DOJ Memoranda (EFTA02847284)

DEPARTMENT OF JUSTICE

OFFICE OF PROFESSIONAL RESPONSIBILITY

REPORT

Investigation into the U.S. Attorney’s Office for the Southern District of Florida’s Resolution of Its 2006-2008 Federal Criminal Investigation of Jeffrey Epstein and Its Interactions with Victims during the Investigation

November 2020

NOTE: THIS REPORT CONTAINS SENSITIVE, PRIVILEGED, AND PRIVACY ACT PROTECTED INFORMATION. DO NOT DISTRIBUTE THE REPORT OR ITS CONTENTS WITHOUT THE PRIOR APPROVAL OF THE OFFICE OF PROFESSIONAL RESPONSIBILITY.

EFTA02847285

EXECUTIVE SUMMARY

The Department of Justice (Department) Office of Professional Responsibility (OPR) investigated allegations that in 2007-2008, prosecutors in the U.S. Attorney’s Office for the Southern District of Florida (USAO) improperly resolved a federal investigation into the criminal conduct of Jeffrey Epstein by negotiating and executing a federal non-prosecution agreement (NPA). The NPA was intended to end a federal investigation into allegations that Epstein engaged in illegal sexual activity with girls.¹ OPR also investigated whether USAO prosecutors committed professional misconduct by failing to consult with victims of Epstein’s crimes before the NPA was signed or by misleading victims regarding the status of the federal investigation after the signing.

I. OVERVIEW OF FACTUAL BACKGROUND

The Palm Beach (Florida) Police Department (PBPD) began investigating Jeffrey Epstein in 2005, after the parents of a 14-year-old girl complained that Epstein had paid her for a massage. Epstein was a multi-millionaire financier with residences in Palm Beach, New York City, and other United States and foreign locations. The investigation led to the discovery that Epstein used personal assistants to recruit girls to provide massages to him, and in many instances, those massages led to sexual activity. After the PBPD brought the case to the State Attorney’s Office, a Palm Beach County grand jury indicted Epstein, on July 19, 2006, for felony solicitation of prostitution in violation of Florida Statute § 796.07. However, because the PBPD Chief and the lead Detective were dissatisfied with the State Attorney’s handling of the case and believed that the state grand jury’s charge did not address the totality of Epstein’s conduct, they referred the matter to the Federal Bureau of Investigation (FBI) in West Palm Beach for a possible federal investigation.

The FBI brought the matter to an Assistant U.S. Attorney (AUSA), who opened a file with her supervisor’s approval and with the knowledge of then U.S. Attorney R. Alexander Acosta. She worked with two FBI case agents to develop a federal case against Epstein and, in the course of the investigation, they discovered additional victims. In May 2007, the AUSA submitted to her supervisors a draft 60-count indictment outlining charges against Epstein. She also provided a lengthy memorandum summarizing the evidence she had assembled in support of the charges and addressing the legal issues related to the proposed charges.

For several weeks following submission of the prosecution memorandum and proposed indictment, the AUSA’s supervisors reviewed the case to determine how to proceed. At a July 31, 2007 meeting with Epstein’s attorneys, the USAO offered to end its investigation if Epstein pled guilty to state charges, agreed to serve a minimum of two years’ incarceration, registered as a sexual offender, and agreed to a mechanism through which victims could obtain monetary damages. The USAO subsequently engaged in additional meetings and communications with Epstein’s team of attorneys, ultimately negotiating the terms of a state-based resolution of the federal investigation, which culminated in the signing of the NPA on September 24, 2007. The

^<sup>1 As used in this Report, including in quoted documents and statements, the word “girls” refers to females who were under the age of 18 at the time of the alleged conduct. Under Florida law, a minor is a person under the age of 18.

NPA required Epstein to plead guilty in state court to the then-pending state indictment against him and to an additional criminal information charging him with a state offense that would require him to register as a sexual offender—specifically, procurement of minors to engage in prostitution, in violation of Florida Statute § 796.03. The NPA required Epstein to make a binding recommendation that the state court sentence him to serve 18 months in the county jail followed by 12 months of community control (home detention or “house arrest”). The NPA also included provisions designed to facilitate the victims’ recovery of monetary damages from Epstein. In exchange, the USAO agreed to end its investigation of Epstein and to forgo federal prosecution in the Southern District of Florida of him, four named co-conspirators, and “any potential co-conspirators.” Victims were not informed of, or consulted about, a potential state resolution or the NPA prior to its signing.

The signing of the NPA did not immediately lead to Epstein’s guilty plea and incarceration, however. For the next nine months, Epstein deployed his extensive team of prominent attorneys to try to change the terms that his team had negotiated and he had approved, while simultaneously seeking to invalidate the entire NPA by persuading senior Department officials that there was no federal interest at issue and the matter should be left to the discretion of state law enforcement officials. Through repeated communications with the USAO and senior Department officials, defense counsel fought the government’s interpretation of the NPA’s terms. They also sought and obtained review by the Department’s Criminal Division and then the Office of the Deputy Attorney General, primarily on the issue of federal jurisdiction over what the defense insisted was “a quintessentially state matter.” After reviewing submissions by the defense and the USAO, on June 23, 2008, the Office of the Deputy Attorney General informed defense counsel that the Deputy Attorney General would not intervene in the matter. Only then did Epstein agree to fulfill his obligation under the NPA, and on June 30, 2008, he appeared in state court and pled guilty to the pending state indictment charging felony solicitation of prostitution and, pursuant to the NPA, to a criminal information charging him with procurement of minors to engage in prostitution. Upon the joint request of the defendant and the state prosecutor, and consistent with the NPA, the court immediately sentenced Epstein to consecutive terms of 12 months’ incarceration on the solicitation charge and 6 months’ incarceration on the procurement charge, followed by 12 months of community control. Epstein began serving the sentence that day, in a minimum-security Palm Beach County facility. A copy of the NPA was filed under seal with the state court.

On July 7, 2008, a victim, identified as “Jane Doe,” filed in federal court in the Southern District of Florida an emergency petition alleging that the government violated the Crime Victims’ Rights Act (CVRA), 18 U.S.C. § 3771, when it resolved the federal investigation of Epstein without consulting with victims, and seeking enforcement of her CVRA rights.2 In responding to the petition, the government, represented by the USAO, revealed the existence of the NPA, but did not produce it to the petitioners until the court directed it to be turned over subject to a protective order; the NPA itself remained under seal in the federal district court. After the initial filings and hearings, the CVRA case was dormant for almost two years while the petitioners pursued civil cases against Epstein.

² Emergency Victim’s Petition for Enforcement of Crime Victim’s [sic) Rights Act, 18 U.S.C. Section 3771, Doe v. United States, Case No. 9:08-cv-80736-KAM (S.D. Fla. July 7, 2008). Another victim subsequently joined the litigation as “Jane Doe 2.”

Soon after he was incarcerated, Epstein applied for the Palm Beach County Sheriff’s work release program, and the Sheriff approved his application. In October 2008, Epstein began spending 12 hours a day purportedly working at the “Florida Science Foundation,” an entity Epstein had recently incorporated that was co-located at the West Palm Beach office of one of Epstein’s attorneys. Although the NPA specified a term of incarceration of 18 months, Epstein received “gain time,” that is, time off for good behavior, and he actually served less than 13 months of incarceration. On July 22, 2009, Epstein was released from custody to a one-year term of home detention as a condition of community control, and he registered as a sexual offender with the Florida Department of Law Enforcement. After victims and news media filed suit in Florida courts for release of the copy of the NPA that had been filed under seal in the state court file, a state judge in September 2009 ordered it to be made public.

By mid-2010, Epstein reportedly settled multiple civil lawsuits brought against him by victims seeking monetary damages, including the two petitioners in the CVRA litigation. During the CVRA litigation, the petitioners sought discovery from the USAO, which made substantial document productions, filed lengthy privilege logs in support of its withholding of documents, and submitted declarations from the AUSA and the FBI case agents who conducted the federal investigation. The USAO opposed efforts to unseal various records, as did Epstein, who was permitted to intervene in the litigation with respect to certain issues. Nevertheless, the court ultimately ordered that substantial records relating to the USAO’s resolution of the Epstein case be made public. During the course of the litigation, the court made numerous rulings interpreting the CVRA. After failed efforts to settle the cast, the parties’ cross motions for summary judgment remained pending for more than a year.

In 2017, President Donald Trump nominated Acosta to be Secretary of Labor. At his March 2017 confirmation hearing, Acosta was questioned only briefly about the Epstein case. On April 17, 2017, the Senate confirmed Acosta’s appointment as Labor Secretary.

In the decade following his release from incarceration, Epstein reportedly continued to settle multiple civil suits brought by many, but not all, of his victims. Epstein was otherwise able to resume his lavish lifestyle, largely avoiding the interest of the press. On November 28, 2018, however, the Miami Herald published an extensive investigative report about state and federal criminal investigations initiated more than 12 years earlier into allegations that Epstein had coerced girls into engaging in sexual activity with him at his Palm Beach estate.3 The Miami Herald reported that in 2007, Acosta entered into an “extraordinary” deal with Epstein in the form of the NPA, which permitted Epstein to avoid federal prosecution and a potentially lengthy prison sentence by pleading guilty in state court to “two prostitution charges.” According to the Miami Herald, the government also immunized from prosecution Epstein’s co-conspirators and concealed from Epstein’s victims the terms of the NPA. Through its reporting, which included interviews of eight victims and information from publicly available documents, the newspaper painted a portrait of federal and state prosecutors who had ignored serious criminal conduct by a wealthy man with powerful and politically connected friends by granting him a “deal of a lifetime” that allowed him both to escape significant punishment for his past conduct and to continue his

Julie K… “Perversion of Justice,” Miami Herald, Nov. 28, 2018. hosil/www.miamiherald.com/ newsilocal/anicle220097825 html.

abuse of minors. The Miami Herald report led to public outrage and media scrutiny of the government’s actions.⁴

On February 21, 2019, the district court granted the CVRA case petitioners’ Motion for Partial Summary Judgment, ruling that the government violated the CVRA in failing to advise the victims about its intention to enter into the NPA.⁵ The court also found that letters the government sent to victims after the NPA was signed, describing the investigation as ongoing, “mislead [sic] the victims to believe that federal prosecution was still a possibility.” The court also highlighted the inequity of the USAO’s failure to communicate with the victims while at the same time engaging in “lengthy negotiations” with Epstein’s coursel and assuring the defense that the NPA would not be “made public or filed with the court.” The court ordered the parties to submit additional briefs regarding the appropriate remedies. After the court’s order, the Department recused the USAO from the CVRA litigation and assigned the U.S. Attorney’s Office for the Northern District of Georgia to handle the case for the government. Among the remedies sought by the petitioners, and opposed by the government, was rescission of the NPA and federal prosecution of Epstein.

On July 2, 2019, the U.S. Attorney’s Office for the Southern District of New York obtained a federal grand jury indictment charging Epstein with one count of sex trafficking of minors and one count of conspiracy to commit sex trafficking of minors. The indictment alleged that from 2002 until 2005, Epstein created a vast network of underage victims in both New York and Florida whom he sexually abused and exploited. Epstein was arrested on the charges on July 6, 2019. In arguing for Epstein’s pretrial detention, prosecutors asserted that agents searching Epstein’s Manhattan residence found thousands of photos of nude and half-nude females, including at least one believed to be a minor. The court ordered Epstein detained pending trial, and he was remanded to the custody of the Bureau of Prisons and held at the Metropolitan Correctional Center in Manhattan.

Meanwhile, after publication of the November 2018 Miami Herald report, the media and Congress increasingly focused attention on Acosta as the government official responsible for the NPA. On July 10, 2019, Acosta held a televised press conference to defend his and the USAO’s actions. Acosta stated that the Palm Beach State Attorney’s Office “was ready to allow Epstein to walk free with no jail time, nothing.” According to Acosta, because USAO prosecutors considered this outcome unacceptable, his office pursued a difficult and challenging case and obtained a resolution that put Epstein in jail, forced him to register as a sexual offender, and provided victims with the means to obtain monetary damages. Acosta’s press conference did not end the controversy, however, and on July 12, 2019, Acosta submitted to the President his resignation as

^<sup>4 See, e.g., Ashley Collman, “Stunning new report details Trump’s labor secretary’s role in plea deal for billionaire sex abuser,” The Business Insider, Nov. 29, 2018; Cynthia McFadden, “New Focus on Trump Labor Secretary’s role in unusual plea deal for billionaire accused of sexual abuse,” NBC Nightly News, Nov. 29, 2018; Anita Kumar, “Trump labor secretary out of running for attorney general after Miami Herald report,” McClatchy Washington Bureau, Nov. 29, 2018; Emily Peck, “How Trump’s Labor Secretary Covered For A Millionaire Sex Abuser,” Huffington Post, Nov. 29, 2018; Julie K. [111], et al., “Lawmakers issue call for investigation of serial sex abuser Jeffrey Epstein’s plea deal,” Miami Herald, Dec. 6, 2018.

^<sup>5 Doe v. United States, 359 F. Supp. 3d 1201 (S.D. Fla., Feb. 21, 2019) (Opinion and Order, 9:08-80736-CIV-Marra).

Secretary of Labor. In a brief oral statement, Acosta explained that continued media attention on his handling of the Epstein investigation rather than on the economy was unfair to the Labor Department.

On August 10, 2019, Epstein was found hanging in his cell and was later pronounced dead. The New York City Chief Medical Examiner concluded that Epstein had committed suicide.

As a result of Epstein’s death, the U.S. Attorney’s Office for the Southern District of New York filed a nolle prosequi to dismiss the pending indictment against Epstein. On August 27, 2019, the district court held a hearing at which more than a dozen of Epstein’s victims—including victims of the conduct in Florida that was addressed through the NPA—spoke about the impact of Epstein’s crimes. The court dismissed the Epstein indictment on August 29, 2019.

After Epstein’s death, the federal district court in Florida overseeing the CVRA litigation denied the petitioners their requested remedies and closed the case as moot. Among its findings, the court concluded that although the government had violated the CVRA, the government had asserted “legitimate and legally supportable positions throughout this litigation,” and therefore had not litigated in bad faith. The court also noted it expected the government to “honor its representation that it will provide training to its employees about the CVRA and the proper treatment of crime victims,” as well as honoring its promise to meet with the victims.

On September 30, 2019, CVRA petitioner “Jane Doe 1” filed in her true name a petition for a writ of mandamus in the United States Court of Appeals for the Eleventh Circuit, seeking review of the district court’s order denying all of her requested remedies. In its responsive brief, the government argued that “as a matter of law, the legal obligations under the CVRA do not attach prior to the government charging a case” and thus, “the CVRA was not triggered in [the Southern District of Florida] because no criminal charges were brought.” Nevertheless, during oral argument, the government conceded that the USAO had not been “fully transparent” with the petitioner and had “made a mistake in causing her to believe that the case was ongoing when in fact the NPA had been signed.” On April 14, 2020, a divided panel of the Court of Appeals denied the petition, ruling that CVRA rights do not attach until a defendant has been criminally charged. On August 7, 2020, the court granted the petition for rehearing en bane and vacated the panel’s opinion; as of the date of this Report, a briefing schedule has been issued, and oral argument is set for December 3, 2020.

II. THE INITIATION AND SCOPE OF OPR’S INVESTIGATION

After the Miami Herald published its investigative report on November 28, 2018, U.S. Senator Ben Sasse, Chairman of the Senate Judiciary Subcommittee on Oversight, Agency Action, Federal Rights and Federal Courts, sent a December 3, 2018 letter to OPR, citing the Miami Herald’s report and requesting that OPR “open an investigation into the instances identified in this reporting of possible misconduct by Department of Justice attorneys.” On February 6, 2019, the Department of Justice Office of Legislative Affairs advised Senator Sasse that OPR had opened

an investigation into the matter and would review the USAO’s decision to resolve the federal investigation of Epstein through the NPA.6

After the district court issued its ruling in the CVRA litigation, on February 21, 2019, OPR included within the scope of its investigation an examination of the government’s conduct that formed the basis for the court’s findings that the USAO violated the CVRA in failing to afford victims a reasonable right to confer with the government about the NPA before the agreement was signed and that the government affirmatively misled victims about the status of the federal investigation.

During the course of its investigation, OPR obtained and reviewed hundreds of thousands of records from the USAO, the FBI, and other Department components, including the Office of the Deputy Attorney General, the Criminal Division, and the Executive Office for U.S. Attorneys. The records included emails, letters, memoranda, and investigative materials. OPR also collected and reviewed materials relating to the state investigation and prosecution of Epstein. OPR also examined extensive publicly available information, including depositions, pleadings, orders, and other court records, and reviewed media reports and interviews, articles, podcasts, and books relating to the Epstein case.

In addition to this extensive documentary review, OPR conducted more than 60 interviews of witnesses, including the FBI case agents, their supervisors, and FBI administrative personnel; current and former USAO staff and attorneys; current and former Department attorneys and senior managers, including a former Deputy Attorney General and a former Assistant Attorney General for the Criminal Division; and the former State Attorney and former Assistant State Attorney in charge of the state investigation of Epstein. OPR also interviewed several victims and attorneys representing victims, and reviewed written submissions from victims, concerning victim contacts with the USAO and the FBI.

OPR identified former U.S. Attorney Acosta, three former USAO supervisors, and the AUSA as subjects of its investigation based on preliminary information indicating that each of them was involved in the decision to resolve the case through the NPA or in the negotiations leading to the agreement. OPR deems a current or former Department attorney to be a subject of its investigation when the individual’s conduct is within the scope of OPR’s review and may result in a finding of professional misconduct. OPR reviewed prior public statements made by Acosta and another subject. All five subjects cooperated fully with OPR’s investigation. OPR requested that all of the subjects provide written responses detailing their involvement in the federal investigation of Epstein, the drafting and execution of the NPA, and decisions relating to victim notification and consultation. OPR received and reviewed written responses from all of the subjects, and subsequently conducted extensive interviews of each subject under oath and before a court reporter. Each subject was represented by counsel and had access to relevant contemporaneous documents before the subject’s OPR interview. The subjects reviewed and provided comments on their respective interview transcripts and on OPR’s draft report. OPR

⁶The federal government was closed from December 22, 2018, to January 25, 2019. After initiating its investigation, OPR also subsequently received other letters from U.S. Senators and Representatives inquiring into the status of the OPR investigation.

carefully considered the comments and made changes, or noted comments, as OPR deemed appropriate; OPR did not, however, alter its findings and conclusions.

Finally, OPR reviewed relevant case law, statutes, regulations, Department policy, and attorney professional responsibility rules as necessary to resolve the issues presented in this case and to determine whether the subjects committed professional misconduct.

As part of its investigation, OPR examined the interactions between state officials and the federal investigators and prosecutors, but because OPR does not have jurisdiction over state officials, OPR did not investigate, or reach conclusions about, their conduct regarding the state investigation.⁷ Because OPR’s mission is to ensure that Department attorneys adhere to the standards of professional conduct, OPR’s investigation focused on the actions of the subject attorneys rather than on determining the full scope of Epstein’s and his assistants’ criminal behavior. Accordingly, OPR considered the evidence and information regarding Epstein’s and his assistants’ conduct as it was known to the subjects at the time they performed their duties as Department attorneys. Additional evidence and information that came to light after June 30, 2008, when Epstein entered his guilty plea under the NPA, did not affect the subjects’ actions prior to that date, and OPR did not evaluate the subjects’ conduct on the basis of that subsequent information.

OPR’s investigation occurred approximately 12 years after most of the significant events relating to the USAO’s investigation of Epstein, the NPA, and Epstein’s guilty plea. As a result, many of the subjects and witnesses were unable to recall the details of events or their own or others’ actions occurring in 2006-2008, such as conversations, meetings, or documents they reviewed at the time.⁸ However, OPR’s evaluation of the subjects’ conduct was aided significantly by extensive, contemporaneous emails among the prosecutors and communications between the government and defense counsel. These records often referred to the interactions among the participants and described important decisions and, in some instances, the bases for them.

III. OVERVIEW OF OPR’S ANALYTICAL FRAMEWORK

OPR’s primary mission is to ensure that Department attorneys perform their duties in accordance with the highest professional standards, as would be expected of the nation’s principal law enforcement agency. Accordingly, OPR investigates allegations of professional misconduct against current or former Department attorneys related to the exercise of their authority to

^<sup>7 In August 2019, Florida Governor Ron DeSantis announced that he had directed the Florida Department of Law Enforcement to open an investigation into the conduct of state authorities relating to Epstein. As reported, the investigation focuses on Epstein’s state plea agreement and the Palm Beach County work release program.

^<sup>8 OPR was cognizant that Acosta and the three managers all left the USAO during, or not long after resolution of, the Epstein case, while the AUSA remained with the USAO until mid-2019. Moreover, as the line prosecutor in the Epstein investigation and also as co-counsel in the CVRA litigation until the USAO was recused from that litigation in early 2019, the AUSA had continuous access to the USAO documentary record and numerous occasions to review these materials in the course of her official duties. Additionally, in responding to OPR’s request for a written response, and in preparing to be interviewed by OPR, the AUSA was able to refresh her recollection with these materials to an extent not possible for the other subjects, who were provided with relevant documents by OPR in preparation for their interviews.

investigate, litigate, or provide legal advice.⁹ OPR also has jurisdiction to investigate allegations of misconduct against Department law enforcement agents when they relate to a Department attorney’s alleged professional misconduct.

In its investigations, OPR determines whether a clear and unambiguous standard governs the challenged conduct and whether a subject attorney violated that standard. Department attorneys are subject to various legal obligations and professional standards in the performance of their duties, including the Constitution, statutes, standards of conduct imposed by attorney licensing authorities, and Department regulations and policies. OPR finds misconduct when it concludes by a preponderance of the evidence that a subject attorney violated such a standard intentionally or recklessly. Pursuant to OPR’s analytical framework, when OPR concludes that (1) no clear and unambiguous standard governs the conduct in question or (2) the subject did not intentionally or recklessly violate the standard that governs the conduct, then it concludes that the subject’s conduct does not constitute professional misconduct. In some cases, OPR may conclude that a subject attorney’s conduct does not satisfy the elements necessary for a professional misconduct finding, but that the circumstances warrant another finding. In such cases, OPR may conclude that a subject attorney exercised poor judgment, made a mistake, or otherwise acted inappropriately under the circumstances. ¹⁰

IV. ISSUES CONSIDERED

In this investigation, OPR considered two distinct sets of allegations. The first relates to the negotiation, execution, and implementation of the NPA. The second relates to the USAO’s interactions with Epstein’s victims and adherence to the requirements of the CVRA. The two sets of issues are described below and are analyzed separately in this Report.

A. The Negotiation, Execution, and Implementation of the NPA

In evaluating whether any of the subjects committed professional misconduct, OPR considered whether any of the NPA’s provisions violated a clear or unambiguous statute, professional responsibility rule or standard, or Department regulation or policy. In particular, OPR considered whether the NPA violated standards relating to (1) charging decisions, (2) declination of criminal charges, (3) deferred or non-prosecution agreements, (4) plea agreements, (5) grants

^<sup>9 28 C.F.R. § 0.39a(a)(1). OPR has authority to investigate the professional conduct of attorneys occurring during their employment by the Department, regardless of whether the attorney left the Department before or during OPR’s investigation. Over its 45-year history, OPR has routinely investigated the conduct of former Department attorneys. Although former Department attorneys cannot be disciplined by the Department, OPR’s determination that a former Department attorney violated state rules of professional conduct for attorneys could result in a referral to an appropriate state attorney disciplinary authority. Furthermore, findings resulting from investigations of the conduct of Department attorneys, even former employees, may assist Department managers in supervising future cases.

^<sup>10 In some instances, OPR declines to open an investigation based upon a review of the initial complaint or after a preliminary inquiry into the matter. In December 2010, one of the attorneys representing victims in the CVRA litigation raised allegations that Epstein may have exerted improper influence over the federal criminal investigation and that the USAO had deceived the victims of Epstein’s crimes about the existence of the NPA. Pursuant to its standard policy, OPR declined to open an investigation into those allegations at that time in deference to the then-pending CVRA litigation.

of immunity, or (6) the deportation of criminal aliens. The potentially applicable standards that OPR considered as to each of these issues are identified and discussed later in this Report. OPR also examined whether the evidence establishes that any of the subjects were influenced to enter into the NPA, or to include in the NPA terms favorable to Epstein, because of an improper motive, such as a bribe, political consideration, personal interest, or favoritism. OPR also examined and discusses in this Report significant events that occurred after the NPA was negotiated and signed that shed additional light on the USAO’s handling of the Epstein investigation.

B. The District Court’s Conclusion That the USAO Violated the CVRA

To address the district court’s adverse judicial findings, OPR assessed the manner, content, and timing of the government’s interactions with victims both before and after the NPA was signed, including victim notification letters issued by the USAO and the FBI and interviews conducted by the USAO. OPR considered whether any of the subject attorneys violated any clear and unambiguous standard governing victim consultation or notification. OPR examined the government’s lack of consultation with the victims before the NPA was signed, as well as the circumstances relating to the district court’s finding that the USAO affirmatively misled Epstein’s victims about the status of the federal investigation after the NPA was signed.

V. OPR’S FINDINGS AND CONCLUSIONS

OPR evaluated the conduct of each subject and considered his or her individual role in various decisions and events. Acosta, however, made the pivotal decision to resolve the federal investigation of Epstein through a state-based plea and either developed or approved the terms of the initial offer to the defense that set the beginning point for the subsequent negotiations that led to the NPA. Although Acosta did not sign the NPA, he participated in its drafting and approved it, with knowledge of its terms. During his OPR interview, Acosta acknowledged that he approved the NPA and accepted responsibility for it. Therefore, OPR considers Acosta to be responsible for the NPA and for the actions of the other subjects who implemented his decisions. Acosta’s overall responsibility for the government’s interactions or lack of communication with the victims is less clear, but Acosta affirmatively made certain decisions regarding victim notification, and OPR evaluates his conduct with respect to those decisions.

A. Findings and Conclusions Relating to the NPA

With respect to all five subjects of OPR’s investigation, OPR concludes that the subjects did not commit professional misconduct with respect to the development, negotiation, and approval of the NPA. Under OPR’s framework, professional misconduct requires a finding that a subject attorney intentionally or recklessly violated a clear and unambiguous standard governing the conduct at issue. OPR found no clear and unambiguous standard that required Acosta to indict Epstein on federal charges or that prohibited his decision to defer prosecution to the state. Furthermore, none of the individual terms of the NPA violated Department or other applicable standards.

As the U.S. Attorney, Acosta had the “plenary authority” under established federal law and Department policy to resolve the case as he deemed necessary and appropriate, as long as his decision was not motivated or influenced by improper factors. Acosta’s decision to decline to

initiate a federal prosecution of Epstein was within the scope of his authority, and OPR did not find evidence that his decision was based on corruption or other impermissible considerations, such as Epstein’s wealth, status, or associations. Evidence shows that Acosta resisted defense efforts to have the matter returned to the state for whatever result state authorities deemed appropriate, and he refused to eliminate the incarceration and sexual offender registration requirements. OPR did not find evidence establishing that Acosta’s “breakfast meeting” with one of Epstein’s defense counsel in October 2007 led to the NPA, which had been signed weeks earlier, or to any other significant decision that benefited Epstein. The contemporaneous records show that USAO managers’ concerns about legal issues, witness credibility, and the impact of a trial on the victims led them to prefer a pre-charge resolution and that Acosta’s concerns about the proper role of the federal government in prosecuting solicitation crimes resulted in his preference for a state-based resolution. Accordingly, OPR does not find that Acosta engaged in professional misconduct by resolving the federal investigation of Epstein in the way he did or that the other subjects committed professional misconduct through their implementation of Acosta’s decisions.

Nevertheless, OPR concludes that Acosta’s decision to resolve the federal investigation through the NPA constitutes poor judgment. Although this decision was within the scope of Acosta’s broad discretion and OPR does not find that it resulted from improper factors, the NPA was a flawed mechanism for satisfying the federal interest that caused the government to open its investigation of Epstein. In Acosta’s view, the federal government’s role in prosecuting Epstein was limited by principles of federalism, under which the independent authority of the state should be recognized, and the federal responsibility in this situation was to serve as a “backstop” to state authorities by encouraging them to do more. However, Acosta failed to consider the difficulties inherent in a resolution that relied heavily on action by numerous state officials over whom he had no authority; he resolved the federal investigation before significant investigative steps were completed; and he agreed to several unusual and problematic terms in the NPA without the consideration required under the circumstances. In sum, Acosta’s application of federalism principles was too expansive, his view of the federal interest in prosecuting Epstein was too narrow, and his understanding of the state system was too imperfect to justify the decision to use the NPA. Furthermore, because Acosta assumed a significant role in reviewing and drafting the NPA and the other three subjects who were supervisors left the USAO, were transitioning to other jobs, or were absent at critical junctures, Acosta should have ensured more effective coordination and communication during the negotiations and before approving the final NPA. The NPA was a unique resolution, and one that required greater oversight and supervision than Acosta provided.

B. Findings and Conclusions Relating to the Government’s Interactions with Victims

OPR further concludes that none of the subject attorneys committed professional misconduct with respect to the government’s interactions with victims. The subjects did not have a clear and unambiguous duty under the CVRA to consult with victims before entering into the NPA because the USAO resolved the Epstein investigation without a federal criminal charge. Significantly, at the time the NPA was signed, the Department did not interpret CVRA rights to attach unless and until federal charges had been filed, and the federal courts had not established a clear and unambiguous standard applying the CVRA before criminal charges were brought. In addition, OPR did not find evidence that the lack of consultation was for the purpose of silencing victims. Nonetheless, the lack of consultation was part of a series of government

interactions with victims that ultimately led to public and court condemnation of the government’s treatment of the victims, reflected poorly on the Department as a whole, and is contradictory to the Department’s mission to minimize the frustration and confusion that victims of a crime endure.

OPR determined that none of the subjects was responsible for communications sent to certain victims after the NPA was signed that described the case as “under investigation” and that failed to inform them of the NPA. The letters were sent by an FBI administrative employee who was not directly involved in the investigation, incorporated standard form language used by the FBI when communicating with victims, and were not drafted or reviewed by the subjects. Moreover, the statement that the matter was “under investigation” was not false because the government in fact continued to investigate the case in anticipation that Epstein would not fulfill the terms of the NPA. However, the letters risked misleading the victims and contributed to victim frustration and confusion by failing to provide important information about the status of the investigation. The letters also demonstrated a lack of coordination between the federal agencies responsible for communicating with Epstein’s victims and showed a lack of attention to and oversight regarding communication with victims.

After the NPA was signed, Acosta elected to defer to the State Attorney the decision whether to notify victims about the state’s plea hearing pursuant to the state’s own victim’s rights requirements. Although Acosta’s decision was within his authority and did not constitute professional misconduct, OPR concludes that Acosta exercised poor judgment when he failed to make certain that the state intended to and would notify victims identified through the federal investigation about the state plea hearing. His decision left victims uninformed about an important proceeding that resolved the federal investigation, an investigation about which the USAO had communicated with victims for months. It also ultimately created the misimpression that the Department intentionally sought to silence the victims. Acosta failed to ensure that victims were made aware of a court proceeding that was related to their own cases, and thus he failed to ensure that victims were treated with forthrightness and dignity.

OPR concludes that the decision to postpone notifying victims about the terms of the NPA after it was signed and the omission of information about the NPA during victim interviews and conversations with victims’ attorneys in 2008 do not constitute professional misconduct. Contemporaneous records show that these actions were based on strategic concerns about creating impeachment evidence that Epstein’s victims had financial motives to make claims against him, evidence that could be used against victims at a trial, and were not for the purpose of silencing victims. Nonetheless, the failure to reevaluate the strategy prior to interviews of victims and discussions with victims’ attorneys occurring in 2008 led to interactions that contributed to victims’ feelings that the government was intentionally concealing information from them.

After examining the full scope and context of the government’s interactions with victims, OPR concludes that the government’s lack of transparency and its inconsistent messages led to victims feeling confused and ill-treated by the government; gave victims and the public the misimpression that the government had colluded with Epstein’s counsel to keep the NPA secret from the victims; and undercut public confidence in the legitimacy of the resulting agreement. The overall result of the subjects’ anomalous handling of this case understandably left many victims feeling ignored and frustrated and resulted in extensive public criticism. In sum, OPR concludes that the victims were not treated with the forthrightness and sensitivity expected by the Department.

VI. ORGANIZATION OF THE REPORT

The Report is divided into three chapters. In Chapter One, OPR describes the relevant federal, state, and local law enforcement entities involved in investigating Epstein’s criminal conduct, as well as the backgrounds of the five subjects and their roles in the events in question. OPR provides a brief profile of Epstein and identifies the defense attorneys who interacted with the subjects.

In Chapter Two, OPR sets forth an extensive account of events relating to the federal investigation of Epstein. The account begins with the initial complaint in March 2005 by a young victim and her parents to the local police—a complaint that launched an investigation by local law enforcement authorities—and continues through the mid-2006 opening of the federal investigation; the September 2007 negotiation and signing of the NPA; Epstein’s subsequent efforts to invalidate the NPA through appeals to senior Department officials; Epstein’s June 2008 guilty plea in state court; and, finally, efforts by the AUSA to ensure Epstein’s compliance with the terms of the NPA during his incarceration and until his term of home detention ended in July 2010. After describing the relevant events, OPR analyzes the professional misconduct allegations relating to the decisions made regarding the development and execution of the NPA. OPR describes the relevant standards and sets forth its findings and conclusions regarding the subjects’ conduct.

Chapter Three concerns the government’s interactions with victims and the district court’s findings regarding the CVRA. OPR describes the relevant events and analyzes the subjects’ conduct in light of the pertinent standards.

OPR sets forth the extensive factual detail provided in Chapters Two and Three, including internal USAO and Department communications, because doing so is necessary for a full understanding of the subjects’ actions and of the bases for OPR’s conclusions.

TABLE OF CONTENTS

Exhibit 5: State Information

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CHAPTER ONE

SIGNIFICANT ENTITIES AND INDIVIDUALS

I. THE FEDERAL AND LOCAL LAW ENFORCEMENT AGENCIES

A. The Department of Justice, the U.S. Attorney’s Office for the Southern District of Florida, and the Federal Bureau of Investigation

The Department of Justice (Department) is a cabinet-level executive branch department headed by the United States Attorney General. The stated mission of the Department is to enforce federal law and defend the interests of the United States; ensure public safety; provide federal leadership in preventing and controlling crime; seek just punishment for those guilty of unlawful behavior; and ensure the fair and impartial administration of justice. The Department enforces federal criminal law through investigations and prosecutions of violations of federal criminal statutes. It also engages in civil litigation. During the period relevant to this Report, the Department had approximately 110,000 employees in 40 components. The Department’s headquarters are in Washington, D.C., and it conducts most of its work through field locations around the nation and overseas.

The prosecution of federal criminal laws is handled primarily through 94 U.S. Attorney’s Offices, each headed by a presidentially appointed (with advice and consent of the U.S. Senate) U.S. Attorney who has independent authority over his or her office but is overseen by the Attorney General through the Deputy Attorney General.¹ The Department’s Criminal Division, headed by an Assistant Attorney General, includes components with specialized areas of expertise that also prosecute cases, assist in the prosecutions handled by U.S. Attorney’s Offices, and provide legal expertise and policy guidance. Among the Criminal Division components mentioned in this Report are the Appellate Section, the Office of Enforcement Operations, the Computer Crime and Intellectual Property Section, and, most prominently, the Child Exploitation and Obscenity Section (CEOS).

CEOS, based in Washington, D.C., comprises attorneys and investigators who specialize in investigating and prosecuting child exploitation crimes, especially those involving technology, and they assist U.S. Attorney’s Offices in investigations, trials, and appeals related to these offenses. CEOS provides advice and training to federal prosecutors, law enforcement personnel, and government officials. CEOS also works to develop and refine proposals for prosecution policies, legislation, government practices, and agency regulations.

The U.S. Attorneys’ Manual (USAM) (revised in 2018 and renamed the Justice Manual) is a compilation of Department rules, policies, and guidance governing the conduct of Department employees. It includes requirements for approval by, or consultation with, the Criminal Division

^<sup>1 Two U.S. Attorney’s Offices, in the judicial districts of Guam and of the Northern Mariana Islands, are headed by a single U.S. Attorney. The Attorney General and the U.S. District Court have authority to appoint acting and interim U.S. Attorneys.

or other divisions having responsibility for specific criminal enforcement, such as the Civil Rights Division. In this Report, OPR applies the USAM provisions in effect at the relevant time.

