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Jeffrey Epstein, a Billionaire Friend of Presidents Trump & Clinton, Arrested for Sex Trafficking 
Democracy Now 
7/8/19 
Billionaire hedge fund manager Jeffrey Epstein, who has been accused of sexually assaulting underage girls for 
more than a decade, will appear in federal court today in Manhattan on sex trafficking charges. He was arrested 
on Saturday for allegedly running a sex trafficking operation by luring underage girls as young as 14 years old 
to his mansion in Manhattan. Epstein was previously accused of molesting and trafficking dozens of underage 
girls in Florida, but he ended up serving just 13 months in county jail after the U.S. prosecutor in Florida, 
Alexander Acosta, cut what's been described as "one of the most lenient deals for a serial child sex offender in 
history." The plea deal allowed Epstein to avoid a federal trial and possible life in prison, and effectively ended 
an FBI probe into the case. Acosta is now Donald Trump's labor secretary. Epstein has counted Presidents 
Donald Trump and Bill Clinton among his friends. We speak with Vicky Ward, an investigative journalist who 
profiled Jeffrey Epstein for Vanity Fair in 2003 in a piece headlined "The Talented Mr. Epstein." The 
magazine's editor at the time, Graydon Carter, cut out the testimonies of two young women Epstein allegedly 
molested who had spoken to Ward on the record. Ward later wrote about the incident for The Daily Beast in an 
article headlined "I Tried to Warn You About Sleazy Billionaire Jeffrey Epstein in 2003." 
Transcript 
This is a rush transcript. Copy may not be in its final form. 
AMY GOODMAN: This is Democracy Now! I'm Amy Goodman. Billionaire hedge fund manager Jeffrey 
Epstein, who has been accused of sexually assaulting underage girls for more than a decade, was arrested 
Saturday on sex trafficking charges. He was arrested at Teterboro Airport in New Jersey. He'll appear in federal 
court today. The New York Times reports he's being accused of running a sex trafficking operation by luring 
underage girls—some as young as 14 years old—to his mansion in Manhattan. 
He was previously accused of molesting and trafficking dozens, and potentially hundreds, of underage girls in 
Florida. But Epstein ended up serving just 13 months in county jail after the U.S. prosecutor in Florida, 
Alexander Acosta, cut what's been described as "one of the most lenient deals for a serial child sex offender in 
history." The plea deal allowed Epstein to avoid a federal trial and possible life in prison, and effectively ended 
an FBI probe into the case. Alex Acosta is now Donald Trump's labor secretary. 
Jeffrey Epstein has counted Presidents Donald Trump and Bill Clinton among his friends. They've flown with 
him. Trump told New York magazine in 2002, "I've known Jeff for 15 years. Terrific guy. He's a lot of fun to 
be with. It is even said that he likes beautiful women as much as I do, and many of them are on the younger 
side," Trump said about his friend Jeffrey Epstein. Again, this was before all the charges were brought. In 2000, 
Trump was photographed with Epstein at Trump's Mar-a-Lago Club in Palm Beach, Florida. 
To talk about what led up to Epstein's most recent arrest and what comes next, we're joined by Vicky Ward, an 
investigative journalist who profiled Jeffrey Epstein for Vanity Fair in 2003 in a piece headlined "The Talented 
Mr. Epstein." The magazine's editor at the time, Graydon Carter, cut out the testimonies of two young women 
Epstein allegedly molested, who had spoken to Ward on the record, one of them underage. Ward wrote about 
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what happened with her Epstein reporting for The Daily Beast in an article headlined "I Tried to Warn You 
About Sleazy Billionaire Jeffrey Epstein in 2003." 
Welcome back to Democracy Now! It's great to have you with us, Vicky. 
VICKY WARD: Thanks, Amy. 
AMY GOODMAN: So, for people who do not understand who this man is—he's referred to as billionaire 
hedge fund manager Jeffrey Epstein—who is he, and what do you believe he is being charged with right now? 
The indictment is about to be opened. 
VICKY WARD: So, I don't think he's a hedge fund manager. He is certainly very wealthy. There is great 
mystery as to how he actually made his money. He tells people that he advises—he takes a percentage, and he 
advises billionaires only. He won't take anyone poorer than a billionaire. And he takes a cut, which adds up to a 
lot of money. This, when I investigated him in 2002, really turned out to be untrue. 
What was interesting was that the man who claimed to have sort of taught Jeffrey many financial tricks, and 
who claims to this day that Jeffrey has his money, is a gentleman by the name of Steve Hoffenberg, who went 
to jail for 20 years for committing the biggest Ponzi scheme pre-Bemie Madoff. So, the mystery of Jeffrey 
Epstein's wealth has never been clarified. 
AMY GOODMAN: He started out as a Dalton teacher, right? 
VICKY WARD: Right. 
AMY GOODMAN: A teacher at the private school in Manhattan. 
VICKY WARD: Absolutely. 
AMY GOODMAN: Math teacher. 
VICKY WARD: Absolutely. And he then went to Bear Stearns. He left Bear Stearns, the investment bank, 
under very mysterious circumstances. And what's interesting about that is that he seemed to have a curious 
power over the two gentlemen who ran Bear Stearns, James Cayne and Ace Greenberg. And he was certainly 
questioned by the SEC back in the day. 
AMY GOODMAN: The Securities and Exchange Commission. 
VICKY WARD: Yes, as to what he might have known about an insider trading case to do with a company 
called St. Joe Minerals Corp., in which both Ace Greenberg and Jimmy Cayne were also questioned. So, you 
know, this is a man who definitely trades in the knowledge he has over the rich and famous, and uses it for 
leverage. He also introduces rich and famous people, like Bill Clinton, like Donald Trump, to girls. 
