[This is from [HN00KH][GDrive] ] 

Mr. Epstein’s time at Dalton was brief, and an administrator said it ended in a dismissal.

[....]  The school, which had been a progressive haven for the children of artists and writers, was undergoing a shift under a new headmaster. Donald Barr, the father of Attorney General William Barr, came in as a disciplinarian focused on beefing up the academics of the school, and on enforcing a strict code of conduct.

In a school known for creativity, administrators had prohibited denim jeans and “bizarre and eccentric costumes.” If Mr. Barr caught students using marijuana, he would often send them to therapy as a condition of staying in the school. He himself described his leadership style as “by ukase,” using the Imperial Russian term for an edict from the czar.

[...]   In February 1974, Mr. Barr had announced that he was resigning as headmaster, protesting the meddling by the board of trustees, but that he would stay on until the end of the school year. It is unclear whether Mr. Barr hired Mr. Epstein during that time.

Mr. Epstein, from Brooklyn, was just 21 when he joined the faculty at Dalton, arriving without a college degree. The school’s student newspaper reported in September 1974 that he was starting that year as a math and physics teacher.

The next year [1975], he participated in a school musical for parents and faculty, and he appeared in later editions of the paper as the coach of the Dalton Tigers math team until the beginning of 1976.

The school had new leadership under Gardner Dunnan, who tentatively explored a rollback of some of its strict rules. Mr. Dunnan announced in early 1975 a policy that would allow denim inside the building, although students were still told to be neat and clean. 

In the years since, however, Mr. Dunnan has faced allegations of his own inappropriate conduct. A former Dalton student said in a lawsuit that she had been invited to live with Mr. Dunnan at age 14, and had suffered repeated sexual assaults under his care. Mr. Dunnan denied the allegations. The lawsuit was dropped, but the woman’s lawyer, Mariann Meier Wang, said she intended to refile it. 

 [...]   But Peter Branch, who was an interim headmaster after Mr. Barr and later the head of the high school, was not as fond of Mr. Epstein’s teaching. He said that he did not recall anyone raising concerns to him about Mr. Epstein’s conduct with students, but that he had heard concerns from the faculty about Mr. Epstein’s teaching, and eventually determined that the teacher needed to go.

He comes with cash to burn, a fleet of airplanes, and a keen eye for the ladies — to say nothing of a relentless brain that challenges Nobel Prize–winning scientists across the country — and for financial markets around the world. Ever since the Post’s “Page Six” ran an item about the president’s late-September visit to Africa with Kevin Spacey and Chris Tucker – on his new benefactor’s customized Boeing 727 – the question of the day has been: Who in the world is Jeffrey Epstein?

It’s a life full of question marks. Epstein is said to run $15 billion for wealthy clients, yet aside from Limited founder Leslie Wexner, his client list is a closely held secret. A former Dalton math teacher, he maintains a peripatetic salon of brilliant scientists yet possesses no bachelor’s degree. For more than ten years, he’s been linked to Manhattan-London society figure Ghislaine Maxwell, daughter of the mysteriously deceased media titan Robert Maxwell, yet he lives the life of a bachelor, logging 600 hours a year in his various planes as he scours the world for investment opportunities. He owns what is said to be Manhattan’s largest private house yet runs his business from a 100-acre private island in St. Thomas.

Power on Wall Street has generally accrued to those who have made their open bids for it. Soros. Wasserstein. Kravis. Weill. The Sturm und Drang of their successes and failures has been played out in public. Epstein breaks the mold. Most everyone on the Street has heard of him, but nobody seems to know what the hell he is up to. Which is just the way he likes it.

“My belief is that Jeff maintains some sort of money-management firm, though you won’t get a straight answer from him,” says one well-known investor. “He once told me he had 300 people working for him, and I’ve also heard that he manages Rockefeller money. But one never knows. It’s like looking at the Wizard of Oz – there may be less there than meets the eye.”

Says another prominent Wall Streeter: “He is this mysterious, Gatsbyesque figure. He likes people to think that he is very rich, and he cultivates this air of aloofness. The whole thing is weird.”