During the period most relevant to this Report, the Attorney General was Michael Mukasey, the Deputy Attorney General was Mark Filip, and the Assistant Attorney General for the Criminal Division was Alice Fisher. The Chief of CEOS was Andrew Oosterbaan.

The U.S. Attorney’s Office for the Southern District of Florida (USAO) handles federal matters in the Southern District of Florida judicial district, which covers the counties of Miami-Dade, Broward, Monroe, Palm Beach, 1, St. Lucie, Indian River, Okeechobee, and Highlands, an area of over 15,000 square miles. During the period relevant to this Report, the USAO had a staff of approximately 200 Assistant U.S. Attorneys (AUSAs) and 200 support personnel. The main office is in Miami; staffed branch offices are located in Fort Lauderdale, West Palm Beach (covering Palm Beach County), and Fort Pierce; and an unstaffed branch office is located in Key West. The West Palm Beach USAO office is approximately 70 miles from the Miami office. The USAO is headed by the U.S. Attorney; the second-in-command is the First Assistant U.S. Attorney (FAUSA), who serves as principal advisor to the U.S. Attorney and supervises all components of the USAO, including the Criminal, Civil, and Appellate Divisions, each of which is headed by a Chief. During the period relevant to this Report, the West Palm Beach office consisted of two criminal sections and was headed by a Managing AUSA.

The Federal Bureau of Investigation (FBI) is the principal federal law enforcement agency and is part of the Department. It maintains field offices that work with U.S. Attorney’s Offices. The FBI field office in Miami, headed by a Special Agent in Charge, has satellite offices, known as Resident Agencies, one of which is located in West Palm Beach and covers Palm Beach County. The Epstein investigation was handled by Special Agents assigned to a particular West Palm Beach Resident Agency squad, headed by a Supervisory Special Agent. FBI responsibility for advising crime victims of their rights and of victim services available to them is handled by non-agent Victim Specialists.

The following chart shows the Department’s organizational structure during the period relevant to this Report:

B. The State and Local Law Enforcement Agencies

Florida state criminal prosecutions are primarily managed by an Office of State Attorney in each of the state’s 20 judicial circuits, headed by a State Attorney who is elected to a four-year term. Palm Beach County constitutes the 15th Judicial Circuit. Barry Krischer was the elected State Attorney for that circuit from 1992 until January 2009. During the period relevant to this Report, the Palm Beach County State Attorney’s Office, based in the City of West Palm Beach, had more than 100 attorneys and several investigators, and a Crimes Against Children Unit headed by Assistant State Attorney Lanna Belohlavek.

The incorporated Town of Palm Beach occupies the coastal barrier island off the city of West Palm Beach. Its law enforcement agency is the Palm Beach Police Department (PBPD). Michael Reiter, who joined the PBPD in 1981, served as PBPD Chief from 2001 to February 2009.

The Palm Beach County Sheriff’s Office (PBSO), based in the City of West Palm Beach, is the largest law enforcement agency in the county. Through its Department of Corrections, the PBSO operates the Main Detention Center and, during the period relevant to this Report, housed minimum-security detainees, including those on work release, at its Stockade facility. The current Sheriff has served continuously since January 2005.

II. THE SUBJECT ATTORNEYS AND THEIR ROLES IN THE EPSTEIN CASE

R. Alexander Acosta was appointed Interim U.S. Attorney for the Southern District of Florida in June 2005, at age 36. In June 2006, President W. Bush formally nominated Acosta, and after Senate confirmation, Acosta was sworn in as the U.S. Attorney in October 2006.

After graduating from law school, Acosta served a federal appellate clerkship; an 18-month term as an associate at the firm of Kirkland & Ellis in Washington, D.C.; approximately four years as a policy fellow and law school lecturer; and nearly two years as a Deputy Assistant Attorney General in the Department’s Civil Rights Division. He was presidentially appointed in 2002 as a member of the National Labor Relations Board, and in 2003 as Assistant Attorney General in charge of the Department’s Civil Rights Division, where he served from August 2003 until his appointment as Interim U.S. Attorney, and where he oversaw, among other things, the prosecution of human trafficking and child sex-trafficking cases. As U.S. Attorney, Acosta’s office was in the USAO’s Miami headquarters, although he traveled to the USAO’s branch offices.

During Acosta’s tenure as U.S. Attorney, the USAO initiated the federal investigation of Epstein, engaged in plea discussions with Epstein’s counsel, and negotiated the federal non-prosecution agreement (NPA) that is the subject of this Report. Acosta made the decision to resolve the federal investigation into Epstein’s conduct by allowing Epstein to enter a state plea. Acosta was personally involved in the negotiations that led to the NPA, reviewed various iterations of the agreement, and approved the final agreement signed by the USAO. Acosta continued to provide supervisory oversight and to have meetings and other communications with Epstein’s attorneys during the nine-month period between the signing of the NPA on September 24, 2007, and Epstein’s entry of guilty pleas in state court pursuant to the terms of the agreement, on June 30, 2008. On December 8, 2008, after the presidential election and while Epstein was serving his state prison sentence, Acosta was formally recused from all matters involving the law firm of

Kirkland & Ellis, which was representing Epstein, because Acosta had begun discussions with the firm about possible employment.

After leaving the USAO in June 2009, Acosta became the of the Florida International University College of Law. In April 2017, Acosta became the U.S. Secretary of Labor, but he resigned from that post effective July 19, 2019, following public criticism of the USAO’s handling of the Epstein case.

Jeffrey H. Sloman joined the USAO in 1990 as a line AUSA. In 2001, he became Deputy Chief of the USAO’s Fort Lauderdale branch office Narcotics and Violent Crimes Section, and in 2003, became the Managing AUSA for that branch office. In early 2004, Sloman was appointed Chief of the USAO’s Criminal Division. In October 2006, Sloman became the FAUSA, and Sloman’s office was located with Acosta’s in the Miami office’s executive suite.

As FAUSA, Sloman was responsible for supervising the Civil, Criminal, and Appellate Divisions, and he was part of the supervisory team that oversaw the Epstein investigation. Although Sloman had relatively little involvement in the decisions and negotiations that led to the NPA and did not review it before it was signed, he personally negotiated an addendum to the NPA, which he signed on behalf of the USAO in October 2007. After subordinates Matthew Menchel and Andrew Lourie left the USAO, Sloman directly engaged with the line AUSA, Villafafia, on Epstein matters, and participated in meetings and other communications with defense counsel. After Acosta was formally recused from the Epstein matter in December 2008, Sloman became the senior USAO official supervising the matter. When Acosta left the USAO, Sloman became the Acting U.S. Attorney for the Southern District of Florida, and in January 2010, the Attorney General appointed Sloman to be the Interim U.S. Attorney for the district. Sloman left the USAO to enter private practice in June 2010.

Matthew I. Menchel joined the USAO in 1998 after having served as a New York County (Manhattan) Assistant District Attorney for 11 years. After several years as a line AUSA, Menchel became Chief of the USAO’s Major Crimes Section. In October 2006, Menchel became the Chief of the USAO’s Criminal Division, based in Miami. As Criminal Division Chief, Menchel was part of the supervisory team that oversaw the Epstein investigation, and he participated in meetings and other communications with defense counsel. Menchel participated in the decision to extend a two-year state-based plea proposal to Epstein and communicated it to the defense. Shortly after that plea offer was extended to Epstein in early August 2007, and before the precise terms of the NPA were negotiated with defense counsel, Menchel left the USAO to enter private practice.

Andrew C. Lourie joined the USAO as a line AUSA in 1994, after having served for three years as an AUSA in New Jersey. During his 13-year tenure at the USAO, Lourie served two terms on detail as the Acting Chief of the Department’s Criminal Division’s Public Integrity Section, first from September 2001 until September 2002, and then from February 2006 until July 2006. Between those two details, and again after his return to the USAO in July 2006, Lourie was a Deputy Chief of the USAO’s Criminal Division, serving as the Managing AUSA for the West Palm Beach branch office. Lourie was part of the supervisory team that oversaw the Epstein investigation and negotiated the NPA, participating in meetings and other communications with defense counsel. During September 2007, while the NPA was being negotiated, Lourie transitioned out of the USAO to serve on detail as the Principal Deputy Assistant Attorney General

for the Department’s Criminal Division, a position in which he served as Chief of Staff to Assistant Attorney General Alice Fisher. Lourie left the Department in February 2008 to enter private practice.

Ann C. Villafana joined the USAO in September 2001 as a line AUSA. She served in the Major Crimes Section in Miami until January 2004, when she transferred to the West Palm Beach branch office. Villafafia handled the majority of the child exploitation cases in West Palm Beach, along with other criminal matters. In 2006, she was designated as the USAO’s first coordinator for Project Safe Childhood, a new Department initiative focusing on child sexual exploitation and abuse.2

In 2006, Villafafia assumed responsibility for the Epstein investigation. As the line AUSA, Villafaila handled all aspects of the investigation. Villafafia determined the lines of inquiry to pursue, identified the witnesses to be interviewed, conducted legal research to support possible charges, and sought guidance from others at the USAO and in the Department. Villafafia, along with the FBI case agents and the FBI Victim Specialist, had direct contact with Epstein’s victims. She handled court proceedings related to the investigation. She drafted a prosecution memorandum, indictment, and related documents, and revised those documents in response to comments from those in her supervisory chain of command. Villafafia participated in meetings between members of the USAO and counsel for Epstein, and prepared briefing materials for management in preparation for those meetings and in response to issues raised during those meetings. Although Acosta made the decision to utilize a non-prosecution agreement to resolve the federal investigation and approved the terms of the NPA, Villafafia was the primary USAO representative negotiating with defense counsel and drafting the language of the NPA, under her supervisors’ direction and guidance, and she signed the NPA on behalf of the USAO. Thereafter, Villafatia monitored Epstein’s compliance with the NPA and addressed issues relating to his conduct. After two victims pursued a federal civil lawsuit seeking enforcement of their rights under the Crime Victims’ Rights Act (CVRA), 18 U.S.C. § 3771 (“the CVRA litigation” or “the CVRA case”), in July 2008, Villafafia served as co-counsel to the lead attorney representing the USAO until February 2019, when the USAO was recused from handling the litigation.3 Villafaiia left the USAO in August 2019 to join another federal government agency.

The following chart shows the USAO positions filled by the subjects, or other USAO personnel, during the period of the Epstein investigation.

²Project Safe Childhood is a nationwide initiative launched by the Department in May 2006 to combat the growing epidemic of technology-facilitated child sexual exploitation and abuse. Led by the U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.

³After the district court issued its February 21, 2019 opinion finding misconduct on the part of the government, the Department re-assigned the CVRA case to the U.S. Attorney’s Office for the Northern District of Georgia.

USAO Roles and Responsibilities in Epstein Investigation Mid-2006 through Mid-2009

HI. JEFFREY EPSTEIN AND HIS DEFENSE ATTORNEYS

A. Jeffrey Epstein

Jeffrey Epstein was born in Brooklyn, New York, in 1953.4 Although he did not graduate from college, he taught physics and mathematics to teens at an elite private school in Manhattan from 1974 until 1976. Through connections made at the school, he was hired at the Wall Street firm of Bear Stearns, where he from junior assistant to a floor trader to become a limited partner before leaving in 1981. An enigmatic individual whose source of wealth was never clear, Epstein reportedly provided wealth management and advisory services to a business entrepreneur through whom Epstein acquired a mansion in midtown Manhattan, where he resided. In the early 1990s, Epstein acquired a large residence in Palm Beach, Florida. He also owned a private island in the U.S. Virgin Islands, a ranch in New Mexico, and a residence in Paris, France. He traveled among his residences in a private Boeing 727 jet.

Epstein reportedly was an investor, founder, or principal in myriad businesses and other entities, in numerous locations. Although frequently referred to as a billionaire, the sources and extent of his wealth were never publicly established during his lifetime.’ He associated with prominent and wealthy individuals from business, political, academic, and social circles, and engaged in substantial philanthropy. Epstein maintained a large corps of employees, including housekeeping staff and pilots, as well as numerous female personal assistants, several of whom traveled with him.

B. Epstein’s Defense Attorneys

Jeffrey Epstein employed numerous criminal defense attorneys in responding to the allegations that he had coerced girls into engaging in sexual activity with him at his Palm Beach, Florida estate. As different law enforcement entities became involved in investigating the allegations, he added attorneys having particular relevant knowledge of, or connections with, those entities. At the outset of the state investigation, Epstein retained nationally prominent Miami criminal trial attorney Roy Black. He was also represented by a local criminal defense attorney who was a former Palm Beach County Assistant State Attorney, and by nationally prominent Harvard Law School professor and criminal defense attorney Man Dershowitz, who was a selfdescribed close friend of Epstein. After initial plea negotiations with the State Attorney’s Office, Epstein replaced the local attorney with Jack Goldberger, a prominent West Palm Beach criminal defense attorney whose law partner was married to the Assistant State Attorney handling the Epstein case; once Epstein hired Goldberger, the Assistant State Attorney was removed from the Epstein case on the basis of that conflict of interest. Another prominent attorney who began representing Epstein during the state investigation was New York City attorney Gerald Lefcourt,

⁴Epstein’s background has been extensively researched and reported in the media. See. e.g.. Landon Jr., “Jeffrey Epstein: International Moneyman of Mystery.” New York, Oct. 28, 2002; Vicky “The Talented Mr. Epstein,” Vanity Fair, Mar. 2003; James Barron, “Who Is Jeffrey Epstein? An Opulent Life, Celebrity Friends and Lurid Accusations,” New York Times, July 9, 2019; Lisette Voytko, “Jeffrey Epstein’s Dark Facade Finally Cracks,” Forbes, July 12, 2019.

After Epstein’s death, his net worth was estimated to be approximately $577 million, based on his will and trust documents. https://time.com/5656776/jeffrey-epstein-will-estate/.

whose law firm website cites his “national reputation for the aggressive defense” of “high-profile defendants in criminal matters.”

In late 2006, after the USAO opened its investigation, Epstein hired Miami criminal defense attorneys who were former AUSAs. One, Guy, had also served as the U.S. Attorney for the Southern District of Florida and as Director of the Department’s Executive Office for United States Attorneys, the component charged with providing close liaison between the Department and the U.S. Attorneys. Another, Lilly Ann, had served in the USAO and as a Deputy Chief in the Major Crimes Section before leaving in 2005. In August 2007, immediately after the USAO offered the terms that ultimately led to the NPA, two attorneys from the firm of Kirkland & Ellis, one of the largest law firms in the country, contacted the USAO on Epstein’s behalf: Kenneth Starr, former federal judge and Solicitor General, who was serving as of Pepperdine University School of Law while of counsel to the firm; and Jay Lefkowitz, a litigation partner who had served in high-level positions in the administrations of Presidents H.W. Bush and W. Bush. They were joined by nationally prominent Boston criminal defense attorney Weinberg. After the NPA was signed, former U.S. Attorney Joe D. Whitley joined the defense team, as did the former Principal Deputy Chief of CEOS and another former U.S. Attorney, who was also a retired federal judge.

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CHAPTER TWO

THE NON-PROSECUTION AGREEMENT

PART ONE: FACTUAL BACKGROUND

I. OVERVIEW

In the following sections in this chapter, the Office of Professional Responsibility (OPR) details the significant events leading to, and during, the federal investigation of Epstein; the negotiation and signing of the NPA; and the defense’s subsequent nine-month effort to stop the NPA from taking effect. OPR also describes more briefly the events occurring after Epstein pled guilty in state court, as the USAO sought to hold him to the terms of the agreement. In describing events, OPR relies heavily on contemporaneous documents, particularly emails. In many instances, the emails not only describe meetings and identify the participants, but also set forth the issues under discussion, the alternatives considered, and the basis for certain decisions. When helpful to explain the actions taken by the subjects, OPR also includes the subjects’ explanations as provided in their written responses to, or interviews with, OPR, or explanations provided by witnesses.

A timeline of key events is set forth on the following page.

II. MARCH 2005 – MAY 2006: EPSTEIN IS INVESTIGATED BY THE PALM BEACH POLICE DEPARTMENT AND THE PALM BEACH COUNTY STATE ATTORNEY’S OFFICE

A. The Initial Allegations and the PBPD Investigation

In March 2005, the parents of a 14-year-old girl reported to the PBPD that a man had paid their daughter $300 to give him a massage in his Palm Beach home.⁶ The PBPD began investigating Epstein, identified as the recipient of the massage, and two of his personal assistants, who were also implicated by the complainant. The investigation soon expanded beyond the initial claim, to encompass allegations that during 2004 and 2005, Epstein, through his female assistants

^<sup>6 As previously noted, “girls” refers to females under the age of 18. Epstein’s contacts with girls and young women previously had come to the attention of the PBPD. In March 2004, a PBPD officer documented a telephone complaint that a 17-year-old girl had been giving Epstein topless massages at his residence for several months for $200 per massage. The girl claimed that there were nude photos of other girls throughout Epstein’s home and offered to cooperate with a police investigation. The PBPD report relating to this complaint described the information as “unverified,” and it was not pursued.

On November 28, 2004, the police received and recorded information that young women had been observed coming and going from Epstein’s residence. The police suspected Epstein was procuring prostitutes, but because the PBPD did not have evidence that the women seen entering Epstein’s home were minors, and typically did not investigate prostitution occurring in private residences, it did not open an investigation into the matter.

Timeline of Key Events for Federal Epstein Investigation - May 2006 through October 2008

and some of the victims as well, regularly recruited local high-school-age girls to give him massages in his home that, in some cases, led to sexual activity.

Through their interviews with victims, the police learned more about Epstein’s conduct. Some girls had only one encounter with Epstein, while others had many encounters with him. The nature of the massages varied. According to victims, some girls remained fully clothed while they massaged Epstein, some wore only their underwear, and some were fully nude. Victims stated that during these massages, Epstein masturbated himself. Some victims alleged that he touched them during the massage, usually fondling their breasts or touching their vaginas directly or through their clothing. Some victims reported that Epstein used a vibrator to masturbate them, and some stated that he digitally penetrated them. Some victims who stated that they saw him more often alleged that Epstein engaged in oral and vaginal sex with them. According to one victim, an Epstein female assistant participated, on at least one occasion, in sexual activity with the victim at Epstein’s direction.⁷

Although the allegations varied in the specific details, for the most part they were consistent in describing a general pattern of conduct by Epstein and several of his assistants. According to the information provided to, and evidence gathered by, the PBPD, Epstein’s assistants scheduled up to three massage appointments each day, often contacting the girls to make an appointment while Epstein was en route to Palm Beach from one of his other residences. Typically, when a girl arrived at Epstein’s home for a massage, she was taken upstairs to the bedroom and bathroom area by one of Epstein’s assistants, who set up a massage table and massage oils. When the assistant left the room, Epstein entered, wearing only a robe or a towel. After removing his clothing, Epstein lay face down and nude on the massage table, instructed the girl to remove her clothing, and then explained to her how he wished her to perform the massage. During the massage, Epstein masturbated himself, often while fondling the girl performing the massage. When Epstein climaxed, the massage was over. Usually, Epstein paid the girl $200 for the massage, and if she had not been to his home before, Epstein asked for her phone number to contact her in the future. Epstein encouraged the girls who performed these massages to find other girls interested in performing massages for him, and promised that if a girl brought a friend along to perform a massage, each girl would receive $200. Several of the victims acknowledged to the PBPD that they had recruited other girls on Epstein’s behalf.

The evidence regarding Epstein’s knowledge of the girls’ ages was mixed. Some girls who recruited other girls reportedly instructed the new recruits to tell Epstein, if asked, that they were over 18 years old. However, some girls informed the PBPD that they told Epstein their real ages. Police were able to corroborate one girl’s report that Epstein sent flowers to her at her high school after she performed in a school play. In addition, an employee of Epstein told the PBPD that some of the females who came to Epstein’s residence appeared to be underage.

Epstein was aware of the PBPD investigation almost from the beginning. He retained local criminal defense counsel, who in turn hired private investigators. In October 2005, the PBPD, with the assistance of the State Attorney’s Office, obtained a search warrant for Epstein’s residence. When police arrived at Epstein’s home on October 20, 2005, to execute the warrant,

^<sup>7 According to the PBPD records, investigators obtained no allegations or evidence that any person other than this female assistant participated in the sexual activity with the girls.

they found computer monitors and keyboards in the home, as well as disconnected surveillance cameras, but the computer equipment itself—including video recordings and other electronic storage media—were gone. Nonetheless, the PBPD retrieved some evidence from Epstein’s home, including notepads on which Epstein’s assistants documented messages from many girls over a two-year span returning phone calls to confirm appointments. The police also found numerous photographs of naked young females of indeterminate age. Police photographs taken of the interior of Epstein’s home corroborated the victims’ descriptions to police of the layout of the home and

bedroom and bathroom area. The police also found massage tables and oils, one victim’s high school transcript, and items the police believed to be sex toys.

B. The State Attorney’s Office Decides to Present the Case to a State Grand Jury

State Attorney Barry Krischer explained to OPR that the Epstein case was unusual in that police brought the case to his office without having made an arrest. Krischer was unfamiliar with Epstein, and the case was assigned to the Crimes Against Children Unit. PBPD Chief Michael Reiter stated in a 2009 civil deposition that when the PBPD initially brought the case to the State Attorney’s Office in 2005, Krischer was supportive of the investigation and told Reiter, “Let’s go for it,” because, given the nature of the allegations, Epstein was “somebody we have to stop.” Krischer told OPR, however, that both the detectives and the prosecutors came to recognize that “there were witness problems.”

Assistant State Attorney and Crimes Against Children Unit Chief Lanna Belohlavek told OPR that she and an experienced Assistant State Attorney who initially worked with her on the case “were at a disagreement” with the PBPD “over what the state . . . could ethically charge.” According to Belohlavek, she did not believe the evidence the police presented would satisfy the elements of proof required to charge Epstein with the two felony crimes the police wanted filed, unlawful sexual activity with a minor (Florida Statute § 794.05(1)) and lewd and lascivious molestation of a minor (Florida Statute § 800.04(5)), and the police “were not happy with that.”⁸ In addition, victims had given contradictory statements to police, and the original complainant, who could have supported a charge requiring sexual offender registration, recanted her allegation of sexual contact. Belohlavek offered Epstein a resolution that would result in a five-year term of probation, which he rejected.⁹

Records publicly released by the State Attorney’s Office show that, beginning in early 2006, attorneys for Epstein sought to persuade the state prosecutors to allow Epstein to plead “no contest” rather than guilty. To that end, the defense team aggressively investigated victims and presented the State Attorney’s Office with voluminous material in an effort to undermine some of the victims’ credibility, including criminal records, victims’ social media postings (such as MySpace pages) about their own sexual activity and drug use, and victim statements that appeared to undercut allegations of criminal activity and Epstein’s knowledge of victims’ ages. Krischer

^<sup>8 Belohlavek stated that she did not consider charging procurement of a minor for prostitution—the charge Epstein ultimately pled to pursuant to the NPA—because the police had not presented it.

^<sup>9 In April 2006, the State Attorney’s Office offered Epstein an opportunity to plead guilty to the third degree felony of aggravated assault with the intent to commit a felony, with adjudication withheld and five years of probation with no unsupervised contact with minors.

told OPR that Epstein’s local counsel brought attorney Alan Dershowitz to see Krischer and the Assistant State Attorney, but Dershowitz was “overly aggressive” and threatened, “We’re going to destroy your witnesses; don’t go to court because we’re going to destroy those girls.” According to Krischer, Dershowitz so “tainted the waters” that Epstein also hired local attorney Jack Goldberger, with whom Krischer had “a working relationship.” Because the husband of the Assistant State Attorney was Goldberger’s law partner, Belohlavek recused the Assistant State Attorney to remove “even the appearance of any kind of conflict” of interest, and Belohlavek took over the case. Goldberger, together with Gerald Lefcourt, a nationally known New York criminal defense attorney also representing Epstein, then directed their efforts at Belohlavek and Krischer to dissuade the office from prosecuting Epstein, largely by attacking the credibility of the victim witnesses.

Meanwhile, the State Attorney’s Office took the unusual step of preparing to present the case to a grand jury. Krischer told OPR that under state law as it existed until changed in 2016, his office prosecuted minors as young as 14 for prostitution.¹⁰ The possibility that Epstein’s victims themselves could have been prosecuted caused “great consternation within the office,” and according to Krischer, resulted in the decision to put the case before the grand jury.¹¹ Belohlavek told OPR that her office took the allegations against Epstein “seriously, because . . . it was an organized scheme to involve young girls by offering them money. And I wouldn’t say that we . . . thought they were prostitutes . . . [but] I think there was solicitation.” However, she said, although Epstein’s “behavior was reprehensible, . . . I’m limited by . . . the state statutes as to what I can charge.” Krischer told OPR, “There were so many issues involving the victim-witnesses that to my mind, in consultation with my [prosecutors], the only way to achieve, to my mind, real justice was to present the case to the grand jury and not to direct-file” criminal charges against Epstein.

C. Florida State Procedure for Bringing Criminal Charges

Federal criminal procedure requires that a felony charge—that is, any charge punishable by imprisonment for one year or more—be brought by a grand jury unless waived by a defendant.¹² Under Florida law, however, a grand jury is required to bring criminal charges only in a death penalty case.¹³ For all other cases, a State Attorney has concurrent authority to file criminal charges by means of a document called an “information” or to seek a grand jury indictment. Although Florida criminal cases are routinely charged by information, state grand juries are often utilized in sensitive or high-profile cases, such as those involving allegations of wrongdoing by public officials.¹⁴ Florida grand jury proceedings are subject to strict secrecy rules that, among

^<sup>10 Belohlavek told OPR that prostitution was a misdemeanor charge, and she did not handle misdemeanors.

^<sup>11 Because the Florida Department of Law Enforcement investigation into the State Attorney’s Office’s handling of the Epstein case was pending at the time OPR interviewed Krischer, he declined to further explain to OPR his office’s prosecutive decisions.

^<sup>12 U.S. Const. amend. V; Fed. R. Crim. P. 7(a), (b). The sole exception under the rule is felony criminal contempt, which need not be charged by indictment. Fed. R. Crim. P. 7(a)(1).

^<sup>13 Fla. Const. Art. I, § 15(a).

^<sup>14 The Florida Bar, The Grand Jury, Reporters Handbook – The Grand Jury, available at https://www floridabar. org/news/resources/rpt-hbk/rpt-hbk-13/.

other things, prohibit anyone from being present while grand jurors deliberate and vote, and proscribe the release of the notes, records, and transcripts of a grand jury.15

D. PBPD Chief Reiter Becomes Concerned with the State Attorney’s Office’s Handling of the State Investigation and Seeks a Federal Investigation

In 2006, PBPD Chief Reiter perceived that Krischer’s attitude had changed and, according to Reiter’s statements in his 2009 deposition, Krischer said that he did not believe the victims were credible. Reiter was disturbed when Krischer suggested that the PBPD issue a notice for Epstein to appear in court on misdemeanor charges, leading Reiter to begin questioning Krischer’s objectivity and the State Attorney’s Office’s approach to the case. As Reiter explained in his deposition:

This was a case that I felt absolutely needed the attention of the State Attorney’s Office, that needed to be prosecuted in state court. It’s not generally something that’s prosecuted in a federal court. And I knew that it didn’t really matter what the facts were in this case, it was pretty clear to me that Mr. Krischer did not want to prosecute this case.

On May 1, 2006, Reiter submitted to Krischer probable cause affidavits and a case filing package relating to Epstein, one of his personal assistants, and a young local woman whom Epstein first victimized and then used to recruit other girls. In his transmittal letter, which was later made public, Reiter criticized Krischer, noting that he found the State Attorney’s Office’s “treatment of these cases [to be] highly unusual.“I6 Reiter urged Krischer “to examine the unusual course that your office’s handling of this matter has taken” and to consider disqualifying himself from prosecuting Epstein.17

III. THE FBI AND THE USAO INVESTIGATE EPSTEIN, AND THE DEFENSE TEAM ENGAGES WITH THE USAO

A. May 2006 — February 2007: The Federal Investigation Is Initiated, and the USAO Opens a Case File

In ea,006, a West Palm Beach FBI Special Agent who worked closely with AUSA Villafafia on child exploitation cases—and who is referred to in this Report as “the case agent”—mentioned to Villafafia in “casual conversations” having learned that the PBPD was investigating a wealthy Palm Beach man who recruited minors for sexual activity. The case agent told Villafafia that the PBPD had reached out to the FBI because the State Attorney’s Office was considering either not charging the case or allowing the defendant to plead to a misdemeanor

¹⁵Fla. Stat. § 905.27 (2007).

¹⁶See Lany MI, “Palm Beach chief focus of fire in Epstein case,” Palm Beach Post, Aug. 14, 2006.

¹⁷As noted, Krischer generally declined in his OPR interview to explain his office’s prosecutive decisions; however, regarding allegations of favoritism to Epstein’s defense counsel, Krischer told OPR, “I just don’t play that way.”

charge. Villafafia suggested meeting with the PBPD, but the case agent explained that before formally presenting the case to the FBI, the PBPD wanted to see how the State Attorney’s Office decided to charge Epstein.

1. The PBPD Presents the Matter to the FBI and the USAO

In May 2006, the lead Detective handling the state’s investigation met with Villafafia and the FBI case agent to summarize for them the information learned during the state’s investigation.’ At the time, neither Villafafia nor the case agent had heard of Epstein or had any knowledge of his background.

According to Villafafia, during this meeting, the Detective expressed concern that “pressure had been brought to bear on . . . Krischer by Epstein’s attorneys,” and he and Chief Reiter were concerned the state would charge Epstein with only a misdemeanor or not at all.19 The Detective explained that the defense had hired private investigators to trail Reiter and the Detective, had raised claims of various improprieties by the police, and, in the view of the PBPD, had orchestrated the removal of the Assistant State Attorney initially assigned to handle the matter, who was viewed as an aggressive prosecutor, by hiring a defense attorney whose relationship with the Assistant State Attorney created a conflict of interest for the prosecutor. Further, given the missing computer equipment and surveillance camera videotapes, the Detective believed Epstein may have been “tipped off’ in advance about the search warrant.

During the meeting, Villafafia reviewed the U.S. Code to see what federal charges could be brought against Epstein. She focused on 18 U.S.C. §§ 2422 (enticement of minors into prostitution or other illegal sexual activity and use of a facility of interstate or foreign commerce to persuade or induce a minor to engage in prostitution or other illegal sexual activity) and 2423 (travel for purposes of engaging in illegal sexual conduct). As they discussed these charges, the Detective told Villafafia that Epstein and his assistants had traveled out of the Palm Beach International Airport on Epstein’s private airplane, and flight logs sometimes referred to passengers as “female” without a name or age, which the Detective suspected might be references to underage girls. However, the Detective acknowledged that he was unable to confirm that suspicion and did not have firm evidence indicating that Epstein had transported any girls interstate or internationally. Nevertheless, Villafafia believed Epstein could be prosecuted federally, in part because of his own interstate and international travel to the Southern District of Florida to abuse girls. Villafafia discussed with the Detective and the case agent the additional investigation needed to prove violations of the federal statutes she had identified. She told them that if the evidence supported it, the case could be prosecuted federally, but she assured them that opening a federal investigation would not preclude the State Attorney’s Office from charging Epstein should it choose to do so.

¹⁸The Detective died in May 2018.

¹⁹In his 2009 deposition, Reiter testified that after he referred the Epstein matter to the FBI, a Town of Palm Beach official approached Reiter and criticized his referral of the investigation to the FBI, telling Reiter that the victims were not believable and “Palm Beach solves its own problems.”

2. May 2006: The USAO Accepts the Case and Opens a Case File

On May 23, 2006, Villafaña prepared the paperwork to open a USAO case file. Villafaña told OPR that several aspects of the case implicated federal interests and potentially merited a federal prosecution: (1) the victimization of minors through the use of facilities of interstate commerce (the telephone and airports); (2) the number of victims involved; (3) the possibility that Epstein had been producing or possessing child pornography (suggested by the removal of the computer equipment from his residence); and (4) the possibility that improper political pressure had affected the State Attorney Office’s handling of the case. The investigation was named “Operation Leap Year” because the state investigation had identified approximately 29 girls as victims of Epstein’s conduct.²⁰

Villafaña told OPR that from the outset of the federal investigation, she understood that the case would require a great deal of time and effort given the number of potential victims and Epstein’s financial resources. Nonetheless, Villafaña was willing to put in the effort and believed that the FBI was similarly committed to the case. Villafaña discussed the case with her immediate supervisor, who also “thought it would be a good case” and approved it to be opened within the USAO’s file management system, and on May 23, 2006, it was formally initiated.

3. July 14, 2006: Villafaña Informs Acosta and Sloman about the Case

Because Villafaña was not familiar with Epstein, she researched his background and learned that he “took a scorched earth approach” to litigation. Villafaña was aware that Epstein had hired multiple lawyers to interact with the State Attorney’s Office in an effort to derail the state case, and she believed he would likely do the same in connection with any federal investigation.

Therefore, Villafaña arranged to meet with U.S. Attorney Alexander Acosta and Jeffrey Sloman, who at the time was the Criminal Division Chief.²¹ Villafaña told OPR that she had never before asked to meet with “executive management” about initiating a case, but the allegations that Epstein had improperly influenced the State Attorney’s Office greatly troubled her. Villafaña explained to OPR that she wanted to ensure that her senior supervisors were “on board” with the Epstein investigation. In addition, she viewed Sloman as a friend, in whom she had particular confidence. At this point, although Villafaña’s immediate supervisor was aware of the case, Villafaña did not inform Andrew Lourie, who was then in charge of the West Palm Beach office and her second-line supervisor, about the matter or that she was briefing Acosta and Sloman.

Villafaña met with Acosta and Sloman in Miami on July 14, 2006. She told OPR that at the meeting, she informed them that the PBPD had identified a group of girls who had provided to

^<sup>20 Villafaña opened “Operation Leap Year” during the same month in which the Department launched its “Project Safe Childhood” initiative, and Acosta designated Villafaña to serve as the USAO’s Project Safe Childhood coordinator.

^<sup>21 Although Acosta had been formally nominated to the U.S. Attorney position on June 9, he was not confirmed by the Senate until August 3, 2006, and was not sworn in until October 2006. In September 2006, Acosta announced the appointments of Sloman as FAUSA and Matthew Menchel as Chief of the USAO’s Criminal Division, and they assumed their respective new offices in October 2006.

Epstein massages that were sexual in nature, and that Epstein had used “various types of pressure” to avoid prosecution by the state, including hiring attorneys who had personal connections to the State Attorney. Villafaña said that part of her goal in speaking to Acosta and Sloman at the outset of the federal investigation was to sensitize them to the tactics Epstein’s legal team would likely employ. Villafaña explained, “When you have a case that you know people are going to be getting calls about . . . you just want to make sure that they know about it so they don’t get . . . a call from out of the blue.” According to Villafaña, she told Acosta and Sloman that the FBI was willing to put the necessary resources into the case, and she was willing to put in the time, but she “didn’t want to get to the end and have [the] same situation occur” with a federal prosecution as had occurred with the state. She told OPR, “I remember specifically saying to them that I expected the case would be time and resource-intensive and I did not want to invest the time and the FBI’s resources if the Office would just back down to pressure at the end.” According to Villafaña, Acosta and Sloman promised that “if the evidence is there, we will prosecute the case.” In a later email to Lourie and her immediate supervisor, Villafaña recounted that she spoke with Acosta and Sloman because she “knew that what has happened to the state prosecution can happen to a federal prosecution if the U.S. Attorney isn’t on board,” but Acosta and Sloman had given her “the light” to go forward with the Epstein investigation.

Both Acosta and Sloman told OPR that they did not recall the July 2006 meeting with Villafaña. Each told OPR that at the time the federal investigation was initiated, he had not previously heard of Epstein.²²

Acosta told OPR that he understood from the outset that the case involved a wealthy man who was “doing sordid things” with girls, and that it “seemed a reasonable matter to pursue” federally. Epstein’s wealth and status did not raise any concern for him, because, as Acosta told OPR, the USAO had prosecuted “lots of influential folks.” When asked by OPR to articulate the federal interest he perceived at the time to be implicated by the case, Acosta responded, “the exploitation of girls or minor females.” Regarding Villafaña’s view that she had been given a “Interest he proceed with the investigation, Acosta told OPR that he would not likely have explicitly told Villafaña to “go spend your time” on the case; rather, his practice would have been simply to acknowledge the information she shared about the case and confirm that a federal investigation “sound[ed] reasonable.”