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You then asked me about the charges today. I think what's so interesting about the charges today is that they're 
the result—the indictments that are going to be unsealed are the result not only of the FBI's work, but of the 
Public Corruption Unit, which does suggest—and obviously I'm speculating here—that bribery may have been 
involved. And why that's so important is, for me, who tried to expose this man for what he is back in two 
thousand and—I was actually reporting it late 2002, the piece ran in 2003—is he has, ever since then, got away. 
He's been untouchable. His money has somehow bought him the ability to evade justice. And so I'm fascinated 
by the fact that the Public Corruption Unit has been involved in this investigation, as well as the FBI. 
AMY GOODMAN: So, in 2018, the Miami Herald published an award-winning series of articles exposing 
Epstein's crimes and the high-powered people who protected him. The series is called "Perversion of Justice?' 
This is a clip from a video accompanying the piece, where we hear the voices of the women describing what 
happened to them. 
I went from an abusive situation to being a runaway to living in foster homes to just 
already being hardened by life on the streets. 
he other girls that I personally know of that went were coming from trailer parks that 
were having gun shootings, drugs. 
My mother was on drugs at the time, and she couldn't provide for me. And I was pretty 
much homeless. 
JACK SCAROLA: One child would be lured over, would be paid substantial sums of money, would be offered 
the further inducement of being paid a bounty for anybody else that she was able to bring to Epstein. A network 
developed where many young girls in the same kinds of circumstance wound up being victimized. 
The three of us slid into the backseat of the cab, and we drove, and I remember just 
driving down Okeechobee Boulevard and thinking how I had never been on Palm Beach Island before, in my 
whole entire life that I had lived in West Palm Beach. 
By the time I was 16, I brought him up to 75 girls, all the ages of, you know, 14, 15, 16, 
people going from eighth grade to ninth grade. At just school parties is where I would recruit them from. 
All Jeffrey cared about was "Go find me more girls." His appetite was insatiable. He 
couldn't stop. He wanted new, fresh, young faces every single day. 
AMY GOODMAN: That video from the Miami Herald. The Miami Herald did this incredible three-part series, 
"Perversion of Justice," by Julie Brown. Vicky Ward, you were doing the first pieces back in 2003. How old are 
your twin daughters right now? 
VICKY WARD: Twin sons, 16. 
AMY GOODMAN: Twin sons. 
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VICKY WARD: Yes. 
AMY GOODMAN: Sixteen years old. 
VICKY WARD: Yes. 
AMY GOODMAN: So, that is very significant, because you were pregnant at the time you were doing this 
piece. 
VICKY WARD: Yes. 
AMY GOODMAN: Can you describe what happened to you when you wrote this piece? You spoke to Jeffrey 
Epstein. 
VICKY WARD: Oh, multiple times, multiple times. He wheeled out, you know, all these important bankers and 
academics and financiers to talk to me. And he would call me all the time, but he would threaten me. He would 
talk, and then he would say, "You know, Vicky, if I don't like this piece, you know, something is going to 
happen to your unborn children." You know, and that way, he would sort of say it, you know, lightly, but I went 
to the magazine's general counsel at the time. 
AMY GOODMAN: So, you actually put security on them in the NICU, in the—
VICKY WARD: When they came early, he had asked me what hospital they were going to be born at. So I 
actually did put security on them. They were born two months prematurely. And I did. And I think one of the 
reasons it took me so long to revisit this story is that it was obviously extremely traumatic, not least because, 
you know, getting the two young women who talked to me to go on the record, verifying with sources around 
them their accounts of what had happened to them, was extraordinarily harrowing and difficult. And—
AMY GOODMAN: So, these are two sisters. 
VICKY WARD: Yes. And two sisters who—
AMY GOODMAN: Alleged. 
VICKY WARD: —who alleged that Jeffrey Epstein had assaulted each of them separately, on separate 
occasions, but one of them at the time was underage. And it was a classic story of two young women who did 
not come from a particularly rich family. The younger one wanted to go to an Ivy League school. Jeffrey 
offered to pay for this, but only if he got to know this young woman better. And he was very plausible. He had 
his girlfriend, Ghislaine Maxwell, who—very charming, well educated, British sort of socialite around New 
York—
AMY GOODMAN: I mean, this is very significant. 
VICKY WARD: Yes. 
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AMY GOODMAN: She's the daughter of Robert Maxwell—
VICKY WARD: Maxwell. 
AMY GOODMAN: —former owner of the New York Daily News. 
VICKY WARD: Yes. So, Ghislaine was the one who phoned these young women's mother to reassure her how 
safe they would be, and—because, of course, the poor mother now blames herself terribly for what happened. 
And, you know, I talked to—there were numerous people. The artist Eric Fischl was a friend of the older 
daughter. They all verified. They remembered these two women recounting their trauma at the time, so brave. 
We all go through this, and then to suddenly find, at the 11 th hour, that somehow Jeffrey got to the editor of the 
magazine. This story was being pulled. I was told—
AMY GOODMAN: Wait a second. He came into Cond€ Nast's offices? 
VICKY WARD: Yes, he came in. I had had no—I was not told about this. He came in. He had a private 
meeting with the magazine's then-editor, Graydon Carter, after which I was informed that Graydon believed 
Jeffrey Epstein. I was told that Jeffrey Epstein had told Graydon that he was, quote-unquote, "sensitive about 
the women." And so they would be pulled from the story. So it would now be a business story. And—
AMY GOODMAN: About what? A business story. 
VICKY WARD: Well, it was a business story that explained that Jeffrey Epstein was not who he claimed to be 
in his professional life. But the very powerful, awful stories of what happened to these women got taken out. 
And I was—
AMY GOODMAN: And these girls, are they involved with the case that's being opened today, where he's 
being brought into a Manhattan court? 
VICKY WARD: I don't know. I have heard—I have not confirmed that. I have—one source has told me that 
possibly they are, which, for me, would be—
AMY GOODMAN: Sixteen years later. 