The wizard that meets the eye is spare and fit; with a long jaw and a carefully coiffed head of silver hair, he looks like a taller, younger Ralph Lauren. A raspy Brooklyn accent betrays his Coney Island origins. He spends an hour and fifteen minutes every day doing advanced yoga with his personal instructor, who travels with him wherever he goes. He is an enthusiastic member of the Trilateral Commission and the Council on Foreign Relations.

He dresses casually — jeans, open-necked shirts, and sneakers — and is rarely seen in a tie. Indeed, those close to him say the reason he quit his board seat at the Rockefeller Institute was that he hated wearing a suit. “It feels like a dress,” he told one friend.

Epstein likes to tell people that he’s a loner, a man who’s never touched alcohol or drugs, and one whose nightlife is far from energetic. And yet if you talk to Donald Trump, a different Epstein emerges. “I’ve known Jeff for fifteen years. Terrific guy,” Trump booms from a speakerphone. “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. No doubt about it — Jeffrey enjoys his social life.”

But beautiful women are only a part of it. Because here’s the thing about Epstein: As some collect butterflies, he collects beautiful minds. “I invest in people — be it politics or science. It’s what I do,” he has said to friends. And his latest prize addition is the former president. In his eyes, Clinton as a species represents the highest evolutionary form of the political animal. To be up close to him, as he was during the African journey, is akin to seeing the rarest of beasts on a safari. As he put it to a friend upon his return from Africa, “If you were a boxer at the downtown gymnasium at 14th Street and Mike Tyson walked in, your face would have the same look as these foreign leaders had when Clinton entered the room. He is the world’s greatest politician.”

“Jeffrey is both a highly successful financier and a committed philanthropist with a keen sense of global markets and an in-depth knowledge of twenty-first-century science,” Clinton says through a spokesman. “I especially appreciated his insights and generosity during the recent trip to Africa to work on democratization, empowering the poor, citizen service, and combating HIV/AIDS.”

Before Clinton, Epstein’s rare appearances in the gossip columns tended to be speculation as to the true nature of his relationship with Ghislaine Maxwell. While they are still friends, the English tabloids have postulated that Maxwell has longed for a more permanent pairing and that for undetermined reasons Epstein has not reciprocated in kind. “It’s a mysterious relationship that they have,” says society journalist David Patrick Columbia. “In one way, they are soul mates, yet they are hardly companions anymore. It’s a nice conventional relationship, where they serve each other’s purposes.”

Friends of the two say that Maxwell, whose social life has always been higher-octane than Epstein’s, lent a little pizzazz to the lower-profile Epstein. Indeed, at a party at Maxwell’s house, her friends say, one is just as apt to see Russian ladies of the night as one is to see Prince Andrew. The Oxford-educated Maxwell, described by many as a man-eater (she flies her own helicopter and was recently seen dining with Clinton at Nello’s on Madison Avenue), lives in her own townhouse a few blocks away. Epstein is frequently seen around town with a bevy of comely young women but there has been no boldfaced name to replace Maxwell. “You may read about Jeffrey in the social columns, but there is much more to him than that,” says Jeffrey T. Leeds of the private equity firm Leeds Weld & Co. “He’s a talented money manager and an extremely hardworking person with broad interests. Most unusual, though, is that in this media-obsessed age he is not in any sense a self-promoter.”

Born in 1953 and raised in Coney Island, Epstein went to Lafayette High School. According to his bio, he took some classes in physics at Cooper Union from 1969 to 1971. He left Cooper Union in 1971 and attended NYU’s Courant Institute, where he took courses in mathematical physiology of the heart, leaving that school, too, without a degree. Between 1973 and 1975, Epstein taught calculus and physics at the Dalton School.

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. So impressed was one Wall Street father of a student that he said to Epstein point-blank: “What are you doing teaching math at Dalton? You should be working on Wall Street — why don’t you give my friend Ace Greenberg a call.”

