Billionaires are risky

Jeffrey Epstein and the uber-rich

A three-part series, now available for everyone to read.

If you haven’t already, please:


At its heart, do you know what the NBA is? Billionaires. The N.B.A., as in the legal entity headquartered in Manhattan, has long required them. Or, more accurately, is them. There have been other basketball leagues over the last century. Some were run by people who loved the game, or had a certain business vision. This league, the one that has lasted, is the one in which stadium owners banded together in an effort to sell tickets on nights with no Ice Capades or touring acts. These were rich people eager to make stadiums a little more profitable. The league is 30 very rich NBA governors, who employ staff, like the commissioner. 

I don’t know how we used to think of billionaires. Maybe rare and valuable? Good friends to have? Maybe you’d get the word “eccentric” thrown in there, too. But mostly, it was just lucky you if you knew or worked with a billionaire.

It’s more macabre now. Lesley Wexner was once seen as the billionaire next door, who had some success starting a store in Ohio called “The Limited.” In a recent New York Times story, a longtime friend and co-investor Jim Duberstein said Wexner was “probably the finest person I ever met in my life. He was the most charitable, the most generous, the most understanding. I had nothing but praise for him—until he just cut his umbilical cord.”

Jeffrey Epstein has given us new ways to worry about billionaires. Wexner started hanging out with Epstein, and in short order Wexner handed over extraordinary control. (Epstein reportedly had power of attorney to actually sign documents as Wexner). It’s as if Wexner’s interests had been hijacked. Watching it play out, a classmate of Wexner’s, who helped him raise money for “The Limited,” tells the Times “this whole thing has been a real mystery to me.”

Now the world is so crazy that we have to ask questions about what forces—intelligence services, money launderers, sex traffickers, organized crime—could have had influence, via Epstein, not just into Wexner, but potentially his businesses (Epstein reportedly told people he was recruiting models for Victoria’s Secret, another Wexner business), charity work, and everything else. It’s hard to say for sure that someone didn’t have something over Wexner. 

The story of Wexner brings up a new hard-to-answer question: Is there a chance your NBA governor is beholden to some other, bigger, creepier force? It’s less crazy to ask than it once was. However we used to assess billionaires, we now have to understand:

  • The U.S. is feeling the full force of a multi-faceted attack, from Russia and probably elsewhere, folding together elements of intelligence, organized crime, and the offshore movement of some of the biggest quantities of money ever known. “Russian efforts to influence the 2016 U.S. presidential election represent the most recent expression of Moscow’s longstanding desire to undermine the U.S. led liberal democratic order,” says the January 2017 Intelligence Community Assessment (from the CIA, NSA, and FBI). Masha Gessen writes in The New Yorker: “What we are observing is not most accurately described as the subversion of American democracy by a hostile power. Instead, it is an attempt at state capture by an international crime syndicate.” Molly McKew, in Politico, describes the varied playing field of this war: “The Russian security state defines America as the primary adversary. The Russians know they can’t compete head-to-head with us—economically, militarily, technologically—so they create new battlefields. They are not aiming to become stronger than us, but to weaken us until we are equivalent.”

  • After the U.S. financial crash of 2007 and 2008, the entire U.S. financial system became hungry for cash. (This is when cash-hungry U.S. real estate developer Bruce Ratner turned to oligarch Mikhail Prokhorov to invest in the Nets.) Money from difficult-to-track offshore accounts has been arriving in the U.S. in such quantities that I wonder if any financial institution can say with certainty they know whose money they have.

  • Some of Epstein’s victims describe being trained for years to gather embarrassing sexual details, photographs, and video from some of the most powerful people on the planet, with whom Epstein networked aggressively. 

So a new question we have to ask is: which billionaires have been cultivated, co-opted, or compromised in some way? Do any of them have leverage in the NBA?

I don’t envy whoever has the hard job of answering that question. But I do have one thought: pay special attention to whoever has gaggles of paid, hyper-sexualized women hanging around. 

