Trust Account Management: Handling Client And Third Party Funds: Fill & Download for Free

I think we first have to look at what we actually know:A) he’s probably not a billionaire.If someone has $100mm or more they can easily say “I’m a billionaire” because their lifestyle will not be any different at all from a billionaires.You can buy a 40,000 foot house, ride private planes all day and night, have an island, etc for all much less than a $100 million.Important to remember: So anyone with $100 million or more can say “I’m a billionaire” and nobody would know.The reason I suspect he’s not a billionaire is:1. His financial documents when he was looking to make bail said he had $559 million, a very specific amount. Maybe he has some money also hidden away but probably not that much more.2. The house he lived in in NYC was a gift from his billionaire friend, Leslie Wexner. Billionaires don’t need other billionaires giving them gifts.So now the question is: how did he make any money at all?The theory is that he was a hedge fund manager or a money manager of some sort. That’s what he claimed.This is definitely NOT TRUE.All we actually know is that thirty years ago he helped the billionaire Leslie Wexner with some philanthropy deals and perhaps other financial advice.Here’s what we also know:1. There is ZERO evidence he ever tried to raise money.Hedge funds need to raise lots and lots of money.When a big hedge fund raises money they need big investors. They need people working for them to manage those clients.They need to hire marketing teams to set up meetings. The meetings are attended by a dozen or so people who are involved in making the decision.To be a billionaire hedge fund manger you probably need to be managing at least $5,000,000,000 for over a decade.Thousands of people would be involved to raise that kind of money. Marketers, employees, employees, of the investors, people who did due diligence, background checks, etc.Zero people have stated that they were involved in any aspect of fundraising.2. There is ZERO evidence that he actually invested in anything.This is the law: every fund with more than $100,000,000 in assets has to disclose to the SEC every three months what stocks they hold.The SEC has zero information from Jeffrey Epstein and all the top hedge funds over a billion are accounted for.What if he invested in real estate or private companies? Again, with that kind of money, hundreds or thousands of people would have to know.Has anyone stated they know of any investments? Zero.3. What if he invested secretly through a third party?Well, then the third party would know. There’s no evidence that any third party invested for him.And it’s still not that easy. Because you are required to know your investor by law. It’s hard to invest secretly.A great example is Yasser Arafat.After he died, it turned out he had invested in two companies in the US: Bowlmor Lanes (a bowling alley!) and a software company called Vaultus (MY COMPANY!) .We didn’t know it was Arafat. He invested through a third party.But that’s all he could get away with. Maybe $4 million worth. It’s very hard to invest a large amount of money secretly.SO HOW DOES HE HAVE MONEY?With everything in life, the simplest answer is probably the most accurate.When I first thought about this I thought:He probably pitched rich foreign billionaires (sheikhs, dictators, etc) and said, “if you put money in my fund, you can have access to my island, and btw, lots of young girls on my island and it’s all VERY SECURE AND PRIVATE”.But then I thought, that’s the stupid answer.Running a hedge fund is hard. Raising money is hard (see above). And these dictators could not care less about investing.The hedge fund was just a story so people could explain why they were wiring him money.Instead, he made his money from what I will call “Club Epstein”.He set up the island, the procurement of young girls, the facade of respectability, the protection from government (through his massive connections and philanthropy presence).And the, wink, you can do anything you want on the island.(Epstein’s island).THAT was his product.That is obviously not an easy product to build. And it’s a product that was apparently in demand by at least a few wealthy, or connected, and corrupt billionaires, royalty, world leaders, etc.He sold it to all takers.Let’s say “membership” in Club Epstein was $20,000,000.Every single dictator in the world can afford that. Almost every single royal person in the world can afford that.Various foreign corrupt businessmen can afford that without thinking of it.30 members and Epstein has $600,000,000.That’s how he made his money.FAQ:Why would billionaires, dictators, royalty, etc join a high-priced club?Answer: because they couldn’t get the girls themselves.Or they couldn’t get it with their privacy intact. Or they would be violating their religion. Or they were married and had a public image to live up to.Or they were afraid to get arrested. Or they didn’t want to deal with all the other issued involved.They wanted to be able to pretend they were going to a “philanthropy meeting” (part of the club) or a meeting of intellectuals (Dershowitz, Minsky, etc) on Epstein’s island and, wink wink, have girls show up at the after-party.Why Epstein? Can’t you get this in Thailand or other sex-industry countries?Epstein hung out with Presidents, country leaders, philanthropists, etc.For decades you could have reasonable excuses to meet Epstein (not after his Florida jail time but before). But if you are a