stearns fund managers back in July 2009. It begins (and note we presume “$67 million” is a typo for $57mn):

JEFFREY Epstein is a free man. Yesterday, the massage-loving billionaire financier was released six months early from his 18-month prison sentence in Florida because he’s co-operating with federal prosecutors.

Epstein, who pleaded guilty to procuring teenage girls for prostitution, is helping the feds prosecute Ralph Cioffi and Matthew Tannin, the Bear Stearns hedge fund managers who allegedly took him for $67 million. Cioffi and Tannin are set to go on trial in Brooklyn federal court on Sept. 28 on charges of misleading investors in their subprime mortgage investment fund, which went bust last year.

The article is included in the files because New York prosecutors in the Bear Stearns case forwarded it to their Florida colleagues in bemusement, noting that they had “never heard of [Epstein] until this morning” and they had “since learned that he is pretty unsavory”.

A follow-up email from a Florida prosecutor, notes the following:

I just got off the phone with the prosecutors from the Bear Steams case in New York. They had seen the NY Post article that claimed that Epstein got such a low sentence because he was co-operating with the feds on the Bear Steams prosecution. They had never heard of him. I just told them a bit about how things worked out and my theory on how that rumor got started.

Amazingly, what the prosecutor describes as “rumour” has persisted until this day, even though the identity of the $57mn investor was actually made public during the US government’s unsuccessful trial against Cioffi and Tannin, the Bear Stearns hedge fund managers.

Cioffi and Tannin’s 2008 indictment sets out some basic details around the party then known as “Major Investor #1”:

One of the three largest investors in the Funds (“Major Investor #1”), whose identity is known to the Grand Jury, told CIOFFI on April 18 that it was considering redemption of its approximately $57 million investment. Among other things, CIOFFI falsely informed Major Investor #1 that he and the other portfolio managers had $8 million invested in the Funds and that this represented one-third of their liquid net worth. CIOFFI failed to inform Major Investor #1, however, that he had recently withdrawn $2 million of his approximately $6 million investment from the Enhanced Fund. Major Investor #1 informed BSAM the next day that it wished to redeem its entire $57 million investment. CIOFFI and TANNIN were aware of Major Investor #1’s intention to redeem its investment.

According to Bear Stearns’ response to Epstein’s claim, however, the identity of Major Investor #1 was revealed at trial (our emphasis in bold):

Epstein’s penchant for lies and half-truths was further displayed in June 2008, when he authorized his publicist to tell the press that he was the “Major Investor No. 1” described in the indictment of Messrs. Cioffi and Tannin. See Bear Bites Billionaire, N.Y. POST, June 38, 2008, at 11. According to the indictment, “Major Investor No. 1” invested $57,000,000 in the HG Funds. Of course, Epstein never had anywhere near $57,000,000 invested in the HG Funds and now that the trial has concluded, the entire world knows that “Major Investor No. 1” was Concord Management, not Epstein.

The earlier Page Six item referenced is still online and indeed includes this on-record confirmation from Epstein’s PR man: “His rep, Howard Rubenstein, confirmed Epstein is “Major Investor No. 1” but had no further comment.”

Amazingly, a whole host of contemporaneous reporting from the Bear Stearns trial notes that Concord Management, a little-known investment firm based in the New York suburb of Tarrytown, was unmasked as Major Investor #1 during proceedings. The trial heard that Concord filed two redemptions for May 31 and June 30 — suggesting it only partially redeemed its $57mn investment before the fund blew up on June 7.

Concord became rather more famous a decade later, however, when reporters at the NYT in 2022 revealed its alleged main client: Russian oligarch Roman Abramovich.

The following year, the Securities and Exchange Commission accused Concord of allegedly “operating as unregistered investment advisers to their only client — a wealthy former Russian official widely regarded as having political connections to the Russian Federation.”

The client is described only as “UBO A” in the SEC’s complaint, but the timing of sanctions imposed on him by the United Kingdom and the European Union, as well as a freezing order on his assets in Jersey, match those of Abramovich.

Concord has denied the SEC’s core claims against it and is contesting the regulator’s civil complaint. Lawyers for Concord declined to comment. A person close to Abramovich did not respond to a request for comment.

And to nip any speculation from fevered readers in the bud: Epstein wrote in 2016 that he had “never met” Abramovich.

In short, in this one very limited regard, Jeffrey Epstein is in the clear: he did not file a $57mn redemption notice from Enhanced Leverage shortly before the now notorious Bear Stearns hedge fund blew up.

It seems, however, that Epstein himself may well have had a hand in getting that rumour started.