Epstein was in many respects the perfect candidate for Greenberg’s consideration. Greenberg, a senior partner at Bear Stearns at the time and a legendary trader in his own right, has long made it clear that it’s the hungry, brilliant guys lacking the fancy degrees that he favors at Bear. They even have an acronym: PSDs — poor, smart, and a deep desire to be rich. It was a description that fit Epstein to a T. He was a Brooklyn guy with a motor for a brain, and while he did love teaching, this close-up view of the rarefied Upper East Side life of his students’ gave him a taste for the big time.

So in 1976, he dropped everything and reported to work at Bear Stearns, where he started off as a junior assistant to a floor trader at the American Stock Exchange. His ascent was rapid.

At the time, options trading was an arcane and dimly understood field, just beginning to take off. To trade options, one had to value them, and to value them, one needed to be able to master such abstruse mathematical confections as the Black-Scholes option-pricing model. For Epstein, breaking down such models was pure sport, and within just a few years he had his own stable of clients. “He was not your conventional broker saying ‘Buy IBM’ or ‘Sell Xerox,’ ” says Bear Stearns CEO Jimmy Cayne. “Given his mathematical background, we put him in our special-products division, where he would advise our wealthier clients on the tax implications of their portfolios. He would recommend certain tax-advantageous transactions. He is a very smart guy and has become a very important client for the firm as well.”

In 1980, Epstein made partner, but he had left the firm by 1981. Working in a bureaucracy was not for him; what’s more, in rubbing up against ever greater sums of money during his time at Bear, he began to feel the need to grab his own piece of the action.

In 1982, according to those who know Epstein, he set up his own shop, J. Epstein and Co., which remains his core business today. The premise behind it was simple: Epstein would manage the individual and family fortunes of clients with $1 billion or more. Which is where the mystery deepens. Because according to the lore, Epstein, in 1982, immediately began collecting clients. There were no road shows, no whiz-bang marketing demos – just this: Jeff Epstein was open for business for those with $1 billion–plus.

His firm would be different, too. He was not here just to offer investment advice; he saw himself as the financial architect of every aspect of his client’s wealth — from investments to philanthropy to tax planning to security to assuaging the guilt and burdens that large sums of inherited wealth can bring on. “I want people to understand the power, the responsibility, and the burden of their money,” he said to a colleague at the time.

As a teacher at Dalton, he had witnessed firsthand the troubled attitudes of some of the poor little rich kids under his charge; at Bear, he had come to the realization that, counterintuitively, the more money you had, the more anxious you became. For a middle-class kid from Brooklyn, it just didn’t make sense.

From the get-go, his business was successful. But the conditions for investing with Epstein were steep: He would take total control of the billion dollars, charge a flat fee, and assume power of attorney to do whatever he thought was necessary to advance his client’s financial cause. And he remained true to the $1 billion entry fee. According to people who know him, if you were worth $700 million and felt the need for the services of Epstein and Co., you would receive a not-so-polite no-thank-you from Epstein.

It’s nice work if you can get it. Epstein runs a lean operation, and those close to him say that his actual staff — based here in Manhattan at the Villard House (home to Le Cirque); New Albany, Ohio; and St. Thomas, where he reincorporated his company seven years ago (now called Financial Trust Co.) — numbers around 150 and is purely administrative. When it comes to putting these billions to work in the markets, it is Epstein himself making all the investment calls — there are no analysts or portfolio managers, just twenty accountants to keep the wheels greased and a bevy of assistants — many of them conspicuously attractive young women — to organize his hectic life. So assuming, conservatively, a fee of .5 percent (he takes no commissions or percentages) on $15 billion, that makes for a management fee of $75 million a year straight into Jeff Epstein’s pocket. Nice work indeed.

It has been rumored that Linda Wachner and David Rockefeller have been clients, too, but both parties deny any such relationship. What’s more, who ever heard of a financial adviser turning down $500 million accounts? All the speculation and mystery has proved fertile ground for some alternative Jeffrey Epstein stories – the most bizarre of which has him playing the piano (he is classically trained) for high rollers in a Manhattan piano bar in the mid-eighties.