prominent Sheikh, it’s a bit suspicious to your inner circle if you go to Bangkok ten times a year.Why didn’t Epstein get caught earlier?The obvious reason.The CIA approached him at some point and said, “we will protect you as best we can if you give us all video and photos of everyone on the island.”And he said, “Deal!”Prince Andrew is all over Wikileaks. Prince Andrew is all over this Epstein story.All of these guys that have come up in other investigations seem to have spent a lot of time with Epstein.So clearly the CIA was interested in his clientele. They don’t stay interested from afar. The CIA makes deals. Epstein would have had no reason to refuse the deal.But then why was he prosecuted in Florida?Was he? He spent 18 months in jail (nothing) and was protected from all future prosecution.This deal was so pro-Epstein that Acosta, the prosecutor who put together the deal had to actually resign from being Secretary of Labor.Nobody can understand why Acosta made a deal this good for Epstein.In fact, Epstein’s main case right now is that this would be “double jeopardy” and he was protected from prosecution by the Florida case and the way Acosta worded it.Epstein assumed he could not be prosecuted in NYC because of this. There’s been some debate on this but nothing conclusive.Which is why the Fed was going through more measures: uncovering documents, raiding his island, etc. They didn’t have any new evidence to show that this was a new case and not just a rehash of the 2007 case.===============Did he kill himself?There’s three possible answers: Yes (but then how?), No (he was killed), and He’s not dead.All three involve conspiracy. Rule #1: the more that has to conspire for something to happen, then the less likely it is true.For instance, “he was killed” involves the extra complication of a killer and someone hiring a killer and the mechanics of how the killing would happen and not be noticed in an autopsy.Almost impossible. So he was not killed.And, for fun, is he alive? They used a fake body. They falsified the autopsy, etc. Again, too many complications.—-So the easiest answer is “Yes”. He killed himself.Why would he kill himself if he thought he was going to go free:A) prison conditions at the MCC facility have been known to be horrible.( drawing of a prison cell from 2018 when MCC was being accused of having horrible conditions).B) he knew his life would never be the same.Eventually they were going to do a deal with him (even if they couldn’t prosecute him) that would be: “give us all of your money and then we will let you go” and he probably couldn’t handle that.C) more information is coming out every day.If he wasn’t killed inside the facility, there’s reasonable chance he would be killed, tortured, whatever, outside jail, with no financial resources to protect himself.The Fed is currently looking for his diaries. Perhaps there were things in there that he just didn’t want to face. He knows the inner mind of someone so corrupt?D) People say that it is almost impossible to kill yourself in the MCC facility. How would he do it?BUT: there is evidence in the past few decades that bribing guards have had results.Despite being one of the most important prisons in the US, as recently as 2016 a wealthy prisoner paid $45,000 to a guard for alcohol, cigarettes, and a cell phone.That prisoner (and guard) were caught.The difference in this case is that the CIA had a vested interest (not being a conspiracy theorist here. This is obvious as stated above) and many many billionaires around the world had a vested interest to make payments and make it easy.A bribe explains all of the unusual things around his suicide.he wasn’t on suicide watch.have the most over-worked guards on dutyslip him something he can hang himself withwait a bitAgain, why would he kill himself?it wasn’t 100% clear the “double jeopardy” argument would work.he might get killed in a much worse fashion.he couldn’t handle all the information coming out. All the trust, his entire persona, was going to get flushed down the tubes. He maybe couldn’t handle that.he was going to be wiped out anyway and his self worth was his net worth.conditions (rat and cockroach infested) in the facility probably dehumanized him and his thought process.he probably figured a life in prison, where he would be repeatedly harassed and beaten by other prisoners was not worth it and he didn’t want to take the chance when he had the opportunity (encouraged by his “friends”) to do it himself.This is not about any secret knowledge I have about Epstein. In fact, the fact that I DO NOT have knowledge about him despite being around hedge fund mangers for 20 years gives me a lot of insight into this.The only knowledge I have is:the rules about disclosure when you have a lot of money invested.the rules about “know your investor” when you are raising money. (e.g. my experience with Arafat secretly investing in a company I started but it wasn’t revealed until after his death)some knowledge about the CIAsimilarities between this and the Madoff Ponzi scheme (which I had a lot of knowledge about).public information about MCC (the jail).And a strong belief that the “Occam’s Razor” - the idea that the simplest answer is usually correct) works. It always has worked for me.Summary:Epstein made all of his money from “Club Epstein” described above.The CIA helped him out quite a bit.He killed himself.There were many incentives for corrupt and despicable billionaires and world leaders to use Epstein’s services as opposed to alternatives.

