There have been a number of articles discussing Jeffrey Epstein’s used of charities.   One of the is the New York Times “Jeffrey Epstein’s Opaque Finances Could Become Focal Point for Investigators” which discusses his use of charities.

“The money, tens of millions of dollars of it, would flow among Jeffrey Epstein’s dozens of bank accounts, shell companies and, at times, charities linked to high-powered friends. …”

The NYT discuss how little is known about large flows of money.

“In the early 2000s, for example, $88 million appeared in Mr. Epstein’s Virgin Islands-registered company that normally was home to only small amounts of money. At another point, an entity once linked to Mr. Epstein sent tens of millions of dollars to the charity of a billionaire retail tycoon, Leslie H. Wexner — years after Mr. Wexner has said he severed ties with Mr. Epstein. …

But the knottiest financial enigma involves Mr. Epstein’s relationship with Mr. Wexner, the chief executive of the apparel conglomerate L Brands, who for years entrusted Mr. Epstein with his financial life.

L Brands, a publicly traded company that owns Victoria’s Secret and Bath & Body Works, has hired a prominent law firm, Davis Polk & Wardwell, to investigate what role, if any, Mr. Epstein played at the company, according to people briefed on the matter.

Mr. Wexner has said that he had severed ties with Mr. Epstein in late 2007, more than a year after Mr. Epstein was first charged with sexual misconduct with minors. In 2008, Mr. Epstein pleaded guilty in Florida to soliciting prostitution from a minor.

In a letter last week to his family foundation, Mr. Wexner, 81, accused Mr. Epstein of having misappropriated “vast sums.”

People briefed on the matter said Mr. Epstein created a complex web of investment vehicles for Mr. Wexner, then collected high fees or withdrew funds for his personal use. Tax records show that many millions of dollars moved from one of Mr. Wexner’s charities to a charity that Mr. Epstein controlled.”

It is not clear whether the vast sums were in part from charity or private funds.  The NYT continues “But in 2011 — four years after Mr. Wexner has said he had severed all ties with Mr. Epstein — Mr. Wexner’s charitable foundation received a $56 million contribution from a trust linked to Mr. Epstein, according to charity records and other financial documents reviewed by The New York Times.”

The NYT continues on the charity side “The flow of money between the foundations, the apparent mixing of private and charitable funds and the use of a foundation to settle a claim of misappropriation appears problematic, said Ray Madoff, a professor at the Boston College Law School and an expert in rules governing charities.

“It definitely raises questions,” Ms. Madoff said. “None of this seems to be engaged in for charitable purposes. It seems it was being engaged in for unwinding their affairs. Using charities for that is not really appropriate.”

Hopefully as the investigation continues it will be possible to know the extent and ways in which Mr. Epstein may have misused charities for his own private benefit.  It is important to remember that in both the US and Canada there are rules for how private and public foundations as supposed to act.  These are not supposed to be personal slush funds for the wealthy.   For those interested in the rules around Canadian private and public foundation you may find our upcoming program helpful.  As well we assist private and public foundations with legal, ethical and practical issues relating to their operations.