Sloman told OPR that he could not recall what he initially knew about the Epstein investigation, other than that he had a basic understanding that the State Attorney’s Office had “abdicated their responsibility” to investigate and prosecute Epstein. In his OPR interview, Sloman did not recall with specificity Villafaña’s concern about Epstein’s team pressuring the State Attorney’s Office, but he said he was never concerned that political pressure would affect the USAO, noting that as of July 2006, the USAO had recently prosecuted wealthy and politically connected lobbyist Jack Abramoff.

^<sup>22 Lourie told OPR that when he first heard about the Leap Year investigation, he likewise was unaware of Epstein. On July 24, 2006, Villafaña emailed to Sloman a link to a Palm Beach Post article that described Epstein as a “Manhattan money manager” and “part-time Palm Beacher who has socialized with Donald Trump, Bill Clinton and Kevin Spacey.” Sloman forwarded the article to Acosta.

4. Late July 2006: The State Indicts Epstein, and the USAO Moves Forward with a Federal Investigation

Several days after Villafaña spoke with Acosta and Sloman, on July 19, 2006, Assistant State Attorney Belohlavek presented the case to the state grand jury.²³ Krischer told OPR that “the whole thing” was put before the grand jury. According to a statement made at the time by the State Attorney’s Office spokesman, the grand jury was presented with a list of charges from highest to lowest, without a recommendation by the prosecutor, and deliberated with the prosecutor out of the room.²⁴ The state grand jury returned an indictment charging Epstein with one count of felony solicitation of prostitution, in violation of Florida Statute § 796.07, a felony under state law because it alleged three or more instances of solicitation.²⁵ The indictment did not identify the person or persons solicited and made no mention of the fact that Epstein had solicited minors.²⁶ On July 23, 2006, Epstein self-surrendered to be arrested on the indictment, but was not detained, and the charges were made public.

Villafaña told OPR that she decided to move forward with the federal investigation at that point because she believed the State Attorney’s Office would permit Epstein to enter a plea to a reduced misdemeanor charge and that once he entered a guilty plea, the Department’s Petite policy might preclude a federal prosecution.²⁷ Villafaña told OPR that at the time, she “definitely believed that we were going to proceed to [a federal] indictment, assuming that … we had sufficient evidence.”

^<sup>23 Villafaña and the FBI obtained and examined records of the state grand jury proceeding, and Lourie reviewed them. Because the grand jury records have not been ordered released publicly, OPR does not discuss their substance in this Report.

^<sup>24 Larry 1, “Police say lawyer tried to discredit teenage girls,” Palm Beach Post, July 29, 2006, citing statement by State Attorney’s Office spokesman Michael Edmondson.

^<sup>25 Indictment in State v. Epstein, 2006CF9454AXX (July 19, 2006), attached as Exhibit 1 to this Report.

^<sup>26 In pertinent part, the state indictment read, “[B]etween the 1st day of August [2004] and October 31, 2005, [Epstein] did solicit, induce, entice, or procure another to commit prostitution lewdness, or assignation, . . . on three or more occasions.” The 15-month time frame and lack of detail regarding the place or manner of the offense made it impossible to identify from the charging document which victim or victims served as the basis for the charge in the state indictment. Belohlavek explained to OPR that the charge did not list specific victims so that she could go forward at trial with whichever victim or victims might be available and willing to testify at that time.

^<sup>27 The Petite policy is a set of guidelines used by federal prosecutors when considering whether to pursue federal charges for defendants previously prosecuted for state or local offenses. The Constitution does not prohibit the federal government from prosecuting defendants who have been charged, acquitted, or convicted on state charges based on the same criminal conduct. The Supreme Court has repeatedly upheld the long-standing principle that the prohibition against double jeopardy does not apply to prosecutions brought by different sovereigns. See, e.g., Gamble v. United States, 587 U.S. ____, 139 S. Ct. 1960, 1966-67 (2019) (and cases cited therein); Abbate v. United States, 359 U.S. 187, 195 (1959) (and cases cited therein); and United States v. Lanza, 260 U.S. 377, 382 (1922). Nonetheless, to better promote the efficient use of criminal justice resources, the Department developed policies in 1959 and 1960 to guide federal prosecutors in the use of their charging discretion. See Chapter Two, Part Two, Section II.A.2, for a more detailed discussion of the Petite policy.

On July 24, 2006, Villafafia alerted Sloman, who informed Acosta, that the State Attorney’s Office had charged and arrested Epstein.28 On that same day, the FBI in West Palm Beach formally opened the case, assigning the case agent and, later, a co-case agent, to investigate it. Villafafia told Sloman that the FBI agents “are getting copies of all of the evidence and we are going to review everything at [the] FBI on Wednesday,” and she noted that her target date for filing federal charges against Epstein was August 25, 2006. Acosta emailed Sloman, asking whether it was “appropriate to approach [State Attorney Krischer] and give him a heads up re where we might go?” Sloman replied, “No for fear that it will be leaked straight to Epstein.“29

Although Laurie learned of the case at this point from Sloman, and eventually took a more active role in supervising the investigation, Villafafia continued to update Acosta and Sloman directly on the progress of the case.30 Villafatia’s immediate supervisor in West Palm Beach had little involvement in supervising the Epstein investigation, and at times, Villafafia directed her emails to Sloman, Menchel, and Lourie without copying her immediate supervisor. In the immediate supervisor’s view, however, “Miami” purposefully assumed all the “authority” for the case, which the immediate supervisor regarded as “highly unusual.“3I

By late August 2006, Villafaha and the FBI had identified several additional victims and obtained “some flight manifests, telephone messages, and cell phone records that show the communication and travel in interstate commerce” by Epstein and his associates. Villafalla reported to her supervisors that the State Attorney’s Office would not provide transcripts from the state grand jury voluntarily, and that she would be meeting with Chief Reiter “to convince him to relinquish the evidence to the FBI.” Villafafia also told her supervisors that she expected “a number of fights” over her document demands, and that some parties were refusing to comply “after having contact with Epstein or his attorneys.”

Villafafia’s reference to anticipated “fights” and lack of compliance led Sloman to ask whether she was referring to the victims. Villafafia responded that the problems did not involve victims, but rather a former employee of Epstein and some business entities that had objected to document demands as overly burdensome. Villafafia explained to Sloman and Laurie that some victims were “scared and/or embarrassed,” and some had been intimidated by the defense, but “everyone [with] whom the agents have spoken so far has been willing to tell her story.” Villafafia

²⁸On the same day, Sloman emailed Laurie, whom Villafafta had not yet briefed about the case, noting that Operation Leap Year was “a highly sensitive case involving some Palm Beach rich guy.”

²⁹During his OPR interview, Sloman did not recall what he meant by this remark, but speculated that it was likely that “we didn’t trust the Palm Beach State Attorney’s Office,” and that he believed there may have been “some type of relationship between somebody in the [State Attorney’s Office] and the defense team.”

³⁰ After Villafafta sent a lengthy substantive email about the case to her immediate supervisor, Laurie, Sloman, and Acosta on August 23, 2006, Laurie emailed Sloman: “Do you and Alex [Acosta] want her updating you on the case?” Sloman responded, “At this point, I don’t really care. If Alex says something then I’ll tell her to just run it through you guys.”

³¹OPR understood “Miami” to be a reference to the senior managers who were located in the Miami office, that is, Acosta, Sloman, and Menchel. Records show, and Villafaiia told OPR, that she believed Epstein’s attorneys “made a conscious decision to skip” her immediate supervisor and directed their communications to the supervisory chain above the immediate supervisor—Lourie, Menchel, Sloman, and Acosta.

also informed Sloman and Lourie that the FBI was re-interviewing victims who had given taped statements to the PBPD, to ensure their stories “have not changed,” and that “[a]ny discrepancies will be noted and considered.” She conceded that “[g]etting them to tell their stories in front of a jury at trial may be much harder,” but expressed confidence that the two key victims “will stay the course.” She acknowledged that the case “needs to be rock solid.”

The case agent told OPR that in this initial stage of the investigation, the FBI “partnered up very well” with the USAO. She recalled that there was little higher-level management oversight either from the FBI or the USAO, and “we were allowed to do what we needed to do to get our job done.” This included continuing to identify, locate, and interview victims and Epstein employees, and obtaining records relating to Epstein’s travel, communications, and financial transactions. The case agent viewed the case as “strong.”

5. October 2006 – February 2007: Epstein’s Defense Counsel Initiate Contact with Villafaña, Lourie, and Sloman, and Press for a Meeting

Just as Epstein had learned of the PBPD investigation at its early stage, he quickly became aware of the federal investigation, both because the FBI was interviewing his employees and because the government was seeking records from his businesses. One of Epstein’s New York attorneys, Gerald Lefcourt, made initial contact with Villafaña in August 2006. As the investigation progressed, Epstein took steps to persuade the USAO to decline federal prosecution.³² As with the state investigation, Epstein employed attorneys who had experience with the Department and relationships with individual USAO personnel.³³ One of Epstein’s Miami lawyers, Guy a former career AUSA and U.S. Attorney for the Southern District of Florida, made an overture on Epstein’s behalf in early November 2006.³⁴ telephoned Villafaña, a call that Sloman joined at Villafaña’s request.

^<sup>32 Villafaña told OPR that Epstein’s lawyers wanted to stop the investigation “prematurely.”

^<sup>33 Chapter One, Section III.B of this Report identifies several of the attorneys known to have represented Epstein in connection with the federal investigation, along with a brief summary of their connections to the Department, the USAO, or individuals involved in the investigation. At least one former AUSA also represented during civil depositions individuals associated with Epstein. Menchel told OPR that he and his colleagues recognized Epstein was selecting attorneys based on their perceived influence within the USAO, and they viewed this tactic as “ham-fisted” and “clumsy.” Menchel told OPR, “[O]ur perspective was this is not going to . . . change anything.”

^<sup>34 served in the USAO for over 10 years, and was U.S. Attorney from 2000 to 2002. He then served for two years as Director of the Executive Office for U.S. Attorneys, the Department’s administrative office serving the U.S. Attorneys.

Early in the investigation, Lourie voluntarily notified the USAO’s Professional Responsibility Officer that Lourie was friends with and also had a close friendship with and law partner, who also was a former AUSA and also represented Epstein. Lourie requested guidance as to whether his relationships with and and law partner created either a conflict of interest or an appearance of impropriety mandating recusal. The Professional Responsibility Officer responded that Lourie’s relationships with the two men were not “covered” relationships under the conflict of interest guidelines but deferred to Sloman or Menchel “to make the call.” Thereafter, Sloman authorized Lourie to continue supervising the case. During his OPR interview, Lourie asserted that his personal connection to did not influence his handling of the case.

“anything’ she wanted” without the necessity of legal process. asked to meet with Villafaña and Sloman to discuss the Epstein investigation, but Villafaña declined.

Shortly thereafter, Lilly Ann, a former AUSA, contacted Sloman and advised him that she also represented Epstein. was employed by the USAO from 2000 to September 2005 and had been a Deputy Chief of the USAO’s Major Crimes section at the time Menchel was the Chief. According to Sloman’s contemporaneous email recounting the conversation, when indicated to him that his participation in call with Villafaña led the defense team to believe that the matter had been “elevated” within the USAO, Sloman tried to “disabuse” her of said that Epstein “wanted to be as transparent and cooperative as possible” that notion. in working with the USAO. Despite the fact that had already made contact with the USAO on Epstein’s behalf, sent a letter to Villafaña on November 15, 2006, in which she asserted that she and Gerald Lefcourt were representing Epstein and asked that the USAO direct all contact or communications about Epstein to them. In response, Villafaña requested that the defense provide documents and information pertinent to the federal investigation, including the documents and information that Epstein had previously provided to the State Attorney’s Office, and “computers, hard drives, CPUs [computer processing units], and any other computer media” removed from Epstein’s home before the PBPD executed its search warrant in October 2005. In January 2007, contacted Villafaña to schedule a meeting, but Villafaña responded that she wanted to receive and review the documents before scheduling a meeting with

Immediately after receiving Villafaña’s response, bypassed Villafaña and phoned Lourie, with whom she had worked when she was an AUSA, to press for a meeting. Lourie agreed and Lefcourt. Lourie explained to Villafaña that to meet with was concerned that federal charges were “imminent,” wanted to meet with the USAO and “make a pitch,” and promised that once given the opportunity to do so, if the USAO “wanted to interview Epstein, that would be a possibility.” Villafaña told Lourie that had not yet provided the documents she had promised, and Villafaña wanted “the documents not the pitch.” Lourie explained to OPR, however, that it was his practice to grant meetings to defense counsel; he considered it “good for us” to learn the defense theories of a case and believed that “information is power.” Lourie further explained that learning what information the defense viewed as important could help the USAO form its strategy and determine which counts relating to which victims should be charged. Lourie also believed that as a general matter, prosecutors should grant defense requests to make a presentation, because “[p]art of [the] process is for them to believe they are heard.” In addition to agreeing to a meeting, Lourie sent a narrowed document request, which responded to complaint that the USAO’s earlier request was overbroad but which retained the demand for the computer-related items removed from Epstein’s home. The meeting was scheduled for February 1, 2007, and Lourie asked to provide the documents and materials to the USAO by January 25, 2007.

Villafaña did not agree with Lourie’s decision to meet with and Lefcourt. Indeed, two days after Lourie agreed to the meeting, Villafaña alerted him that she had spoken again with and learned that Epstein was not going to provide the requested documents. As Villafaña told Lourie, “I just get to listen to the pitch and hear about how the girls are liars and drug users.” She told OPR that in her view, “it was way too early to have a meeting,” she already knew what the defense would say, and she could not see how a meeting would benefit the federal investigation. She explained to Lourie the basis for her objections to the meeting, but Lourie “vehemently” disagreed with her position. Villafafia and a West Palm Beach AUSA with whom she was consulting about the investigation, and who served for a time as her co-counsel, both recalled meeting with Lourie in his office to express their concerns about meeting with defense counsel. They perceived Lourie to be dismissive of their views.35 According to Villafafia, Lourie believed that a meeting with the defense attorneys would be the USAO’s chance to learn the defense’s legal theories and would position the USAO to arrange a debriefing of Epstein, through which the USAO might learn information helpful to a prosecution. Villafafia told OPR, however, that while this strategy might make sense in a M -collar crime case, she did not believe it was appropriate or worthwhile in a child exploitation case, in which the perpetrator would be unlikely to confess to the conduct. Villafafia also told OPR that she did not believe the USAO could extract information about the defense legal theories without telling the defense the precise crimes the USAO intended to charge, which Villafafia did not want to reveal.

6. February 2007: Defense Counsel Meet with Lourie and Villafafia and Present the Defense Objections to a Federal Case

At the February I, 2007 meeting with Lourie and Villafafia, and Lefcourt set out arguments that would be repeated throughout the months-long defense campaign to stop the federal investigation. In support of their arguments, the defense attorneys provided a 25-page letter, along with documents the defense had obtained from the state’s investigative file and potential impeachment material the defense had developed relating to the victims.

In the letter and at the meeting, defense counsel argued that (1) the allegations did not provide a basis for the exercise of federal jurisdiction; (2) the evidence did not establish that Epstein knew girls who provided him with massages were minors; (3) no evidence existed proving that any girl traveled interstate to engage in sex with Epstein; (4) the USAO would violate the Petite policy by initiating federal prosecution of a matter that had already been addressed by the state; and (5) there were “forensic barriers” to prosecution, referring to witness credibility issues. The letter suggested that “misleading and inaccurate reports” from the PBPD “may well have affected” the USAO’s view of the case. The letter also claimed that the State Attorney’s Office had taken into account the “damaging histories of lies, illegal drug use, and crime” of the state’s two principal victims (identified by name in the letter), and argued that “with witnesses of their ilk,” the state might have been unable “to make any case against Epstein at all.” Lourie told OPR that he did not recall the meeting, but Villafaila told OPR that neither she nor Lourie was persuaded by the defense presentation at this “listening session.”

B. February — May 2007: Villafafia and the FBI Continue to Investigate; Villafafia Drafts a Prosecution Memorandum and Proposed Indictment for USAO Managers to Review

Correspondence between Villafafia and defense counsel show that Villafaila carefully considered the defense arguments concerning the victims’ credibility, and she reviewed audiotapes

³⁵Villafana told OPR that in a “heated conversation” on the subject, Lourie told them they were not being “strategic thinkers.” Her fellow AUSA remembered Lourie’s “strategic thinker” comment as well, but recalled it as having occurred later in connection with another proposed action in the Epstein case. Lourie did not recall making the statement but acknowledged that he could have.

of the state’s victim interviews and partial transcripts provided by defense counsel.36 Villafafia also pursued other investigative steps, which included working with the FBI to locate an expert witness to testify about the effect of sexual abuse on victims. She also continued collecting records relating to Epstein’s business entities, in part to help establish the interstate nexus of Epstein’s activity. On several occasions, Villafafia sought guidance from CEOS, which had considerable national expertise in child exploitation cases, about legal issues relating to the case, such as whether charges she was considering required proof that the defendant knew a minor victim’s age.

USAO procedures generally required that a proposed indictment be accompanied by a prosecution memorandum from the AUSA handling the case. The prosecution memorandum was expected to explain the factual and legal bases for the proposed charges and address any significant procedural, factual, and legal issues of which the AUSA was aware; witness-related issues; expected defenses; and sentencing issues. Routine prosecutions could be approved by lower-level supervisors, but in high-profile or complex cases, proposed indictments might require review and approval by the Criminal Division Chief, the FAUSA, or even the U.S. Attorney.

Accordingly, Villafafia drafted an 82-page prosecution memorandum directed to Acosta, Sloman, Menchel (who had replaced Sloman as the USAO’s Criminal Division Chief the previous October, when Sloman became the FAUSA), Lourie, and her immediate supervisor, dated May 1, 2007, supporting a proposed 60-count indictment that charged Epstein with various federal crimes relating to sexual conduct with and trafficking of minors. The prosecution memorandum set forth legal issues and potential defenses relating to each proposed charge; explained why certain other statutes were rejected as proposed charges; described the evidence supporting each count and potential evidentiary issues; and addressed the viability and credibility of each of the victims who were expected to testify at trial.

Villafafia’s immediate supervisor told OPR that she read the prosecution memorandum, had only a few small edits to the indictment, and advised Lourie that she approved of it. The immediate supervisor told OPR that she viewed the case as prosecutable, but recognized that the case was complex and that Villafafia would need co-counsel.

In his OPR interview, Lourie recalled thinking that the prosecution memorandum and proposed indictment “were very thorough and contained a lot of hard work,” but that he wanted to employ a different strategy for charging the case, focusing initially only on the victims that presented “the toughest cases” for Epstein—meaning those about whom Epstein had not already raised credibility issues to use in cross-examination. Lourie told OPR that although he had some concerns about the case—particularly the government’s ability to prevail on certain legal issues and the credibility challenges some of the victims would face—he did not see those concerns as insurmountable and was generally in favor of going forward with the prosecution.

Although indictments coming out of the West Palm Beach office usually did not require approval in Miami, in this case, Lourie understood that “[b]ecause there was front office involvement from the get-go,” he would not be the one making the final decision whether to go

³⁶Lefcourt and provided the recordings during a follow-up meeting with Lourie and Villafafta on February 20, 2007, and thereafter furnished the transcripts.

forward with charges in this case. Lourie forwarded a copy of the prosecution memorandum to Menchel. Lourie’s transmittal message read:

did a 50 [sic] page pros memo in the Epstein case. I am going to start reading it tonight. . . . It’s a major case because the target is one of the richest men in the country and it has been big news. He has a stable of attorneys, including Dershowitz, [Roy] Black, Lefcourt, 1, and Lily [sic] 1. Jeff Sloman is familiar with the investigation. The state intentionally torpedoed it in the grand jury so it was brought to us. I am going to forward the pros memo to you so you can start reading it at the same time I do. The FBI is pushing to do it in Mid [sic] May, which I think is not critical, but we might as well get a jump on it. I have some ideas about the indictment (needs to be ultra lean with only clean victims), so I am not sending that yet.

Lourie explained to OPR that by “clean” victims, he meant those for whom the defense did not have impeachment evidence to use against them.

A few days later, Lourie emailed Menchel, asking if Menchel had read the prosecution memorandum. Lourie directed Menchel’s attention to particular pages of the prosecution memorandum, noting that the “keys” were whether the USAO could prove that Epstein traveled for the purpose of engaging in sexual acts, and the fact that some minor victims told Epstein they were 18.³⁷ Lourie asked for Menchel’s “very general opinion as to whether this is a case you think the office should do,” and reminded Menchel that the State Attorney’s Office “went out of their way to get a no-bill on this . . . and thus only charged adult solicitation, which they would bargain away to nothing.”

During his OPR interview, Menchel said that Lourie’s email transmitting the prosecution memorandum was his “official introduction” to the case and at that point in time, he had never heard of Epstein and had no information about his background. He recalled that the USAO had been asked to review the case because the state had not handled it appropriately. Menchel told OPR, however, that he had little memory about the facts of the case or what contemporaneous opinions he formed about it.

Acosta told OPR that he could not recall whether he ever read Villafaña’s prosecution memorandum, explaining that he “would typically rely on senior staff,” who had more prosecutorial experience, and that instead of reading the memorandum, he may have discussed the case with Sloman, Menchel, and Lourie, who he assumed would have read the document. Acosta

^<sup>37 In various submissions to the USAO, the defense contended that the federal statute required proof that engaging in a sexual act was the “paramount or dominant purpose” of Epstein’s travel, but that Epstein’s travel was motivated by his desire to live outside of New York for over half of each year for tax purposes. The defense also asserted that the federal statutes at issue required proof that the defendant knew the victims were under 18, but that Epstein “took affirmative steps to ensure that every woman was at least 18 years of age.” In her prosecution memorandum, however, Villafaña set forth her conclusion that the statute only required proof that engaging in a sexual act was one of the motivating factors for the travel. She also concluded that the statutes did not require proof that the defendant knew the victims were minors.

recalled generally having conversations with Sloman and Menchel about the Epstein case, but he could not recall with specificity when those conversations took place or the details of the discussions.

Sloman told OPR that because of his broad responsibilities as FAUSA, he left it to Menchel, as a highly experienced trial attorney and the Criminal Division Chief, to work directly with Acosta, and Sloman recalled that it was Menchel and Lourie who conducted a “granular review” of the charging package. Acosta confirmed to OPR that Sloman and Menchel “were a team” who became involved in issues as needed, and if Sloman perceived that Menchel was taking the lead on the Epstein matter, Sloman may have deferred to Menchel.

C. May – June 2007: Miami Managers Consider the Prosecution Memorandum and Proposed Charges

When she submitted the prosecution memorandum, Villafaña intended to file charges by May 15, 2007, and the FBI planned to arrest Epstein immediately thereafter. Villafaña, however, had not obtained authorization to indict on that schedule. The managers in Miami wanted time to analyze the lengthy prosecution memorandum and consider the potential charges and charging strategy. Just a few days after he received the prosecution memorandum, and after learning that the FBI was planning a press conference for May 15, Sloman advised Villafaña that “[t]his Office has not approved the indictment. Therefore, please do not commit us to anything at this time.”³⁸

On May 10, 2007, with Menchel’s concurrence, Lourie sent a copy of Villafaña’s prosecution memorandum to CEOS Chief Andrew Oosterbaan, who in turn sent it to his deputy and another CEOS attorney, asking them to assess the legal issues involved in the case and describing it as a “highly sensitive” case involving “a high profile, very rich defendant.”³⁹ After CEOS reviewed the materials, Oosterbaan responded to Lourie with an email stating that the memorandum was “exhaustive” and “well done” and noting that Villafaña “has correctly focused on the issues as we see them.” He summarized CEOS’s analysis of the application of key facts to the statutes she proposed charging, concurring in Villafaña’s assessments but noting that further research was needed to determine whether certain statutes required proof of a defendant’s knowledge of victims’ ages. Oosterbaan offered to assign a CEOS attorney to work with Villafaña on the case. Lourie forwarded Oosterbaan’s email to Menchel and Villafaña.

Meanwhile, contemporaneous emails show that Lourie, at least, was already considering an early resolution of the case through a pre-indictment plea agreement.⁴⁰ After Lourie spoke with

^<sup>38 Lourie later reported to Menchel that the FBI had “wanted to arrest [Epstein] in [the] Virgin Islands during a beauty pageant . . . where he is a judge.” The case agent recalled that she and her co-case agent were disappointed with the decision, and that the Supervisory Special Agent was “extremely upset” about it. After the federal investigation began, and except for his self-surrender to face the state indictment in July 2006, Epstein largely stayed away from West Palm Beach, only returning occasionally.

^<sup>39 Before becoming Chief of CEOS, Oosterbaan was an AUSA at the USAO for about ten years and was good friends with Lourie.

^<sup>40 In her prosecution memorandum, Villafaña argued against pre-charge plea negotiations, arguing that it “may undermine our arguments for pretrial detention.” Menchel, however, told OPR that he did not consider strengthening a bail argument to be a valid ground to decline to meet with defense counsel about a case.

the FBI squad supervisor on May 9, 2007, to explain that charges against Epstein would not be quickly approved, he reported to Menchel that the FBI was “not happy” about the delay, adding, “I did not even tell them I think we should bring [Epstein] in, once we decide to charge him, and offer a pre-indictment deal, figuring a judge might never agree to such a deal post indictment. That would have sent them thru the roof.” Lourie explained to OPR that he thought a judge, after seeing an indictment charging the full nature and scope of Epstein’s conduct, might not agree to a plea involving substantially less time or to dismiss substantive charges.⁴¹

Lourie told OPR that despite Oosterbaan’s favorable opinion of the case, “[t]his was . . . a bit of uncharted territory,” involving facts that were unlike the case law Oosterbaan had cited. Although Lourie had some concerns about the legal issues and about the witnesses, he “probably” did not see any impediment to going forward with the case; in fact, Lourie “was not in favor of walking away, which is what the defense wanted [the USAO] to do.” But while Lourie “thought we could have won and we could have prevailed through appeal,” he “didn’t think the odds were nearly as good as you want in a criminal case, and . . . the things that we had to gain [through a plea agreement] were much more than [in] a normal criminal case,” in which the only cost of a loss would be that the defendant did not go to jail. Lourie told OPR that to the best of his recollection, he thought a plea agreement would be a good result, and although the government might have to “give up some jail time,” there were other benefits to a plea, such as the ability to require Epstein to register as a sex offender and the availability of monetary damages for the victims. Lourie recalled “thinking that this case should settle and we should set it up so we can settle it” by, for example, charging Epstein by complaint and then negotiating a plea to limited charges in a criminal information. Villafaña told OPR that she agreed with Lourie that a criminal complaint charging an “omnibus conspiracy” containing “all of the information related to what the case was about” would be a good way to “get things moving” toward a pre-indictment plea.

Although Lourie and Villafaña believed a pre-indictment plea agreement was a desired resolution, there was no guarantee that Epstein would agree to plead guilty, and they continued to work together to shape an indictment. On May 10, 2007, Lourie emailed Villafaña:

[M]arie

I believe that Epstein’s att[orneys] are scared of the victims they don’t know. Epstein has no doubt told them that there were many. Thus I believe the f[ir]st indictment should contain only the victims they have nothing on at all. We can add in the other ones that have myspace [sic] pages and prior testimony in a [superseding indictment]. I think for the first strike we should make all their nightmare[]s come true. Thoughts?⁴²

^<sup>41 Lourie explained to OPR that the government’s dismissal of counts in an indictment required the court’s approval, and that, while “it’s rare,” it was possible that a judge, seeing the nature and extent of Epstein’s conduct as set forth in an extensive indictment, might not allow substantive counts to be dismissed.

^<sup>42 Lourie’s references to MySpace pages and “prior testimony” referred to the impeachment information brought forward by defense counsel.

Lourie followed up his email to Villafaña with one to Menchel, in which Lourie reiterated the potential benefits of a pre-indictment plea, explaining that he and Villafaña believed “the best thing to do is charge Epstein by complaint, assuming we decide to charge him. . . . The [sentencing] guidelines will be in the 20 year range, so we would need to plead him to one or two conspiracies to cap him and there is no telling if a judge would go for that once we indict.”⁴³ Menchel responded that he and Acosta would read the prosecution memorandum and “[w]e can discuss after that.”

Later that afternoon, Villafaña sent Lourie an email, which Lourie forwarded to Menchel, explaining that a “conservative calculation” of Epstein’s potential sentencing exposure under the U.S. Sentencing Guidelines would be 168 to 210 months, and that in her view, the facts warranted an upward departure from that range. Villafaña told OPR that although Lourie proposed some changes to the draft indictment, at that point no one had told her that the evidence was insufficient to support the proposed charges or that the office did not want to go forward with the case.

In an email to Acosta and Menchel on May 11, 2007, Lourie recommended charging Epstein by complaint and seeking a pre-indictment plea:

My current thoughts are that we should charge him. Not sure that I agree with the charging strategy as it is now, but at this point I think we only need to get on the same page as to whether the statutes cover the conduct and whether the conduct is the type we should charge. I think the answer to both is yes, although there is some risk on some of the statutes as this is uncharted territory to some degree. We can decide later what the [charging document] should look like precisely and which victims should be charged.

I also think if we choose to go forward, we should start with a complaint, arrest him, detain him . . . and then try to see if he wants a pre-indictment resolution. That would give us more control [over] a plea than if we indict him and need the court’s approval to dismiss counts. We will need to cap him with conspiracy counts to make a plea attractive and the court could give us a hard time with that if we try to dismiss indicted counts.

Although her supervisors were communicating among themselves about the case, Villafaña was unaware of those discussions and was frustrated that she was not receiving more feedback. She continued preparing to charge Epstein. Two weeks after submitting the prosecution memorandum, on May 14, 2007, Villafaña informed Lourie and Menchel by email that Epstein was flying to New Jersey from the Virgin Islands, and she asked whether she could file charges the next day. Menchel responded that “[y]ou will not have approval to go forward tomorrow,” and explained that Acosta “has your [prosecution] memo,” but was at an out-of-town conference, adding, “This is obviously a very significant case and [A]lex wants to take his time making sure

^<sup>43 Lourie told OPR that he was referring to one or two counts of conspiracy under 18 U.S.C. § 371, the general “omnibus” federal conspiracy statute that carries a maximum sentence of five years.

he is comfortable before proceeding.” Menchel told Villafaña he had “trouble understanding” why she was in a “rush” “given how long this case has been pending.”⁴⁴

OPR questioned Lourie, Menchel, Sloman, and Acosta about the timeline for reviewing the prosecution memorandum and the proposed charges. Acosta and Menchel believed Villafaña’s timeline was unrealistic from the start. Acosta told OPR that Villafaña was “very hard charging,” but her timeline for filing charges in the case was “really, really fast.” Menchel described Villafaña as “out over her skis a little bit” and “ahead of” Acosta in terms of his analysis of the case.⁴⁵ Menchel said it was clear to him that Acosta “was going to be the one making the call” about whether to go forward with charges, and Acosta needed more time to make a decision. Menchel told OPR, “This [was] not a case [we were] going to review in two weeks and make a decision on.” Sloman told OPR that although he did not conduct a “granular review” of the proposed charges, he believed Menchel and Lourie had done so and “obviously” had concluded that “the facts and the law didn’t suggest that the right thing to do was to automatically indict.” Lourie told OPR that he believed “the case was moving ahead.”

Villafaña continued to seek direction from her managers. On May 15, 2007, she emailed Sloman, noting that “[i]t seemed from our discussion yesterday that pestering Alex [Acosta] will not do any good. Am I right about that?” Sloman responded, “Yes.” On May 21, 2007, three weeks after submitting the prosecution memorandum, Villafaña emailed Sloman and Menchel asking for “a sense of the direction where we are headed—i.e., approval of an indictment something like the current draft, a complaint to allow for pre-indictment negotiations, an indictment drastically different from the current draft?” Sloman responded only, “Taken care of.”⁴⁶

D. Defense Counsel Seek a Meeting with Senior USAO Managers, which Villafaña Opposes

Meanwhile, Epstein’s defense counsel continued to seek additional information about the federal investigation and a meeting with senior USAO managers, including Acosta. In a May 10, 2007 email to Menchel, Lourie reported that Epstein’s attorneys “want me to tell them the statutes

^<sup>44 Villafaña explained to OPR that the “rush” related to her concern that Epstein was continuing to abuse girls: “In terms of the issue of why the hurry, because child sex offenders don’t stop until they’re behind bars. That was our time concern.” Menchel, however, told OPR that he did not recall Villafaña offering this explanation to him. OPR notes that in their respective statements to OPR and in their comments on OPR’s draft report, Menchel and Villafaña expressed contradictory accounts or interpretations of certain events. When it was necessary for OPR to resolve those conflicts in order to reach its findings and conclusions, OPR considered the extensive documentary record and the testimony of other subjects and witnesses, to the extent available.

^<sup>45 Sloman similarly recalled that Menchel thought Villafaña was “ahead of where the office was internally” and that caused “discontent” between Villafaña and Menchel. Villafaña was not the only one, however, who was surprised that the indictment was not approved immediately. The case agent told OPR that it seemed “everything changed” after Villafaña submitted the prosecution memorandum, and the momentum towards an indictment abated. Villafaña’s immediate supervisor told OPR that from her perspective, it appeared “Miami didn’t want the case prosecuted.” However, Menchel rebuked Villafaña in his July 5, 2007 email to her for having “led the agents to believe that [filing charges in] this matter was a foregone conclusion.”

^<sup>46 Sloman could not recall during his OPR interview what he meant by this remark, but he speculated that he had spoken to Menchel, and Menchel was going to take care of it.

we are contemplating so Dershowitz can tell us why they don’t apply.s47 Lourie told Menchel, “I don’t see the downside,” but added, ’= is against it.” Menchel responded that it was “premature” to provide the information. During his OPR interview, Menchel could not specifically recall why he believed it was “premature” to provide the defense with the requested information, but speculated that it was too soon after the prosecution memorandum had been circulated for Acosta to have made a decision about how he wanted to proceed. This recollection is consistent with the May 2007 emails reflecting that Acosta wanted time to consider the proposed prosecution.

On May 22, 2007, defense counsel Lefcourt emailed Lourie a letter to “confirm” that Epstein’s attorneys would be given an opportunity to meet with Lourie before the USAO reached a final decision on charging Epstein. Lourie forwarded the letter to Menchel and Sloman, but noted that Epstein’s defense team was “really ready for the next level,” rather than another meeting with him. Lourie suggested that Menchel meet with defense counsel, adding, “Whether Alex would be present or grant them another meeting after that is his call.” Lourie also emailed Lefcourt, clarifying that Lourie had not promised to call Epstein’s counsel before filing charges, and suggesting that Epstein’s counsel make their next presentation to Menchel.

Although Lourie’s emails show that he had no objection to more senior USAO managers meeting with defense counsel, Villafafia opposed such a meeting. Several emails indicate that Menchel traveled to West Palm Beach to meet with Lourie and Villafaiia on the afternoon of May 23, 2007.48 On that same date, Villafafia drafted an email, which she planned to send to Sloman and Menchel, expressing her disagreement with meeting with defense counsel. Although the email was written for Sloman and Menchel, Villafafia sent it as a draft only to her immediate supervisor, seeking her “guidance and counsel” as to how to proceed.

Hi Jeff and Matt — I just want to again voice my disagreement with promising to have a meeting or having a meeting with Lefcourt or any other of Epstein’s attorneys. As I mentioned, this is not a case where we will be sitting down to negotiate whether a defendant will serve one year versus two years of probation. This is a case where the defendant is facing the possibility of dozens of years of prison time. Just as the defense will defend a case like that differently than they would handle a probation-type case, we need to handle this case differently. Part of our prosecution strategy was already disclosed at the last meeting, and I am concerned that more will be disclosed at a future meeting.

My co-chair . . . who has prosecuted more of these cases than the rest of us combined and who actually worked on the drafting of some of the child exploitation statutes, also opposes a meeting. We have been accused of not being “strategic thinkers” because of our

⁴⁷Dershowitz had joined Lefcourt and in representing Epstein for the federal case.