The definition of a profession includes subscribing to and abiding by a code of behavior. For attorneys this is often called the Code of Professional Conduct. The American Bar Association publishes a model form ; most sates have some variation of it. To be licensed to practice law in a given state means that we swear to abide by those rules.Each state has various levels of discipline. I have practiced in Illinois for 40 years so that is my frame of reference . Our disciplinary body is the Attorney Registration and Disciplinary Commission (ARDC). The ARDC gets may complaints about attorneys. They always investigate. The vast majority do not rise to the level of an infraction, much less discipline. It will be the same in other states.What will vary, and which is important for your question, is at what point is the complaint published. The issue has to go through several levels in Illinois before it is posted on the ARDC website. That means that the attorney most likely did the thing he is accused of but it may or may not be a violation of the code.That means you need to look at the specifics of what the attorney was charged with and whether there are any pending appeals. All that will be clear from the website. If it is not, call the disciplinary board. They will explain the procedure. They are actually happy to do so and are set up to take anonymous inquiries.The other points to consider are how long ago was the discipline and what he was the charge. Something that happened 25 years ago when a person was just out of school doesn’t bother me personally as much as something more recent. You may feel different.If the lawyer was disciplined because he had not handled client funds correctly, use someone else. Look for the term IOLTA or Trust Account. It is as sacred as you can get that you guard client’s funds in your trust account.If he was disciplined because he was convicted of a crime, look at the crime. Did it involve something that bears on his morals or character like opening a charge account using false information or skipping out on a hotel bill? Or was it a battery conviction from a bar room brawl or a complaint from a vengeful ex’?The really serious crimes such as embezzlement or defrauding a client would get him permanently removed from the rolls of licensed attorneys.The short answer to your question ( like many legal questions) is, it depends.I regularly work with attorneys who have been disciplined. I just keep an open eye on things on their cases. By the same token, there are people whose records are pristine but after shaking their hand, I count to make sure all my fingers are still there.Illinois keeps statistics on lawyer misdeeds. 2016 is the most recent year available. This may help you put matters in context. The whole report is available at Attorney Registration & Disciplinary Commission under the Annual Reports tab. Start around page 20 of the PDF. It is clearly written and gives you information about real lawyer conduct, not dramatized. Here are some excerpts:Type of Misconduct Number*Neglect .................................................................................... 2,183Failing to communicate with client, including failing to communicate the basis of a fee .............................................. 859Excessive or improper fees, including failing to refund unearned fees ..................................................................... 833Fraudulent or deceptive activity including misrepresentation to a tribunal, clients, and non-clients .................................... 595Improper management of client or third party funds, including commingling, conversion, failing to promptly pay litigation costs or client creditors or issuing NSF checks ............................................................... 454Filing frivolous or non-meritorious claims or pleadings ............ 318Criminal conduct, assisting a client in a crime or fraud, and counseling illegal or fraudulent conduct ......................... 244Failing to provide competent representation .............................. 189Conflict of Interest: .................................................................... 184Rule 1.7: Concurrent clients ........................................................ 118 Rule 1.8(a): Improper business transaction with client .................. 13Rule 1.8(b): Improper use of information ........................................ 2 Rule 1.8(c): Improper instrument or gift from client ........................ 5Rule 1.8(d): Improper acquisition of literary/media rights ............... 1Rule 1.8(e): Improper financial assistance to client ......................... 2Rule 1.8(h)(1): Improper agreement limiting liability ...................... 1Rule 1.8(j): Improper sexual relations with client ........................... 3Rule 1.9: Successive conflicts ....................................................... 33Rule 1.13: Organizational client ...................................................... 1Rule 1.18(c): Prospective client ....................................................... 5Conduct prejudicial to the administration of justice, including conduct that is the subject of a contempt finding or court sanction ....................................................... 218Improper trial conduct, including using means to embarrass, delay or burden another or suppressing evidence where there is a duty to reveal ................................ 182Prosecutorial misconduct ........................................................... 175Practicing in a jurisdiction where not authorized ....................... 132Failing comply with Rule 764 following discipline ..................... 88Improper commercial speech, including inappropriate written or oral solicitation ....................................................... 76 [advertising]Not abiding by a client’s decision concerning the representation or taking unauthorized action on the client’s behalf .......................................................................... 52Failing to preserve client confidences or secrets .......................... 51Type of Misconduct Number*Improper communications with a represented person .................. 35Improper communication with an unrepresented person .............. 29Threatening criminal prosecution or disciplinary proceedings to gain advantage in a civil matter ....................... 