VICKY WARD: Sixteen years later. Because one of the things that has haunted me is that there I was, trying to 
expose this man in 2003, and the original—the first FBI investigation, the one that got neutered by Alexander 
Acosta, didn't begin until 2006, so it's always been on my conscience that for three years he molested hundreds 
of sort of helpless, poor women who were in no position to fight back against him. 
AMY GOODMAN: Alex Acosta. 
VICKY WARD: Yeah. 
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AMY GOODMAN: We'll end it with him, who's now President Trump's labor secretary, was the U.S. attorney 
in Florida at the time. 
VICKY WARD: Yeah. 
AMY GOODMAN: This sweetheart deal, to say the least—
VICKY WARD: Yeah. 
AMY GOODMAN: I mean, Jeffrey Epstein, if found guilty at the time of molesting, assaulting the number of 
women who had brought cases, something nearly around 40-
VICKY WARD: Right. 
AMY GOODMAN: —could have gone to jail for life in prison. 
VICKY WARD: If Alexander Acosta had let the FBI to continue with its investigation. But instead, there was 
this—that he had one meeting with Jay Lefkowitz, a member of Jeffrey Epstein's powerhouse, massive sort of 
legal team, and he did the—you know, he later justified the plea deal that was cut, the nonprosecution 
agreement, that was significantly, by the way, not just helpful to Jeffrey Epstein, but helpful to four conspirators 
who had enabled him. He claimed later, "Well, you know, the women's testimony might not have stood up. 
This was the best deal I could get." But, in fact, we now know that he actually broke the law. You're not 
allowed to cut a deal like that and not tell victims, who were cooperating with a separate FBI investigation, 
which is what happened. They were completely blindsided by this thing. 
And finally, this year—and I have to say thank you to Julie Brown, the Miami Herald journalist, for 
highlighting the issue before Congress, and thank you to Ben Sasse, the Republican senator from Nebraska, for 
joining with IS Democrats and going back to the Justice Department and saying, "What on Earth happened? 
This is a clear miscarriage of justice. Investigate it," because I think it's against that political climate of 
goodwill that you now have the FBI saying, "OK, let's go back." 
AMY GOODMAN: Very quickly, as we end, the relationship that Jeffrey Epstein had with President Clinton? 
Flew him numerous times around the world. 
VICKY WARD: Yes. 
AMY GOODMAN: And with President Trump? 
VICKY WARD: Yes. Well, he called that plane—right?—if you can believe it, the "Lolita Express," which—
AMY GOODMAN: Who called it? 
VICKY WARD: Jeffrey Epstein, which gives you some idea of the lack of humility of this person. His power—
I think the whole reason he has got away for so long is the extraordinary network of powerful people that he 
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could bring down with him. That is why he's remained untouchable for so long. So his friendships are not 
insignificant; they're a big part of this story. 
AMY GOODMAN: Well, we will certainly continue to follow this. Vicky Ward, investigative journalist who 
profiled Jeffrey Epstein for Vanity Fair in 2003 in a piece headlined "The Talented Mr. Epstein." 
When we come back, we look at the shocking case in Alabama where prosecutors have dropped manslaughter 
charges against a pregnant woman whose pregnancy ended after she was shot in the stomach by a co-worker, 
then she herself was charged with manslaughter. Stay with us. 
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Who Is Jeffrey Epstein? An Opulent Life and Lurid Accusations 
New York Times 
By James Barron 
7/9/19 
For years, Jeffrey Epstein lived a luxurious life, socializing with celebrities, jetting off to Europe, California or 
the Caribbean, where he owned a private island. 
In New York, where he lived in one of the largest private houses in Manhattan, his name turned up in gossip 
columns from time to time, linked to presidents and princes. But he largely stayed out of the spotlight, almost 
never talking to reporters. 
He remained an enigma, a mysterious money manager who even managed to keep any client list private. 
Now Mr. Epstein, 66, is at the center of a case involving sex-trafficking and conspiracy charges. He was 
charged on Monday with bringing girls as young as 14 to his homes in Manhattan and Palm Beach, Fla., for sex. 
He is also accused of paying some of them to recruit other girls, also underage. Mr. Epstein pleaded not guilty. 
He was indicted by a federal grand jury in New York more than a decade after the top federal prosecutor in 
Miami — Alexander Acosta, now President Trump's labor secretary — signed off on a plea deal involving 
similar allegations that was kept secret from his accusers until it had been finalized in court. 
It spared Mr. Epstein from a trial and possible long sentence in federal prison. Instead, he served 13 months on 
state charges of soliciting prostitution in Florida. But he was allowed to leave the jail six days a week to go to 
an office and work. 
Since then, The Miami Herald has run a series of articles about Mr. Epstein's case, and the Justice Department 
has faced criticism of the plea deal as another instance of a well-connected man sidestepping a reckoning. The 
prosecutors in Manhattan who brought the new charges against Mr. Epstein made it clear that the 2008 deal in 
Florida did not apply. 
"The agreement, by its terms, only binds the Southern District of Florida," Geoffrey S. Berman, the United 
States attorney in Manhattan, said on Monday. 
The indictment marked the downfall of a man who had, until then, been dogged for years by allegations that he 
lured girls and young women into disturbing sexual encounters but seemed to have escaped serious 
consequences. 
He was a noticeable presence at Manhattan parties and movie screenings: Where other men wore jackets and 
ties, he wore what he always wore — a polo-style shirt, open at the collar, and jeans. 
People who have met Mr. Epstein describe him as charming, chatty, disarming and funny. New York magazine 
said in 2002 that he brought "a trophy-hunter's zeal to his collection of scientists and politicians." 
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In 2015, when the now-defunct site Gawker published what it said was his address book, there were entries for 
three Trumps (Donald, his ex-wife Ivana and their daughter Ivanka); Michael R. Bloomberg, the former mayor; 
the actors Alec Baldwin and Dustin Hoffman; the singer and songwriter Jimmy Buffett (whose name was 
misspelled); and the Nobel Peace Prize winner Elie Wiesel, among many others. 