IS During her OPR interview, Villafana could not recall the meeting with specificity, but believed the purpose was to discuss whether the USAO should agree to additional meetings with Epstein’s counsel. Menchel, similarly, told OPR that he could not remember anything specific about the meeting.

opposition to these meetings, but we are simply looking at this case as a violent crime prosecution involving stiff penalties rather than as a collar or public corruption case where the parties can amicably work out a light sentence.⁴⁹

With respect to the “policy reasons” that Lefcourt wants to discuss, those were already raised in his letter (which is part of the indictment package) and during his meeting with Andy and myself. Those reasons are: (1) he wants the Petit [sic] policy to trump our ability to prosecute Epstein, (2) this shouldn’t be a federal offense, and (3) the victims were willing participants so the crime shouldn’t be prosecuted at all. Unless the Office thinks that any of those arguments will be persuasive, a meeting will not be beneficial to the prosecution, it will only benefit the defense. With respect to Lefcourt’s promised legal analysis, that also has already been provided. The only way to get additional analysis is to expose to the defense the other charges that we are considering. In my opinion this would seriously undermine the prosecution.

The defense is anxious to have a meeting in order to delay the investigation/prosecution, to find out more about our investigation, and to use political pressure to stop the investigation.

I have no control over the Office’s decisions regarding whether to meet with the defense or to whom the facts and analysis of the case will be disclosed. However, if you all do decide to go forward with these meetings in a way that is detrimental to the investigation, then I will have to ask to have the case reassigned to an AUSA who is in agreement with the handling of the case.

After receiving this draft, the immediate supervisor cautioned Villafaña, “Let’s talk before this is sent, please.”⁵⁰ Villafaña told OPR that the supervisor counseled Villafaña not to send the email to Sloman or Menchel because Villafaña could be viewed as insubordinate. She also told Villafaña that if Villafaña did not stay with the case, “the case would go away” and Epstein “would never serve a day in jail.”

Villafaña told OPR that at that point in time, she believed the USAO was preparing to file charges against Epstein despite agreeing to accommodate the defense request for meetings. She also told OPR, on the other hand, that she feared the USAO was “going down the same path that the State Attorney’s Office had gone down.” Villafaña believed the purpose of the defense request

^<sup>49 In commenting on OPR’s draft report, Menchel’s counsel noted Menchel’s view that the nature of a defendant’s crimes and potential penalty does not affect whether prosecutors are willing to meet with defense counsel to discuss the merits of a case.

^<sup>50 The immediate supervisor recalled telling Villafaña that she and Villafaña were “not driving the ship,” and once “the bosses” made the decision, “there’s nothing else you can do.”

for meetings was to cause delay, but “the people in my office either couldn’t see that or didn’t want to see that,” perhaps because of “their lack of experience with these types of cases” or a misguided belief “that [Epstein’s] attorneys would not engage in this behavior.” Villafaña told OPR that she “could not seem to get [her supervisors] to understand the seriousness of Epstein’s behavior and the fact that he was probably continuing to commit the behavior, and that there was a need to move with necessary speed.” Nonetheless, Villafaña followed the guidance of her immediate supervisor and did not send the email.

Like Lourie, Menchel told OPR that he believed meeting with defense counsel was good practice. Menchel told OPR that he saw “no downside” to hearing the defense point of view. Defense counsel might make a persuasive point “that’s actually going to change our mind,” or alternatively, present arguments the defense would inevitably raise if the case went forward, and Menchel believed it would be to the USAO’s advantage to learn about such arguments in advance. Menchel also told OPR that he did not recall Villafaña ever articulating a concern that Epstein was continuing to offend, and in Menchel’s view, Epstein was “already under a microscope, at least in Florida,” and it would have been “the height of stupidity” for Epstein to continue to offend in those circumstances.

E. June 2007: Villafaña Supplements the Prosecution Memorandum

While Villafaña’s supervisors were considering whether to go forward with the proposed charges, Villafaña took additional steps to support them. On June 14, 2007, she supplemented the prosecution memorandum with an addendum addressing “credibility concerns” relating to one of the victims. In the email transmitting the addendum to Lourie, Menchel, Sloman, and her immediate supervisor, Villafaña reported, “another Jane Doe has been identified and interviewed,” and the “different strategies” about how to structure the charges left Villafaña unsure whether “to make . . . changes now or wait until we have received approval of the current charging strategy.” The addendum itself related to a particular victim referred to as the minor who “saw Epstein most frequently” and who had allegedly engaged in sexual activity with both Epstein and an Epstein assistant. In the addendum, Villafaña identified documents she had found corroborating four separate statements made by this victim.

Villafaña told OPR that the only victim about whom any supervisor ever articulated specific credibility issues was the victim discussed in the addendum. Lourie told OPR that he had no specific recollection of the addendum, but it was “reasonable” to assume that the addendum addressed one particular victim because no one had identified specific concerns relating to any other victim. Villafaña’s immediate supervisor similarly told OPR that to her recollection, the discussions about credibility issues were generic rather than tied to specific victims.

F. The June 26, 2007 Meeting with Defense Counsel

Menchel agreed to meet with defense counsel on June 26, 2007, communicating directly with about the arrangements. At Menchel’s instruction, on June 18, 2007, Villafaña sent a letter to defense counsel identifying what she described as “the statutes under consideration.”⁵¹

^<sup>51 Villafaña sent copies of this letter to both Menchel and 10000. Villafaña told OPR that she objected to sending this information to the defense. Although Menchel did not recall directing Villafaña to send the letter to

On that same day, Villafaña emailed Lourie, Menchel, Sloman, and her immediate supervisor complaining that she had received no reply to her query about making changes to the proposed indictment and asking again for feedback. During his OPR interview, Lourie observed that Villafaña’s request for feedback reflected her desire to “charge this case sooner than … everybody else,” but Acosta was still considering what strategy to pursue. Sloman told OPR that he did not know whether Villafaña received any response to her request, but he believed that at that point in time, Menchel and Lourie were evaluating the case to make a decision about how to proceed.

The day before the June 26 meeting, defense counsel Lefcourt transmitted to the USAO a 19-page letter intended to provide “an overview of our position and the materials we plan to present in order to demonstrate that none of the statutes identified by you can rightly be applied to the conduct at issue here.” Reiterating their prior arguments and themes, defense counsel strongly contested the appropriateness of federal involvement in the matter. Among other issues, Lefcourt’s letter argued:

• Voluntary sexual activity involving “young adults–16 or 17 years of age”–was “strictly a state concern.”
• Federal statutes were not meant to apply to circumstances in which the defendant reasonably believed that the person with whom he engaged in sexual activity was 18 years of age.
• One of the chief statutes the USAO had focused upon, 18 U.S.C. § 2422(b), was intended to address use of the internet to prey upon child victims through “internet trolling,” but Epstein did not use the internet to lure victims.
• The “travel” statute, 18 U.S.C. § 2423(b), prohibits travel “for the purpose of” engaging in illicit sexual conduct, but Epstein traveled to Florida to visit family, oversee his Florida-based flight operations, and “engage in the routine activities of daily living.”

Lefcourt also argued again that “irregularities” had tainted the state’s case and would “have a significant impact on any federal prosecution.”⁵²

Lourie sent to Menchel, with a copy to Villafaña, an email dividing the defense arguments into “weaker” and “stronger” points. Lourie disagreed with the argument that 18 U.S.C. § 2422(b) was limited to “internet trolling,” and described this as “our best charge and the most defensible for federal interest.” On the other hand, Lourie believed the defense argument that Epstein did not travel to Florida “with the purpose” of engaging in illicit sex with a minor was more persuasive.

Lefcourt, he told OPR that he “wouldn’t take issue” with Villafaña’s claim that he had done so. Menchel also told OPR that he did not recall Villafaña objecting at that point to providing the information to the defense.

^<sup>52 Lefcourt claimed there were deficiencies in the PBPD search warrant and “material misstatements and omissions” in the PBPD probable cause affidavit. As an example, he contended that the police had lacked probable cause to search for videotapes, “since all the women who were asked whether they had been videotaped denied knowledge of any videotaping.” (Emphasis in original).

Lourie opined that the government could argue “that over time [Epstein] set up a network of illegal high school massage recruits that would be difficult to duplicate anywhere else,” which supported the conclusion that the massages must have been a motivating purpose of his travel, if not the sole purpose. However, Lourie expressed concern about “getting to the jury” on this issue and noted that he had not found a legal case factually on point. Villafaña told OPR that she disagreed with Lourie’s analysis of the purpose of travel issue and had discussed the matter with him.⁵³ Villafaña also recalled that there were aspects of the defense submissions she and her colleagues considered “particularly weak.”

On June 26, 2007, Sloman, Menchel, Lourie, Villafaña, the case agent, and the West Palm Beach squad supervisor met at the Miami USAO with Epstein attorneys Dershowitz, Black, Lefcourt, and Matter. Dershowitz led the defense team’s presentation. From the USAO perspective, the meeting was merely a “listening session.”⁵⁴ Echoing the arguments made in Lefcourt’s letter, Dershowitz argued that the USAO should permit the state to handle the case because these were “traditionally state offenses.” The case agent recalled being uncomfortable that the defense was asking questions in an attempt to gain information about the federal investigation, including the number of victims and the types of sexual contact that had been involved.

Villafaña told OPR that when Epstein’s attorneys left the meeting, they appeared to be “under the impression that they had convinced us not to proceed.” But Menchel told OPR, “[T]hey obviously did not persuade” the USAO because “we … didn’t drop the investigation.” According to Villafaña, Lourie, and Menchel, during a short post-meeting discussion at which Lourie expressed concern about the purpose of travel issue and Menchel raised issues related to general credibility of the victims, the prevailing sense among the USAO participants was that the defense presentation had not been persuasive. Villafaña told OPR that she “left [the meeting] with the impression that we were continuing towards” filing charges.

IV. ACOSTA DECIDES TO OFFER EPSTEIN A TWO-YEAR STATE PLEA TO RESOLVE THE FEDERAL INVESTIGATION

USAO internal communications show that in July 2007, Acosta developed, or adopted, the broad outline of an agreement that could resolve the federal investigation. The agreement would leave the case in state court by requiring Epstein to plead guilty to state charges, but would accomplish three goals important to the federal prosecutors: Epstein’s incarceration; his registration as a sexual offender; and a mechanism to provide for the victims to recover monetary

^<sup>53 Villafaña also told OPR that Lourie had, at times, expressed concern about the prosecution’s ability to prove Epstein’s knowledge of the victims’ ages, particularly with regard to those who were 16 or 17 at the time they provided massages.

^<sup>54 In his written response to OPR, Menchel indicated that he had no independent recollection of the June 26, 2007 meeting. In his OPR interview, Menchel said that although he had little memory of the meeting, to the best of his recollection the USAO simply listened to the defense presentation, and in a contemporaneous email, Menchel opined that he viewed the upcoming June 26 meeting as “more as [the USAO] listening and them presenting their position.”

damages.⁵⁵ During a two-month period, the subject attorneys were involved to varying degrees in converting the broad outline into specific terms, resulting in the NPA signed by Epstein on September 24, 2007. The subjects, including Acosta, were generally able to explain to OPR both the larger goals and the case-related factors they likely considered during the process of conceptualizing, negotiating, and finalizing this resolution. However, the contemporaneous emails and other records do not reflect all of the conversations among the decision makers, and their deliberative and decision-making process is therefore not entirely clear. In particular, Menchel and Acosta had offices located near each other and likely spoke in person about the case, but neither had a clear memory of their conversations. Therefore, OPR could not determine all of the facts surrounding the development of the two-year state plea resolution or the NPA.

In the following account, OPR discusses the initial key decision to resolve the federal investigation through state, rather than federal, charges, and sets forth many of the numerous communications that reflect the negotiations between the parties that led to the final NPA. OPR questioned each of the subjects about how the decision was reached to pursue a state resolution, and OPR includes below the subjects’ explanations. The subjects’ memories of particular conversations about this topic were unclear, but from their statements to OPR, a general consensus emerged that there were overlapping concerns about the viability of the legal theories, the willingness of the victims to testify, the impact of a trial on the victims, the overall strength of the case that had been developed at that time, and the uncertainty about the USAO’s ability to prevail at trial and through appeal. In addition, Acosta was concerned about usurping the state’s authority to prosecute a case involving an offense that was traditionally handled by state prosecutors. Based on this evidence, OPR concludes that Acosta may well have formulated the initial plan to resolve the matter through a state plea. In any event, Acosta acknowledged to OPR that, at a minimum, he approved of the concept of a state-based resolution after being made aware of the allegations and the evidence against Epstein as set forth in Villafaña’s prosecution memorandum. Furthermore, Acosta approved of the final terms of the NPA.

A. June – July 2007: The USAO Proposes a State Plea Resolution, which the Defense Rejects

A few days after the June 26, 2007 meeting, emailed Villafaña, advising her that Epstein’s defense team would submit additional material to the USAO by July 11, 2007, and hoped “to be able to reach a state-based resolution shortly thereafter.”⁵⁶ In a July 3, 2007 email, Villafaña told Sloman, Menchel, Lourie, and her immediate supervisor that she intended to initiate plea discussions by inviting “to discuss a resolution of the federal investigation that could

^<sup>55 State laws require that a person convicted of specified sexual offenses register in a database intended to allow law enforcement and the public to know the whereabouts of sexual offenders after release from punitive custody, and, in some cases, to restrict such individuals’ movements and activities. The Florida Sexual Offender/Predator Registry is administered by the Florida Department of Law Enforcement. The Adam Walsh Child Protection and Safety Act of 2006 established a comprehensive, national sex offender registration system called the Sex Offender Registration and Notification Act (SORNA), to close potential gaps and loopholes that existed under prior laws and to strengthen the nationwide network of sex offender registrations.

^<sup>56 In this email, also requested a two-week extension of time for compliance with the USAO’s demands for records, which included a demand for the computer equipment that had been taken from Epstein’s residence before the October 2005 state search warrant and that Villafaña had been requesting from the defense since late 2006.

include concurrent time.” The email primarily concerned other issues, and Villafaña did not explain what the resolution she had in mind would entail.⁵⁷ Villafaña requested to be advised, “[i]f anyone has communicated anything to Epstein’s attorneys that is contrary to this.” Villafaña, who was aware that Menchel and Lourie had been in direct contact with defense counsel about the case, explained to OPR that she made this request because “people were communicating with the defense attorneys,” and she suspected that those communications may have included discussions about a possible plea.

In response to Villafaña’s email, Menchel notified Villafaña that he had told ““a state plea [with] jail time and sex offender status may satisfy the [U.S. Attorney],” but had responded that it “was a non-starter for them.”⁵⁸ During his OPR interview, Menchel had no independent recollection of his conversation with for and did not remember why the defense deemed the proposal a “non-starter.” However, Menchel explained that he would not have made the proposal to without Acosta’s knowledge. He also pointed out that in numerous emails before the June 26, 2007 meeting, he repeatedly noted that Acosta was still deciding what he wanted to do with the Epstein case. Acosta agreed, telling OPR that although he did not remember a specific conversation with Menchel concerning a state-based resolution, Menchel would not have discussed a potential resolution with for the without having discussed it with me.”

1. Acosta’s Explanation for His Decision to Pursue a State-based Resolution

Subsequent events showed that the decision to resolve the case through state charges was pivotal, and OPR extensively questioned Acosta about his reasoning. In his OPR interview, Acosta explained the various factors that influenced his decision to pursue a state-based resolution. Acosta said that although he, Sloman, and Menchel “believed the victims” and “believed [Epstein] did what he did,” they were concerned “about some of the legal issues . . . and some of the issues in terms of testimony.”⁵⁹ Acosta also recalled discussions with his “senior team” about how the victims would “do on the stand.”

Acosta told OPR that “from the earliest point” in the investigation, he considered whether, because the state had indicted the case, the USAO should pursue it.

^<sup>57 Villafaña explained to OPR that she intended to recommend a plea to a federal conspiracy charge and a substantive charge, “consistent with the Ashcroft Memo, which would be the most readily provable offense,” with “a recommendation that the sentence on the federal charges run concurrent with the state sentence, or that [Epstein] would receive credit for time in state custody towards his federal release date.” See n.65 for an explanation of the Ashcroft Memo.

^<sup>58 Villafaña was then in trial and on July 4, 2007, likely before reading Menchel’s email, Villafaña responded to defense counsel regarding the demand for records and also noted, “If you would like to discuss the possibility of a federal resolution . . . that could run concurrently with any state resolution, please leave a message on my voicemail.”

^<sup>59 In commenting on OPR’s draft report, Sloman stated he had no involvement in assessing the Epstein case or deciding how to resolve it, and that OPR should not identify him as among the people upon whom Acosta relied in reaching the two-year-state-plea resolution through the NPA. However, Sloman also told OPR that he had little recollection of the Epstein case, while Acosta specifically recalled having discussed the case with both Sloman and Menchel.

[The prosecution] was going forward on the part of the state, and so here is the big bad federal government stepping on a sovereign . . . state, saying you’re not doing enough, [when] to my mind . . . the whole idea of the [P]etite policy is to recognize that the []state . . . is an independent entity, and that we should presume that what they’re doing is correct, even if we don’t like the outcome, except in the most unusual of circumstances.

Acosta told OPR that “absent USAO intervention,” the state’s prosecution of Epstein would have become final, and accordingly, it was “prudent” to employ Petite policy analysis. As Acosta explained in a public statement he issued in 2011, “the federal responsibility” in this unique situation was merely to serve as a “backstop [to] state authorities to ensure that there [was] no miscarriage of justice.”⁶⁰ Furthermore, Acosta saw a distinction between a case that originated as a federal investigation and one that had already been indicted by the state but was brought to the federal government because of a perception that the state charge was inadequate. In the latter circumstance, Acosta viewed the USAO’s role only as preventing a “manifest injustice.”⁶¹ Acosta explained that “no jail time” would have been a manifest injustice. But it was his understanding that if Epstein had pled guilty to state charges and received a two-year sentence to a registrable offense, “it would never have come to the office in the first place,” and therefore would not be viewed as a manifest injustice.

Acosta also told OPR he was concerned that a federal prosecution in this case would result in unfavorable precedent, because the Epstein case straddled the line between “solicitation” or “prostitution,” which Acosta described as a traditional state concern, and “trafficking,” which was an emerging matter of federal interest. Acosta contended that in 2006, “it would have been extremely unusual for any United States Attorney’s Office to become involved in a state solicitation case, even one involving underage teens,” because solicitation was “the province of state prosecutors.” Acosta told OPR, “I’m not saying it was the right view – but there are at least some individuals who would have looked at this and said, this is a solicitation case, not a trafficking case.” Acosta was concerned that if the USAO convicted Epstein of a federal charge, an appeal might result in an adverse opinion about the distinction between prostitution and sex trafficking.

Acosta also told OPR that he was concerned that a trial would be difficult for Epstein’s victims. In Acosta’s estimation, a trial court in 2007 might have permitted “victim shaming,” which would have been traumatic for them. In addition, the fact that the state grand jury returned a one-count indictment with a charge that would not require jail time suggested to Acosta that the state grand jury found little merit to the case.⁶² Acosta told OPR:

^<sup>60 Letter from R. Alexander Acosta “To whom it may concern” at 1 (Mar. 20, 2011), published online in The Daily Beast.

^<sup>61 Acosta was referring to the Petite policy provision allowing the presumption that a prior state prosecution has vindicated the relevant federal interest to be “overcome . . . if the prior [state] sentence was manifestly inadequate in light of the federal interest involved and a substantially enhanced sentence . . . is available through the contemplated federal prosecution.” USAM § 9-2.031.D.

^<sup>62 Acosta told OPR he was unaware that USAO prosecutors believed the State Attorney’s Office had deliberately undermined the case before the state grand jury. Menchel told OPR that he understood that the State

I do think it’s important to look back on this, and try to be in the shoes of the thought process in 2006 and ’07 when trafficking prosecutions were fairly new, when . . . more so than today, some jurors may have looked at this as prostitution, and . . . [a] judge’s tolerance for victim shaming may have . . . caused more hesitation on the part of victims . . . .⁶³

Finally, Acosta told OPR that a state-based resolution offered more flexibility in fashioning a sentence, because he believed prosecutors would have difficulty persuading a federal district court in the Southern District of Florida to approve a federal plea for a stipulated binding sentence that differed from the otherwise applicable federal sentencing guidelines range.⁶⁴

In summarizing his thinking at the time, Acosta told OPR,

The way the matter came to the office was, the state wasn’t doing enough. It didn’t provide for prison time. It didn’t provide for registration, and then you had the restitution issue. There were legal issues . . . There were witness issues. And . . . we could go to trial . . . and we may or may not prevail. Alternatively, we could look at a pre-indictment resolution, and at various points, the office went back and forth between a federal pre-indictment resolution, and a state pre-indictment resolution.

Acosta told OPR that, in the end, “there was a preference for deferring to the state” because, in part, the facts of the Epstein case at the time appeared to constitute solicitation or prostitution rather than trafficking, and a federal prosecution would be “uncharted territory.” Acosta explained that he did not view it as problematic to defer resolution of the case to the state, although as the Epstein case played out, the federal role became “more intrusive” than he had anticipated, because the defense tried to get the state to “circumvent and undermine” the outcome.

Attorney’s Office could have proceeded against Epstein by way of an information, but decided to go into the grand jury because the State Attorney’s Office “didn’t like the case” and wanted “political cover” for declining the case or proceeding on a lesser charge.

^<sup>63 Menchel told OPR, however, that the federal judges in West Palm Beach were highly regarded and were generally viewed as “pro-prosecution.”

^<sup>64 Acosta said that “dismissing a number of counts and then doing a [R]ule 11 is not something that [South Florida federal district] judges tend to do.” Other subjects also told OPR that the federal judges in the Southern District of Florida were generally considered averse to pleas that bound them on sentencing, commonly referred to as “Rule 11(c) pleas.”

Federal Rule of Criminal Procedure 11(c)(1)(C) allows the parties to agree on a specific sentence as part of a plea agreement. The court is required to impose that sentence if the court accepts the plea agreement; if the court does not accept the agreed upon plea and sentence, the agreement is void. Villafaña told OPR that Rule 11(c) pleas were “uncommon” in the Southern District of Florida, as the “judges do not like to be told . . . what sentence to impose.” Menchel similarly told OPR that the USAO viewed federal judges in the Southern District of Florida as averse to Rule 11(c) pleas, although Menchel had negotiated such pleas. Villafaña told OPR that she had never offered a Rule 11(c) plea in any of her cases and had no experience with such pleas.

Menchel could not recall who initially suggested a state plea, but noted to OPR that his own “emails . . . make clear that this course of action was ultimately decided by Alex Acosta.” He referenced, among others, his May 14, 2007 email to Villafaña informing her that Acosta was deciding how he wanted to handle the case. Menchel surmised that a state resolution accomplished two things that Acosta viewed as important: first, it resolved any Petite policy concerns, and second, it afforded more flexibility in sentencing than a federal plea would have allowed. Menchel told OPR that the state plea proposal did not reflect any minimization of Epstein’s conduct and that any state plea would have been to an offense that required sexual offender registration. He told OPR, “I don’t think anybody sat around and said, you know, it’s not that big a deal. That was not the reaction that I think anybody had from the federal side of this case.” Rather, Menchel said, “The concern was if we charge him [as proposed], there’s going to be a trial.”

2. July 2007: Villafaña and Menchel Disagree about the Proposed State Resolution

Villafaña told OPR that she was angry when she received Menchel’s July email explaining that he had proposed to resolving the federal investigation through a state plea. In Villafaña’s view, the proposed state resolution “didn’t make any sense” and “did not correspond” to Department policy requiring that a plea offer reflect “the most serious readily provable offense.”⁶⁵ In her view, a plea to a state charge “obviously” would not satisfy this policy. Villafaña also told OPR that in her view, the USAM required the USAO to confer with the investigative agency about plea negotiations, and Villafaña did not believe the FBI would be in favor of a state plea. Villafaña also believed the CVRA required attorneys for the government to confer with victims before making a plea offer, but the victims had not been consulted about this proposal. Villafaña told OPR she had met with some of the victims during the course of the investigation who had negative impressions of the State Attorney’s Office, and she believed that “sending them back to the State Attorney’s Office was not something” those victims would support.

See also Chapter Two, Part Two, Section II.B.1.

^<sup>65 This policy was set forth in a September 22, 2003 memorandum from then Attorney General John Ashcroft regarding “Department Policy Concerning Charging Criminal Offenses, Disposition of Charges, and Sentencing” (known as the “Ashcroft Memo”), which provided, in pertinent part:

^[I]n all federal criminal cases, federal prosecutors must charge and pursue the most serious, readily provable offense or offenses that are supported by the facts of the case, except as authorized by an Assistant Attorney General, United States Attorney, or designated supervisory attorney in the limited circumstances described below. The most serious offense or offenses are those that generate the most substantial sentence under the Sentencing Guidelines, unless a mandatory minimum sentence or count requiring a consecutive sentence would generate a longer sentence. A charge is not “readily provable” if the prosecutor has a good faith doubt, for legal or evidentiary reasons, as to the Government’s ability readily to prove a charge at trial. Thus, charges should not be filed simply to exert leverage to induce a plea. Once filed, the most serious readily provable charges may not be dismissed except to the extent permitted [elsewhere in this Memorandum].

In light of these concerns, Villafafia emailed Menchel, expressing her strong disagreement with the process:

[I]t is inappropriate for you to enter into plea negotiations without consulting with me or the investigative agencies, and it is more inappropriate to make a plea offer that you know is completely unacceptable to the FBI, ICE [Immigration and Customs Enforcement], the victims, and me. These plea negotiations violate the Ashcroft memo, the U.S. Attorney[s] Manual, and all of the various iterations of the victims’ rights legislation. Strategically, you have started the plea negotiations as though we are in a position of weakness, anxious to make the case go away, by telling the defense that we will demand no federal conviction. We left the meeting on June 26th in a stronger position than when we entered, and your statement that a state resolution would satisfy us takes away that advantage. If you make it seem like the U.S. Attorney doesn’t have faith in our investigation, Epstein has no incentive to make a deal.

Second, your discussion makes it appear that my investigation is for “show” only and completely undermines my ability to deal with Epstein’s attorneys directly….

I would like to make a presentation to the U.S. Attorney, Jeff [Sloman], Andy [Lourie], and you with our side of the investigation and a revised indictment. The presentation will address the points raised by Epstein’s counsel and will convince you all of the strength of the case.

In the meantime, please direct all communications from Epstein’s counsel to me.

Menchel told OPR he realized Villafaila was “very anxious” to file charges in the case. Villafafia had put a “tremendous” amount of effort into the investigation, and Menchel “was not unsympathetic at all to her desires” to pursue a federal case. However, as Menchel told OPR, Villafafia’s supervisors, including Acosta, were “trying to be a little bit more dispassionate,” and her urgency was “not respectful” of Acosta’s position. Menchel viewed the tone of Villafafia’s email as “highly unacceptable,” and her understanding of applicable law and policy incorrect. In particular, Menchel pointed out that although the Ashcroft Memo requires prosecutors to charge the “most readily provable offense,” there is nevertheless room for “flexibility,” and that the U.S. Attorney has discretion—directly or through a designated supervisor such as Menchel—to waive the policy.

Menchel’s reply email began with a rebuke:

Both the tone and substance of your email are totally inappropriate and, in combination with other matters in the past, it seriously calls your judgment into question.

As you well know, the US Attorney has not even decided whether to go forward with a prosecution in this matter, thus you should have respected his position before engaging in plea negotiations.

Along that same line, despite whatever contrary representations you made to the agents in this matter, it was made clear to you by the US Attorney and the First Assistant from the time when you were first authorized to investigate Mr. Epstein that the office had concerns about taking this case because of petit [sic] policy and a number of legal issues. Despite being told these things, you prepared a pros memo and indictment that included a definitive date for indictment. It has come to my attention that you led the agents to believe that the indictment of this matter was a foregone conclusion and that our decision to put off that date and listen to the defense attorneys’ concerns is indicative of the office having second thoughts about indicting. As you well knew, you were never given authorization by anyone to seek an indictment in this case.⁶⁶

In the email, Menchel went on to explain the circumstances of his conversation with and respond to Villafaña’s complaints:

called me before, not after, the June 26th meeting. It Lilly was an informal discussion and not in the nature of an official plea offer but rather a feeling out by both sides as to what it might take to resolve the matter. As you are also well aware, the only reason why this office even agreed to look into the Epstein matter in the first instance was because of concerns that the State had not done an adequate job in vindicating the victims’ rights. As you and the agents conceded, had Epstein been convicted of a felony that resulted in a jail sentence and sex offender status, neither the FBI nor our office ever would have interceded. You should also know that my discussion with Lilly was made with the US Attorney’s full knowledge. Had Lilly expressed interest in pursuing this avenue further, I certainly would have raised it with all the interested individuals in this case, including you and the agents. In any event, I fail to see how a discussion that went nowhere has hurt our bargaining position. I am also quite confident that no one

^<sup>66 Menchel also sent this message to Sloman and copied Lourie.

on the defense team believes that the federal investigation in this matter has been for show.

Nor are your arguments that I have violated the Ashcroft memo, the USAM or any other policy well taken. As Chief of the Criminal Division, I am the person designated by the US Attorney to exercise appropriate discretion in deciding whether certain pleas are appropriate and consistent with the Ashcroft memo and the USAM – not you.

As for your statement that my concerns about this case hurting Project Safe Childhood are unfounded, I made it clear to you that those concerns were voiced by the US Attorney.⁶⁷ Whether or not you are correct, matters of policy are always within his purview and any decisions in that area ultimately rest with him.

Finally, you may not dictate the dates and people you will meet with about this or any other case. If the U.S. Attorney or the First Assistant desire to meet with you, they will let you know. Nor will I direct Epstein’s lawyers to communicate only with you. If you want to work major cases in the district you must understand and accept the fact that there is a chain of command – something you disregard with great regularity.

Villafaña acknowledged to OPR that as Criminal Division Chief, Menchel had authority to deviate from the Ashcroft Memo requiring that guilty pleas be to the most serious readily provable offense. She disagreed, however, with his representation about her initial meeting with Acosta and Sloman regarding the Epstein investigation, noting that Menchel had not been at that meeting.⁶⁸ Villafaña told OPR that no one had communicated to her the “concerns” Menchel mentioned, and she had not been given an opportunity to respond to those concerns.⁶⁹

A week later, Villafaña replied to Menchel’s email, reiterating her concerns about the process and that filing charges against Epstein was not moving forward:

Hi Matt – My trial is over, so I now have [] time to focus back on this case and our e-mail exchange. There are several points in your

^<sup>67 Neither Menchel nor Villafaña could recall for OPR to what concerns they were referring. In commenting on OPR’s draft report, Acosta’s attorney noted that Acosta’s concerns were “the possibility that bringing a case with serious evidentiary challenges pressing novel legal issues could result in an outcome that set back the development of trafficking laws and result in an aggregate greater harm to trafficking victims.”

^<sup>68 Menchel confirmed to OPR that he was not involved in the decision to initiate the federal investigation.

^<sup>69 Villafaña characterized Menchel’s email as “meant to intimidate” and told OPR that she felt “put in [her] place” by him. She perceived that Menchel was making it clear that she should not “jump the chain of command.” Menchel, however, asserted to OPR that Villafaña had a “history of resisting supervisory authority” that warranted his strong response.

e-mail that I would like to address, and I also would like to address where we are in the case.

First, I wanted to address the comment about jumping the chain of command. After that concern was brought to my attention several months ago, I have tried very hard to be cognizant of the chain of command. . . . If there is a particular instance of violating the chain of command that you would like to discuss, I would be happy to discuss it with you.

. . . .

The statement that I have not respected Alex’s position regarding the prosecution of the case demonstrates why you hear the frustration in the tone of my e-mail. For two and a half months I have been asking about what that position is. I have asked for direction on whether to revise the indictment, whether there are other issues that Alex wants addressed prior to deciding, whether there is additional investigation that needs to be done, etc. None of that direction has been forthcoming, so I am left with . . . victims, and agents all demanding to know why we aren’t presenting an indictment. Perhaps that lack of direction is through no fault of yours, but I have been dealing with a black box, so I do not know to whom I should address my frustration. My recollection of the original meeting with Alex and Jeff is quite different than your summary. In that meeting, I summarized the case and the State Attorney’s Office’s handling of it. I acknowledged that we needed to do work to collect the evidence establishing a federal nexus, and I noted the time and money that would be required for an investigation. I said that I was willing to invest that time and the FBI was willing to invest the money, but I didn’t want to get to the end and then have the Office be intimidated by the high-powered lawyers. I was assured that that would not happen. Now I feel like there is a ceiling that prevents me from moving forward while evidence suggests that Epstein is continuing to engage in this criminal behavior. Additionally, the FBI has identified two more victims. If the case is not going to go forward, I think it is unfair to give hope to more girls.

As far as promising the FBI that an indictment was a foregone conclusion, I don’t know of any case in the Office where an investigation has been opened with the plan NOT to indict. And I have never presented an indictment package that has resulted in a declination. I didn’t treat this case any differently. I worked with the agents to gather the evidence, and I prepared an indictment package that I believe establishes probable cause that a series of crimes have been committed. More importantly, I believe there is proof beyond a reasonable doubt of Epstein’s criminal culpability. Lastly, I was not trying to “dictate” a meeting with the U.S. Attorney or anyone else. I stated that I “would like” to schedule a meeting, asking to have the same courtesy that was extended to the defense attorneys extended to the FBI and an Assistant in the Office. With respect to your questions regarding my judgment, I will simply say that disagreements about strategy and raising concerns about the forgotten voices of the victims in this case should not be classified as a lapse in judgment. This Office should seek to spirited debate about the law and the use of prosecutorial discretion . . . . [M]y first and only concern in this case (and my other child exploitation cases) is the victims. If our personality differences threaten their access to justice, then please put someone on the case whom you trust more, and who will also protect their rights.

In the meantime, I will be meeting with the agents on Monday to begin preparing a revised indictment package containing your suggestions on the indictment and responding to the issues raised by Epstein’s attorneys. . . . If there are any specific issues that you or the U.S. Attorney would like to see addressed, please let me know.⁷⁰

Villafaña did not get the meeting with Acosta that she requested. She viewed Menchel’s message as a rejection of her request to make a presentation to Acosta, and she told OPR that even though she regarded Sloman as a friend, she did not feel she could reach out even to him to raise her concerns.⁷¹ Menchel, however, told OPR that he did not “order” Villafaña to refrain from raising her concerns with Acosta, Sloman, or Lourie, and he did not believe his email to Villafaña foreclosed her from meeting with Acosta. Rather, “the context of this exchange is, she is running roughshod over the U.S. Attorney, and what I am saying to her is, there is a process. You’re not in charge of it. I’m not in charge of it. [Acosta’s] in charge of it.” Acosta, who was apparently not aware of Villafaña’s email exchange with Menchel, told OPR that from his perspective, Villafaña was not “frozen out” of the case and that he would have met with her had she asked him directly for a meeting.

B. Villafaña Attempts to Obtain the Computer Equipment Missing from Epstein’s Palm Beach Home, but the Defense Team Opposes Her Efforts

As the USAO managers considered in July 2007 how to resolve the federal investigation, one item of evidence they did not have available to assist in that decision was the computer equipment removed from Epstein’s home before the PBPD executed its search warrant. Although Villafaña took steps to obtain the evidence, defense counsel continued to oppose her efforts.

⁷⁰ Menchel forwarded this email to Sloman.

^<sup>71 Villafaña told OPR that she later spoke to Menchel, asking Menchel to redirect to Villafaña, but that Menchel responded it was not Villafaña’s “place” to tell him to whom he should direct communications.

Early in the federal investigation, Villafafia recognized the potential significance of obtaining the missing computer equipment. Villafafta told OPR that she and the FBI agents went through every photograph found in Epstein’s house, but found none that could be characterized as child pornography. Nevertheless, Villafafta told OPR that investigators had learned that Epstein used hidden cameras in his New York residence to record his sexual encounters, and she believed he could have engaged in similar conduct in his Palm Beach home. In addition, the computer equipment potentially contained surveillance video that might have corroborated victim statements about visiting Epstein’s home. More generally, in Villafaiia’s experience, individuals involved in child exploitation often possessed child pomography.72 Villafafia’s co-counsel, who had substantial experience prosecuting child pornography cases, similarly told OPR, “Epstein was a billionaire. We knew his house was wired with video, it would be unusual [for] someone with his capabilities not to be video recording” his encounters.