Do you personally know:

  1. Anyone with a harem or similar? 

  2. Anyone with established ties to organized crime?

  3. Anyone thought to be working with intelligence?

  4. Anyone expert in moving large amounts of money offshore?

The first part of this series included a quote from Summer Brennan writing about alleged sex-trafficker of young girls Jeffrey Epstein: “There is a world in which this is the norm. A class of (mostly) uber-powerful men who think the rules do not apply to them.” 

Here’s my insight, borne of research for this series: more than seems random, those four numbered things up there tend to come together. One doesn’t predict the other, but if you answer yes to any one of them, I suggest, you are much more likely to answer yes to others. That’s the world Brennan is talking about. 

Existing in and around that milieu has not, evidently, been a litmus test to disqualify men from all kinds of things, including buying NBA teams. 

TrueHoop is not alleging these NBA-tied figures committed crimes. The point here is that it’s worth considering that while America is under attack, it’s possible those in the upper reaches of the NBA have had exposure to potentially corrupting forces.

One of the most famously bad men of the last century, Adnan Khashoggi, is an interesting lesson. He reportedly checks all four boxes above. Sex parties and the women who traveled in his wake made the first paragraph of Khashoggi’s obituary in the Guardian, by Michael Gillard, which went on to explain they were there for strategic reasons:

In feudal Saudi society, Khashoggi, like all agents, was allowed to enrich himself only so long as he paid a large slice of these commissions into the Swiss bank accounts of his royal patrons and provided other services. Khashoggi was always accompanied by his “pleasure wives”, the “flowers on the table” – expensive call girls, models and starlets flown in from around the world. 

That’s one of the big lessons: if you’re employing women to be sexy in groups, very often they seem to be a business expense. But legitimate businesses don’t accept that form of payment.

And, of course, even though he died in 2017, Khashoggi had Epstein ties. New York magazine did a thorough rundown of the rich and famous with ties to Epstein. One entire entry, by Matt Stieb, is about Khashoggi, and loaded with mystery:

Khashoggi, Adnan: Saudi Arabian man of mystery.
To bolster their argument that private-jet owner Epstein is a massive flight risk, SDNY prosecutors produced an expired Austrian passport under an alias that listed Saudi Arabia as Epstein’s primary country of residence. His lawyers claim the fake ID was for the “personal protection” of “an affluent member of the Jewish faith” traveling in the Middle East, but it could also point to one of his more secretive income sources.

According to his former friend the journalist Jesse Kornbluth, in the mid-1980s Epstein said he “worked for governments to recover money looted by African dictators” and occasionally subcontracted to those same autocrats to “help them hide their stolen money.” 

A source who spoke with journalist Vicky Ward said one of Epstein’s clients was the late Saudi arms dealer Khashoggi, a middleman in the Iran-Contra scandal who helped smuggle cash for the Marcos family out of the Philippines. In 1988, Khashoggi was arrested in Switzerland for concealing assets and later faced fraud and racketeering charges in the U.S. (He was later acquitted.) That year, he sold his 282-foot yacht to the Sultan of Brunei, who soon flipped it to Donald Trump. 

And wouldn’t you know: Khashoggi tried to buy an NBA team. Before he died, Utah Jazz owner Larry Miller wrote a book called Driven, which includes this episode:

In 1984, they tried to sell the team to Adnan Khashoggi, the extravagant Saudi Arabian billionaire arms dealer and investor who two years later would appear on the cover of Time magazine with the headline, “Those Shadowy Arms Traders.” He agreed to buy half the Jazz for $8 million. All he had to do was win approval from the NBA. The NBA checks the backgrounds of potential owners to determine if they can handle it financially and to ensure that they have had no criminal dealings. Khashoggi refused to produce records of his international business dealings. The NBA denied the deal...

Vetting billionaires is getting trickier. There’s another, new, post-Epstein question to ask: who might have their hooks in? Are they intelligence? Mafia? Kremlin-tied?