He turned up in the gossip columns but lived "a life full of question marks," as New York magazine put it in 
2002. More than one writer likened Mr. Epstein to Jay Gatsby, the enduringly impenetrable F. Scott Fitzgerald 
character. He was said to look a little like the designer Ralph Lauren, who was born in the Bronx. 
But Mr. Epstein came from Brooklyn. His father was a city Parks Department employee. Mr. Epstein took 
classes in physics at The Cooper Union in the mid-1970s and later attended New York University, but did not 
receive a degree from either school, New York magazine reported. 
He began his career as a math teacher at the Dalton School, an elite private school in Manhattan whose alumni 
include the cable-news anchor Anderson Cooper, the comedian Chevy Chase and the actress Claire Danes. 
"By most accounts, he was something of a Robin Williams-in-"Dead Poets Society" type of figure, wowing his 
high-school classes with passionate mathematical riffs," according to the New York magazine article. 
From there he took his math skills to Bear Stearns, then a powerful Wall Street investment bank. 
Both New York magazine and Vanity Fair magazine reported that he made connections at Dalton that led him 
to Alan C. Greenberg, then the dauntless chief executive of the Wall Street firm Bear Stearns. Known as "Ace," 
Mr. Greenberg was later the firm's chairman and the chairman of its executive committee. 
Under Mr. Greenberg and another top executive, James Cayne, Mr. Epstein "did well enough to become a 
limited partner — a rung beneath full partner," Vanity Fair reported. 
He left in the early 1980s, forming a consulting firm called the International Assets Group that he ran out of his 
apartment, according to Vanity Fair. Later he set up a money management firm called J. Epstein & Co. It 
eventually became the Financial Trust Company, based in the Virgin Islands. 
But there was an expensive footnote about him and Bear Stearns. When two big Bear Stearns hedge funds 
collapsed in 2007 at the start of the financial crisis, Mr. Epstein's firm was one of the bigger losers, out more 
than $50 million. Mr. Epstein's firm also claimed in a lawsuit that he lost even more money when Bear Stearns 
itself collapsed in 2008. 
Exactly what his money management operation did was cloaked in secrecy, as were most of the names of 
whomever he did it for. He claimed to work for a number of billionaires, but the only known major client was 
Leslie Wexner, the billionaire founder of several retail chains, including The Limited. 
Mr. Wexner is the chief executive of L Brands, which now operates Victoria's Secret and Bath & Body Works. 
Mr. Epstein also did work for Steven Hoffenberg, a financier who offered to rescue The New York Post in 
1994, the year before he was charged with securities fraud. 
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Mr. Epstein's townhouse was once owned by a company that he and Mr. Wexner both controlled. In 2011, it 
was transferred to a Virgin Island-based company called Maple Inc., of which Mr. Epstein is the president. 
A spokeswoman for Mr. Wexner said the retail magnate had "severed ties" with Mr. Epstein about a decade 
ago. Calls to Financial Trust's office in St. Thomas and to a lawyer for Mr. Epstein there have not been 
returned. 
Over the weekend, investigators smashed the tall wooden front doors of Mr. Epstein's $56 million Manhattan 
townhouse in a raid, and said they found a safe with lewd photographs. In arguing that his wealth and private 
jets made him a flight risk, they said he had six residences. 
They also emphasized his private island in describing his primary residence on Little St. James Island, in the 
Virgin Islands. They said he had a second home on the islands, along with places in New Mexico — a ranch he 
reportedly named "Zorro" — and Paris. 
They also described a fleet that included S.U.V.s and a Mercedes-Benz sedan. His New York State sex-offender 
listing, required after his deal in Florida in 2008, said he also had a 2017 Bentley. 
There was no mention of the Boeing 727 — decorated with mink and sable throws — that flew him to Africa 
with former President Bill Clinton and the actor Kevin Spacey in 2002. It also flew Mr. Epstein and other 
acquaintances to a TED Talk in California with lunch catered by Le Cirque, a Manhattan restaurant with a 
celebrity clientele. 
President Clinton "knows nothing about the terrible crimes" that Mr. Epstein was charged with in New York or 
pleaded guilty to in Florida in 2008, a spokesman for the former president said on Monday. The spokesman, 
Angel Urefia, said that Mr. Clinton had taken four trips on Mr. Epstein's plane in 2002 and 2003 — one to 
Europe, one to Asia and two to Africa. 
Mr. Urefia emphasized that Mr. Clinton was accompanied by staff members and supporters of Mr. Clinton's 
foundation "on every leg of every trip" and was accompanied by someone from his staff and his security detail 
when he made "one brief visit" to Mr. Epstein's home. That was around the same time as a meeting in Mr. 
Clinton's office in Harlem in 2002, Mr. Urefia said. 
"He's not spoken to Epstein in well over a decade, and has never been to Little St. James Island, Epstein's ranch 
in New Mexico or his residence in Florida," Mr. Urefia said. 
Not everyone who flew on Mr. Epstein's planes was a boldface name. Models "have been heard saying they are 
full of gratitude to Epstein for flying them around, and he is a familiar face to many of the Victoria's Secret 
girls," Vanity Fair said in 2003 after noting, "Epstein is known about town as a man who loves women — lots 
of them, mostly young." 
Private as he was, he was apparently concerned about what the public thought of him. A mutual friend arranged 
for him to meet R. Couri Hay, a public relations consultant. Mr. Hay said on Monday that their first meeting, at 
Mr. Epstein's townhouse, took place three years ago. 
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Mr. Epstein was not ready to re-emerge in the public eye — not then, anyway. Three months ago, Mr. Epstein 
called and invited him over to discuss damage control, Mr. Hay said. 