As the investigation continued, Villafafta took various steps to acquire the computer equipment removed from Epstein’s Palm Beach residence. As noted previously in this Report, in her initial request to Epstein’s counsel for documents, she asked defense counsel to provide “[t]he computers, hard drives, CPUs, and any other computer media (including CD-ROMs, DVDs, floppy disks, flash drives, etc.) removed from” the residence. Although Lourie subsequently narrowed the government’s request for documents, the request for computer equipment remained. The defense, however, failed to comply with the request.

Villafana learned that the computer equipment was in the possession of a particular individual. After consulting the Department’s Computer Crime and Intellectual Property Section and Office of Enforcement Operations about the appropriate legal steps to obtain the computer equipment, Villafafta described her plan in an email to Menchel. She asked Menchel for any comments or concerns, but OPR did not find an email response from him, and Menchel told OPR that he did not recall Villafafta’s efforts to obtain the computer equipment.

In May 2007, following the plan she had outlined to Menchel, Villafafia initiated action requiring production of the computer equipment by a particular date. In her email to Villafafta on June 29, 2007, requested a two-week extension, indicating that she hoped a “state-based resolution” to the case would soon be reached.73 Villafatla advised her supervisors of the request, and responded to that she “would like to get the computer equipment as soon as possible.” Nonetheless, Villafalia eventually agreed to an extension.

Meanwhile, Epstein attorney Roy Black wrote separately to Villafafia, demanding to know whether Villafafia had complied with applicable Department policies before seeking the computer

⁷²In addition, Villafana became aware that in August 2007, FBI agents interviewed a minor victim who stated that she had been photographed in the nude by Epstcin’s assistant, who told the victim that Epstein took pictures of the girls.

⁴³ This email led Villafana to ask her supervisors if any of them had discussed with the defense a possible resolution of the case, which resulted in Villafaiia’s exchange of emails with Menchel about their respective views of the case. See Section IV.A.2 in this Part

equipment.⁷⁴ After further communications on this issue involving Black, 1, Villafaña, and Lourie, Black took legal action that effectively halted production of the computer equipment to the USAO until the issue could be decided by the court—which, as explained below, never happened because the parties entered into the NPA.

C. July 2007: The Defense Continues Its Efforts to Stop the Federal Investigation

In addition to their efforts to stop the government from obtaining the computer equipment, defense counsel also sent letters to the USAO, dated July 6, 2007, and July 25, 2007, reiterating their objections to a federal investigation of Epstein. The July 25, 2007 letter included a lengthy “case analysis chart” purporting to support the defense argument that Epstein had committed no federal offense. The July 25 letter also noted that the defense had been consulting with the former Principal Deputy Chief of CEOS, reporting that she “supports our position without reservation that this is not a matter upon which the federal statu[t]es should be brought to bear.”⁷⁵

While the defense was reiterating its objections to the federal investigation, CEOS expressed its endorsement of Villafaña’s legal analysis and proposed charges. On July 18, 2007, CEOS Chief Oosterbaan emailed Sloman, Menchel, and Lourie, stating that he had read Villafaña’s prosecution memorandum “closely,” and noting that “[s]he did a terrific job. As we opined to Andy [Lourie] back in May, [CEOS] agree[s] with her legal analysis. Her charging decisions are legally sound.” Oosterbaan observed:

I have also reviewed the arguments contained in the letters from defense counsel. Their legal analysis is detailed and comprehensive, but I find none of their arguments persuasive. That is not to say that all the arguments are completely devoid of merit. I expect the judge to consider some of the arguments closely. Nevertheless, while the law applicable here is not always crystal clear, the balance of available precedent favors us. From the prosecution memorandum it is clear that set the applicable law, and has charged the case accordingly. And, while with this prosecution the government clearly faces a strong and determined defense team, it is a challenge well worth facing. I also happen to know that there is absolutely no concern . . . about facing the challenges this case presents.

In closing, Oosterbaan renewed his offer to have CEOS “help you with this prosecution,” and to send “whatever and whoever you need” to assist.

^<sup>74 Villafaña forwarded Black’s letter to Menchel, explaining the circumstances relating to the removal of the computer equipment from Epstein’s home, the steps she had taken to make the required consultations in the Department, and that she and Lourie had worked together on her response to Black.

^<sup>75 The news that the former CEOS Principal Deputy Chief was advising the Epstein team led to an email exchange between Sloman and CEOS Chief Oosterbaan, who commented, “By the way, let me know if you want me to put something in writing to you with our position and detailing all of the child prostitution cases she supervised with similar facts.”

D. Acosta Decides on a Resolution That Includes a Two-Year Term of Incarceration

The next critical step in the development of the NPA was the decision to propose a twoyear term of imprisonment. Although presented to the defense as the “minimum” the USAO would accept, in actuality the two-year proposal became only the starting point for the negotiations, with the result that the defense continued to chip away at it as the negotiations continued. The contemporaneous emails make no mention of any rationale for the decision to propose two years as the government’s beginning negotiating position, and nobody with whom OPR spoke was able to recall how the decision was made. As discussed below, Acosta did offer OPR an explanation, but OPR was unable to find contemporaneous evidence supporting it.⁷⁶

While the defense was communicating its objections to the federal investigation to Villafaña, Lourie, Menchel, and Sloman, Villafaña continued moving toward filing charges. On July 19, 2007, the day after receiving Oosterbaan’s email supporting a potential prosecution, Villafaña emailed Lourie and Menchel seeking approval to take further investigative steps regarding three of Epstein’s assistants. However, Menchel directed Villafaña to “hold off… until we decide what course of action we are going to take on [E]pstein which should happen next week.” Menchel told OPR that he did not specifically recall why he asked Villafaña to wait, but he assumed it was because Acosta was deciding what course of action to take on the case.

On Monday, July 23, 2007, Menchel submitted a resignation notice to Acosta, stating that he would be leaving the USAO effective August 6, 2007.⁷⁷

1. The July 26, 2007 Meeting in Miami

Early on the morning of Thursday, July 26, 2007, Villafaña informed Menchel that she was preparing a new draft indictment containing revisions he had suggested, including removal of all but three of the “travel counts” and “a large number of [the] overt acts,” and the addition of overt acts and counts relating to two additional victims; she would not, however, have the revised indictment ready in time “for our discussion today” at their 2:00 p.m. meeting. Menchel told OPR that the fact that he had both proposed revisions to the indictment and also directed Villafaña to delay the investigative steps involving the assistants indicated that he was “trying to do something” with the case, but was waiting for Acosta to decide the “underlying issue” of whether to proceed with federal charges.

Acosta made that decision on or before July 26, 2007. On that afternoon, Villafaña met in Miami with Menchel. She told OPR that Sloman, as well as the FBI case agents and their supervisors, were also present, with Lourie participating by telephone. Villafaña told OPR that she expected that the meeting, requested by Menchel, would address the direction of the investigation. However, Villafaña told OPR that after everyone had assembled, Menchel entered the room and stated that Acosta “has decided to offer a two-year state deal.” According to

^<sup>76 See Section IV.D.2 in this Part.

As early as May 4, 2007, Menchel had informed Acosta that he was intending to leave the USAO to enter private practice.

Villafaña, Menchel left the meeting after almost no discussion, leaving Villafaña “shocked and stunned.”

Menchel told OPR that he did not recall the July 26, 2007 meeting. Nonetheless, he strongly disputed Villafaña’s description of events, asserting that it would have been “directly at odds with his management style” to convene such a meeting, announce Acosta’s decision, and leave without discussion. Acosta told OPR that he had “decided and endorsed this resolution at some point,” but he did not recall being aware that Menchel was going to announce the decision at the July 26 meeting; in addition, although Acosta did not recall the circumstances of Menchel’s relaying of that decision, he said it “would have been consistent with” his decision for Menchel to do so. Neither Sloman nor Lourie recalled the meeting. The FBI case agent recalled attending a meeting at the USAO in Miami with her co-case agent and supervisors, together with Villafaña, Lourie (by telephone), Menchel, and Sloman, at which they discussed how to proceed with the Epstein case. According to the case agent, at this meeting the FBI insisted that Epstein be registered for life as a sexual offender, and the co-case agent advocated for waiting until the court had ruled on the USAO’s ability to obtain Epstein’s computer equipment.

Regardless of exactly how Acosta’s decision regarding the two-year term was communicated to Villafaña and the FBI agents, and regardless of who initially proposed the specific term, the record shows that Acosta ultimately made the decision to offer Epstein a resolution that included a two-year term of imprisonment, as he acknowledged.⁷⁸

2. The Subjects’ Explanations for the Decision to Offer Epstein a Sentence with a Two-Year Term of Incarceration

Villafaña asserted that she was not consulted about the specific two-year term before the decision was made.⁷⁹ Villafaña told OPR that she had worked hard to develop a strong case, and none of her supervisors had identified to her any specific problem with the case that, in her view, explained the decision to extend an offer for a two-year sentence. Villafaña also told OPR that Menchel provided no explanation for this decision during the July 26, 2007 meeting, and Villafaña did not ask for an explanation because she accepted his statement that it was Acosta’s decision. Villafaña described the proposal as “random,” and told OPR, “[W]e’re all [sentencing] guidelines people, so 24 months just makes no sense in the context of the guidelines. There’s no way to get to 24 months with this set of offenses.”⁸⁰

OPR notes that Villafaña did not appear hesitant to send emails to her supervisors setting forth her views and objections, and there is no reference before this meeting in any of her emails indicating that a decision had been made to offer a two-year term of incarceration. Therefore, given that a meeting had been arranged involving Menchel and Villafaña, and possibly most of the other primary USAO and FBI participants, it seems logical that Acosta made a decision to resolve the case with a two-year state plea not long before the meeting.

^<sup>79 OPR found no evidence in the documentary record indicating that Villafaña had knowledge of Acosta’s decision or the two-year term before the July 26, 2007 meeting at which she said she learned of it.

^<sup>80 From the time the U.S. Sentencing Guidelines went into effect in 1987, they have been the mechanism for calculating federal criminal sentences. Since 2005, the Guidelines have been non-binding, but the federal courts are required to consider them. As noted in the commentary to USAM § 9-27.710,

Sloman also told OPR that he did not know how the decision to offer a two-year plea offer was reached, but he believed that Acosta made the decision based on recommendations from Menchel, Lourie, and Villafaña. He opined to OPR that the decision was likely based on an assessment by Menchel and Lourie of the litigation risks presented by the case.⁸¹ Sloman added that he did not know how a two-year sentence might have related to specific charges or to either state or federal sentencing guidelines. Lourie likewise told OPR he did not recall how the two-year term was decided upon, or by whom, but he speculated that it may have been presented by the defense as the most Epstein would accept, and that the decision would have been reached by Acosta following “extended consideration, research, and discussion,” among Acosta, Sloman, Menchel, Lourie, and Villafaña.⁸²

Menchel told OPR that he did not recall discussing a two-year plea deal with Acosta or who reached the decision that two years was an appropriate sentence. Menchel also told OPR, however, that he recalled believing that if the USAO had filed the contemplated federal charges, Epstein would have felt he had “nothing to lose” and “undoubtedly” would have chosen to take the case to trial. Menchel recalled believing there was a real risk that the USAO might lose at trial, and in so doing, might cause more trauma to the victims, particularly those who were reluctant to testify. Menchel told OPR that he did not believe that anyone at the time looked at two years “as a fair result in terms of the conduct. I think that was not the issue. The issue was whether or not if we took this case to trial, would we risk losing everything,” and “if we . . . felt we could have gotten more time, we would have, without having to press it to the trial.”

Acosta told OPR that “I had decided and endorsed” the two-year resolution “at some point,” and that it resulted from “back and forth” discussion “over the course of some days or a week or two.” As noted earlier in this Report, Acosta viewed the USAO’s role in this case merely as a “backstop” to the state’s prosecution, which he explained to OPR was “a polite way of saying[, ‘]encouraging the state to do a little bit more.[’]”⁸³ Acosta said that he understood two years’ imprisonment to have represented the sentence Epstein faced under one of the original charges the PBPD was considering at the outset of the state investigation.⁸⁴ Acosta also told OPR that he

the attorney for the government has a continuing obligation to assist the court in its determination of the sentence to be imposed. The prosecutor must be familiar with the guidelines generally and with the specific guideline provisions applicable to his or her case. In discharging these duties, the attorney for the government should . . . endeavor to ensure the accuracy and completeness of the information upon which the sentencing decisions will be based.

⁸¹ In Sloman’s view, Menchel and Lourie were “two of the finest trial lawyers” in the USAO.

^<sup>82 Lourie noted that Sloman and Menchel were “two extraordinarily experienced people in [Acosta’s] front office who had tried . . . gobs and gobs of cases.”

^<sup>83 In commenting on OPR’s draft report, Acosta’s attorney asserted that OPR’s use of Acosta’s quote, “a little bit more,” “unfairly minimized” Acosta’s and the USAO’s efforts to achieve justice in this case. Acosta’s attorney also asserted that the phrase was “clearly soft-spoken understatement,” that the terms obtained were “substantially more onerous than the state’s alternative resolution,” and that Acosta was “clearly declining the invitation to take the State to task and soft-pedaling an obvious distinction.”

^<sup>84 OPR examined this assertion and was unable to verify that the proposed two-year term of imprisonment corresponded with the charges that the PBPD considered at the outset of the state investigation or with the charge in

understood that the PBPD would not have asked the FBI to investigate Epstein if the state had pursued the appropriate charges. In other words, in Acosta’s view, “[T]his was, rightly or wrongly, an analysis that distinguished between what is necessary to prevent manifest injustice, versus what is the appropriate federal outcome to that.” Acosta told OPR that he believed he had discussed his concerns about the case with Lourie, Sloman, or Menchel, although he could not recall any specific conversation with them.

E. Villafaña Drafts a “Term Sheet” Listing the Requirements of a Potential Agreement with the Defense

A meeting with defense counsel was scheduled for Tuesday, July 31, 2007. Villafaña told OPR that between July 26 and July 30, 2007, she had “some sort of discussion” with her supervisors that resulted in her creation of a “term sheet” identifying the proposed terms for resolving the federal investigation through state charges. Sometime during that period, Villafaña left a voicemail message for Menchel. During their OPR interviews, neither Villafaña nor Menchel could recall what Villafaña said in that message. On July 30, 2007, Menchel emailed Villafaña:

I received your voicemail this morning. I don’t see any reason to change our approach. I think telling them that unless the state resolves this in a way that appropriately vindicates our interests and the interests of the victims, we will seek [federal charges] conveys that we are serious. While Lilly [has represented in the past that this would likely not happen, I never conveyed it in quite these terms before. In any event, this is the course of action that the US Attorney feels comfortable taking at this juncture.

The following day, July 31, 2007, Villafaña emailed a one-page “Terms of Epstein Non-Prosecution Agreement” to Sloman, Menchel, and Lourie. Villafaña told OPR she had never before seen or heard of a non-prosecution agreement and that it was a concept “completely foreign” to her.⁸⁵ Villafaña told OPR that the idea of styling the two-year state plea agreement with Epstein

the state indictment. OPR considered various potential state charges involving various numbers of victims and found no obvious reasonable state sentencing guidelines calculation that would have resulted in a two-year sentence.

^<sup>85 Deferred prosecution and non-prosecution agreements were standard, though infrequently used, vehicles for resolving certain federal criminal cases against corporate entities. A 2008 Departmental memorandum explained:

The terms “deferred prosecution agreement” and “non-prosecution agreement” have often been used loosely by prosecutors, defense counsel, courts and commentators. As the terms are used in these Principles [of Federal Prosecution of Business Organizations], a deferred prosecution agreement is typically predicated upon the filing of a formal charging document by the government, and the agreement is filed with the appropriate court. In the non-prosecution agreement context, formal charges are not filed and the agreement is maintained by the parties rather than being filed with a court. Clear and consistent use of these terms will enable the Department to more effectively identify and share best practices and to track the use of such agreements. These Principles do not apply

as a “non-prosecution agreement” came from Acosta, although Menchel may have communicated that terminology to her. According to Villafaña, she asked that it include a mechanism for the victims to be provided monetary compensation through 18 U.S.C. § 2255 in lieu of the restitution that would have been available if Epstein were pleading guilty to federal charges.⁸⁶ Acosta told OPR that he “developed and approved” the term sheet.”

Before the document was presented to defense counsel, two terms were dropped from Villafaña’s draft—one providing that the agreement would apply only to already-identified victims, and another requiring the deal to be accepted, and Epstein to plead guilty, within the month. The final term sheet was as follows:

⁸⁶ A civil remedy for personal injuries suffered by victims of certain crimes is provided for in the federal criminal code at 18 U.S.C. § 2255. Subsection (a) of the statute, as in effect from July 27, 2006, to March 6, 2013, provided as follows:

Any person who, while a minor, was a victim of a violation of section 2241(c), 2242, 2243, 2251, 2251A, 2252, 2252A, 2260, 2421, 2422, or 2423 of this title and who suffers personal injury as a result of such violation, regardless of whether the injury occurred while such person was a minor, may sue in any appropriate United States District Court and shall recover the actual damages such person sustains and the cost of the suit, including a reasonable attorney’s fee. Any person as described in the preceding sentence shall be deemed to have sustained damages of no less than $150,000 in value.

Villafaña also told OPR that she asked that the terms include the requirement that Epstein plead to an offense that required him to register as a sexual offender; however, sex offender status was also mentioned in Menchel’s July 3, 2007 email to Villafaña recounting his preliminary discussions with

to plea agreements, which involve the formal conviction of a corporation in a court proceeding.

Memorandum from Acting Deputy Attorney General Craig S. Morford to Heads of Departmental Components and United States Attorneys at n.2 (Mar. 7, 2008), available at https://www.justice.gov/archives/jm/criminal-resource-manual-163-selection-and-use-monitors. Villafaña did not have significant experience prosecuting corporate entities.

CONFIDENTIAL PLEA NEGOTIATIONS

TERMS OF EPSTEIN NON-PROSECUTION AGREEMENT

• Epstein pleads guilty (not nolo contendere) to an Information filed by the Palm Beach County State Attorney’s Office charging him with:
  • lewd and lascivious battery on a child, in violation of Fl. Stat. 800.04(4);
  • (b) solicitation of minors to engage in prostitution, in violation of Fl. Stat. 796.03; and
  • (c) engaging in sexual activity with minors at least sixteen years of age, in violation of Fl. Stat. 794.05.
• Epstein and the State Attorney’s Office make a joint, binding recommendation that Epstein serve at least two years in prison, without any opportunity for withholding adjudication or sentencing; and without probation or community control in lieu of imprisonment.
• Epstein agrees to waive all challenges to the information filed by the State and the right to appeal.
• Epstein agrees that, if any of the victims identified in the federal investigation file suit pursuant to 18 U.S.C. § 2255, Epstein will not contest the jurisdiction of the U.S. District Court for the Southern District of Florida over his person and the subject matter. Epstein will not contest that the identified victims are persons who, while minors, were victims of violations of Title 18, United States Code, Sections(s) 2422 and/or 2423.
• After Epstein enters his state court plea and is sentenced, the FBI and the U.S. Attorney’s Office will close their investigations.

V. THE USAO PRESENTS EPSTEIN WITH KEY TERMS OF A DEAL: PLEAD GUILTY TO STATE CHARGES REQUIRING A TWO-YEAR TERM OF INCARCERATION AND SEXUAL OFFENDER REGISTRATION, AND AGREE TO A MEANS FOR THE VICTIMS TO OBTAIN MONETARY DAMAGES

Although the USAO term sheet was presented to Epstein’s defense team on July 31, 2007, it took almost another two months to reach a final agreement in the form of the NPA. The contemporaneous emails show that over the course of those two months, defense counsel offered multiple counter-proposals to the USAO’s stated terms, and alternated between working out the state plea disposition and seeking an alternative federal plea arrangement. The emails make clear that as the negotiations intensified in September 2007, the prosecutors became increasingly frustrated, particularly with what they perceived as the defense tactic of agreeing to terms and provisions but then backtracking or altering the agreed-upon terms in subsequent communications. It is apparent that the defense persistence achieved some measure of success, at least concerning

the period of imprisonment, because the USAO failed to hold firm to its proposal of “at least two years in prison.” The USAO did, however, consistently reject defense proposals to change other terms, particularly the requirement that Epstein register as a sexual offender.

A. July 31, 2007: The USAO Presents Its Proposal to the Defense Team, which Makes a Counteroffer

Menchel, Sloman, Lourie, Villafaña, and the case agents met with Epstein attorneys Lefcourt, and Black on July 31, 2007, with Menchel “leading the meeting” for the USAO.⁸⁷ The USAO presented the term sheet, and Villafaña distributed a federal sentencing guidelines calculation showing that if prosecuted federally, Epstein faced a sentencing range of 188 to 235 months’ incarceration.

Villafaña recalled that during the meeting, Epstein’s attorneys opposed the requirement of sexual offender registration, argued that Epstein would not be safe in prison, suggested that Epstein serve a sentence of home confinement or “community control”⁸⁸ in lieu of incarceration, and emphasized that a state resolution provided greater sentencing flexibility.⁸⁹ Villafaña told OPR that when Epstein’s attorneys expressed concern during the meeting about Epstein’s security in a state prison and argued for a home confinement sentence, Menchel suggested Epstein plead to a federal charge so that he could serve his time in a federal facility. A few days after the meeting, Villafaña emailed Menchel, stating that she had “figured out a way to do a federal plea with a 2-1/2 year cap.”

Although Acosta had authorized a plea to state charges, emails and other correspondence show that during the negotiations, the parties also considered structuring a plea around federal

⁸⁸ According to the Florida Department of Corrections fact sheet for defendants subjected to community control,

Florida Dept. of Corrections, Succeeding on Community Control at 1, http://www.dc.state.fl.us/cc/ccforms/ Succeeding-on-Community-Control.pdf.

⁸⁷ Villafaña was the only witness with whom OPR spoke who had a substantive memory of this meeting.

The Community Control supervision program was created as a diversion to incarceration or imprisonment; therefore it is an intensive supervision program where you are confined to your home unless you are working, attending school, performing public service hours, participating in treatment or another special activity that has been approved in advance by your officer. The program was designed to build accountability and responsibility along with providing a punishment alternative to imprisonment. While on Community Control supervision (also known as “house arrest”) you will not be allowed to leave your home to visit family or friends, go out to dinner or to the movies, go on vacation, or many of the other activities you are used to being able to do . . . , but it does allow you to continue to work to support yourself and your family or attend school in lieu of being incarcerated and away from loved ones.

^<sup>89 Villafaña told OPR that she was concerned about a state resolution because the defense team “had a lot of experience with the state system. We did not.” Villafaña anticipated there would be ways to “manipulate” a state sentence and the USAO would be “giving up all control,” and she told OPR that she discussed this concern with Lourie, although she could not recall when that discussion occurred.

charges in addition to state charges. On behalf of the defense team, followed up on the July 31, 2007 meeting with an August 2, 2007 letter to Menchel:

We welcomed your recognition that a state prison sentence is neither appropriate for, nor acceptable to, Mr. Epstein, as the dangers of the state prison system pose risks that are clearly untenable. We acknowledge that your suggestion of a plea to two federal misdemeanors was an attempt to resolve this dilemma. Our proposal is significantly punitive, and if implemented, would, we believe, leave little doubt that the federal interest was demonstrably vindicated.⁹⁰

added, “We must keep in mind that Jeffrey Epstein is a 54-year-old man who has never been arrested before. He has lived an otherwise exemplary life.”

The “significantly punitive” proposal described in the defense letter involved no period of mandatory incarceration. Instead, suggested two years of home confinement, with regular reporting to and visits from a community control officer; payment of restitution, damages, court and probationary costs, and law enforcement costs; random drug testing; community service; psychological counseling; and a prohibition on unsupervised contact with the victims. The letter specifically referred to the victim damages-recovery procedure that the government had proposed under 18 U.S.C. § 2255 and represented that Epstein was “prepared to fully fund the identified group of victims which are the focus of the [USAO] – that is, the 12 individuals noted at the meeting on July 31, 2007.” Under the defense proposal, the state would incarcerate Epstein only if he failed to comply with the terms of supervised custody.

B. In an August 3, 2007 Letter, the USAO States That a Two-Year Term of Imprisonment Is the Minimum That Will Vindicate the Federal Interest

Villafaña told OPR that she and her managers agreed the counteroffer was unacceptable, and she conferred with Lourie or Menchel about the government’s response. Villafaña drafted for Menchel’s signature a letter asserting that the USAO considered a two-year term of imprisonment to be the minimum sentence that would “vindicate” the federal interest in the Epstein investigation. Villafaña’s draft stated that the USAO “has never agreed that a state prison sentence is not appropriate for Mr. Epstein,” but was willing to allow Epstein to enter a guilty plea under Federal Rule of Criminal Procedure 11(c)(1)(C) to a federal felony charge with a binding recommendation for a two-year term of incarceration. Villafaña specified that Epstein would also be required to concede liability under 18 U.S.C. § 2255 for all of the victims identified during the federal investigation, “not just the 12 that formed the basis of an initial planned charging instrument.”

^<sup>90 The USAO countered, however, that it “never agreed that a state prison sentence is not appropriate” and that “a plea to two federal misdemeanors was never extended or meant as an offer.” Records show that throughout the Epstein matter, the USAO attorneys identified instances when defense attorneys misstated or otherwise did not accurately describe events or statements. Accordingly, in evaluating the subject attorneys’ conduct, OPR did not rely on uncorroborated defense assertions.

Menchel made several substantive changes to Villafaña’s draft letter. He specified that “a two-year term of state imprisonment” was the minimum sentence that would satisfy the federal interest in the case. (Emphasis added.) With regard to the option of a federal plea, Menchel wrote that the USAO “would be willing to explore a federal conviction” and retained the reference to a Rule 11(c) plea. Menchel also removed the reference to the specific state offenses to which Epstein would be required to plead guilty. Menchel forwarded the redraft to Acosta, suggesting that they speak about it the next morning, as well as to Sloman, Lourie, and Villafaña.

The final letter, as shown on the following pages, was identical to Menchel’s redraft, except that it omitted all reference to a federal plea under Rule 11(c).⁹¹

^<sup>91 Menchel told OPR that he did not disfavor Rule 11(c) pleas but knew that the USAO believed the judges were generally averse to them. He did not recall why the provision was dropped from the letter, but “assumed” it was a decision by Acosta. In a September 6, 2007 email, Villafaña told Sloman that she and Menchel had discussed a Rule 11(c) plea, but she opined that Menchel “must have asked Alex about it and it was nixed.” Villafaña told OPR that Lourie, too, had told her Acosta did not want to do a Rule 11(c) plea.

R. ALEXANDER ACOSTA

UNITED STATES ATTORNEY

U.S. Department of Justice

United States Attorney Southern District of Florida

99 N.E. 4 Street Miami, FL 33132 (305) 961-9100 - Telephone (305) 530-6444 - Facsimile

August 3, 2007

Re: Jeffrey Epstein

Dear Lilly:

Thank you for your letter of August 2^nd regarding your proposal on how to resolve the Epstein matter.

As we explained at our meeting on July 31, 2007, the Office believes that the federal interest will not be vindicated in the absence of a two-year term of state imprisonment for Mr. Epstein. That offer was not meant as a starting point for negotiations, it is the minimum term of imprisonment that will obviate the need for federal prosecution. The Office has never agreed that a state prison sentence is not appropriate for Mr. Epstein. Rather we simply stated that if Mr. Epstein preferred to serve his sentence in a federal penetentiary, we would be willing to explore a federal conviction that may allow that in lieu of any state resolution. Further, as I made clear in our follow up telephone conversation after the meeting, a plea to two federal misdemeanors was never extended or meant as an offer.

We also would reiterate that the agreement to Section 2255 liability applies to all of the minor girls identified during the federal investigation, not just the 12 that form the basis of an initial planned charging instrument.

As you know, the ability to engage in flexible plea negotiations is dramatically changed upon the return of an indictment. Once an indictment is returned, the Office does not intend to file a Superseding Information containing a lesser charge or to dismiss the case in favor of state prosecution. LILLY ANN AUGUST 3, 2007 PAGE 2

Please let us know your client’s decision by no later than August 17. I have conferred with U.S. Attorney Acosta who has asked me to communicate that the two-year term of incarceration is a non-negotiable minimum to vindicate a federal interest, and, at this time, he is not inclined to meet with counsel for Mr. Epstein.

Sincerely,

R. Alexander Acosta United States Attorney

Matthew Menchel Chief, Criminal Division

ce: Roy Black Gerald B. Lefcourt R. Alexander Acosta Jeffrey Sloman Andrew Lourie A. Villafaña

Menchel told OPR that in his view, the two-year sentence established a “floor” for negotiations and if Epstein rejected the offer, subsequent offers would require him to accept more jail time rather than less. Menchel told OPR that the USAO was “leaving our options open” by retaining the option of a federal plea because he thought the defense was “trying . . . to get him into a federal penitentiary.” The letter’s deadline of August 17, 2007, for acceptance of the government’s offer was intended to accommodate Villafaña’s request that the deadline provide her with enough time to go to New York, pursue investigative steps involving two of Epstein’s assistants, do witness interviews, and take additional legal steps to obtain Epstein’s computers if Epstein rejected the deal. Menchel told OPR he considered August 17 to be a firm deadline: “[I]f you tell someone they have two weeks, it should be two weeks.” Menchel signed and sent the letter on Friday, August 3, 2007, which was his last day at the USAO before joining a private law firm.⁹²

The following Monday, August 6, 2007, Villafaña contacted Menchel by email at his new firm to inquire whether the letter to Epstein’s counsel had gone out on Friday. Villafaña explained

^<sup>92 Menchel told OPR that the timing of the letter to was a “total coincidence,” and had nothing to do with his impending departure from the USAO.

to OPR that she “wanted to know whether this letter went out. Because . . . if the letter didn’t go out we can make this all go away and restart.” Menchel confirmed to her that he had sent the letter out by email.

Later that day, the West Palm Beach FBI squad supervisor told Sloman that he understood Epstein had rejected the USAO’s proposal, and he asked when Epstein would be charged. Villafaña told OPR that the squad supervisor “yelled at” Sloman about the USAO’s decision not to prosecute Epstein federally. Sloman similarly told OPR that the squad supervisor “like [Villafaña] . . . [a]nd the agents felt very strongly about the case.”⁹³

C. August – September 2007: Epstein Hires Additional Attorneys, Who Meet with Acosta

1. Acosta Agrees to Meet with Epstein’s New Attorneys

Villafaña told OPR that Epstein’s team was “incensed” that Acosta would not meet with them and that the USAO had set such a short deadline to respond to its offer. Around this time, Epstein added to his team Kenneth Starr and Jay Lefkowitz, two prominent attorneys from the law firm Kirkland & Ellis, whom Acosta knew from his employment a decade earlier as an associate at the firm.⁹⁴ On the evening of August 6, 2007, Sloman emailed Acosta: “Just saw Menchel. I didn’t know Kirkland made a call into you. You were right. Unbelievable.” During their OPR interviews, neither Acosta nor Sloman remembered the call from Kirkland & Ellis and could provide no additional information about the contact.⁹⁵ A reply email from Acosta to Sloman indicates that the Kirkland & Ellis attorneys were considering elevating to the Department their objections to the USAO’s involvement in the Epstein matter. In that email, Acosta stated, “They are likely to go to DC. We should strategize a bit. We are not changing positions, and that should be made clear.”

The next day, Acosta wrote to Sloman:

[Epstein’s] attorneys want to go to DC on the case, on the grounds of a process foul, i.e., that I have not met with them. I’m concerned that this will delay matters.

I am thinking of heading this off, by (i) agreeing to meet to discuss general legal policy only (the only matter in which DC has arguable

^<sup>93 In an email to Lourie reporting the conversation, Sloman reported that he told the squad supervisor that “it’s a tad more complicated” and commented, “The guy is killing me.” The squad supervisor told OPR that he did not remember this exchange with Sloman, but he recalled the agents being “upset” with the proposed resolution of the case and he likely would have told Sloman, “When do we indict? Why don’t we just move forward?”

^<sup>94 Acosta told OPR that as a junior associate with Kirkland & Ellis from September 1995 to March 1997, he had worked on at least one matter each with Starr and Lefkowitz, and since that time, he had professional acquaintanceships with both.

^<sup>95 Menchel told OPR that he did not remember the timing of the call, but he did remember an occasion on which he entered Acosta’s office as Acosta was finishing a phone conversation, and Acosta stated, “[T]hat was Ken Starr,” and told Menchel the call related to the Epstein case.

jurisdiction), while making clear that we are not talking about the details of the case, and (ii) asking [CEOS Chief] Oosterba[an] to participate by teleconference, thereby intercepting the DC meeting.

Thoughts?

Acosta told OPR that he had no concern about Departmental “scrutiny of the NPA scheme” and that “[i]f anything,” he was concerned whether the Department might direct the USAO to “drop this case.“96

2. Leading to the Meeting with Defense Counsel, Investigative Steps Are Postponed, and the Defense Continues to Oppose Villafana’s Efforts to Obtain the Computer Evidence

On August 8, 2007, Villafafia informed Acosta that she had spoken with Oosterbaan, who was willing to join a meeting with the defense; although he could not do so in person until after August 21, he was willing to participate by phone in order “to stay firm on our August 17th deadline.” Villafafia also reiterated that she wanted to contact Epstein’s assistants in New York and to interview some of Epstein’s colleagues and former employees there. Noting that “there was some concern about [taking the proposed investigative steps] while we are trying to negotiate a plea,” Villafafia asked Acosta for guidance. Lourie also emailed Acosta and Sloman, asking that the USAO “stick to our deadline if possible.” Lourie pointed out that CEOS “has no approval authority” and opined it was “a bit extreme to allow the defense to keep arguing this [case] to different agencies.” Acosta replied, “This will end up [at the Department] anyhow, if we don’t meet with them. I’d rather keep it here. Brin[g]ing [the Chief of CEOS] in visibly does so. If our deadline has to slip a bit … it’s worth it.”

As a result, the investigative steps were postponed. On August 10, 2007, Villafafia emailed Lourie inquiring whether she could “still go ahead” with the New York trip and whether she could oppose Black’s request to stay the litigation concerning the government’s efforts to obtain Epstein’s computer equipment until after Acosta’s meeting with the defense team. Villafafia was reluctant to delay the litigation and reported to Lourie that agents recently had interviewed a girl who began seeing Epstein at age 14 and who was photographed in the nude by an Epstein assistant. On August 13, 2007, Villafafia advised Black that the USAO was not willing to agree to a stay of the litigation. However, reached out to Lourie on August 22, 2007, and obtained his agreement to a joint request for a stay until the week after Acosta’s meeting with defense counsel, which was scheduled for September 7, 2007.

Villafafia told OPR that, in her opinion, the defense efforts to put off the litigation concerning the computers was “further evidence of the importance of [this] evidence.”” Villafafia suspected the computers contained evidence that “would have put this case completely to bed.”

⁹⁶ In context, Acosta appeared to mean that although he was not concerned about the Department reviewing the NPA or its terms, he did have concerns that the Department would decide the USAO should not have accepted the case because of a lack of federal interest and might direct the USAO to end its involvement in the matter.

⁹⁷Menchel told OPR, on the other hand, “there could be a lot of reasons why” defense counsel would resist “turn[ing] over an entire computer.”

She believed that access to the computer evidence would strengthen the government’s negotiating position, but that her supervisors “did not seem to recognize that.” Villafafia said she did not understand why her supervisors were uninterested in determining what the computers contained. Instead, they instructed Villafafia to “keep calling the judge” to ask for a delay in the litigation proceedings.

Sloman told OPR that he recalled an issue about the computers, but did not recall “what the thinking was at the time” about pursuing that evidence or why Villafafia was “ordered to stand down.” Acosta, Menchel, and Lourie all told OPR that they did not recall Villafafia’s effort to obtain the computer evidence or that there had been litigation relating to it. Lourie, however, told OPR that the computers might have contained “very powerful evidence” that possibly “could have changed our advice to [Acosta], or his decision making.” In his OPR interview, Menchel was uncertain whether the computer evidence would have been useful, but also acknowledged to OPR, “You always want more as a prosecutor.”

On August 31, 2007, in preparation for the upcoming September 7, 2007 meeting with defense counsel that he planned to attend, CEOS Chief Oosterbaan traveled to West Palm Beach to meet with Villafalia and the case agents and to examine the case file. He explained to OPR that he wanted to see the file before meeting with the defense so that he could best “represent[] the interests of the prosecution team,” and that he was in favor of going forward with the case. According to Villafafia, during his review of the file, Oosterbaan told her that the case was “really good” and offered to assist Villafafia at trial.