27Failing to properly withdraw from representation, including failing to return client files or documents ................ 24Failing to supervise subordinates ................................................. 22Ex parte or improper communication with judge or juror ........................................................................... 15Improper division of legal fees/partnership with nonlawyer ................................................................................ 11Incapacity due to chemical addiction or mental condition.................................................................................. 10Violation of anti-discrimination statute or ordinance ................... 10Improper practice after failure to register under Rule 756 ............. 9Failing to maintain appropriate attorney-client relationship with client with diminished capacity ......................................... 8Abuse of public office to obtain advantage for client ..................... 7Improper extrajudicial statement .................................................... 7Making false statements in bar admission or disciplinary matter ... 6Failing to report misconduct of another lawyer or judge ................ 4False statements about a judge, judicial candidate or public official ........................................................................ 3Improper agreement restricting lawyer’s right to practice .............. 3Improper employment where lawyer may become a witness ......... 3Judicial candidate’s violation of Judicial Code .............................. 3Bad faith avoidance of student loan ............................................... 2Stating or implying ability to improperly influence authority ........ 1Aiding judicial misconduct/gift/loan to judge or court employee .. 1Failing to report discipline in another jurisdiction ......................... 1Failing to report criminal conviction .............................................. 1Failing to file tax return or pay taxes ............................................. 1No misconduct alleged ............................................................... 155* Totals exceed the number of requests for investigations docketed in 2016 because in many requests more than one type of misconduct is alleged.….In the remaining 3,988 investigations closed in 2016 by the Administrator, the staff determined that an investigation was warranted. In most cases, these investigations began with a letter from Intake counsel to the lawyer named in the grievance, enclosing a copy of the complainant’s submission and asking the lawyer to submit a written response. The lawyer’s written response was usually forwarded for comment to the complainant, and the file was reviewed by Intake counsel after the complainant’s reply was received or past due. If, at that stage, the submissions and any back-up documentation obtained demonstrated that the lawyer did not violate professional conduct rules, or at least that a violation could not be proved, Intake counsel closed the file. If Intake counsel determined that further investigation was warranted, the file was reassigned to Litigation counsel.For the 3,988 investigations closed after a determination to conduct an investigation was made, 2,554, or 64%, were closed by Intake counsel, with approximately 84% of those investigations closed within 90 days of receipt.[That would suggest no official discipline took place]

Congratulations on your startup and having a willing angel, most investors aren't this accommodating and will give you a "soft" promise of this sort without actually putting up the money.I'm 2/3 in agreement with David S. Rose here. A lawyer definitely can do this for you. It raises some ethical and risk management issues, which means it's going to cost some money, but we lawyers can handle that. Basically, even though you're the client(*) and the lawyer has a fiduciary duty of loyalty to you, they have also made a promise to your investor that they will not disburse the funds absent a completed investment, so if your investor disputes for any reason that you should be funded the lawyer will either return the money to them or hold it until you work things out. Most people understand this, and are willing to give earnest money to a law firm on that basis.A third party escrow service would be more efficient costwise, but it would be hard to find one that automatically releases your investment money when you hit an investment target. Some of us are working on solutions to that, but for now escrow services are mostly of the variety where both sides have to agree that the conditions have been met before making the exchange. If one side says yes and the other side says no, the service throws up its arms and tells the parties they have to settle (or at worst, litigate) the matter on their own and come back with the results. Depending on the arrangement the service will either hold the escrow funds and exchange property until both sides give release instructions, or return each to their respective parties and tell them to try again later. One difficulty is that while money can actually be held in escrow, ownership in a company can only be held in escrow as a legal fiction. Actually, money and stock are both legal fictions, but 100% of America buys into the idea of money as a paper or electronic record, whereas most people would not recognize company shares as something that can be proven by a certificate alone absent the consent of the company.I'm curious why David says you can't just deposit the check. I see no legal reason why not, as long as your investor trusts your assurance that you won't touch the money. Trust is the key issue and it may not work from a business standpoint. But from a legal perspective I don't see why you couldn't deposit the funds, which means it's just a zero interest loan from them to you with a promise that you won't spend it, until you both agree that the investment is done. You'd better honor that, because there would be a lot of temptation to spend that money.(*) This needs saying again, you are not a client of me or my firm, nothing here creates a lawyer / client relationship, this is a public forum where such matters cannot be discussed with any assurance of confidentiality, and everything I discuss is general commentary about the issue and not advice specific to you or legal advice.