"He hates every story starting with `billionaire pervert,' Mr. Hay said. "Jeffrey had long stories about the 
difference between pedophilia with very young children and tweens and teens a little older." He added, "It was 
his way of trying to talk his way around it." 
Mr. Hay said he ultimately declined to work for Mr. Epstein. He said he had misgivings about Mr. Epstein's 
sincerity. 
Sarah Maslin Nir, Matthew Goldstein and Matthew Haag contributed reporting. 
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Complex Frauds 
Gyure 
No Prison for the Friars Club Boss Members Seem to Love or Hate 
The New York Times 
By Colin Moynihan 
7/8/19 
A former executive director of the Friars Club was sentenced to one year of supervised release on Monday, but 
there were few signs in the courtroom, filled to overflowing with bickering current and past members, that the 
proceeding would end the rancor that disrupted the 115-year-old club. 
Some critics of the former director, Michael Gyure, who pleaded guilty in January to having filed false tax 
returns, said his actions reflected a pattern of lax oversight at the club. 
Mr. Gyure's supporters, on the other hand, have dismissed the criticism as overblown and described his 
continued stewardship as vital to the club's future. 
Judge Naomi Reice Buchwald of Federal District Court in Manhattan repeatedly emphasized on Monday that 
Mr. Gyure, 51, was being sentenced only for his tax offenses. Gripes about his leadership, she said, were 
beyond the court's scope. 
"It's clear that there are factions within this club," she said at one point. "It seems to me that the dispute 
between the factions is essentially a civil dispute." 
His guilty plea covered tax returns for four years ending in 2015. He was charged with failing to include 
hundreds of thousands of dollars in supplemental income, including personal expenses covered by the club. 
Prosecutors had asked that Mr. Gyure be sentenced to 12 to 18 months in prison, saying that, beyond his tax 
offenses, he had sought to enrich himself at the expense of the club and its members. Defense lawyers said Mr. 
Gyure did not deserve prison time, noting, among other things, that many members want him to continue to 
help lead the organization and that he was given a new five-year employment contract, albeit in a different role 
with no oversight of the club's finances. 
There was little doubt that those supportive members outnumbered the critics in the courtroom and, after the 
sentencing, some returned to the club, now shuttered for the summer and undergoing renovations, for a 
celebration. 
Mr. Gyure acknowledged the divisions in his statement to the court, telling Judge Buchwald he had only 
himself to blame for his tax crimes. 
"I recognize that I have some detractors at the Friars Club," he said. "Sadly, I have given them ammunition." 
He quickly added that "the vast majority" of club members were on his side and promised "integrity and 
loyalty" to them. 
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The club, whose members have included Frank Sinatra, George Burns and Johnny Carson, has served as a 
bastion for a type of humor symbolized by the insult-filled roasts that it has held for celebrities and which are 
often broadcast on television. 
Since 1957, the club's headquarters has been an East 55th Street townhouse, known as the "Monastery," which 
includes a barbershop, a gym and a second floor bar named after Barbra Streisand. 
Over the last decade or so, some members became concerned by what they viewed as poor oversight by the 
club's management. The club lost its tax-exempt status as a fraternal organization in 2010. Charity events took 
in $3 million but yielded only $13,000 for charity. The club was often late in paying bills and its state taxes. 
Prosecutors wrote in a sentencing memorandum to the court that even as the club was struggling financially, 
Mr. Gyure aimed to benefit himself. For example, they said Mr. Gyure had attempted to direct any profits from 
a roast of the former NFL quarterback Terry Bradshaw, which was aired on ESPN, to a company he led, instead 
of the Friars. 
Defense lawyers countered that the Friars typically created separate companies to handle masts so the club 
would avoid liability, and that Mr. Gyure had not benefited because the roast did not turn a profit. 
Mr. Gyure began serving as executive director in 2007. 
"For the past 12 years Michael has been the glue that held the Friars Club together," Paul Shechtman, a defense 
lawyer told the judge on Monday. 
But three former Friars and one current member of the club vehemently disagreed, saying that mismanagement 
under his reign had led to multiple problems. 
One who spoke was Sondra Beninati, who said she became disturbed when she realized the Friars owed large 
amounts of unpaid sales tax. She agreed to wear a hidden recording device for federal investigators who raided 
the club in 2017 because of suspicion of financial improprieties. 
She said she and her husband had asked how club officials were handling the sales tax matter and sought 
several meetings with Mr. Gyure. 
"We were blocked at every turn," she said. 
But Judge Buchwald cut Ms. Beninati and two other speakers short, saying their assertions were not directly 
connected to the false tax returns that Mr. Gyure had filed. 
"How the club is run is up to its members," she said, and advised that one recourse might be the ballot box. 
"Elections, they have consequences." 
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No jail time for tax-cheating Friars Club honcho, some members aren't laughing 
New York Daily News 
By Trevor Boyer 
7/8/19 
The tax-cheating former director of the Friars Club escaped a prison stint on Monday, the culmination of a court 
case that left some roast-ready members fuming. 
At his hearing in Manhattan Federal Court, disgraced club honcho Michael Gyure was sentenced to time served, 
a year of supervised release and 100 hours of community service, and fined $5,500. 
"I have no one to blame but myself," a contrite Gyure told the court, choking up as he described a happy 
childhood in England and loving parents. "I have betrayed their memory," he said, adding, "I am so sorry that 
they have had to suffer this disgrace." 
Gyure has paid the Internal Revenue Service a total of $156,920 for what he owed for three years of false tax 
filings, plus interest, said his lawyer, Paul Shechtman. 
Just by looking at these celebrities, we'd be none the wiser to know they are gay. Meanwhile, they have all 
publicly come out and are all in a relationship. 
The standing-mom-only courtroom was packed with Friars members who were rooting for Gyure's freedom or 
howling for his scalp. 
The comedy world's most famous private club has endured tight finances and the prospect of declining 
membership. Gyure pleaded guilty in January to filing faulty tax forms following a two-year investigation by 
the Justice Department. The club is now closed for renovations. 