On September 6, 2007, the day before the meeting with defense counsel, Sloman sent Villafafia an email asking, “Please refresh my recollection. What is the `deal’ on the table?” Sloman told OPR that his question reflected the fact that in his capacity as FAUSA, he was involved in “a hundred other things” at that time.” Villafafia sent Sloman the term sheet and explained to him, “You and Matt [Menchel] and I had also discussed a possible federal plea to an Information charging a 371 conspiracy, with a Rule 11 plea with a two-year cap, but I think Matt must have asked Alex about it and it was nixed.” Villafafia continued:

There are three concerns that I hope we can address tomorrow. First, that there is an absolute drop-dead date for accepting or rejecting because it is strategically important that we indict before the end of September, which means . . . September 25th. Second, the agents and I have not reached out to the victims to get their approval, which as Drew [Oosterbaan] politely reminded me, is required under the law. And third, I do not want to make any promises about allowing Epstein to self-surrender because I still believe that we have a good chance of getting him detained.”

⁹⁸Sloman noted that with the attention given to the Epstein investigation, “it seems like .. . this was the only case [in the office), but there were other cases.”

⁹⁹As Villafatia explained in her OPR interview, when a violent crime defendant self-surrenders, the government may have difficulty winning an argument for pretrial detention or bond. Contrary to Villafana’s assertion in the email, the CVRA, even when applicable, required only victim consultation, not victim approval, and as is explained in

Villafaña added that the PBPD Chief had alerted the FBI that an upcoming news article would report that Epstein was “going to plead to a state charge” and the PBPD Chief “wanted to know if the victims had been consulted about the deal.” Sloman forwarded Villafaña’s email to Acosta with a note that read simply, “fyi.”

Later that evening, Villafaña circulated to Sloman, Lourie, and Oosterbaan two alternative documents: a draft federal plea agreement and a draft NPA.¹⁰⁰ The draft federal plea agreement, following the USAO’s standard format, called for Epstein to plead guilty to a five-year conspiracy under 18 U.S.C. § 371 to entice minors to engage in prostitution, an offense requiring registration as a sexual offender, with a Rule 11(c) binding sentence of two years’ imprisonment. The draft NPA contained the terms presented to the defense team on July 31, 2007, and called for Epstein to enter a state plea by September 28, 2007. Villafaña told OPR that because she had never seen a non-prosecution agreement before, she relied on a template she found either using USAO or the Department’s internal online resources, but she did not do any additional research regarding the use of non-prosecution agreements.¹⁰¹

3. September 7, 2007: Acosta, Other USAO Attorneys, and FBI Supervisors Meet with Epstein Attorneys Starr, Lefkowitz, and

On Friday, September 7, 2007, Acosta, Sloman, Villafaña, Villafaña’s co-counsel, Oosterbaan, and one or two supervisory FBI agents met at the USAO’s West Palm Beach office with defense attorneys and, for the first time, Starr and Lefkowitz.¹⁰² This was Acosta’s first meeting with Epstein’s defense team. Villafaña understood the purpose of this meeting was to afford Epstein’s counsel an opportunity to “make a pitch” as to why the case should not be prosecuted federally. Villafaña recalled that at a “pre-meet” before defense counsel arrived, Acosta did not express concern about the viability of the prosecution or the strength of the case.

Acosta told OPR that the meeting was not “a negotiation,” but a chance for the defense to present their arguments, which were made by Starr and focused primarily on federalism. Villafaña similarly recalled that the meeting mainly consisted of the defense argument that the Epstein case should remain a state matter in which the USAO should not interfere. Both Villafaña and her co-counsel recalled that Starr addressed himself directly to Acosta, and that Starr, who had held Senate-confirmed positions in the government, commented to Acosta that he and Acosta were “the only people in this room who have run the [gantlet] of confirmation by the Senate.” Acosta did not recall the comment, but he told OPR, “[B]ack in July, we had decided that we were going

Chapter Three, the Department’s position at the time was that victim consultation was not required in matters in which the government did not pursue a federal charge. The USAO’s actions with respect to victim consultation and the Department’s interpretation of the CVRA are discussed in detail in Chapter Three of this Report.

^<sup>100 The initial draft NPA is attached as Exhibit 2 to this Report.

^<sup>101 OPR was unable to identify a template upon which she might have relied.

^<sup>102 Lourie was not present. During September 2007, he was traveling between Florida and Washington, D.C., as he transitioned to his new detail post as Principal Deputy Assistant Attorney General and Chief of Staff to the head of the Department’s Criminal Division, Assistant Attorney General Alice Fisher. He served in that detail until he left the Department in February 2008.

forward, that either there is this pre-indictment resolution, or we go forward with an indictment. The September meeting did not alter or shift our position.s103

Villafaiia told OPR that after hearing the defense argument, Acosta reiterated that the federal interest in the case could be vindicated only by a state plea to an offense that required sexual offender registration, resulted in a two-year term of incarceration, and was subject to the 18 U.S.C. § 2255 process for providing compensation to the victims. When defense counsel objected to the registration requirement, Acosta held firm, and he also rejected the defense proposal for a sentence of home confinement. In a subsequent email exchange with Criminal Division Deputy Assistant Attorney General Sigal Mandelker, who supervised CEOS, Oosterbaan reported that the meeting was “non-eventful,” noting that defense counsel argued “federalism” and might approach Criminal Division Assistant Attorney General Alice Fisher to present that argument directly to her.

VI. SEPTEMBER 2007: THE PLEA NEGOTIATIONS INTENSIFY, AND IN THE PROCESS, THE REQUIRED TERM OF IMPRISONMENT IS REDUCED

Acosta had dispensed with the August 17, 2007 plea deadline specified in Menchel’s August 3, 2007 letter, in order to allow the defense to meet with him. After that meeting, and although Villafafia continued to plan to file charges on September 25, no new plea deadline was established, and the negotiations continued through most of September.

The defense used that time to push the USAO to make concessions. Because Acosta was not willing to compromise on the issue of sexual offender registration or providing a means through which the victims could seek monetary damages, the negotiations focused on the term of imprisonment. As the contemporaneous emails show, the USAO did not hold to its position that a two-year term of imprisonment was “the minimum” that the USAO would accept. To reach an agreement with the defense on Epstein’s sentence, the USAO explored possible pleas in either federal or state court, or both, and Villafafia spent considerable time and effort working with defense counsel on developing alternative pleas with various outcomes. In the course of that process, the agreement was revised to require that Epstein accept a sentence of 18 months, with the understanding that under the state’s sentencing procedures, he would likely serve just 15 months.

A. The Incarceration Term Is Reduced from 24 Months to 20 Months

Shortly after the September 7, 2007 meeting, Epstein attorney Gerald Lefcourt, who had not been present at the meeting, spoke with both Acosta and Lourie, and made a new counteroffer, proposing that Epstein serve 15 months in jail followed by 15 months in home confinement. On the afternoon of Monday, September 10, 2007, Villafaila emailed Sloman, identifying issues she wanted to discuss with him, including her concern that defense counsel was pushing for a resolution that would allow Epstein to avoid incarceration and possibly sexual offender registration. Villafafia stated that Lefcourt’s counteroffer was “a reasonable counteroffer in light of our starting position of 24 months,” but added that it was “a really low sentence.” Villafafia

¹⁰³Sloman echoed this point, telling OPR that Starr’s presentation focused on the issue of federalism, but the USAO had already decided to defer prosecution to the state and after the meeting, the USAO continued on that path.

noted that the revised charges involved 19 victims, so the defense proposal for a 15-month sentence amounted to less than one month per victim. Villafaña requested that “whatever the U.S. Attorney decides to do,” the agreement with Epstein should “follow . . . a version of my written nonprosecution agreement” in order to “avoid any state shenanigans and . . . keep the defense on a strict timeline.”

Later that day, Villafaña circulated to Acosta and Sloman a revised NPA that called for a 20-month jail sentence to be followed by 10 months of home confinement. This redrafted NPA contained a provision that specified, “With credit for gain time, Epstein shall serve at least 17 months in a state correctional institution.”¹⁰⁴ Acosta reviewed the revised NPA and amended it to include a statement clarifying that it was Epstein’s obligation “to undertake discussions with the State of Florida to ensure compliance with these procedures.” Villafaña sent her version of the revised NPA to Lefcourt that afternoon and forwarded Acosta’s proposed change to him the following day, after she learned of it.

On September 11, 2007, the court contacted Villafaña to inquire whether the USAO would be prepared to proceed with the litigation concerning the computers the following day. At Sloman’s direction, Villafaña asked the court to delay the hearing, and the court rescheduled it for the following week. At the same time, anticipating that plea negotiations would fail, Villafaña circulated a revised indictment to her co-counsel and Oosterbaan, seeking their feedback before sending it “through the chain of command.” Villafaña also sent Oosterbaan the revised NPA and told him she was “still shooting for 9/25” to bring charges, assuming the defense declined the USAO’s offer. Oosterbaan responded, “The counter-offering is unfortunate, but I suppose it’s understandable.”¹⁰⁵

That afternoon, Lourie asked Villafaña, “What is our latest offer?” Villafaña responded, “Plead to the three specified [state] charges, a 30-month sentence, split 20 in jail and 10 in ‘community control,’ and agree that the girls are victims for purposes of damages. We also put in deadlines for a plea and sentencing date.”

B. September 12, 2007: The USAO and Defense Counsel Meet with the State Attorney

Although the USAO and defense counsel had been discussing resolving the federal investigation with a plea to state charges, there is no evidence that the USAO involved the State Attorney’s Office in those discussions until September 12, 2007. On that day, Lourie, Villafaña, and another USAO supervisor who would be replacing Lourie as manager of the USAO’s West Palm Beach office, and Epstein attorneys Lefkowitz, Lefcourt, and Goldberger met with State Attorney Barry Krischer and Assistant State Attorney Lanna Belohlavek. Other than Villafaña, few of the participants had any memory of the meeting or the results of it. The available evidence indicates that the USAO made additional concessions during the meeting.

^<sup>104 Through “gain time,” Florida inmates can earn a reduction in their sentence for good behavior.

^<sup>105 Oosterbaan told OPR that he did not recall having read the NPA at this juncture and “had no involvement with it.”

Villafaña told OPR that during the meeting, the group discussed the draft NPA, but she did not think they gave a copy to Krischer and Belohlavek. Neither Krischer nor Belohlavek expressed concern about proceeding as the USAO was proposing. According to Villafaña, Belohlavek explained that a plea to the three state counts identified in the draft NPA would affect the state’s sentencing guidelines, and that it would be better for the guidelines calculation if Epstein pled guilty to just one of the three counts. Villafaña recalled that when Belohlavek confirmed that Epstein would be required to register as a sexual offender if he pled to any one of the three charges, Lourie, speaking for the USAO, agreed to allow Epstein to enter his plea to just one state charge in addition to the pending state indictment, and the defense attorneys selected the charge of procurement of minors to engage in prostitution.¹⁰⁶ Lourie, however, disputed Villafaña’s recollection that he made the final decision, stating that it was “illogical” to conclude that he had the authority to change the terms of agreement unilaterally.¹⁰⁷

During the meeting, defense counsel raised concerns about Epstein serving time in state prison. Villafaña also told OPR that Lourie, the other supervisor, and she made clear during the meeting that they expected Epstein to be incarcerated 24 hours a day, seven days a week, during the entirety of his sentence, and they did not “particularly care” whether it was in a state or local facility. Belohlavek explained to OPR that in order for Epstein to serve his time in a county facility, rather than state prison, his sentence on each charge could be no more than 12 months, so that, for example, consecutive terms of 12 months and 6 months—totaling 18 months—could be served in the county jail. Villafaña told OPR:

Our thing was incarceration 24 hours a day. So during this meeting, I remember [the defense] talking about … a one year count followed by a six-month count … that [Epstein] could serve them back to back but at the county jail, rather than having to go to a state facility. But then I said, “But if you do that, it’s still going to have to be round the clock incarceration.” And Barry Krischer said yes. And [he] said that to avoid [Epstein being extorted while incarcerated], he would be kept in solitary confinement.

Villafaña did not recall whether she and Lourie agreed to an 18-month sentence during that meeting, but she told OPR that in her view, allowing Epstein to serve his sentence in the county jail was not a “concession” because he would be incarcerated regardless.

Neither Lourie nor the other USAO supervisor present could recall any substantive details of the September 12, 2007 meeting, and Krischer and Belohlavek told OPR they did not remember the meeting at all. Krischer did, however, recall that he was “not offended at all” when he learned of the proposed federal resolution, requiring Epstein to plead to both the pending state indictment and an additional charge requiring sexual offender registration, explaining to OPR that Epstein “was going to plead guilty to my indictment, we were going to add an additional charge, he was

^<sup>106 Later, the defense would claim that they had mistakenly understood that the selected charge would not involve sexual offender registration.

^<sup>107 As noted below, a contemporaneous email indicates that shortly after the meeting, Lourie and Villafaña spoke with Acosta and Sloman, who concurred with the agreement.

going to become a registered sex offender, and he was going to go actually do time—which he hadn’t done up to this point.” Krischer asked, “Why would I turn that down?” Krischer also noted that at that time, sexual offender registration “was not the norm” in Florida, and he recognized that “it was clearly something that was important to the U.S. Attorney’s Office.“108

Acosta told OPR that he did not recall if he learned what transpired at the September 12 meeting, nor did he recall why the USAO team agreed to permit Epstein to plead guilty to only one charge. Acosta told OPR, however, that he recognized that Villafafia and Lourie needed “some degree of discretion to negotiate”; that “in the give and take” of negotiations, they might propose a concession; and he was comfortable with the concession as long as the charge to which Epstein ultimately pled “captured the conduct” in an “appropriate” way.

Although Epstein’s attorneys expressed interest in Epstein serving his time in a county facility (rather than state prison), one of Epstein’s attorneys alternatively expressed interest in Epstein serving his time in a federal facility, and along with discussions about the possible state resolution, the USAO and Epstein’s counsel also discussed a possible federal plea with a sentence running concurrently to the sentence Epstein would receive on the already indicted state charge. Later that day, Villafafia sent Lefkowitz an email advising that she and Lourie had talked with Acosta and Sloman, and they were “all satisfied in principle with the agreement.”’” The next day, September 13, 2007, Villafafia sent an email to Acosta, Sloman, Lourie, and two other supervisors, identifying potential federal offenses that would yield a two-year sentence. Villafafia also emailed defense counsel, stating that she had been “spending some quality time with Title 18”—referring to the code of federal criminal statutes—to make sure there would be a “factual basis” for any federal plea, and identifying the federal statutes she was considering.

C. The Evidence Does Not Clearly Show Why the Term of Incarceration Was Reduced from 24 Months to 20 Months to 18 Months

OPR reviewed the contemporaneous records and asked Acosta, Villafafia, and Lourie to explain how the jail term Epstein would have to accept came to be reduced from two years to 18 months. Lourie had no recollection of the process through which the term of incarceration was reduced. Villafafia and Acosta offered significantly different explanations.

Villafafia told OPR:

We had this flip flop between is it going to be a state charge, is it going to be a federal charge, is it going to be [a] state charge, is it going to be a federal charge? And to get to a federal charge, there was no way to do 24 months that made any sense. So somehow it ended up being 20 months and then it got to be 18 months. And these were calls that if I remember correctly, Jay Lefkowitz was

los Belohlavek, however, told OPR that sexual offender registration “was a common occurrence” for enumerated state crimes, but the state crime charged in the state indictment against Epstein was not one of them.

¹⁰⁹The email does not indicate what the parties meant by “the agreement.”

having directly with Alex Acosta, and Alex Acosta agreed to 18 months.

Villafaila further explained to OPR:

Regarding going from 24 months to 20 months, I recall a discussion that 24 months of federal time was really 20 months after gain time, so Epstein should be allowed to plead to 20 months’ in the state. Epstein’s counsel represented that he wouldn’t get gain time like that in the [s]tate, and someone above me agreed. Later, of course, as shown in the agreements, Epstein’s counsel (Jay Lefkowitz) got Alex to agree that Epstein should be allowed to earn gain time in the [s]tate, so the 20 months in the state became at least 17 months.

Regarding going from 20 months’ to 18 months, … this came from a negotiation between Epstein’s counsel and Andy or Alex where the federal statutory max could only be 24 or 18, so 18 was agreed to. I also recall that, after Epstein’s counsel decided that they wanted to proceed with an NPA and only a state guilty plea, I asked Alex why we didn’t return to 20 months because the reason why we went to 18 months was because that was the only way to end up with a federal statutory maximum.“’

However, a subsequent account of the history of negotiations with Epstein’s attorneys, drafted by Villafafia for Acosta several weeks after the September 12, 2007 meeting with the State Attorney’s Office, stated that “a significant compromise” reached at the meeting “was a reduction in the amount of jail time — from [the originally proposed] twenty-four months down to eighteen months, which would be served at the Palm Beach County Jail rather than a state prison facility.” Acosta also noted to OPR that Villafafia was engaged in a “tough negotiation,” and he was willing to allow her the discretion to reduce the amount of incarceration time without him “secondguessing” her. Acosta acknowledged that he “clearly approved it at some point.”

Based on this record, OPR could not definitively determine when, how, or by whom the decision was made to reduce the required term of imprisonment from 24 months to 18 months. It is possible that the reduction was connected to Epstein’s effort to achieve a result that would allow him to serve his time in a county facility, but it may also have resulted from the parties’ attempts to reach agreement on federal charges that would not result in a sentence of incarceration greater than what had been discussed with respect to state charges. In the end, the evidence shows that Acosta approved of a reduced term of incarceration from 24 months to 18 months, and the USAO understood at the time that the state gain time requirement would further reduce the actual amount of time Epstein would spend incarcerated.

no By “federal statutory maximum,” Villafana referred to 12-month and 6-month misdemeanors.

D. The Parties Continue to Negotiate but Primarily Focus on a Potential Plea to Federal Charges

During the remainder of September, Villafaña conducted plea negotiations and drafted the final NPA, mainly with Epstein attorney Jay Lefkowitz. In a September 13, 2007 email to CEOS Chief Oosterbaan, Villafaña reported that the plea negotiations were “getting fast and furious.” She said that the defense wanted to establish a “victim’s fund” through which Epstein could make payments to the victims, rather than having the victims file individual § 2255 court actions for damages, which she speculated was “to keep this stuff out of the public [c]ourt files.”

According to the email documentation, by Friday, September 14, 2007, the parties had moved toward a “hybrid” federal plea agreement, incorporating a plea to state charges, which would allow Epstein to serve his sentence for all the charges concurrently in a federal prison. Villafaña informed Acosta, Sloman, Lourie, and other colleagues that negotiations with Lefkowitz had resulted in a tentative agreement for Epstein to plead to two federal charges: harassment to prevent a witness from reporting a crime (18 U.S.C. § 1512(d)(2), which was then a one-year misdemeanor), and simple assault on an airplane (18 U.S.C. § 113(a)(5), a six-month misdemeanor). Villafaña reported that Lefkowitz “put in a pitch for only 12 months, I put in a pitch that [Epstein] plead to 24 with a 20-month recommendation, and we decided that we would be stuck with the 18 months.”

Later that day, Villafaña sent to Lefkowitz a draft “hybrid” plea agreement and information mirroring the agreement in principle she had described to her supervisors, but which she noted had “not yet been blessed” by them. The agreement provided that Epstein would plead guilty to the two federal charges for which the parties would jointly recommend that he be sentenced to the statutory maximum penalty of 18 months’ imprisonment followed by 2 years of supervised release, and that he would also plead guilty to the state registrable offense of procurement of minors to engage in prostitution, for which Epstein and the State Attorney’s Office would make a joint, binding recommendation that he be sentenced to serve at least 20 months in prison followed by 10 months of community control (home confinement). Although not specified in the draft agreement, the negotiations evidently expected the federal and state terms would run concurrently. In addition to payment of restitution, Epstein would not oppose jurisdiction or victim status for any of the victims identified in the federal investigation—at that point specified as numbering 40—who elected to file suit for damages under 18 U.S.C. § 2255. A guardian ad litem would be appointed to communicate with the defense on the victims’ behalf.

Lourie, however, quickly made clear that he was not in favor of the proposal. In response to Villafaña’s email about the potential federal charges, but after Villafaña sent the proposal to Lefkowitz, Lourie told her, “The assault [charge] sounds like a stretch and factually [is] sort of silly.”¹¹¹ Lourie also told Sloman, Acosta, and another supervisor that he did not “like the assault charge” and believed that it would not “go smooth with every judge.” Acosta responded, “If we need[,] let’s find a different charge.” On Saturday, September 15, 2007, Villafaña emailed Lefkowitz, using her personal email address, reporting that she had “gotten some negative reaction

^<sup>111 The charge was to be based on “an incident in which Epstein ‘put great pressure’ . . . on [one of his female assistants] to call the girls to set up appointments.”

to the assault charge” and suggesting a different factual scenario to support a federal charge.¹¹² At this point, Sloman left on vacation, and he informed Acosta and Villafaña that in his absence Lourie had agreed “to help finalize this.” Lourie spent the following work week at his new post at the Department in Washington, D.C., but communicated with his USAO colleagues by phone and email.

In a Sunday, September 16, 2007 email, Villafaña informed Lefkowitz that she had drafted a factual proffer to accompany a revised “hybrid” federal plea proposal. In that email, Villafaña also noted that she was considering filing charges in the federal district court in Miami, “which will hopefully cut the press coverage significantly.” This email received considerable attention 12 years later when it was made public during the CVRA litigation and was viewed as evidence of the USAO’s efforts to conceal the NPA from the victims. Villafaña, however, explained to OPR that she was concerned that news media coverage would violate the victims’ privacy. She told OPR, “[I]f [the victims] wanted to attend [the plea hearing], I wanted them to be able to go into the courthouse without their faces being splashed all over the newspaper,” and that such publicity was less likely to happen in Miami, where the press “in general does not care about what happens in Palm Beach.”

Lefkowitz responded to Villafaña with a revised version of her latest proposed “hybrid” plea agreement, in a document entitled “Agreement.” Significantly, this defense proposal introduced two new provisions. The first related to four female assistants who had allegedly facilitated Epstein in his criminal scheme. The defense sought a government promise not to prosecute them, as well as certain other unnamed Epstein employees, and a promise to forego immigration proceedings against two of the female assistants:

Epstein’s fulfilling the terms and conditions of the Agreement also precludes the initiation of any and all criminal charges which might otherwise in the future be brought against [four named female assistants] or any employee of [a specific Epstein-owned corporate entity] for any criminal charge that arises out of the ongoing federal investigation . . . Further, no immigration proceeding will be instituted against [two named female assistants] as a result of the ongoing investigation.

The second new provision related to the USAO’s efforts to obtain Epstein’s computers:

Epstein’s fulfilling the terms and conditions of the Agreement resolves any and all outstanding [legal process] that have requested witness testimony and/or the production of documents and/or computers in relation to the investigation that is the subject of the Agreement. Each [legal process] will be withdrawn upon the execution of the Agreement and will not be re-issued absent reliable

^<sup>112 Villafaña told OPR that she sometimes used her home email account because “[n]egotiations were occurring at nights, on weekend[s], and while I was [away from the office for personal reasons], . . . and this occurred during a time when out of office access to email was very limited.” Records show her supervisors were aware that at times she used her personal email account in communicating with defense counsel in this case.

evidence of a violation of the agreement. Epstein and his counsel agree that the computers that are currently under [legal process] will be safeguarded in their current condition by Epstein’s counsel or their agents until the terms and conditions of the Agreement are fulfilled.

Later that day, Villafaña sent Lefkowitz a lengthy email to convey two options Lourie had suggested: “the original proposal” for a state plea but with an agreement for an 18-month sentence, or pleas to state charges and two federal obstruction-of-justice charges. Villafaña also told Lefkowitz she was willing to ask Acosta again to approve a federal plea to a five-year conspiracy with a Rule 11(c) binding recommendation for a 20-month sentence. Villafaña explained:

As to timing, it is my understanding that Mr. Epstein needs to be sentenced in the state after he is sentenced in the federal case, but not that he needs to plead guilty and be sentenced after serving his federal time. Andy recommended that some of the timing issues be addressed only in the state agreement, so that it isn’t obvious to the judge that we are trying to create federal jurisdiction for prison purposes.

With regard to prosecution of individuals other than Epstein, Villafaña suggested standard federal plea agreement language regarding the resolution of all criminal liability, “and I will mention ‘co-conspirators,’ but I would prefer not to highlight for the judge all of the other crimes and all of the other persons that we could charge.” Villafaña told OPR that she was willing to include a non-prosecution provision for Epstein’s co-conspirators, who at the time she understood to be the four women named in the proposed agreement, because the USAO was not interested in prosecuting those individuals if Epstein entered a plea. Villafaña told OPR, “[W]e considered Epstein to be the top of the food chain, and we wouldn’t have been interested in prosecuting anyone else.” She did not consider the possibility that Epstein might be trying to protect other, unnamed individuals, and no one, including the FBI case agents, raised that concern. Villafaña also told OPR that her reference to “all of the other crimes and all of the other persons that we could charge” related to her concern that if the plea agreement contained information about uncharged conduct, the court might ask for more information about that conduct and inquire why it had not been charged, and if the government provided such information, Epstein’s attorneys might claim the agreement was breached.¹¹³

With regard to immigration, Villafaña told OPR that the USAO generally did not take any position in plea agreements on immigration issues, and that in this case, there was no evidence that either of the two assistants who were foreign nationals had committed fraud in connection with their immigration paperwork, “and I think that they were both in status. So there wasn’t any reason

^<sup>113 OPR understood Villafaña’s concern to be that if the government were required to respond to a court’s inquiry into additional facts, Epstein would object that the government was trying to cast him in a negative light in order to influence the court to impose a sentence greater than the agreed-upon term.

for them to be deported.“¹¹⁴ As to whether the foreign nationals would be removable by virtue of having committed crimes, Villafaña told OPR she did not consider her role as seeking removal apart from actual prosecution.

Villafaña concluded her email to Lefkowitz by expressing disappointment that they were not “closer to resolving this than it appears that we are,” and offering to meet the next day to work on the agreement:

Can I suggest that tomorrow we either meet live or via teleconference, either with your client or having him within a quick phone call, to hash out these items? I was hoping to work only a half day tomorrow to save my voice for Tuesday’s hearing . . . , if necessary, but maybe we can set a time to meet. If you want to meet “off campus” somewhere, that is fine. I will make sure that I have all the necessary decision makers present or “on call,” as well.¹¹⁵

Villafaña told OPR that she offered to meet Lefkowitz away from the USAO because conducting negotiations via email was inefficient, and Villafaña wanted “to have a meeting where we sat down and just finalized things. And what I meant by off campus is, sometimes people feel better if you go to a neutral location” for a face-to-face meeting.

On the morning of Monday, September 17, 2007, the USAO supervisor who was taking over Lourie’s duties as manager of the West Palm Beach office asked Villafaña for an update on the plea negotiations, and she forwarded to him the email she had sent to Lefkowitz the previous afternoon. Villafaña told the manager, “As you can see . . . there are a number of things in their last draft that were unacceptable. All of the loopholes that I sewed up they tried to open.”

Shortly thereafter, Villafaña alerted the new manager, Acosta, and Lourie that she had just spoken with Lefkowitz, who advised that Epstein was leaning towards a plea to state charges under a non-prosecution agreement, and she would be forwarding to Lefkowitz “our last version of the Non-Prosecution Agreement.” Acosta asked that Villafaña “make sure they know it[’]s only a draft” and reminded her that “[t]he form and language may need polishing.” Villafaña responded, “Absolutely. There were a lot of problems with their last attempt. They tried to re-open all the loopholes that I had sewn shut.” Villafaña sent to Lefkowitz the draft NPA that she had provided to Lefcourt on September 11, 2007, noting that it was the “last version” and would “avoid [him] having to reinvent the wheel.” She also updated the FBI case agents on the status of negotiations, noting that she had told her “chain of command . . . that we are still on for the [September] 25th [to bring charges] . . . , no matter what.”

After receiving the draft NPA, Lefkowitz asked Villafaña to provide for his review a factual proffer for a federal obstruction of justice charge, and, with respect to the NPA option, asked, “[I]f

^<sup>114 According to the case agents, the West Palm Beach FBI office had an ICE agent working with them at the beginning of the federal investigation, and the ICE agent normally would have looked into the immigration status of any foreign national, but neither case agent recalled any immigration issue regarding any of the Epstein employees.

^<sup>115 Lefkowitz was based in New York City but traveled to Miami in connection with the case.

we go that route, would you intend to make the deferred [sic] prosecution agreement public?” Villafaña replied that while a federal plea agreement would be part of the court file and publicly accessible, the NPA “would not be made public or filed with the Court, but it would remain part of our case file. It probably would be subject to a FOIA [Freedom of Information Act] request, but it is not something that we would distribute without compulsory process.”¹¹⁶ Villafaña told OPR that she believed Epstein did not want the NPA to be made public because he “did not want people to believe him to have committed a variety of crimes.” As she explained to OPR, Villafaña believed the NPA did not need to be disclosed in its entirety, but she anticipated notifying the victims about the NPA provisions relating to their ability to recover damages.

E. The Parties Appear to Reach Agreement on a Plea to Federal Charges

Negotiations continued the next day, Tuesday, September 18, 2007. Responding to Villafaña’s revised draft of the NPA, Lefkowitz suggested that Epstein plead to one federal charge with a 12-month sentence, followed by one year of supervised release with a requirement for home detention and two years of state probation, with the first six months of the state sentence to be served under community control. Villafaña replied, “I know that the U.S. Attorney will not go below 18 months of prison/jail time (and I would strongly oppose the suggestion).” Shortly thereafter, Villafaña emailed Acosta, Lourie, and the incoming West Palm Beach manager:

Hi all – I think that we may be near the end of our negotiations with Mr. Epstein, and not because we have reached a resolution. As I mentioned yesterday, I spent about 12 hours over the weekend drafting Informations, changing plea agreements, and writing factual proffers. I was supposed to receive a draft agreement from them yesterday, which never arrived. At that time, they were leaning towards pleading only to state charges and doing all of the time in state custody.

Late last night I talked to Jay Lefkowitz who asked about Epstein pleading to two twelve-month federal charges with half of his jail time being spent in home confinement pursuant to the guidelines. I told him that I had no objection to that approach but, in the interest of full disclosure, I did not believe that Mr. Epstein would be eligible because he will not be in Zone A or B.¹¹⁷ This morning Jay Lefkowitz called and said that I was correct but, if we could get Mr. Epstein down to 14 months, then he thought he would be eligible.

My response: have him plead to two separate Informations. On the first one he gets 12 months’ imprisonment and on the second he gets

^<sup>116 FOIA requires disclosure of government records upon request unless an exemption applies permitting the government to withhold the requested records. See 5 U.S.C. § 552.

^<sup>117 Sentences falling within Zones A or B of the U.S. Sentencing Guidelines permit probation or confinement alternatives to imprisonment.

twelve months, with six served in home confinement, to run consecutively.

I just received an e-mail asking if Mr. Epstein could just do 12 months imprisonment instead.

As you can see, Mr. Epstein is having second thoughts about doing jail time. I would like to send Jay Leflcowitz an e-mail stating that if we do not have a signed agreement by tomorrow at 5:00, negotiations will end. I have selected tomorrow at 5:00 because it gives them enough time to really negotiate an agreement if they are serious about it, and if not, it gives me one day before the Jewish holiday to get [prepared] for Tuesday . . . [September 25] , when I plan to [file charges], and it gives the office sufficient time to review the indictment package.

Do you concur?

A few minutes later, the incoming West Palm Beach manager emailed Lourie, suggesting that Lourie “talk to Epstein and close the deal.”’”

Within moments, Lourie replied to the manager, with a copy to Villafafia, reporting that he had just spoken with Leflcowitz and agreed “to two fed[eral] obstruction[] charges (24 month cap) with nonbinding recommendation for 18 months. When [Epstein] gets out, he has to plead to state offenses, including against minor, registrable, and then take one year house arrest/community confinement.” By reply email, Villafafta asked Lourie to call her, but there is no record of whether they spoke.

F. Defense Counsel Offers New Proposals Substantially Changing the Terms of the Federal Plea Agreement, which the USAO Rejects

Approximately an hour after Lourie’s email reporting the deal he had reached with Lefkowitz, Lefkowitz sent Villafafta a revised draft plea agreement. Despite the agreement Lourie believed he and Leflcowitz had reached that morning, Lefkowitz’s proposal would have resulted in a 16-month federal sentence followed by 8 months of supervised release served in the form of home detention. Lefkowitz also inserted a statement in his proposal explicitly prohibiting the USAO from requesting, initiating, or encouraging immigration authorities to institute immigration proceedings against two of Epstein’s female assistants.

Villafafia circulated the defense’s proposed plea agreement to Lourie and two other supervisors, and expressed frustration that the new defense version incorporated terms that were “completely different from what Jay just told Andy they would agree to.” Villafafia also pointed out that the defense “wants us to recommend an improper calculation” of the sentencing guidelines

¹¹s The manager told OPR that he probably meant this as a joke because in his view the continued back-andforth communications with defense counsel “was ridiculous,” and the only way to “get this deal done” might be to have a direct conversation with Epstein.

and had added language waiving the preparation of a presentence investigation (PSI) “so he can keep all of his information confidential. I have already told Jay that the PSI language . . . was unacceptable to our office.” Of even greater significance, in a follow-up email, Villafaña noted that the defense had removed both the requirement that Epstein plead to a registrable offense and the entire provision relating to monetary damages under 18 U.S.C. § 2255.

In the afternoon, Villafaña circulated her own proposed “hybrid” plea agreement, first internally to the management team with a note stating that it “contains the 18/12 split that Jay and Andy agreed to,” and then to Lefkowitz. Regarding the prosecution of other individuals, she included the following provision: “This agreement resolves the federal criminal liability of the defendant and any co-conspirators in the Southern District of Florida growing out of any criminal conduct by those persons known to the [USAO] as of the date of this plea agreement,” including but not limited to the conspiracy to solicit minors to engage in prostitution.

In her email to Lefkowitz, transmitting the plea agreement, Villafaña wrote:

. . . .

Could you share the attached draft with your colleagues. It is in keeping with what Andy communicated to me was the operative “deal.” The U.S. Attorney hasn’t had a chance to review all of the language, but he agrees with it in principle.

[The West Palm Beach manager] and I will both be available at 2:00. … One of my suggestions is going to be (again) that we all sit down together in the same room, including Barry [Krischer] and/or Lanna [Belohlavek], so we can hash out the still existing issues and get a signed document.

Villafaña also emailed Acosta directly, telling him she planned to meet with Epstein’s attorneys to work on the plea agreement, and asking if Acosta would be available to provide final approval. Acosta replied, “I don’t think I should be part of negotiations. I’d rather leave it to you if that’s ok.” Acosta told OPR that “absent truly exceptional circumstances,” he believed it was important for him “to not get involved” in negotiations, and added, “You can meet, like I did in September, [to] reaffirm the position of the office, [and] back your AUSA, but ultimately, I think your trial lawyer needs discretion to do their job.” Villafaña told OPR, however, that she did not understand Acosta to be giving her discretion to conduct the negotiations as she saw fit; rather, she believed Acosta did not want to engage in face-to-face negotiations because “he wanted to have an appearance of having sort of an arm’s length from the deal.”¹¹⁹ Villafaña replied to Acosta’s

^<sup>119 As noted throughout the Report, Villafaña’s interpretation of her supervisors’ motivations for their actions often differed from the supervisors’ explanations for their actions. Because it involved subjective interpretations of individuals’ motivations, OPR does not reach conclusions regarding the subjects’ differing views but includes them as an indication of the communication issues that hindered the prosecution team. See Chapter Two, Part Three, Section V.E.

message, “That is fine. [The West Palm Beach manager] and I will nail everything down, we just want to get a final blessing.”

Negotiations continued throughout the day on Wednesday, September 19, 2007, with Villafaña and Lefkowitz exchanging emails regarding the factual proffer for a plea and the scheduling of a meeting to finalize the plea agreement’s terms. During that exchange, Villafaña made clear to Lefkowitz that the time for negotiating was reaching an end:

I hate to have to be firm about this, but we need to wrap this up by Monday. I will not miss my [September 25 charging] date when this has dragged on for several weeks already and then, if things fall apart, be left in a less advantageous position than before the negotiations. I have had an 82-page pros memo and 53-page indictment sitting on the shelf since May to engage in these negotiations. There has to be an ending date, and that date is Monday.