Regardless, rejecting Khashoggi was a high-water mark in the NBA’s screening process; I am certain there have been many others, but Khashoggi is the only person I can name who didn’t pass muster to invest in the NBA. Meanwhile, sports have long been targets for money laundering, and still are. (It’s openly discussed as a major issue in soccer.)

Why would Khashoggi want what was then a money-losing NBA team, anyway? One guess: To launder money. Another: You see up there where I quoted Matt Stieb? Or Larry Miller? Or any writer? It says arms dealer Khashoggi. It always does. Khashoggi’s obituary says he loathed that title. Despite his money, I’m sure there were clubs he couldn’t join, heights he couldn’t attain. Those two words are also a red flag to investigators of all kinds, from building inspectors to the IRS. Now imagine you have a job trying to help the Marcos family of the Philippines quietly move a fortune, and your every move is awash in the suspicion that all your dollars are illicit. Those two words—arms dealer—are Khashoggi’s identity, his brand, and were a stain on Khashoggi wherever he went. 

Pro sports teams, though, are so powerful and ubiquitous in the public imagination that they can redefine someone like Khashoggi. Life as Utah Jazz owner Adnan Khashoggi would have been so very much more delightful. (What would we call James Dolan without the Knicks? Mikhail Prokhorov without the Nets?) 

Since Khashoggi, the whole money-moving business has grown exponentially. In Oliver Bullough’s book Moneyland, we learn that these offshore dollars are now traveling in the most insane quantities. Economist James Henry estimates that as of 2014, 52 percent of Russian household income is offshore, as is 57 percent of income from Gulf nations. French economist Gabriel Zucman estimates that as of a few years ago, 8 percent of all the world’s financial wealth—$7.6 trillion of $95.5 trillion—is held in tax havens. West Palm Beach lawyer Jeffrey Fisher is one of the best in the world at tracing down these assets, and says the mistake is to underestimate. “You’ve got to realize that the asset protection industry is trillions of dollars, not billions of dollars.” 

There is no way the NBA, or any institution, can say that tidal wave of money hasn’t touched its coffers. A ton of them are in the U.S., in legitimate investments. There’s an entire wealth management industry to ferry them across borders, and we know from the Panama Papers and the Paradise Papers that a who’s who of the deep-pocketed now move money in ways that used to come with Bond-villain like trappings of yachts, half-naked women, and connections to alleged mobsters and intelligence agencies.

What’s weird, though, is that even as the business of moving money has grown ever slicker, it still hasn’t been totally able to move away from those Bond-villain like signals. Bradley Birkenfeld has written a tell-all (Lucifer’s Banker) about his corrupt time as a Swiss banker, and how he recruited wealthy clients into his tax-avoidance schemes. “When they flew to see him in Geneva,” writes Bullough in Moneyland, “he’d take them to a top-class restaurant, then a strip bar, where he’d pay for their prostitutes. That would get them in the right frame of mind for business, so the next morning he’d escort them to the bank where they would sign over their money.”

Other stories are more extreme. Research for TrueHoop’s ongoing series on Mikhail Prokhorov meant reading a lot about how things work at the higher reaches of Russian power. That has meant reading a surprising number of books involving organized crime, including McMafia, All the Kremlin’s Men, Moneyland, House of Trump House of Putin, and Putin’s Kleptocracy. There are a lot of stories of how money moves overseas, through businesses legitimate and otherwise. A lot of it happens with a backdrop of strippers, wild parties, and prostitutes. 

  • From Craig Unger’s House of Trump, House of Putin: “The ‘meeting’ took place at the V Holubu, a Prague restaurant Mogilevich owned and used as a money-laundering center, with strippers, hookers, and a guest list that included … everyone who was anyone in the Russian mafia.”