"In my opinion, Michael Gyure is a bad person," declared lawyer Irwin Cohen, asserting that on three occasions 
Gyure chiseled him out of thousands of dollars for work he did on the club's behalf. "I trusted him, and I 
believe he preyed on me," he said. "I think that incarceration is justified." 
Comedy writer Carol Scibelli also griped about Gyure's leadership, claiming he took a committee chairmanship 
from her and that "members were thrown out for ridiculous offenses, others left in disgust." 
When Friars board member Arthur Aidala rose to speak, a weary Judge Naomi Reice Buchwald quipped, 
"Which side are you on?" drawing laughter from an audience appreciative of a snarky jibe. 
"The groom's side, your honor," deadpanned Aidala. "I think it's obvious, your honor, that Mr. Gyure has the 
support of the board." 
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Terrorism & Narcotics 
Wise Honest 
Their Son Died After Being Held by North Korea. Now They Want a $500M Ship as Payments 
Vice News 
By Trone Dowd 
7/8/19 
The parents of Otto Warmbier are demanding compensation for the untimely death of their son, whether North 
Korea wants to cooperate or not. 
Fred and Cindy Warmbier have filed a lawsuit in the Southern District of New York putting a legal claim on a 
North Korean bulk carrier ship seized by the U.S. government last year. The Ohio couple are asking that the 
17,601-ton ship named the Wise Honest be used to pay off part of the $500 million settlement that North Korea 
owes the family, as determined by the U.S. District Court for the District of Columbia last December. 
But North Korea has adamantly denied any responsibility in the 22-year-old student's death in June 2017 a few 
days after he was returned to the U.S. from more than a year in North Korean detention. The family believes 
Otto was tortured and holds the socialist state accountable. 
Seized assets could be the way the Warmbiers get compensation. There is a precedent for such lawsuits: Just 
two years ago, the acting Manhattan U.S. Attorney determined that a $500 million building on Fifth Avenue 
could be used to pay off fines related to violations of Iran sanctions. 
The Wise Honest, which was North Korea's second-largest merchant ship, was caught illegally transporting 
coal near American Samoa in April 2018. U.S. officials determined that the ship was using the trade profits to 
fund North Korea's nuclear and ballistic missile programs, violating rules set by U.N. and U.S. sanctions. 
"We are committed to holding North Korea accountable for the death of our son Otto, and will work tirelessly 
to seize North Korean assets wherever they may be found," the Warmbiers said in a statement released 
Saturday. 
Otto Warmbier was arrested during a study abroad trip to North Korea in January 2016 at Pyongyang 
International Airport for allegedly stealing propaganda posters. He was detained and sentenced to 15 years of 
hard labor in March 2016 before being returned to the U.S. in June 2017. When Otto arrived back home, 
however, he was blind, deaf and brain dead. His parents decided to remove his feeding tube. Warmbier died just 
six days after his return to the U.S. 
A Hamilton County coroner could not identify what caused the college student's death, but both U.S. officials 
and Warmbier's parents have suspected that he was tortured during his 17 months in captivity. 
According to the New York Daily News, North Korean officials called the seizure of the cargo ship a "gangster-
like flagrant act of robbery," and demanded that the vessel be returned "without hesitation." 
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This is not the only time the Warmbiers made news recently. Earlier this year, President Donald Trump found 
himself in hot water after saying that he didn't believe North Korea's leader Kim Jong Un was complicit in 
Otto's death. 
"What happened is horrible," Trump said during the Hanoi Summit in February. "I really believe something 
very bad happened to him, and I don't think that the top leadership knew about it. [...] I don't believe he allowed 
that to happen. Prisons are rough. They are rough places and bad things happen. But I really don't believe that 
he [Kim] knew about it." 
Trump went back on his statement on Twitter the next day, but not without sharp criticism from the Warmbier 
family. 
"We have been respectful during this summit process," Warmbier's parents said in a statement. "Now we must 
speak out. Kim and his evil regime are responsible for the death of our son Otto. Kim and his evil regime are 
responsible for unimaginable cruelty and inhumanity. No excuses or lavish praise can change that." 
Last month, a 29-year-old Australian student Alek Sigley was detained in North Korea for spreading anti-
government sentiment over social media, according to the North Korean Central News Agency. Sigley, who 
was studying Korean literature at Kim 11 Sung University, was deported from the country on July 4, after a 
week in detention. 
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Matters of Interest 
Trump Can't Block Twitter Followers, US Appeals Court Rules 
NY Law Journal 
By Mike Scarcella and Nate Robson 
7/9/19 
President Donald Trump's efforts to block certain critics from following him on Twitter is discriminatory and 
violates the First Amendment, a U.S. appeals court ruled Tuesday. 
The three-judge panel of the U.S. Court of Appeals for the Second Circuit upheld a lower court ruling against 
Trump. The plaintiffs, represented by the Knight First Amendment Institute at Columbia University, are Twitter 
users who were "blocked" from accessing his social media account. 
"Once the president has chosen a platform and opened up its interactive space to millions of users and 
participants, he may not selectively exclude those whose views he disagrees with," Circuit Judge Barrington 
Parker wrote for the unanimous panel. 
The panel said: "In resolving this appeal, we remind the litigants and the public that if the First Amendment 
means anything, it means that the best response to disfavored speech on matters of public concern is more 
speech, not less." 
The panel said the ruling does not consider private social media accounts that may be used by elected officials, 
and does not consider whether social media companies themselves are bound by the First Amendment when 
policing their platforms. 
In Trump's case, the panel said he uses the account as a way to communicate with the public about his 
administration. 
Trump blocked Twitter users who were critical of his presidency, and a trial court judge in Manhattan last year 
concluded that blocking these accounts violated the First Amendment. At the time, the Knight Foundation's 
Jameel Jaffer praised the ruling, which he said "reflects a careful application of core First Amendment 
principles to government censorship on a new communications platform." 