Another focus of curiosity is the relationship that Epstein has with his patron and mentor Leslie Wexner, founder and chairman of the Columbus, Ohio–based Limited chain of women’s-clothing stores. Wexner, who is said to be worth more than $2.5 billion by Forbes, became an Epstein client in 1987. “It’s a weird relationship,” says another Wall Streeter who knows Epstein. “It’s just not typical for someone of such enormous wealth to all of a sudden give his money to some guy most people have never heard of.” The Wexner-Epstein relationship is indeed a multifaceted one.

Given the secrecy that envelops Epstein’s client list, some have speculated that Wexner is the primary source of Epstein’s lavish life — but friends leap to his defense. “Let me tell you: Jeffrey Epstein has other clients besides Wexner. I know because some of them are my clients,” says noted m&a lawyer Dennis Block of Cadwalader, Wickersham & Taft. “I sent him a $500 million client a few years ago and he wouldn’t take him. Said the account was too small. Both the client and I were amazed. But that’s Jeffrey.”

Epstein’ s current residence in Manhattan — a 45,000-square-foot eight-story mansion on East 71st Street — was originally bought by Wexner for $13 million in 1989. Wexner poured many millions into a full gut renovation, then turned it over to Epstein in 1995 after he got married. One story has Epstein paying only a dollar for it, though others say he paid full market price, which would have been in the neighborhood of $20 million. Epstein then undertook his own $10 million gut renovation (special features: closed-circuit TV and a heated sidewalk in front of the house for melting snow), saying to friends: “I don’t want to live in another person’s house.”

There are other houses as well, including a sweeping villa in Palm Beach and a custom-built 51,000-square-foot castle in Santa Fe. Said to be the largest house in the state, the latter sits atop a hill on a 45,000-acre ranch. He had it built because of the month or so he found himself spending there, talking elementary particle physics with his friend Murray Gell-Mann, a Nobel Prize–winning physicist and co-chair of the science board at the Santa Fe Institute.

Epstein also owned a grand house (he has since sold it) near Wexner’s opulent manse at the center of the Limited magnate’s high-end housing development in New Albany, Ohio. New Albany was a lush sprawl of farmland on the outskirts of Columbus that Wexner, starting in 1988, turned into a rich village of multimillion-dollar Georgian homes surrounding a Jack Nicklaus–designed golf course. It was a massive development project, financed largely by Wexner himself. Epstein was a general partner in the real-estate holding company, called New Albany Property, despite putting only a few million dollars of capital into the project.

“Before Epstein came along in 1988, the financial preparations and groundwork for the New Albany development were a total mess,” says Bob Fitrakis, a Columbus-based investigative journalist who has written extensively on Wexner and his finances. “Epstein cleaned everything up, as well as serving Wexner in other capacities — such as facilitating visits to Wexner’s home of the crew from Cats and organizing a Tony Randall song-and-dance show put on in Columbus.” Wexner declines to talk about his relationship with Epstein, but it is clearly one that continues to this day. Not that it helped Epstein in any way to land Clinton. Wexner is a staunch Republican donor, and Epstein, aside from a small contribution to the president’s legal-defense fund, has given more to the likes of former senator Al D’Amato.

What attracted Clinton to Epstein was quite simple: He had a plane (he has a couple, in fact — the Boeing 727, in which he took Clinton to Africa, and, for shorter jaunts, a black Gulfstream, a Cessna 421, and a helicopter to ferry him from his island to St. Thomas). Clinton had organized a weeklong tour of South Africa, Nigeria, Ghana, Rwanda, and Mozambique to do what Clinton does. So when the president’s advance man Doug Band pitched the idea to Epstein, he said sure. As an added bonus, Kevin Spacey, a close friend of Clinton’s, and actor Chris Tucker came along for the ride.

While Epstein got an intellectual kick out of engaging African finance ministers in theoretical chitchat about economic development, the real payoff for him was observing Clinton in his métier: talking HIV/aids policy with African leaders and soaking up the love from Cape Town to Lagos.