Early that afternoon, Lourie—who was participating in the week’s negotiations from his new post at the Department in Washington, D.C.—asked Villafaña to furnish him with the last draft of the plea agreement she had sent to defense counsel, and she provided him with the “18/12 split” draft she had sent to Lefkowitz the prior afternoon. After reviewing that draft, Lourie told Villafaña it was a “[g]ood job” but he questioned certain provisions, including whether the USAO’s agreement to suspend the investigation and hold all legal process in abeyance should be in the plea agreement. Villafaña told Lourie that she had added that paragraph at the “insistence” of the defense, and opined, “I don’t think it hurts us.” Villafaña explained to OPR that she held this view because “Alex and people above me had already made the decision that if the case was resolved we weren’t going to get the computer equipment.”

At 3:44 p.m. that afternoon, Lefkowitz emailed a “redline” version of the federal plea agreement showing his new revisions, and noted that he was “also working on a deferred [sic] prosecution agreement because it may well be that we cannot reach agreement here.” The defense redline version required Epstein to plead guilty to a federal information charging two misdemeanor counts of attempt to intentionally harass a person to prevent testimony, the pending state indictment charging solicitation of prostitution, and a state information charging one count of coercing a person to become a prostitute, in violation of Florida Statute § 796.04 (without regard to age). Neither of the proposed state offenses required sexual offender registration. Epstein would serve an 18-month sentence and a concurrent 60 months on probation on the state charges. The redline version again deleted the provisions relating to damages under 18 U.S.C. § 2255 and replaced it with the provision requiring creation of a trust administered by the state court. It retained language proposed by Villafaña, providing that the plea agreement “resolves the federal criminal liability of the defendant and any co-conspirators in the Southern District of Florida growing out of any criminal conduct by those persons known to the [USAO] as of the date of this plea agreement,” but also re-inserted the provision promising not to prosecute Epstein’s assistants and the statement prohibiting the USAO from requesting, initiating, or encouraging immigration proceedings. It also included a provision stating the government’s agreement to forgo a presentence investigation and a promise by the government to suspend the investigation and withdraw all pending legal process.

G. Villafafia and Lourie Recommend Ending Negotiations, but Acosta Urges That They “Try to Work It Out”

In the late afternoon of Wednesday, September 19, 2007, Villafafia expressed her increasing frustration to her supervisors. She emailed the defense redline version of the plea agreement to Lourie and the incoming West Palm Beach manager, identifying all of the provisions she had “specifically discussed with [the defense team] and rejected, that they have re-inserted into the agreement.” (Emphasis in original). Villafafia opined, “This is NOT good faith negotiations.” Lourie responded that he would “reach out to Alex to discuss.”

Lourie immediately emailed Acosta the following:

I looked at the latest draft from Jay [Lefkowitz] and I must agree with . Based on my own conversations with him, his draft is out of left field. He claims to orally agree to our terms and then sends us a document that is the opposite. I suggest we simply tell him that his counter offer is rejected and that we intend to move forward with our case.

Acosta replied:

Why don’t we just call him. Tell him

• I. You agree, and then change things.
• 2. That’s not acceptable, and is in bad faith. Stop it or we’ll indict.
• 3. Try to work it out.

It seems that we are close, and it[’]s worth trying to overcome what has to be painfully … annoying negotiating tactics.

Acosta explained to OPR that he recognized,

[t]his negotiation was a pain, but if it was the right position, the fact that you’ve got annoying counsel on the other side doesn’t it make it less of a right position. You tell them stop being annoying, you try to work it out, and if not, then you indict.

In response to Acosta’s instruction, Lourie responded, “Ok will do.” He also forwarded to Acosta the latest version of the USAO draft “hybrid” plea agreement that Villafana had sent to Lefkowitz the previous day, which Lourie had requested and obtained from Villafafia earlier that afternoon.

Meanwhile, Villafaila sent to Lourie and his successor West Palm Beach manager a draft message she proposed to send to Lefkowitz with her objections to the defense revisions, explaining, “I know that you keep saying he is going to plead, and he will plead if we cave on everything, but I really do not think that Mr. Epstein is going to engage in serious negotiations until he sees the Indictment and shows up in mag [federal magistrate judge] court.” She suggested charging Epstein on a federal conspiracy charge, and if he refused to plead to that offense, superseding with additional charges and going to trial. She complained that after seven weeks of negotiations, “we are just spinning our wheels.” Her proposed email to Lefkowitz detailed all of the objectionable provisions in his draft, and concluded, “If you or your client insists on these, there can be no plea agreement.”

H. Acosta Edits the Federal Plea Agreement, and Villafaña Sends a Final Version to the Defense

The next day, Thursday, September 20, 2007, Villafaña emailed Assistant State Attorney Belohlavek and informed her:

Our deadline is Monday evening for a signed agreement and arraignment in the federal system. At this time, things don’t look promising anyway, but I will keep you posted. In their latest draft, they changed what they agreed to plead to in the state from solicitation of minors for prostitution (a registrable offense) to forcing adults into prostitution (a non-registrable offense). We will not budge on this issue, so it is looking unlikely that we will reach a mutually acceptable agreement. If that changes, I will let you know.

Acosta sent Lourie “[s]ome thoughts” about the USAO version of the proposed “hybrid” federal plea agreement he had received from Lourie the evening before, commenting that “it seems very straightforward” and “we are not changing our standard charging language” for the defense.¹²⁰ Noting that the draft was prepared for his signature, Acosta told Lourie that he did not typically sign plea agreements and “this should not be the first,” adding that the USAO “should only go forward if the trial team supports and signs this agreement.”¹²¹ Lourie forwarded the email to Villafaña with a transmittal message simply reading, “I think Alex’s changes are all good ones. Please try to incorporate his suggestions, change the signature block to your name and send as final to Jay.” Lourie also noted to Acosta and Villafaña that he believed the defense would want to go back to the initial offer of a state plea with a non-prosecution agreement. When Villafaña sent the revised plea agreement to Lefkowitz later that afternoon, she advised him that if the defense wanted to return to the original offer of a state plea only, the draft NPA she had sent to him on September 17, 2007, would control.

^<sup>120 The USAO had standard federal plea agreement language, from which this “hybrid” plea agreement had substantially diverged.

^<sup>121 The standard procedure was for documents such as plea agreements to be signed by an AUSA under the name of the U.S. Attorney. In his OPR interview, Acosta further explained that wanted to give “the trial team” an opportunity to voice any objections because “if it’s something they don’t feel comfortable with we . . . shouldn’t go forward with it.”

I. The Defense Rejects the Federal Plea Agreement, Returns to the NPA “State-Only” Resolution, and Begins Opposing the Sexual Offender Registration Requirement

After having spent days negotiating the federal charges to be included in a plea agreement, by the afternoon of September 20, 2007, the defense rejected the federal plea option, and the parties resumed negotiations over the details of an NPA calling for Epstein to plead to only state charges. Through multiple emails and attempts (some successful) to speak directly with Acosta and other supervisors, defense attorneys vigorously fought the USAO’s insistence that Epstein plead to a state charge requiring sexual offender registration.

After receiving the federal plea agreement, Lefkowitz spoke with Villafafta. She reported to Acosta and Lourie that Lefkowitz told her the defense was “back to doing the state-chargesonly agreement” and wanted until the middle of the following week to work out the details, but that she had told defense counsel that “we need a signed agreement by tomorrow [Friday] or we are [filing charges] on Tuesday.”

Lefkowitz emailed Villafafia about the draft NPA that she had sent to him, pointing out that it called for a 20-month jail sentence followed by 10 months of community control, rather than 18 months in jail and 12 under community control, and to ask if the USAO had “any flexibility” on the § 2255 procedure. Villafafia responded:

The 18 and 12 has already been agreed to by our office, so that is not a problem. On the issue about 18 [U.S.C. §] 2255, we seem to be miles apart. Your most recent version not only had me binding the girls to a trust fund administered by the state court, but also promising that they will give up their [§] 2255 rights.

I reviewed the e-mail that I sent you on Sunday with the comments on some of your other changes. In the context of a non-prosecution agreement, the office may be more willing to be specific about not pursuing charges against others. However, as I stated on Sunday, the Office cannot and will not bind Immigration.

Also, your timetable will need to move up significantly. As [State Attorney] Barry [Krischer] said in our meeting last week, his office can put together a plea agreement, [and an] information, and get you all before the [state] judge on a change of plea within a day.

Villafalla alerted Krischer that evening that negotiations were “not going very well” and that defense counsel “changed their minds again, and they only want to plead to state charges, not concurrent state and federal.” She added, “If we cannot reach . . . an agreement, then I need to [charge] the case on Tuesday [September 25] and I will not budge from that date.”

In response to Villafafta’s report of her conversation with Lefkowitz about the defense preference for a “state-charges-only agreement,” Lourie alerted her that, “He wants to get out of [sexual offender] registration which we should not agree to.” Lourie emailed Acosta:

I think Jay [Lefkowitz] will try to talk you out of a registrable offense. Regardless of the merits of his argument, in order to get us down in time they made us an offer that included pleading to an offense against a minor (encouraging a minor into prostitution) and touted that we should be happy because it was registrable. For that reason alone, I don’t think we should consider allowing them to come down from their own offer, either on this issue or on time of incarceration.

Lefkowitz attempted to reach Acosta that night, but Acosta directed Villafaña to return the call, and told Lourie that he did not want to open “a backchannel” with defense counsel. Lourie instructed Villafaña, “U can tell [J]ay that [A]lex will not agree to a nonregistration offense.”

On the morning of Friday, September 21, 2007, Villafaña emailed Acosta informing him that “it looks like we will be [filing charges against] Mr. Epstein on Tuesday,” reporting that the charging package was being reviewed by the West Palm Beach manager, and asking if anyone in the Miami office needed to review it. Villafaña also alerted Lourie that she had spoken that morning to Lefkowitz, who “was waffling” about Epstein pleading to a state charge that required sexual offender registration, and she noted that she would confer with Krischer and Belohlavek “to make sure the defense doesn’t try to do an end run.”

That same morning, Epstein attorney , who had not been involved in negotiations for several weeks, emailed Sloman, advising, “[I] want to finalize the plea deal and there is only one issue outstanding and [I] do not believe that [A]lex has read all the defense submissions that would assist in his determination on this point . . . [U]pon resolution, we will be prepared to sign as soon as today.” From his out-of-town vacation, Sloman forwarded the email to Acosta, who replied, “Enjo[y] vacation. Working with [M]arie on this.” Sloman also forwarded email to Lourie and asked, “Do you know what she’s talking about?” Lourie responded that “has not been in any negotiations. Don’t even engage with yet another

J. The USAO Agrees Not to Criminally Charge “Potential Co-Conspirators”

Lefkowitz, in the meantime, sent Villafaña a revised draft NPA that proposed an 18-month sentence in the county jail, followed by 12 months of community control, and restored the provision for a trust fund for disbursement to an agreed-upon list of individuals “who seek reimbursement by filing suit pursuant to 18 U.S.C. § 2255.” This defense draft retained the provision promising not to criminally charge Epstein’s four female assistants and unnamed employees of the specific Epstein-owned corporate entity, but also extended the provision to “any potential co-conspirators” for any criminal charge arising from the ongoing federal investigation. This language had evolved from similar language that Villafaña had included in the USAO’s earlier proposed draft federal plea agreement.¹²² Lefkowitz also again included the sentence

^<sup>122 The language in the USAO’s draft federal plea agreement stated, “This agreement resolves the federal criminal liability of the defendant and any co-conspirators in the Southern District of Florida growing out of any criminal conduct by those persons known to the [USAO]….”

precluding the government from requesting, initiating, or recommending immigration proceedings against the two assistants who were foreign nationals.

At this point, Lefkowitz again sought to speak to Acosta, who replied by email: “I am happy to talk. My caveat is that in the middle of negotiations, u try to avoid[] undermining my staff by allowing ‘interlocutor[]y’ appeals so to speak so I’d want [M]arie on the call[.] I’ll have her set something up.”

Villafaña sent to Lefkowitz her own revised NPA, telling him it was her “attempt at combining our thoughts,” but it had not “been approved by the office yet.” She inserted solicitation of minors to engage in prostitution, a registrable offense, as the charge to which Epstein would plead guilty; proposed a joint recommendation for a 30-month sentence, divided into 18 months in the county jail and 12 months of community control; and amended the § 2255 provision.¹²³ Villafaña’s revision retained the provision suspending the investigation and holding all legal process in abeyance, and she incorporated the non-prosecution provision while slightly altering it to apply to “any potential co-conspirator of Epstein, including” the four named assistants, and deleting mention of the corporate entity employees. Finally, Villafaña deleted mention of immigration proceedings, but advised in her transmittal email that “we have not and don’t plan to ask immigration” proceedings to be initiated.¹²⁴

Later that day, Villafaña alerted Lourie (who had arrived in Florida from Washington, D.C. early that afternoon) and the new West Palm Beach manager (copying her first-line supervisor and co-counsel) that she had included language that defense counsel had requested “regarding promises not to prosecute other people,” and commented, “I don’t think it hurts us.” There is no documentation that Lourie, the West Palm Beach manager, or anyone else expressed disagreement with Villafaña’s assessment. Rather, within a few minutes, Villafaña re-sent her email, adding that defense counsel was persisting in including an immigration waiver in the agreement, to which Lourie responded, “No way. We don’t put that sort of thing in a plea agreement.” Villafaña replied to Lourie, indicating she would pass that along to defense counsel and adding, “Any other thoughts?” When Lourie gave no further response, Villafaña informed defense counsel that Lourie had rejected the proposed immigration language.

OPR questioned the subjects about the USAO’s agreement not to prosecute “any potential co-conspirators.” Lourie did not recall why the USAO agreed to it, but he speculated that he left that provision in the NPA because he believed at the time that it benefited the government in some way. In particular, Lourie conjectured that the promise not to prosecute “any potential co-conspirators” protected victims who had recruited others and thus potentially were co-conspirators in Epstein’s scheme. Lourie also told OPR, “I bet the answer was that we weren’t going to charge” Epstein’s accomplices, because Acosta “didn’t really want to charge Epstein” in

^<sup>123 Villafaña noted that she had consulted with a USAO employee who was a “former corporate counsel from a hospital” about the § 2255 language, and thought that the revised language “addresses the concern about having an unlimited number of claimed victims, without me trying to bind girls who I do not represent.”

^<sup>124 Villafaña gave OPR an explanation similar to that given by the case agents—that an ICE Special Agent had been involved in the early stages of the federal investigation of Epstein, and Villafaña believed the agent knew two of Epstein’s female assistants were foreign nationals and would have acted appropriately on that information. Villafaña also said that the USAO generally did not get involved in immigration issues.

federal court. Sloman similarly said that he had the impression that the non-prosecution provision was meant to protect named co-conspirators who were also victims, “in a sense,” of Epstein’s conduct. Although later press coverage of the Epstein case focused on Epstein’s connection to prominent figures and suggested that the non-prosecution provision protected these individuals, Sloman told OPR that it never occurred to him that the reference to potential co-conspirators was directed toward any of the high-profile individuals who were at the time or subsequently linked with Epstein.¹²⁵ Acosta did not recall the provision or any discussions about it. He speculated that if he read the non-prosecution provision, he likely assumed that Villafaña and Lourie had “thought this through” and “addressed it for a reason.” The West Palm Beach manager, who had only limited involvement at this stage, told OPR that the provision was “highly unusual,” and he had “no clue” why the USAO agreed to it.

Villafaña told OPR that, apart from the women named in the NPA, the investigation had not developed evidence of “any other potential co-conspirators. So, . . . we wouldn’t be prosecuting anybody else, so why not include it? . . . I just didn’t think that there was anybody that it would cover.” She conceded, however, that she “did not catch the fact that it could be read as broadly as people have since read it.”

K. The USAO Rejects Defense Efforts to Eliminate the Sexual Offender Registration Requirement

On the afternoon of Friday, September 21, 2007, State Attorney Krischer informed Villafaña that Epstein’s counsel had contacted him and Epstein was ready to agree “to all the terms” of the NPA—except for sexual offender registration. According to Krischer, defense counsel had proposed that registration be deferred, and that Epstein register only if state or federal law enforcement felt, at any point during his service of the sentence, that he needed to do so. Krischer noted that he had “reached out” to Acosta about this proposal but had not heard back from him. Villafaña responded, “I think Alex is calling you now.” Villafaña told OPR that, to her knowledge, Acosta called Krischer to tell him that registration was not a negotiable term.¹²⁶

Later that afternoon, Villafaña emailed Krischer for information about the amount of “gain time” Epstein would earn in state prison. Villafaña explained in her email that she wanted to include a provision in the NPA specifying that Epstein “will actually be in jail at least a certain number of days to make sure he doesn’t try to ‘convince’ someone with the Florida prison authorities to let him out early.” Krischer responded that under the proposal as it then stood, Epstein would serve 15 months. He also told Villafaña that a plea to a registrable offense would not prevent Epstein from serving his time “at the stockade”—the local minimum security detention facility.¹²⁷

^<sup>125 Sloman also pointed out that the NPA was not a “global resolution” and other co-conspirators could have been prosecuted “by any other [U.S. Attorney’s] office in the country.”

^<sup>126 Krischer told OPR that he did not recall meeting or having interactions with Acosta regarding the Epstein case or any other matter.

^<sup>127 The State Attorney concluded his email: “Glad we could get this worked out for reasons I won’t put in writing. After this is resolved I would love to buy you a cup at Starbucks and have a conversation.” Villafaña responded, “Sounds great.” When asked about this exchange during her OPR interview, Villafaña said: “Everybody

At some point that day, Acosta spoke with Lefkowitz by phone regarding the need for Epstein to plead to a registrable offense. Throughout the weekend, with Villafaña’s Monday deadline looming, defense counsel pressed hard to eliminate the sexual offender requirement. On Saturday, September 22, 2007, sent a series of emails to Lourie. In the first, she provided details from a press report about a Florida public official who the previous day had pled guilty to child sex abuse charges and was sentenced to a term of probation. She noted that she “spoke to [M]att [Menchel]” and asked Lourie to call her. Two hours later she sent Lourie a second, lengthy email, strongly objecting to the registration requirement, and outlining “all arguments against registration [as a sexual offender] in this case.” In this email, claimed that there had been a “miscommunication” during the September 12, 2007 meeting, and that “we only agreed to the solicitation with minors because we believed and [Krischer] and [Belohlavek] confirmed it was NOT registrable.” complained that lifetime sexual offender registration was a “life sentence” that was “uncalled for,” “does not make sense,” and was “inappropriate” to impose “simply [because] the FBI wants it, in return for all there [sic] efforts.” She listed numerous reasons why Epstein should not have to register, including his lack of a prior record or history of sexual offenses; the lack of any danger of recidivism; the ease with which he could be “tracked” without registering; and that it would be “virtually impossible to comply” with four separate state registration requirements. A few minutes later, sent Lefcourt’s phone number to Lourie “in case you want to speak to him directly.”

In another email sent less than two hours later, between told Lourie she was writing again because “you are a very fair person. This resolution in the Epstein case is not reasonable. [I]t is a result of a misunderstanding at a meeting.” She stated that Epstein’s attorneys had “consistently emphasized their goal of 18 months in a federal camp” and “[e]veryone knew that a registerable offense precluded” a camp designation. Constitute added, “Therefore it would have been wholly inconsistent with that primary goal of [Epstein’s] safety to lightly concede to registration at that meeting.” Concluded, “[I]mposing a life sentence on him is not something anyone will eventually be proud of. Please reconsider and help me get a fair result.”

Lourie responded to none of the emails, but he did reach out to Acosta for a phone conversation. By email late that night, at 10:26 p.m., Lefkowitz asked Lourie to phone him.

The next day, Lefkowitz emailed Acosta—with copies to Sloman, Lourie, and Villafaña to “follow up on our conversation Friday,” asking Acosta again to reconsider the requirement that Epstein plead to a registrable offense. Lefkowitz wrote that there had been a “misunderstanding” at the September 12, 2007 meeting:

Before the meeting, Mr. Krischer and Ms. Belohlavek, a sex prosecutor for 13 years, told us that solicitation of a minor . . . is not a registerable offense. However, as it turned out, [it] is a registerable offense and our discussion at the meeting was based on a mistaken assumption. We suggest that Mr. Epstein enter two pleas—one to the Indictment and a second to a non-registerable charge.

has offered to buy me a cup of coffee. I have had coffee with no one.” Krischer told OPR that the “reasons” to which he referred related to the pressure he had been getting from Chief Reiter about the Epstein case.

Lefkowitz set forth arguments similar to those had presented to Lourie, as to why registration “based on the facts alleged in this case . . . simply does not make sense.” In the event that Acosta did not agree to their proposed charges, Lefkowitz offered as an alternative “to stipulate that the state offense” would “constitute a prior sexual offense for purposes of enhanced recidivist sentencing” should Epstein ever again commit a federal sex offense against minors. As Lefkowitz further argued, “By accepting this option, you would be substituting the certainty of recidivist sentencing for the humiliation of registration.” Emails reflect that, early that afternoon, Acosta, Lourie, and Villafaña discussed the matter in a conference call.

Lefkowitz also sent a revised version of the NPA to Villafaña that omitted identification of the charge to which Epstein would plead guilty. Later that day, Lefkowitz emailed Acosta:

I got a call from [M]arie who said you had rejected our proposal. Does that mean you are not even prepared to have [Epstein] commit now to plead to the registerable offense near the end of his 18 month sentence and then be sentenced to 12 month[s] community control for that charge? I thought that was exactly what you proposed [F]riday (although you wanted, but were not able, to do it with some kind of federal charge).

But that still gives you a registerable sex offense, 30 months total, and 18 in jail.

How can that not satisfy you—while still ensuring that [E]pstein is not unduly endangered in jail?

Acosta responded, “I do not mean to be difficult, but our negotiations must take place with the AUSAs assigned to the case.” Acosta added that he had spoken with Lourie and Villafaña, and they had “discretion to proceed as they believe just and appropriate.” Acosta copied Villafaña, and she emailed Acosta to thank him “for the support.”

L. The Defense Adds a Confidentiality Clause

Throughout that Sunday evening, Lefkowitz had numerous email exchanges with Villafaña, and apparently a conference call with Lourie (who was returning to Washington, D.C.) and Villafaña. Later that evening, Lefkowitz sent Villafaña a new version of the NPA that, for the first time, included a confidentiality term:

It is the intention of the parties to this Agreement that it not be disseminated or disclosed except pursuant to court order. In the event the Government must disclose this Agreement in response to a request pursuant to the Freedom of Information Act, the Government agrees to provide Epstein notice before the disclosure of this Agreement.

After making additional revisions, Villafaña sent this NPA to Acosta and Lourie as the “final” version, asking Acosta to let her know what he thought of it. Among her revisions, she changed the confidentiality provision to the following:

The parties anticipate that this agreement will not be made part of any public record. If the United States receives a Freedom of Information Act request or any compulsory process commanding the disclosure of the agreement, it will provide notice to Epstein before making that disclosure.I28

VII. SEPTEMBER 24, 2007: ACOSTA MAKES FINAL EDITS, AND THE NPA IS SIGNED

The contemporaneous emails show that Villafafta continued to update Acosta as the parties negotiated the final language and that Acosta reviewed and edited the NPA. Shortly after midnight on Monday, September 24, 2007, Acosta sent Villafafia “[s]mall edits” to the “final” NPA she had sent to him. Among his changes was language modifying provisions that appeared to require the State Attorney’s Office or the state court to take specific actions, such as requiring that Epstein enter his guilty plea by a certain date. Acosta explained in his email, “I’m not comfortable with requiring the State Attorney to enter into a [joint sentencing] recommendation” or “requiring a State court to stick with our timeline” for entry of the guilty plea and sentencing. Accordingly, Acosta substituted language that required Epstein alone to make a binding sentencing recommendation to the state court, and required Epstein to use his “best efforts” to enter his guilty plea and be sentenced by the specified dates. Acosta also instructed Villafafia to restore a reference to Epstein’s wish “to reach a global resolution of his state and federal criminal liabilities.” Lourie, who had returned to the Department in Washington, D.C., had a phone conversation with Lefkowitz and sent additional comments on the final draft to Acosta and Villafaiia. Villafafia sent a new revision, incorporating edits from Acosta and Lourie, to Lefkowitz later that morning.

On the afternoon of September 24, 2007, Villafafia circulated the new “final” version of the NPA to Acosta, Sloman, Lourie, and other supervisors, and asked Lefkowitz to send her the signed agreement. After Lefkowitz electronically transmitted to Villafafia a copy of the NPA signed by Epstein, she emailed her immediate supervisor and her co-counsel: “They have scanned and emailed the signed agreement. It is done.”

In his transmittal email, Lefkowitz asked Villafafia to “[p]lease do whatever you can to keep this from becoming public.” Villafafia responded:

I have forwarded your message only to Alex, Andy, and [the West Palm Beach manager]. I don’t anticipate it going any further than that. When I receive the originals, I will sign and return one copy to you. The other will be placed in the case file, which will be kept confidential since it also contains identifying information about the girls.

When we reach an agreement about the attorney representative for the girls, we can discuss what I can tell him and the girls about the

¹²⁸In commenting on OPR’s draft report, Lourie observed that because the NPA contained names of uncharged co-conspirators and other protected information, the USAO would have a duty to redact the information before disclosing the NPA.

agreement. I know that Andy promised Chief Reiter an update when a resolution was achieved. . . . [The West Palm Beach manager] is calling, but [he] knows not to tell Chief Reiter about the money issue, just about what crimes Mr. Epstein is pleading guilty to and the amount of time that has been agreed to. [He] also is telling Chief Reiter not to disclose the outcome to anyone.

OPR questioned Villafafia about this email. She explained that she generally kept confidential the terms of the resolution of any case. She understood that “the way that the [Epstein] case was resolved” needed to remain confidential, but the victims could be informed about what happened because by the NPA’s terms, they needed to know what the agreement was about.

Villafana emailed the West Palm Beach manager, asking him to tell PBPD Chief Reiter “the good news” but “leave out the part about damages,” and explained that she wanted to meet with the victims herself to explain how the damages provision would work. Villafafia also told him that Lourie had asked that Reiter share information about the NPA only with the PBPD Detective who had led the state investigation of Epstein.’ Villafafia forwarded to Acosta, Lourie, and the West Palm Beach manager Lefkowitz’s email asking that the USAO try to keep the NPA from becoming public. Acosta responded that the agreement “already binds us not to make public except as required by law under [the Freedom of Information Act],” and asked, “[W]hat more does he want?” Villafafia replied, “My guess is that if we tell anyone else (like the police chief or FBI or the girls), that we ask them not to disclose.” Soon thereafter, Acosta emailed Lourie, Villafafia, and the West Palm Beach manager to set up a call to discuss “who we tell and how much,” adding, “Nice job with a difficult negotiation.”

The final NPA, as signed by Epstein, his attorneys Lefcourt and M, and Villafafia, contained the following pertinent provisions:

• Charges: Epstein would plead guilty to the pending Palm Beach County indictment, plus one count of solicitation of minors to engage in prostitution, a registrable offense.
• Sentence: The parties would make a joint, binding recommendation for a 30-month sentence divided as follows: consecutive terms of 12 months and 6 months in the county jail, without opportunity for withholding adjudication or sentencing and without community control or probation, followed by 12 months of community control, consecutive. 1”
• Damages: As long as the identified victims proceeded exclusively under 18 U.S.C. § 2255, Epstein would not contest federal court jurisdiction or the victims’ status as victims. The USAO would provide to Epstein a list of individuals

¹²⁹The West Palm Beach manager told OPR that he called Chief Reiter. who was “fine” with the outcome.

¹³⁰Withholding adjudication or sentencing referred to a special sentence in which the judge orders probation but does not formally convict the defendant of a criminal offense. See Fla. Stat. § 948.01 (2007).

it had identified as victims.¹³¹ The USAO, with the good faith approval of Epstein’s counsel, would select an attorney representative for the victims, whom Epstein would pay.

• Timing: Epstein would make his best efforts to enter his guilty plea and be sentenced by October 26, 2007. The USAO had no objection to Epstein self-reporting to begin serving his sentence by January 4, 2008.
• Immunity: The USAO would not initiate criminal charges against “any potential co-conspirator of Epstein,” including four named personal assistants.
• Other: Epstein was obligated to undertake discussions with the State Attorney’s Office to ensure compliance with this agreement.

Epstein waived his right to appeal.

Epstein agreed that he would not be afforded any benefits with respect to gain time or other rights, opportunities, and benefits not available to any other inmate.

The federal investigation would be suspended and all pending legal process held in abeyance unless and until Epstein violated any term of the agreement. Evidence “requested by or directly related to” the pending legal process, “including certain computer equipment,” would be kept inviolate until all the NPA terms had been satisfied.

• Breach: The USAO would be required to notify Epstein of any alleged breach of the agreement within 90 days of the expiration of the term of home confinement, and would be required to initiate prosecution within 60 days thereafter.
• Disclosure: The parties “anticipate[d]” that the agreement would not be made part of any public record, and if the USAO received a Freedom of Information Act request or compulsory process commanding disclosure of the agreement, it would provide notice to Epstein before making any disclosure.¹³²

That evening, Lefkowitz emailed Lourie to express concern about the notification he understood would be given to Chief Reiter, stating, “I am very concerned about leaks unduly prejudicing Jeffrey [Epstein] in the media.”¹³³ He added, “I have enjoyed working with you on

^<sup>131 The USAO had not informed the defense of the victims’ identities at this point. The parties anticipated that the USAO would send Epstein’s attorneys a list of victims when Epstein fulfilled his obligation under the NPA to enter his state guilty pleas.

¹³² The final NPA is attached as Exhibit 3 to this Report.

^<sup>133 On October 3, 2007, the Miami FBI media officer notified the USAO that the New York Post had reported that federal authorities were not going to pursue federal charges against Epstein. According to the Post, Epstein would plead guilty to soliciting underage prostitutes, “in a deal that will send him to prison for about 18 months,” followed by “a shorter period of house confinement,” and, according to “sources,” federal authorities had “agreed to drop their

this matter.” Lourie responded with an assurance that the Reiter notification was only “so he does not find out about it in the paper,” and he concluded: “I enjoyed it as well. Mr. Epstein was fortunate to have such excellent representation.”

VIII. POST-NPA NEGOTIATIONS

Almost immediately after the NPA was signed, conflicts arose about its terms, and the difficult negotiation process began anew. The USAO quickly realized that there were numerous issues concerning the monetary damages provision that were not resolved in the NPA, and the parties differed in their interpretations of the § 2255 provision, in particular the role and duties of the attorney representative for the victims. As negotiations regarding the damages provision continued, the defense was able to delay having Epstein enter his guilty plea in state court.

A. September – October 2007: Sloman’s Concerns about Selection of an Attorney Representative Lead to a Proposed NPA Addendum

The first controversy centered on the appointment of an attorney representative for the victims. Initially, Villafaña reached out to a private attorney who was one of several suggested to her for that role. Villafaña notified Lefkowitz that she was recommending the attorney to serve as the victims’ representative and suggested a phone conference to discuss what information the USAO could disclose to the attorney about the case. Villafaña told Lefkowitz that she had never met the attorney, but he had been recommended by “a good friend in our appellate section” and by one of the district judges in Miami.¹³⁴ Over the next few days, Villafaña exchanged messages with the attorney about the possibility of his serving as the attorney representative. She also exchanged emails with Lefkowitz, passing along procedural questions raised by the attorney.

By this time, Lourie had fully transitioned to his detail at the Department’s Criminal Division. Sloman, who had been on vacation during the week the NPA was finalized, returned to the office, reviewed the final agreement, and immediately expressed his disapproval of the provision authorizing the USAO to select an attorney representative for the victims, which he believed might raise the appearance of a conflict of interest. Instead, he proposed that a special make the selection. Although evidently frustrated by Sloman’s belated proposal, Villafaña conveyed to Lefkowitz the suggestion that a special be appointed to select the attorney representative, rather than having the USAO make the selection.¹³⁵ She provided Lefkowitz with

probe into possible federal criminal violations in exchange for the guilty plea to the new state charge, with the understanding that he will do prison time.” Dan Mangan, “Unhappy Ending’ Plea Deal—Moneyman to Get Jail For Teen Sex Massages,” New York Post, Oct. 1, 2007. ABC News later reported that federal charges “could carry more substantial prison time. Now, Epstein’s high-powered lawyers, including Kenneth Starr, . . . may try to get him out of registering as a sex offender . . . .” Scott Michels, “Money Manager Said to Plan to Plead Guilty to Prostitution Charges: Jeffrey Epstein may serve about 18 months in prison for soliciting prostitutes,” ABC News, Oct. 11, 2007.

^<sup>134 The “good friend” was an AUSA whom Villafaña was dating. The defense subsequently raised this as a misconduct issue, alleging that Villafaña was “closely associated” with the individual nominated for the victims’ representative position.

^<sup>135 In a separate email to the proposed attorney representative, Villafaña commented, “[O]f course they tell me this now.”

a proposal regarding the special responsibilities, along with a draft letter to send to the special explaining the procedure for selecting an attorney representative.

Lefkowitz objected to this proposal in a letter to Villafaña, pointing out that the NPA did not provide for the appointment of a special special. More importantly, Lefkowitz used the discussion of the special special as an opening to press for other alterations to the language of the NPA or, at least, to its interpretation. Focusing on the attorney representative, Lefkowitz argued that the attorney’s role should be viewed as limited to negotiating settlements and that the attorney was precluded from filing lawsuits on behalf of victims who could not reach a negotiated settlement with Epstein. Lefkowitz proposed:

[T]he selected attorney should evaluate the claims of each identified individual, negotiate a total fund amount with Mr. Epstein, then distribute the monies based on the strength of each case. For those identified individuals who elect not to settle with Mr. Epstein, they may proceed on their own, but by doing so, they would not be suing under § 2255 as contemplated by [the NPA] and therefore may not continue to be represented by the selected attorney.

Lefkowitz also objected to Villafaña’s draft letter to the special section, asserting that it was essential for the defense to participate in crafting a “mutually acceptable communication” to the victims. Going further, Lefkowitz claimed that any contact between the USAO and the victims about the § 2255 provision would violate the agreement’s confidentiality provision. Lefkowitz admonished the government not to contact the victims “to inform them of the resolution of the case, including [the] appointment of the selected attorney and the settlement process.”

Villafaña forwarded Lefkowitz’s letter to Sloman, complaining that the defense interpretation of the § 2255 procedure violated the clear language of the NPA and asking, “Can I please just indict him [Epstein]?” Days later, see and emailed Sloman, and then sent a follow-up letter, asking that Sloman “help resolve” the issue regarding the attorney representative’s role, and arguing that Epstein had never intended by signing the NPA to promise to pay fees for the victims’ civil lawsuits in the event a settlement could not be reached. When Villafaña explained to Sloman her views on settlement. The more ‘voices’ they hear the more wedges they try to drive between us.” Villafaña agreed, noting that “[t]here are so many of them over there, I am afraid we are getting triple-teamed.”¹³⁶

Villafaña sent a letter regarding the roles of the special a and attorney representative. The next day, October 10, 2007, Lefkowitz sent a six-page letter to Acosta, as a “follow up to our conversation yesterday,” expressing “serious disagreements” with Villafaña’s view of the process for victims to claim § 2255 damages under the NPA. Lefkowitz reiterated the defense position that the attorney representative’s role was meant to be limited to negotiating settlements for the victims, rather than pursuing litigation. Lefkowitz claimed that a requirement

^<sup>136 Villafaña also alerted Sloman that a newspaper was reporting that defense counsel was writing a letter to Acosta asking for reconsideration of the requirement that Epstein register as a sexual offender. Villafaña commented, “It appears they don’t understand that a signed contract is binding.”

that Epstein pay the victims’ legal fees incurred from contested litigation would “trigger profound ethical problems,” in that the attorney representative would have an incentive to reject settlement offers in order to incur more fees. In addition, Lefkowitz rejected Villafaña’s view that Epstein had waived the right to challenge § 2255 liability as to victims who did not want to settle their claims, and contended that any such victims “will have to prove, among other things, that they are victims under the enumerated statutes.” Finally, Lefkowitz again argued that the USAO should not discuss the settlement process with the victims who were to be identified as eligible for settlement under § 2255:

Ms. Villafaña proposes that either she or federal agents will speak with the [victims] regarding the settlement process. We do not think it is the government’s place to be co-counsel to the [victims], nor should the FBI be their personal investigators. Neither federal agents nor anyone from your Office should contact the [victims] to inform them of the resolution of the case, including appointment of the attorney representative and the settlement process. Not only would that violate the confidentiality of the Agreement, but Mr. Epstein also will have no control over what is communicated to the [victims] at this most critical stage. We believe it is essential that we participate in crafting a mutually acceptable communication to the [victims]. We further believe that communications between your Office or your case agents and the [victims] might well violate Rule 6(e)(2)(B) of the Federal Rules of Criminal Procedure. The powers of the federal grand jury should not, even in appearance, be utilized to advance the interests of a party to a civil lawsuit.137

Lefkowitz concluded, “I look forward to resolving these open issues with you during our 4:30 call today.”¹³⁸

Villafaña was at that time on sick leave, and Sloman and Acosta exchanged emails about crafting an addendum to the NPA to address the method of appointing an attorney representative and to articulate the representative’s duties. The next day, October 11, 2007, Sloman exchanged emails with Lefkowitz about the text of a proposed addendum.