Jaffer, the Knight Institute's executive director, said in a statement Tuesday: 
"Public officials' social media accounts are now among the most significant forums for discussion of 
government policy. This decision will ensure that people aren't excluded from these forums simply because of 
their viewpoints, and that public officials aren't insulated from their constituents' criticism. The decision will 
help ensure the integrity and vitality of digital spaces that are increasingly important to our democracy." 
The appeals court, concluding Trump's account is a public forum, noted how often he uses his account—
@realDonaldTrump—to announce official news. Trump, for instance, announced his administration's move to 
ban transgender service members, and he used his account to announce that he had fired his chief of staff, 
Reince Priebus, and replaced him with John Kelly. 
"The president excluded the individual plaintiffs from government-controlled property when he used the 
blocking function of the account to exclude disfavored voices," the appeals court said Tuesday. 
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Judicial Review of Claims of Government Misconduct in Parallel Investigations 
Law 360 
By Elkan Abramowitz and Jonathan Sack 
7/9/19 
Defending an individual who is the subject of parallel civil and criminal investigations is one of the more 
challenging aspects of white-collar defense practice. The situation is quite common, for example, in securities 
fraud investigations conducted by the Securities and Exchange Commission and Department of Justice. Parallel 
investigations raise both pragmatic and legal concerns. As a practical matter, an individual may have to choose 
between invoking her Fifth Amendment right against self-incrimination, which could have adverse 
consequences in civil proceedings, or, conversely, not remain silent and make statements detrimental in 
criminal proceedings. In addition, as a legal matter, parallel investigations pose the danger of prosecutors' 
behind-the-scenes use of civil investigations as a means of securing evidence they might not otherwise be able 
to obtain. 
Courts have held that when federal prosecutors use a civil investigation in furtherance of a criminal 
investigation, fundamental constitutional rights—including a defendant's right against self-incrimination—may 
be infringed. An important procedural question that arises is what preliminary showing a defendant must make 
in a criminal case to trigger discovery and judicial inquiry into the conduct of federal prosecutors. This issue 
was addressed in a recent opinion by Judge Jesse Furman in United States v. Rhodes, No. 18-cr-887 (S.D.N.Y.), 
a prosecution for securities fraud and related offenses in the Southern District of New York. 
In this article, we begin with a discussion of the basic limitations on federal prosecutors when they conduct 
criminal investigations at the same time as related civil enforcement investigations. We then discuss the Rhodes 
case and Judge Furman's decision, which required prosecutors to provide a substantial summary of their 
interactions with civil investigators before deciding whether further inquiry was warranted. The facts and ruling 
in Rhodes illustrate the importance of being sensitive to possible government overreach during parallel civil and 
criminal investigations, and of advancing constitutional arguments when appropriate to protect a defendant's 
rights. 
Parallel Civil and Criminal Investigations 
In United States v. Kordel, the Supreme Court held that the government may conduct parallel civil and criminal 
investigations without violating due process, so long as it does so in good faith and pursuant to proper 
procedures. 397 U.S. 1, 11 (1970). Prosecutors may use evidence obtained in a civil investigation in a 
subsequent criminal proceeding "unless the defendant demonstrates that such use would violate his 
constitutional rights or depart from the proper administration of criminal justice." United States v. Teyibo, 877 
F. Supp. 846, 855 (S.D.N.Y. 1995). An individual's rights would be violated if the government were to (1) 
bring a civil action "solely to obtain evidence for its criminal prosecution," or (2) "fail to advise the defendant 
in its civil proceeding that it contemplates his criminal prosecution." Kordel, 397 U.S. at 11-12 (emphasis 
added). 
In Kordel, a corporate executive was convicted of violating the Food, Drug, and Cosmetic Act partly on the 
basis of earlier answers to interrogatories served on his company by the Food and Drug Administration (FDA) 
in a civil proceeding. The defendant argued that the use of civil interrogatories to obtain evidence in a nearly 
contemporaneous criminal prosecution violated his Fifth Amendment right against compulsory self-
incrimination. 
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The Supreme Court rejected the claim, holding that the defendant's failure to invoke his Fifth Amendment 
rights in responding to the FDA's interrogatories foreclosed his claim of having been compelled to give 
testimony against himself. The Court affirmed the district court's finding that the FDA had not acted in bad 
faith in serving interrogatories, which the FDA regularly did in similar cases. Id. at 7-10. 
Applying Kordel, the Second Circuit has set out the procedural steps for a challenge to a prosecutor's handling 
of parallel investigations. United States v. Gel Spice Co., 773 F.2d 427, 434 (2d Cir. 1985). In Gel Spice, the 
Second Circuit held that a defendant who seeks discovery regarding potential misconduct in parallel civil and 
criminal governmental investigations must make "a `substantial preliminary showing' of bad faith before an 
evidentiary hearing or even limited discovery is to be held." Id. (quoting United States v. Tiffany Fine Arts, 718 
F.2d 7, 14 (2d Cir. 1983)). This standard recognizes the "special danger" of the government undermining the 
rights of a defendant in a criminal investigation "by conducting a de facto criminal investigation using 
nominally civil means." Sterling Nat'l Bank v. A-1 Hotels Intl, 175 F. Supp. 2d 573, 579 (S.D.N.Y. 2001). 
The `Rhodes' Case 
In the Rhodes case, the defendant Jason Rhodes, a hedge fund manager, was indicted on several charges, 
including securities and wire fraud, investment adviser fraud, and conspiracy. The government alleges that 
Rhodes used investor funds to repay other investors, pay hedge fund expenses, and support his lifestyle rather 
than invest in the hedge fund's portfolio. No. 18-cr-887, ECF No. 8 (S.D.N.Y.). According to the indictment, 
Rhodes created false account statements to cover up the misuse of investor funds, which resulted in losses to 
investors of approximately $19.6 million. Id. 16. 