  • In 2010, police in helicopters stormed a yacht in Turkey where there was some kind of party going on involving a tremendous number of condoms and a number of young Russian and Ukrainian women. It made plenty of news at the time. Here’s one detailed account. Although there were several powerbrokers onboard, one caught most of the legal heat. Delphine Strauss reported in the Financial Times: “Tevfik Arif, a Kazakh-born entrepreneur and partner of the US tycoon Donald Trump, was detained earlier this week on suspicion of organising prostitution and people trafficking, a spokesman at the governor’s office in Antalya province said.” Arif, also known as Arifov, is “alleged to have associations with organized crime,” according to this report by McClatchy, and many other sources. He was acquitted in this case.

Why would reputed mobsters have women around so often? Some guesses:

  • Many published reports include hints and scraps of evidence that Epstein may have been connected to intelligence in some way, which makes logical sense. All those dollars are worth it as leverage over a fantastic collection of powerbrokers—we all know the word “kompromat” nowadays because Russian intelligence so values it. Presumably they’re not the only ones. Maybe the women are at the parties in the hopes that powerful men will embarrass themselves with them, creating leverage.

  • Male dominance is a tradition of its own. Award-winning researcher Svetlana Stephenson has published many books and articles on Russian gangs, whose social norms have, in recent decades, been elevated from the street to the oligarchy and Kremlin. Based on exhaustive interviews with members, she has collected many of their rules, one of which is “no deferring to women.”

Remember the guy, Tevfik Arif, who was arrested for that yacht party in Turkey? All those charges were eventually dropped (and efforts were reportedly made to scrub the matter from the internet entirely) after a brouhaha around Donald Trump. At the time of his arrest, Arif was already running a business out of Trump Tower called Bayrock. For a long time he was the only employee. 

Then Arif brought on one other man, Felix Sater, who has made lots of news. But not widely known is an oddity of Sater’s reported business approach. Unger writes:

Back in Trump Tower, as an inducement for Donald to drop by their twenty-fourth floor office, Felix became so fixated on the appearance of female employees that the firm was referred to as Baberock. Taking the bait one day in 2006, Trump ran into Bayrock secretary Rachel Crooks, then twenty-two, on the elevator landing, who introduced herself and then saw him go into action. “He took hold of my hand and held me in place like this,” Crooks said. “He started kissing me on one cheek, then the other cheek. He was talking to me in between kisses, asking where I was from, or if I wanted to be a model. He wouldn’t let go of my hand, and then he went right in and started kissing me on the lips.”

Later, before dissolving, Bayrock was sued by a former finance director, Jody Kriss. As reported by Unger in Vanity Fair:

His complaint alleged that Bayrock was “covertly mob-owned and operated,” “backed by oligarchs and money they stole from the Russian people,” and “engaged in the businesses of financial-institution fraud, tax fraud, partnership fraud, human trafficking, child prostitution, statutory rape, and, on occasion, real estate.” The suit claimed that Bayrock had defrauded Kriss and Ejekam and “never intended to honor” promised payments. Instead, the real purpose of the company, it said, in addition to marketing expensive condos bearing the Trump brand, was “to launder many millions of dollars and evade taxes.”

There is also real evidence Sater has deep ties to intelligence agencies, including U.S. intelligence. In 2014, Sater was named the man of the year of the Port Washington, NY, Chabad. It’s possible the over-the-top speech his rabbi gave, about intelligence professionals lauding Sater for saving untold lives, is generally true. At her 2015 confirmation hearing, Loretta Lynch said Sater provided “information crucial to national security and the conviction of over 20 individuals, including those responsible for committing massive financial fraud and members of La Cosa Nostra.”’

Here’s a Bayrock brochure, from a few years ago, identifying Bayrock’s key business partners. Prominent among them: Donald Trump and Alexander Mashkevich—the oligarch from that Turkish boat party. 

Also featured in that brochure, and prominently in this Bayrock press release, is Apollo Real Estate Advisors, headed by Leon Black, founder of Apollo Global Management. The press release claims Apollo has invested heavily in Bayrock real estate in the U.S. 