Epstein brings a trophy-hunter’s zeal to his collection of scientists and politicians. But the real charge for him is in seeing these guys work it. Like former Democratic Senate leader George Mitchell, for example. In Epstein’s mind, Mitchell is the world’s greatest negotiator, based on his work in Ireland and the Middle East. So he wrote the senator a bunch of checks. Says Mitchell: “He has supported some philanthropic projects of mine and organized a fund-raiser for me once. I would certainly call him a friend and a supporter.”

But it is his covey of scientists that inspires Epstein’s true rapture. Epstein spends $20 million a year on them — encouraging them to engage in whatever kind of cutting-edge research might attract their fancy. They are, of course, quite lavish in their praise in return. Gerald Edelman won the Nobel Prize for physiology and medicine in 1972 and now presides over the Neurosciences Institute in La Jolla. “Jeff is extraordinary in his ability to pick up on quantitative relations,” says Edelman. “He came to see us recently. He is concerned with this basic question: Is it true that the brain is not a computer? He is very quick.”

Then there is Stephen Kosslyn, a psychologist at Harvard. Epstein flew up to Kosslyn’s laboratory in Cambridge this year to witness an experiment that Kosslyn was conducting and Epstein was funding. Namely: Is it true that certain Tibetan monks are capable of holding a distinct mental image in their minds for twenty minutes straight? “We disproved the thesis,” says Kosslyn. “Jeff was on his cell phone most of the time — he actually wanted to short the Tibetan market, because he thought the monk was so stupid. He is amazing. Like a honeybee — he talks to all these different people and cross-pollinates. Just two months ago, I was talking to him about a new alternative to evolutionary psychology. He got excited and sent me a check.”

Epstein has a particularly close relationship with Martin Nowak, an Austrian biology and mathematics professor who heads the theoretical-biology program at the Institute for Advanced Study at Princeton. Nowak is examining how game theory can be used to answer some of the basic evolutionary questions — e.g., why, in our Darwinian society, does altruistic behavior exist? Epstein talks to Nowak about once a week and flies him around the country to his various homes to deliver impromptu lectures. Over the past three years, he has written $500,000 worth of checks to fund Nowak’s research. This past February, Epstein had Nowak over for dinner at the 71st Street townhouse. It was just the two of them (not including the wait staff), and Nowak, making use of a blackboard in the formal dining room, delivered a two-hour highly mathematical description of how language works.

After dinner, Epstein asked if Nowak wanted to meet up with his new friend President Clinton, and off they went to a nearby deli, where Clinton regaled the starstruck former Oxford professor with tales from his own Oxford days. “Jeffrey has the mind of a physicist. It’s like talking to a colleague in your field,” says Nowak. “Sometimes he applies what we talk about to his investments. Sometimes it’s for his own curiosity. He has changed my life. Because of his support, I feel I can do anything I want.”

Danny Hillis, an MIT-educated computer scientist whose company, Thinking Machines, was at the forefront of the supercomputing world in the eighties, and who used to run R&D at Walt Disney Imagineering, thinks Epstein is actually using scientific knowledge to beat the markets. “We talk about currency trading — the euro, the real, the yen,” he says. “He has something a physicist would call physical intuition. He knows when to use the math and when to throw it away. If I had acted upon all the investment advice he has been giving me over the years, I’d be calling you from my Gulfstream right now.”

On the 727 these days, he has been reading a book by E. O. Wilson, the eminent scientist and originator of the field of sociobiology, called Consilience, which makes the case that the boundaries between scientific disciplines are in the process of breaking down. It’s a view Epstein himself holds. He wrote recently to a scientist friend of his: “The behavior of termites, together with ants and bees, is a precursor to trust because they have an extraordinary ability to form relationships and sophisticated social structures based on mutual altruism even though individually they are fundamentally dumb. Money itself is a derivative of trust. If we can figure out how termites come together, then we may be able to better understand the underlying principles of market behavior — and make big money.”