In March 2019, Rhodes filed a motion seeking discovery regarding possible improper coordination between the 
SEC and DOJ. Id., ECF No. 29. Rhodes's chief argument is that DOJ improperly secured personal emails and 
text messages by means of productions compelled by SEC subpoenas (later turned over to DOJ) instead of a 
valid search warrant issued by a judge on the basis of probable cause. In support of this contention, Rhodes 
explained that the SEC had served him with a subpoena for documents in February 2017, after one of Rhodes's 
co-founders had pled guilty to fraud charges and shortly before a grand jury returned indictments of co-
conspirators in Rhodes's case. According to Rhodes, DOJ was aware of his role at the hedge fund at the time 
the SEC first subpoenaed him but nevertheless chose not to charge him. Instead, the government allegedly "laid 
in wait for nearly two years" while Rhodes produced documents to the SEC and appeared for SEC testimony. 
Id., ECF No. 37 at 6. 
In a criminal complaint against Rhodes, DOJ relied on information gathered by the SEC, including text 
messages Rhodes had produced pursuant to SEC subpoena. Rhodes was later indicted on criminal charges, 
including securities fraud, but, unusually, the SEC did not file a civil complaint. Rhodes now argues that, under 
these circumstances, the district court should infer that DOJ "used the civil discovery process in the SEC 
proceeding [solely] to develop the criminal case against [Rhodes,] in violation of his due process rights," id., 
ECF No. 29 at 9, and thus should order broad discovery to the defense relating to the prosecutors' dealings with 
the SEC. 
DOJ opposed the motion, arguing that Rhodes had offered "mere conjecture" that there "may have been 
improper coordination." Id., ECF No. 32 at 8 (emphasis added). In the government's view, Rhodes has not 
alleged any misleading representations to Rhodes or his counsel concerning an ongoing criminal investigation 
when Rhodes received and responded to the SEC's subpoena. The government also noted that Rhodes 
understood he faced possible criminal prosecution throughout the SEC's investigation, as made plain by his 
invocation of his Fifth Amendment rights during SEC testimony. 
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The District Court's Order 
On June 18, 2019, following a hearing and the government's submission of an affidavit, Judge Furman ordered 
the government to provide additional information regarding the prosecutors' coordination with and involvement 
in the SEC's civil investigation for the court's in camera review. Id., ECF No. 47. 
As an initial matter, the court noted that both parties had invoked the wrong standard for determining whether 
Rhodes should be allowed to conduct discovery. Relying on decisions addressing claims of selective 
prosecution, Rhodes argued that he was entitled to discovery if he provided "some evidence tending to show the 
existence" of the essential elements of a due process violation. Id., ECF No. 37 at 5 (quoting United States v. 
Armstrong, 517 U.S. 456, 469 (1996)). The government pointed to a standard typically applied in suppression 
cases—i.e., that discovery is appropriate only "if the moving papers are sufficiently definite, specific, detailed, 
and non-conjectural to enable the court to conclude that contested issues of fact ... are in question." Id., ECF 
No. 32 at 8 (quoting United States v. Mahaffy, 446 F. Supp. 2d 115, 127 (E.D.N.Y. 2006)). Judge Furman 
rejected both positions and applied the test set forth in Gel Spice, 773 F.2d at 434, which called on the district 
court to determine whether Rhodes had made a "substantial preliminary showing" of bad faith by the 
government. 
The court held that, on the present record, Rhodes had failed to make that showing, but observed that the 
Second Circuit had adopted the "substantial preliminary showing" standard in Gel Spice against the backdrop of 
(1) multiple affidavits of government lawyers concerning the relationship between the civil and criminal 
investigations at issue, and (2) documents given to the district court for in camera review. Rhodes, No. 18-cr-
887, ECF No. 47 at 2. In the Rhodes case, in contrast, the government had submitted only a single affidavit by 
one of the Assistant U.S. Attorneys responsible for DOJ's criminal prosecution. The affidavit was limited to 
that AUSA's knowledge and attested that he "neither directed nor requested the issuance of [the SEC's 
subpoena]" and that he "had no role in formulating the [subpoena's] content." Id., ECF No. 44-I 16. Because 
the affidavit did not say anything about the knowledge or involvement of others involved in the criminal 
investigation, Judge Furman found that the affidavit did "nothing to advance the ball." Id., ECF No. 47 at 2. 
Accordingly, Judge Furman ordered the government to "make a more substantial showing in camera." Id. 
Specifically, the court directed the government to submit a detailed affidavit that sets forth "the nature and 
extent of any and all communications between the SEC and those involved in the criminal investigation of 
Rhodes," along with copies of any substantive communications. Id. at 2-3. Only after reviewing these materials 
in camera would the court decide whether the requested discovery is warranted. Id. The government submitted 
its supplemental affidavit and exhibits in camera on July 1, 2019. Id., ECF No. 48. 
Conclusion 
In white-collar criminal matters, parallel investigations are routine. In addition to a grand jury investigation, 
federal or state civil enforcement authorities—e.g., the SEC, CFTC and New York State Attorney General or 
Department of Financial Services—may conduct their own civil investigations, and a company often conducts 
an internal investigation. The multiplicity of investigations poses an inherent danger: that prosecutors could use 
non-criminal investigations to secure statements or tangible evidence that might otherwise not be available to 
them. 
This issue was recently addressed in the context of a company internal investigation in United States v. 
Connolly, 2019 WL 2120523, at *1 (S.D.N.Y. May 2, 2019). Chief Judge Colleen McMahon held that the 
extensive involvement by the CFTC, SEC, and DOJ in an internal investigation conducted by counsel for 
Deutsche Bank—combined with the government's failure to conduct a meaningful investigation of its own—
meant that the bank and its counsel "were de facto the Government." Because the government "outsourced" its 
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