B. October 12, 2007: Acosta and Defense Attorney Lefkowitz Meet for Breakfast

On the morning after his scheduled afternoon phone call with Lefkowitz, Acosta exchanged emails with Lefkowitz, arranging to meet for breakfast the following day, on October 12, 2007, at a Marriott hotel in West Palm Beach. Contemporaneous records show that Acosta was previously scheduled to be in West Palm Beach for a press event on October 11 and to speak at the Palm Beach County Bench Bar conference the following midday, and that he stayed overnight at the Marriott.

^<sup>137 Federal Rule of Criminal Procedure 6(e)(2)(B) relates to secrecy of federal grand jury matters.

^<sup>138 OPR did not locate any emails indicating what happened on the call.

However, as with Villafaña’s publicly released emails to Lefkowitz, this meeting between Acosta and Lefkowitz drew criticism when the media learned of it during the CVRA litigation. It was seen either as further evidence of the USAO’s willingness to meet with Epstein’s attorneys while simultaneously ignoring the victims, or as a meeting at which Acosta made secret agreements with the defense.

Two letters written later in 2007 refer to the breakfast meeting. In a December 2007 letter to 1000, Acosta stated that he had “sua sponte proposed the Addendum to Mr. Lefkowitz at an October meeting in Palm Beach . . . . in an attempt to avoid what I foresaw would likely be a litigious selection process.”¹³⁹ In an October 23, 2007 letter from Lefkowitz to Acosta, less than two weeks after the breakfast meeting, Lefkowitz represented that during the meeting, Acosta

assured me that [the USAO] would not intervene with the State Attorney’s Office regarding this matter; or contact any of the identified individuals, potential witnesses, or potential civil claimants and their respective counsel in this matter; and that neither [the USAO] nor the [FBI] would intervene regarding the sentence Mr. Epstein receives pursuant to a plea with the State, so long as the sentence does not violate state law.¹⁴⁰

However, two days after receiving this letter, Acosta revised a response letter drafted by Sloman, adding the term “inaccurate” to describe Lefkowitz’s claims that Acosta had promised not to intervene with the State Attorney’s Office, contact individual witnesses or claimants, or intervene regarding Epstein’s sentence.¹⁴¹ The draft response stated, “[S]uch a promise equates to the imposition of a gag order. Our Office cannot and will not agree to this.”¹⁴²

Acosta told OPR that he did not remember the breakfast meeting, but he speculated that the meeting may have been prompted by defense complaints that Villafaña had recommended “her boyfriend’s partner” to serve as attorney representative.¹⁴³ Acosta said that “the way this was reported [in the press] was that I negotiated [the NPA] over breakfast,” which was inaccurate because the NPA had been signed weeks before the breakfast meeting.¹⁴⁴ When asked about

^<sup>139 In fact, Sloman and Lefkowitz had been working on language for the Addendum before Acosta’s breakfast meeting with Lefkowitz. It is possible that Acosta was not aware of Sloman’s efforts or had forgotten about them when writing the December 7, 2007 letter.

^<sup>140 This letter is discussed further in the following section of this Report.

¹⁴¹ OPR did not find evidence establishing that the response was ever sent.

^<sup>142 Sloman’s initial draft response referred to a conversation the previous day in which Acosta had “clarified” Lefkowitz’s claims about what Acosta had purportedly said in the October 12, 2007 breakfast meeting.

^<sup>143 As noted previously, the attorney whom Villafaña recommended was a friend of another AUSA whom Villafaña was then dating, but had no professional relationship with either Villafaña or the other AUSA.

^<sup>144 For example, the Miami Herald’s November 2018 investigative report stated that “on the morning of the breakfast meeting, a deal was struck—an extraordinary plea agreement that would conceal the full extent of Epstein’s crimes and the number of people involved. . . . [T]he deal—called a non-prosecution agreement—essentially shut down an ongoing FBI probe . . . .” Julie K. . . . . . . . . . . . . . . . . . .

Lefkowitz’s description of their breakfast meeting discussion, Acosta told OPR that there were “several instances” in which Lefkowitz and other defense counsel mischaracterized something he or an AUSA said, in a way that was misleading.

Emails show that, immediately after the breakfast, Acosta phoned Sloman, who then emailed to Lefkowitz a revision to the Addendum language they had been negotiating and who also later reported to Villafafia that Leflcowitz’s “suggested revision has been rejected.” Other emails show that the parties continued to be at odds about the proposed language for the NPA addendum for several days after the breakfast meeting.

C. Acosta Agrees to the Defense Request to Postpone Epstein’s Guilty Plea; the Parties Continue to Negotiate Issues concerning the Attorney Representative and Finally Reach Agreement on the NPA Addendum

A week after his breakfast meeting with Acosta, Lefkowitz—citing a scheduling conflict sent Acosta an email seeking his agreement to postpone Epstein’s entry of his guilty plea in state court from October 26, 2007, the date agreed to in the NPA, to November 20, 2007. In his email, Lefkowitz reported that the State Attorney’s Office had agreed to the postponement, and he noted that Acosta had said during the breakfast meeting that he “didn’t want to dictate a schedule to the state.“105 Acosta solicited input from Sloman, who later that day emailed Lefkowitz and agreed to the postponement.

With Lourie having departed from the USAO, Sloman became more involved in negotiating the NPA addendum than he had been in the negotiations leading to the NPA, and he quickly came up against the problem Villafaria and Lourie had faced: the defense attorneys continued to negotiate provisions to which they had seemingly already agreed. Between October 12 and 19, 2007, in a series of email exchanges and phone conversations, Acosta, Sloman, Villafana, and Lefkowitz continued working on language for the NPA addendum addressing the process for selection of the attorney representative and describing which of the representative’s activities Epstein would be required to reimburse. Although it appeared that progress was being made towards reaching agreement on the terms of an addendum, on October 19, 2007, Lefkowitz emailed Sloman identifying “areas of concern” with a proposal the USAO had made days before. Sloman forwarded this email to Acosta, noting that it “re-ploughs some of what we accomplished this week,” and raised “unnecessary” issues. Sloman reported to Acosta that a victim in New York had filed a civil lawsuit against Epstein, and Villafaila was concerned that “this may be the real reason for the delay in the . . . plea. She thinks that [Epstein] .. . want[s] to knock that lawsuit out before the guilty plea to deter others.” Sloman also alerted Acosta that newspaper reports indicated that Epstein had planted false stories in the press in an attempt to discredit the victims.

almost three weeks before the breakfast meeting occurred. OPR discusses the breakfast meeting further in its analysis at Chapter Two. Pan Three, Section IV.E.2.

¹⁴⁵Assuming Acosta made the remark Lefkowitz attributed to him, it was consistent with the position Acosta had taken before the NPA was signed. As noted previously, during the NPA negotiations, Acosta had instructed Villafalia to omit language requiring the State Attorney’s Office to take action by a certain date, because he was “not comfortable with requiring the State” to comply with a specific deadline. During his interview, Acosta told OPR that “we as federal prosecutors are not going to walk in and dictate to the state attorney.”

On October 22, 2007, Sloman responded to the issues Lefkowitz had raised, rejecting some defense proposals but agreeing to modify certain language in the proposed addendum to “satisfy your concern.“146 Noting that the addendum and a revised letter to the special were attached, Sloman ended by stating, “[T]his needs to be concluded. Alex and I believe that this is as far as we can go. Therefore, please advise me whether we have a deal no later than COB tomorrow ….”

Nonetheless, the next day, Lefkowitz sent Acosta a three-page letter reiterating the Epstein team’s disagreements with the USAO’s interpretation of the NPA. Lefkowitz noted, however, that Epstein had “every intention of honoring the terms of [the NPA] in good faith,” and that the defense letter was not intended to be “a rescission or withdrawal from the terms of the [NPA].” Lefkowitz added:

I also want to thank you for the commitment you made to me during our October 12 meeting in which you promised genuine finality with regard to this matter, and assured me that your Office would not intervene with the State Attorney’s Office regarding this matter; or contact any of the identified individuals, potential witnesses, or potential civil claimants and their respective counsel in this matter; and that neither your Office nor the [FBI] would intervene regarding the sentence Mr. Epstein receives pursuant to a plea with the State, so long as that sentence does not violate state law. Indeed, so long as Mr. Epstein’s sentence does not explicitly violate the terms of the Agreement, he is entitled to any type of sentence available to him, including but not limited to gain time and work release.

Sloman forwarded the letter to Villafa0a, commenting, “Wait [until] you see this one.” Villafafla replied:

Welcome to my world. I love the way that they want to interpret this agreement.

It also looks like they are planning to ask for and receive a sentence far lower than the one we agreed to. Has anyone talked to Barry [Krischer] about this? Maybe this is the real reason for the delay in entering the guilty plea? We also have to contact the victims to tell [them] about the outcome of the case and to advise them than an attorney will be contacting them regarding possible claims against Mr. Epstein. If we don’t do that, it may be a violation of the Florida Bar Rules for the selected attorney to “cold call” the girls.

¹i6 The defense raised issues concerning the attorney representative, the statutory limit on damages. and inclusion of certain victims.

. . . .

Why don’t we agree to mutual recission [sic] and indict him?

Acosta also weighed in, sending both Villafaña and Sloman an email with a subject line that read “This has to stop,” in which he stated:

Just read the letter.

1. We specifically refused to include the provision saying that we would not communicate. If I recall the conference call, we told him we could not agree to a gag order using those words.

2. The purpose of the agreement was not an out of court settlement. Seems that they can’t take no. Let’s talk re how to proceed. I’m not sure we will ever agree on a letter [to the special about how to select an attorney representative] at this point.

Notwithstanding Acosta’s assessment and prediction, after Sloman sent to Lefkowitz a new draft addendum and they spoke by phone, the parties reached agreement on the addendum’s terms.¹⁴⁷

On October 25, 2007, Sloman sent a letter to the person whom the USAO had selected to serve as special 1999, outlining the special 1999 duties. A few days later, on October 29, 2007, Epstein and his attorneys Lefcourt and 1999 signed the NPA addendum.¹⁴⁸ Villafaña’s name was printed as the USAO representative, but at Villafaña’s request, Sloman signed the addendum for her on behalf of the USAO.

Villafaña later emailed Sloman thanking him for “the advice and the pep talk,” which apparently related to the defense attorneys’ allegation of impropriety concerning her initial selection of the private attorney to assist the victims. Villafaña explained to Sloman:

The funny thing is that I had never met (and still haven’t met) or spoken to [the private attorney] before I asked him if he would be willing to take on this case. . . . But as soon as you mentioned the appearance problem, I saw where the problem would arise and agreed that the Special would be a safer route. I just worry that the defense’s attacks on me could harm the victims.

Sloman responded that defense counsel had “put an . . . insidious spin” on Villafaña’s role in proposing the private attorney, but Sloman added, “I hope that you understand that these ad hominem attacks against you do not diminish in our eyes what you and the agents have accomplished.”

¹⁴⁷ Acosta and Villafaña were copied on this email.

¹⁴⁸ The Addendum is attached as Exhibit 4 to this Report.

D. Epstein Further Delays His Guilty Plea

The addendum did not bring the case to conclusion. Instead, the matter entered a new, protracted phase, which involved the upper echelons of the Department of Justice. Despite the fact that Epstein and his attorneys had signed the NPA, they pursued a new strategy of appealing to senior Department managers with the goal of setting aside the NPA entirely. Although ultimately unsuccessful, the strategy delayed the entry of Epstein’s guilty plea by months.

On October 29, 2007, Villafafia emailed Sloman, raising several issues that she wanted Sloman to address with Lefkowitz. Among other things, Villafafia pointed out that the NPA required Epstein to use his “best efforts” to comply with the agreement, but he had failed to comply with the timeline established by the NPA when he sought and obtained a plea hearing postponement from October 26 to November 20. Responding to Lefkowitz’s attempts to limit the USAO’s communications with various entities and individuals, Villafafia noted that the USAO needed to be able to communicate with the State Attorney’s Office and the victims’ attorney “to [e]nsure that Epstein is abiding by the terms of the agreement.”

That same day, Assistant State Attorney Belohlavek informed Sloman that the state judge assigned to the case had scheduled Epstein’s plea and sentence in early January 2008. Belohlavek assured Sloman that the “plea and sentence will definitely occur before the January 4th date that was agreed on by all for the sentencing.“149 Nonetheless, emails over the course of the next month show that the USAO, the State Attorney’s Office, and defense counsel continued to communicate regarding the date of the guilty plea, with the USAO asserting that a proposed January 7, 2008 date for the entry of Epstein’s guilty plea was “unacceptable,” while the defense contended that Epstein had not agreed to any date. Finally, after multiple communications referring to various potential dates, on December 7, 2007, Epstein attorney Jack Goldberger issued a Notice of Hearing, setting the case for January 4, 2008.150

E. Epstein Seeks Departmental Review of the NPA’s § 2255 Provision Relating to Monetary Damages for the Victims

With Epstein’s plea hearing delayed, he launched a new effort to undermine the validity of the NPA, this time within the Department. On November 16, 2007, Epstein attorney Kenneth Stan• called the office of Assistant Attorney General for the Criminal Division Alice Fisher and left a message that he was calling regarding Epsteinisi At Fisher’s request, Lourie, who in late September 2007 had begun serving his detail as Fisher’s Principal Deputy and Chief of Staff, returned the call. Fisher told OPR that she had no recollection of this call, and Lourie also could

¹¹⁹The NPA had required Epstein’s plea and sentencing to occur by October 26, 2007, but provided that Epstein could report to begin serving his sentence on January 4, 2008.

ISO State v. Epstein, No. 2006-CF-9454, Notice of Hearing (Fifteenth Judicial Circuit, Dec. 7, 2007).

¹³’ In a meeting with Acosta and Sloman on November 21, 2007, Lefkowitz informed them that Starr had placed a call to Fisher.

not recall for OPR the substance of his conversation with Starr, other than that it was likely about Epstein’s wish to have the Department review the case.152

On November 28, 2007, Starr requested, by letter, a meeting with Fisher. In his letter, Starr argued that the USAO improperly had compelled Epstein to agree to pay civil damages under 18 U.S.C. § 2255 as part of a state-based resolution of a criminal case. On the same day, Lefkowitz emailed Sloman, complaining about the USAO’s plan to notify victims about the § 2255 provision and alerting Sloman that Epstein’s counsel were seeking a meeting with the Assistant Attorney General “to address what we believe is the unprecedented nature of the section 2255 component” of the NPA. After Lourie sent to Sloman a copy of the Starr letter, Sloman forwarded it to Villafafia, asking her to prepare a chronology of the plea negotiations and how the § 2255 provision evolved. Villafaiia responded that she was “going through all of the ways in which they have tried to breach the agreement to convince you guys to let me indict.”

In Washington, D.C., Lourie consulted with CEOS Chief Oosterbaan, asking for his thoughts on defense counsel’s arguments. At the same time, at Lourie’s request, Villafafia sent the NPA and its addendum to Lourie and Oosterbaan. Oosterbaan responded to Lourie that he was “not thrilled” about the NPA; described Epstein’s conduct as unusually “egregious,” particularly because of its serial nature; and observed that the NPA was “pretty advantageous for the defendant and not all that helpful to the victims.” He opined, however, that the Assistant Attorney General would not and should not consider or address the NPA “other than to say that she agrees with it.” During her OPR interview, Fisher did not recall reading Starr’s letter or discussing it with Oosterbaan, but believed the comment about her “agree[ing] with it” referred to a federal prosecution of Epstein, which she believed was appropriate. She told OPR, however, that she “played no role in” the NPA and did not review or approve the agreement either before or after it was signed.

As set forth in more detail in Chapter Three of this Report, Villafafia planned to notify the victims about the NPA and its § 2255 provision, as well as about the state plea hearing, and she provided a draft of the notification letter to Lefkowitz for comments. On November 29, 2007, Lefkowitz sent Acosta a letter complaining about the draft notification to the victims. Lefkowitz asked the USAO to refrain from notifying the victims until after defense counsel met with Assistant Attorney General Fisher, which he anticipated would take place the following week. Internal emails indicate that Lourie contacted Oosterbaan about his availability for a meeting with Starr, but both Fisher and Lourie told OPR that such a meeting never took place, and OPR found no evidence that it did.

Acosta promptly responded to Lefkowitz by letter, directing him to raise his concerns about victim notification with Villafafia or Sloman. Acosta also addressed Epstein’s evident efforts to stop the NPA from being enforced:

¹³²In a short email to Fisher. the next day. Lourie reported simply: “He was very nice. Kept me on the phone for [a) half hour talking about [Plepperdine,” referring to the law school where Start served as MI.

[S]ince the signing of the September 24th agreement, more than two months[] ago, it has become clear that several attorneys on your legal team are dissatisfied with that result.

. . . .

[You], Professor Dershowitz, former Solicitor [General] Starr, former United States Attorney and Messrs. Black, Goldberger and Lefcourt previously had the opportunity to review and raise objections to the terms of the Agreement. The defense team, however, after extensive negotiation, chose to adopt the Agreement. Since then counsel have objected to several steps taken by the U.S. Attorney’s Office to effectuate the terms of the Agreement, in essence presenting collateral challenges to portions of the Agreement.

It is not the intention of this Office ever to require a defendant to enter a plea against his wishes. Your client has the right to proceed to trial. If your client is dissatisfied with his Agreement, or believes that it is unlawful or unfair, we stand ready to unwind the Agreement.

In a separate, seven-page letter to Starr, with Villafaña’s and Sloman’s input, Acosta responded to the substance of Starr’s November 28 letter to Assistant Attorney General Fisher. Fisher told OPR that she did not recall why Acosta, rather than her office, responded to the letter, but she conjectured that “probably I was trying to make sure that somebody responded since [the Criminal Division wasn’t] going to respond.”¹⁵³

In his seven-page letter, sent to Starr on December 4, 2007, Acosta wrote:

The Non-Prosecution Agreement entered into between this Office and Mr. Epstein responds to Mr. Epstein’s desire to reach a global resolution of his state and federal criminal liability. Under this Agreement, this District has agreed to defer prosecution for enumerated sections of Title 18 in favor of prosecution by the State of Florida, provided . . . Mr. Epstein satisfies three general federal interests: (1) that Mr. Epstein plead guilty to a “registerable” offense; (2) that this plea include a binding recommendation for a sufficient term of imprisonment; and (3) that the Agreement not harm the interests of his victims.

Acosta explained in the letter that the USAO’s intent was “to place the identified victims in the same position as they would have been had Mr. Epstein been convicted at trial. No more; no less.” Acosta documented the USAO’s understanding of the operation of the NPA’s § 2255

^<sup>153 The USAO may have been asked to respond because Starr’s letter raised issues that had not been previously raised with the USAO, and it would normally fall to the USAO to address them in the first instance.

provision, recounted the history of NPA negotiations, and described the post-signing efforts by Epstein’s counsel to challenge portions of the NPA. Acosta’s letter concluded:

Although it happens rarely, I do not mind this Office’s decision being appealed to Washington, and have previously directed our prosecutors to delay filings in this case to provide defense counsel with the option of appealing our decisions. Indeed, although I am confident in our prosecutors’ evidence and legal analysis, I nonetheless directed them to consult with the subject matter experts in [CEOS] to confirm our interpretation of the law before approving their [charges]. I am thus surprised to read a letter addressed to Department Headquarters that raises issues that either have not been raised with this Office previously or that have been raised, and in fact resolved, in your client’s favor.

I am troubled, likewise, by the apparent lack of finality in this Agreement. The AUSAs who have been negotiating with defense counsel have for some time complained to me regarding the tactics used by the defense team. It appears to them that as soon as resolution is reached on one issue, defense counsel finds ways to challenge the resolution collaterally. My response thus far has been that defense counsel is doing its job to vigorously represent the client. That said, there must be closure on this matter. Some in our Office are deeply concerned that defense counsel will continue to mount collateral challenges to provisions of the Agreement, even after Mr. Epstein has entered his guilty plea and thus rendered the agreement difficult, if not impossible, to unwind.

I would reiterate that it is not the intention of this Office ever to force the hand of a defendant to enter into an agreement against his wishes. Your client has the right to proceed to trial. Although time is of the essence . . . I am directing our prosecutors not to issue victim notification letters until this Friday . . . to provide you with time to review these options with your client. . . . We expect a written decision by [December 7, 2007] at 5 p.m., indicating whether the defense team wishes to reaffirm, or to unwind, the Agreement.

. . . .

Acosta explained to OPR that he did not view his letter as “inviting” Departmental review, but he believed the Department had the “right” to address Epstein’s concerns. Moreover, the USAO’s only option at that time was to declare Epstein in breach of the NPA, which would have prompted litigation as to whether Epstein was, in fact, in breach. Acosta noted that defense counsel repeatedly proclaimed Epstein’s intent to abide by the agreement, making any USAO effort to declare him in breach more difficult. In fact, the day after receiving Acosta’s letter, Starr and Lefkowitz responded to Acosta (with copies to Sloman and Assitant Attorney General Fisher) that the defense “[f]irst and foremost” reaffirmed the NPA and that Epstein “has no intention of unwinding the agreement.”

On December 7, 2007—the deadline set by Acosta in his December 4, 2007 letter to Starr the defense transmitted to the USAO a one-sentence “Affirmation” of the NPA and its addendum, signed by Epstein. is’

F. Despite Affirming the NPA, Defense Counsel Intensify Their Challenges to It and Accuse Villafana of Improper Conduct

1. December 7 and 11,2007: Starr and Lefkowitz Send to Acosta Letters and “Ethics Opinions” Complaining about the Federal Investigation and Villafatia

On the same day that the defense team sent Epstein’s “Affirmation” to the USAO, Starr and Lefkowitz sent to Acosta two “independent ethics opinions”—one authored by prominent criminal defense attorney and former U.S. Attorney Joe Whitley, which assessed purported improprieties in the federal investigation of Epstein, and the other, by a prominent retired federal judge and former U.S. Attorney, arguing against the NPA’s use of the civil damages recovery provision under 18 U.S.C. § 2255 “as a proxy for traditional criminal restitution.”

Days later, on December II, 2007, Starr sent a letter to Acosta transmitting two lengthy submissions authored by Lefkowitz presenting substantive challenges to the NPA and to the “background and conduct of the investigation.” These submissions repeated arguments previously raised by the defense but also asserted new issues. In one submission, 20 pages long, Lefkowitz addressed the “improper involvement” of federal authorities in the investigation and criticized Villafaria for a number of alleged improprieties, including having engaged in “unprecedented federal overreaching” by seeking to prosecute Epstein federally, “insist[ing]” that the State Attorney’s Office “charge Mr. Epstein with violations of law and recommend a sentence that are significantly harsher than what the State deemed appropriate,” and requiring that Epstein plead guilty to a registrable offense, a “harsh” condition that was “unwarranted.“I55

Lefkowitz also argued that the federal investigation relied upon a state investigation that was “tainted” by the lead PBPD Detective’s misrepresentation of key facts in affidavits and interview summaries, leading the USAO to make its charging decision based on flawed information that “compromised the federal investigation.” Finally, Lefkowitz criticized federal involvement in the state plea process as a violation of “the tenets of the Petite Policy.” In a second, 13-page submission, Lefkowitz reiterated Epstein’s complaints about the § 2255 component of the NPA, arguing, among other things, that federal prosecutors “should not be in the business of helping alleged victims of state crimes secure civil financial settlements.”

ts4 The Affirmation read: “I, Jeffrey E. Epstein do hereby re-affirm the Non-Prosecution Agreement and Addendum to same datcd October 30, 2007.”

I55 Villafana sent Lefkowitz a five-page letter responding to the accusations made against her personally.

Notwithstanding these voluminous submissions, Lefkowitz added that Epstein “unconditionally re-asserts his intention to fulfill and not seek to withdraw from or unwind” the NPA.

2. As a Result of the Starr and Lefkowitz Submissions, the New USAO Criminal Chief Begins a Full Review of the Evidence, and Acosta Agrees to Meet Again with Defense Counsel

After reviewing Starr’s and Lefkowitz’s letters, Sloman notified Villafaña that “in light of the recent Kirkland & Ellis correspondence” he had asked Robert Senior, who had succeeded Menchel as Chief of the USAO’s Criminal Division, to review de novo the evidence underlying the proposed revised indictment, and Sloman asked Villafaña to provide Senior with all the state and FBI investigative materials.

In the meantime, Acosta agreed to meet with Starr and other Epstein defense attorneys to discuss the defense complaints raised in Lefkowitz’s December 11, 2007 submissions.¹⁵⁶ The meeting took place in Miami on December 14, 2007. The defense team included Starr, Dershowitz, Lefcourt, and Boston attorney Weinberg. The USAO side included Acosta, Sloman, Villafaña, and another senior AUSA, with the Miami FBI Special Agent in Charge and Assistant Special Agent in Charge also present. In addition to previously raised arguments, during this meeting, Epstein’s attorneys raised a new argument—that the state charge to which Epstein had agreed to plead guilty did not apply to the facts of the case.

3. The Defense Notifies Acosta That It May Pursue a Department Review of the USAO’s Actions

Shortly after the December 14, 2007 meeting, Lefkowitz notified Acosta that if the issues raised at the meeting could not be resolved promptly, the defense team may “have no alternative but to seek review in Washington.” Acosta notified Assistant Attorney General Fisher that the defense team might make an appeal to her, and he asked her to grant such a request for review and “to in fact review this case in an expedited manner [in order] to preserve the January 4th plea date.” Starr and Lefkowitz then sent to Acosta a lengthy letter, with numerous previously submitted defense submissions, reviewing issues discussed at the meeting, and advising that Epstein sought a “prompt, independent, expedited review” of the evidence by “you or someone you trust.” The letter reiterated Epstein’s position that his conduct did not amount to a registrable offense under state law or a violation of federal law, and with respect to the NPA’s § 2255 provision, that it was “improper” to require Epstein to pay damages “to individuals who do nothing but simply assert a claim” under the statute.

^<sup>156 As Assistant Attorney General Fisher’s Chief of Staff, Lourie had informed Starr that Fisher hoped Starr would speak to Acosta to “resolve the[] fairly narrow issues” raised in Starr’s correspondence with Acosta. Acosta had the Starr and Lefkowitz submissions of December 11 forwarded to Fisher.

4. Acosta Attempts to Revise the NPA § 2255 Language concerning Monetary Damages, but the Defense Does Not Accept It

Acosta undertook to respond to defense counsel’s continuing concern about the § 2255 provision. He sent to Deputy Assistant Attorney General Sigal Mandelker language that he proposed including in a revision to the NPA’s § 2255 implementation section. Mandelker forwarded the language to her counterpart in the Civil Division, who responded to Mandelker and Acosta that he did not have “any insight” to offer. On December 19, 2007, after Acosta and Sloman had a phone conversation with Starr and Lefkowitz, Acosta sent to proposing to resolve “our disagreements over interpretation[]” by replacing the existing language of the NPA relating to § 2255 with a provision that would read:

Any person, who while a minor, was a victim of a violation of an offense enumerated in Title 18, United States Code, Section 2255, will have the same rights to proceed under Section 2255 as she would have had, if Mr. Epstein [had] been tried federally and convicted of an enumerated offense. For purposes of implementing this paragraph, the United States shall provide Mr. Epstein’s attorneys with a list of individuals whom it was prepared to name . . . as victims of an enumerated offense by Mr. Epstein. Any judicial authority interpreting this provision, including any authority determining which evidentiary burdens if any a plaintiff must meet, shall consider that it is the intent of the parties to place these identified victims in the same position as they would have been had Mr. Epstein been convicted at trial. No more; no less.

Acosta also noted that he had resisted his prosecutors’ urging to declare the NPA breached by the defense delays.¹⁵⁷

Lefkowitz responded by letter a few days later, suggesting that Acosta’s proposal raised “several troubling questions” and that “the problem arises from the incongruity that exists when attempting to fit a federal civil remedies statute into a criminal plea agreement.”¹⁵⁸ In a follow-up letter to Acosta, to address the USAO’s concern that Epstein was intentionally delaying the entry of his guilty plea, Lefkowitz asserted that “any impediment to the resolution at issue is a direct cause of the disagreements between the parties,” and that defense counsel had “at all times made and will continue to make sincere efforts to resolve and finalize issues as expeditiously as possible.”

Acosta told OPR that despite this assurance from defense counsel, he was “increasingly frustrated” by Epstein’s desire to take an “11th hour appeal” to the Department so soon before the

^<sup>157 As described in detail in Chapter Three, Acosta’s December 19, 2007 letter also addressed defense objections to notifying the victims about the NPA and the state plea.

^<sup>158 After Starr and Lefkowitz had another conversation with Acosta and Sloman, Lefkowitz sent a second letter to Acosta reiterating concerns with the § 2255 provision and asserting that the provision was “inherently flawed and becoming truly unmanageable.” In the end, the defense team rejected Acosta’s December 19, 2007 NPA modification letter.

scheduled January 4, 2008 plea hearing. As soon became apparent, Acosta was unable to achieve an expedited review so that Epstein could plead guilty and be sentenced by January 4, 2008, and the plea and sentencing date was rescheduled. On January 2, 2008, Sloman spoke with Assistant State Attorney Belohlavek, who confirmed that the change of plea hearing had been postponed. In an email reporting this to Acosta and Villafafta, Sloman said that Epstein’s local defense attorney Goldberger had told Belohlavek the postponement was because the facts “did not fit the proposed state charge,” and that Belohlavek told Sloman she agreed with that assessment.t59 The next day, Villafafta sent to Acosta and Sloman a local newspaper article reporting that Epstein’s state plea hearing was reset for March and in exchange for it the federal authorities would drop their investigation of him. Acosta also sent to Sloman and Villafafta an email memorializing a statement made to him by Lefkowitz in a phone call that day: “’I [Lefkowitz] may have made a mistake 6 months ago. [Belohlavek] told us solicitation [is] not registrable. It turns out that the actual offense charged is.”’16°

5. January 7, 2008: Acosta and Sloman Meet with Who Makes Additional Allegations of USAO Misconduct

On January 7, 2008, Acosta and Sloman met with defense attorney at her request. According to meeting notes made by Sloman, among other things, alleged that the USAO’s media spokesperson had improperly disclosed details of the Epstein case to a national news reporter, and “suggested that the USAO could avoid any potential ugliness in DC by agreeing to a watered-down resolution for Epstein.” After Acosta excused himself to attend another meeting and Sloman refused to speak further with “without a witness resent “ she left. Later that day, Acosta and Sloman spoke by phone with Staff, Lefkowitz, and who expressed concern about the “leak” to the news media, reiterated their objections to the NPA, and pressed for the “watered-down resolution,” which they specified would mean allowing Epstein to plead to a charge of coercion instead of procurement, avoid serving time in jail, and not register as a sexual offender. A note in the margin of Sloman’s handwritten notes of the conversation reads: “We’re back to where we started in September.”

That evening, Villafafta expressed concern that the delay in resolving the matter was affecting the USAO’s ability to go forward with a prosecution should Epstein renege on his agreement, and she outlined for Acosta and Sloman the steps she proposed to take while Epstein was pursuing Departmental review. Those steps included re-establishing contact with victims, interviewing victims in New York and one victim who lived in a foreign country, making contact with “potential sources of information” in the Virgin Islands, and re-initiating proceedings to obtain Epstein’s computers.

In the meantime, USAO Criminal Division Chief Robert Senior performed a “soup to nuts” review of the Epstein investigation, reviewing the indictment package and all of the evidence Villafafta had compiled. He told OPR that he could not recall the reason for his review, but opined

¹⁵⁹Belohlavek told OPR that she did not recall this incident, but she noted that the PBPD report did set forth facts supporting the charge of procurement of a minor.

¹⁶⁰Although the meeting Lefkowitz had with Lourie, Villafana, Krischer. and Belohlavek to discuss the state resolution was only four months prior, not six, Lefkowitz’s reference was likely to the September 12, 2007 meeting.

that it was to establish whether, if the plea fell apart, he, as Chief, would agree “that we can go forward with” the charges. He did recall being concerned, after completing the review, that “we did not have . . . a lot of victims . . . lined up and ready to testify” and that some victims might “not be favorable for us.” Nevertheless, he concluded that the proposed charges were sound, and he told Acosta that he would approve proceeding with a federal case.

6. Acosta Asks CEOS to Review the Evidence

Notwithstanding Senior’s favorable review, Acosta and Sloman told Starr and Lefkowitz that they “appreciate[d]” that the defense wanted a “fresh face” to conduct a review, and noted that the Criminal Chief had not undertaken the “in-depth work associated with the issues raised by the defense.” They told the defense team that Acosta had asked CEOS to “come on board” and that CEOS Chief Oosterbaan would designate an attorney having “a national perspective” to conduct a fresh review in light of the defense submissions. Oosterbaan assigned a CEOS Trial Attorney who Villafaña understood was to review the case and prepare for trial in the event Epstein did not “consummate” the NPA. The CEOS Trial Attorney traveled to Florida to review the case materials, and to meet with Villafaña to discuss the case and interview some of the victims. After one such meeting, Villafaña wrote to Acosta and Sloman:

We just finished interviewing three of the girls. I wish you could have been there to see how much this has affected them.

One girl broke down sobbing so that we had to stop the interview twice within a 20 minute span. She regained her composure enough to continue a short time, but she said that she was having nightmares about Epstein coming after her and she started to break down again, so we stopped the interview.

The second girl . . . told us that she was very upset about the 18 month deal she had read about in the paper. She said that 18 months was nothing and that she had heard that the girls could get restitution, but she would rather not get any money and have Epstein spend a significant time in jail.

These girls deserve so much better than they have received so far, and I hate feeling that there is nothing I can do to help them.¹⁶¹

The CEOS Trial Attorney had substantial experience prosecuting child exploitation cases. She told OPR that in her view, the victim witnesses in this case presented a number of challenges for a prosecution: some of the victims did not want to admit they had sexual contact with Epstein; some had recruited other victims to provide Epstein massages, and thus could have been charged as accomplices; some had “drug histories and . . . things like that”; some could appear to have been “complicit”; and there was no evidence of physical violence against the victims. She did not regard

^<sup>161 Villafaña added, “We have four more girls coming in tomorrow. Can I persuade you to attend?”

these victim issues as insurmountable but, based on these alone, the CEOS Trial Attorney considered a potential prosecution of Epstein to be a “crap shoot.” In addition, she told OPR that there were novel legal issues in the case that also presented difficulties, although she believed these difficulties could be overcome. Shortly after the CEOS Trial Attorney met with the victims, however, “things just stopped” when Oosterbaan instructed her to cease her involvement in the case and CEOS engaged in the Criminal Division review sought by Epstein’s defense team.

IX. FEBRUARY – JUNE 2008: THE DEPARTMENT’S REVIEW

Epstein’s defense attorneys sought a broad review from the Department, one that would encompass the defense complaints about federal jurisdiction, specific terms in the NPA, and the various allegations of professional misconduct by USAO attorneys and other personnel. The Department, however, only reviewed the issue of federal jurisdiction and never reviewed the NPA or any specific provisions.¹⁶² Nonetheless, the process took several months as the defense appealed first to CEOS and the Department’s Criminal Division, and then to the Office of the Deputy Attorney General. The chart set forth on the following page shows the positions and relationships among the individuals in those offices involved in communicating with the USAO or defense beginning in November 2007 or in those offices’ reviews, which continued t

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