About now is when people around the NBA might be getting a little nervous. Black has profound business ties to many NBA figures. Most prominently his co-founders at Apollo include Tony Ressler—governor of the Hawks (and, if you remember, Black’s brother-in-law)—and 76ers governor Josh Harris. 

Black is also tied to Epstein. A charity controlled by Black reportedly donated $10 million to a charity controlled by Epstein. It’s one of Epstein’s only publicly known sources of on-the-record revenue. New York magazine writes:

The billionaire co-founder of Apollo Global Management and chairman of MoMA, Black made Epstein the director of his family foundation in 2001. The foundation continued to list Epstein as director on its tax forms until 2012, four years after he had pleaded guilty to soliciting a minor for prostitution in Florida. The foundation now says that Epstein resigned in 2007 and that his name continued to appear on its rolls owing to a “recording error.” In 2011, he was listed as an investor in Environmental Solutions Worldwide, a Pennsylvania company, alongside several people close to Black, including his four children. Black himself was seen with Epstein at a movie screening just a few months after Epstein finished probation in 2010, and Epstein was spotted at a party at Black’s home in the Hamptons as recently as 2015.

It gets more interesting, still. One of Bayrock’s big investments was the Trump SoHo. The original investors in that project included Bayrock, Arif, and Tamir Sapir—who was also on that boat in Turkey.

The whole project was a massive and spectacular failure. Sater failed to disclose his criminal past which exposed Bayrock to allegations of banking fraud. The group found investors anyway, but then condo sales were sluggish. Donald Trump’s children courted legal trouble for misleading potential buyers; there were oddities involving the Manhattan district attorney Cyrus Vance in how the Trumps got out of trouble. (Vance’s office also made arguments on behalf of Jeffrey Epstein that baffled the judge.) Interestingly, one of the hotel’s real business problems arose from LeBron James’ unwillingness to stay there

Eventually one of the original lenders, the CIM Group, bought the whole thing in foreclosure. It’s called the Dominick now. The CIM Group is deep-pocketed, mysterious, and co-founded by Hawks’ governor Tony Ressler’s brother, Richard. 

It’s all obtuse. Hard to unwind. Tricky. But worth policing: Surely next-generation Khashoggis want to use the NBA to clear their names. Intelligence services and crime syndicates could benefit from the NBA’s reputation. 

It’s also real and pressing. “Epstein also trafficked me for sexual purposes to many other powerful men,” writes one of his alleged victims, Virginia Roberts Giuffre, “including politicians and powerful business executives. Epstein required me to describe the sexual events that I had with these men presumably so that he could potentially blackmail them. I am still very fearful of these men today.”

Roberts Giuffre has been courageous. I keep thinking about an article I read last year, in the New Yorker. It’s about an existential threat to an Italian crime family that, like many crime families, belittled and sidelined women. As Alex Perry writes, the women started talking.

Italian prosecutors conceded that ’Ndrangheta women led tragic lives. But many didn’t consider the women to be of much use in their fight; they were just more victims. “The women don’t matter,” the prosecutors told Cerreti. As a woman working for the Italian state, Cerreti knew something about patriarchies that belittled women even as they relied on them. She believed that many judicial officials missed the importance of ’Ndrangheta women, because most of them were men, and “Italian men underestimate all women,” she said.

"Cerreti was convinced that other Mafia women were unhappy with their lives and with their children’s prospects. What if her team could convince them that the state could give them a new life in return for their testimony? “It would break the chain,” she said. “It would remove the guardians of the ’Ndrangheta’s traditions.” The Mafia’s violent bigotry was a fatal weakness, she argued: “Freeing their women is the way to bring down the ’Ndrangheta.”"

It would be a good thing if, now that Roberts Guiffre has told her story, the NBA could assure her that the powerful business executives she still fears have nothing to do with this league.

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