So how do termite grouping patterns fare as an investment strategy? Again, facts are hard to come by. A working day for Epstein starts at 5 a.m., when he gets up and scours the world markets on his Bloomberg screen — each of his houses, in New York, St. Thomas, Palm Beach, and New Mexico, as well as the 727, is equipped with the necessary hardware for him to wake up, roll out of bed, and start trading. He will put some calls in to his private banker at JPMorgan to get a reading as to how wealthy investors — the best gauge of market sentiment, he believes — are reacting to the market’s movements. Then he will call currency traders in Europe. On a given day, he will spend ten hours or so on the phone — after all, he is running $15 billion essentially by himself.

Strangely enough, given his scientific obsessions, he is a computer-phobe and does not use e-mail. “I like to hear voices and see faces when I interact,” he has said. Given the huge sums he has to invest, he focuses on assets with extremely high liquidity, like currencies — though he dabbles in commodities and real estate as well. Those who know him say he is an impulsive, quick-to-change-his-mind trader, still governed by Ace Greenberg’s trader’s maxim: If the stock is down 10 percent, sell it. He has been on the short side of the Brazilian real, and those close to him say bets there have paid off in spades. He recently took a long position on the euro before its rebound on the basis that Europeans were too proud to see their currency sink any lower against the dollar. His next targets: an across-the-board short of the German stock exchange and a possible attack on the Hong Kong dollar peg in light of the recent disclosure of North Korea’s nuclear-weapons program.

None of this is investment rocket science, but getting the direction and the timing right, no matter how conventional the investment idea, can spin large money for an investor. Before taking a big position, Epstein will usually fly to the country in question. He recently spent a week in Germany meeting with various government officials and financial types, and he has a trip to Brazil coming up in the next few weeks. On all of these trips, he flies alone in his commercial-jet-size 727. 

Friends of Epstein say he is horrified at the recent swell of media attention around him (Vanity Fair is preparing a megaprofile, and the Villard House office has had a barrage of calls from other media outlets). He has never granted a formal interview, and did not offer one to this magazine, nor has his picture appeared in any publication. Yet for one so obsessive about his privacy, one wonders — didn’t he realize that flying Clinton and Spacey around Africa was going to blow his cover? As he said to a friend: “If my ultimate goal was to stay private, traveling with Clinton was a bad move on the chessboard. I recognize that now. But you know what? Even Kasparov makes them. You move on.”

Silicon Valley political circles once buzzed with talk of "Gore and Doerr in '04." Now that the former veep has taken himself out of the presidential running and the tech bust has dimmed the appeal of John Doerr, the Kleiner Perkins Caufield & Byers managing partner, some folks are talking up another venture capitalist: retired Gen. Wesley K. Clark, who has said he is thinking of a presidential run. Gen. Clark also says he isn't a member of any political party.

Gen. Clark is best known as the former Supreme Allied Commander, Europe, and as a commentator on foreign-policy issues. But until the end of this month, his day job has been as managing director of merchant banking at Stephens Group Inc. in Little Rock, Ark. He serves on the boards of Entrust Inc., a Dallas Internet security firm; AcxiomCorp., a Little Rock software company; Sirva Inc. (www.sirva.com) of Westmont, Ill., the parent of North American Van Lines; and Messer Griesheim Holding AG of Germany. Gen. Clark recently announced he is leaving Stephens as of the end of February, a Stephens spokesman said.

"I did a lot of tech in the army," Gen. Clark says.

Los Angeles billionaire Eli Broad, who has sought Gen. Clark's views on education, says he is impressed, as is New York money manager Jeffrey Epstein. "He's a brilliant guy," says Linda Stone, a former Microsoft Corp. vice president, who has been introducing Gen. Clark around. Steve Kirsch, a Silicon Valley serial entrepreneur, touted Gen. Clark to fellow philanthropists in San Jose this week. "Electing the right president may be the single most cost-effective charitable donation you can make," Mr. Kirsch said, but added later that Gen. Clark's lack of political experience may make him better suited as a candidate for vice president.

(2016 intro .... Lately, Jeffrey Epstein’s high-flying style has been drawing oohs and aahs: the bachelor financier lives in New York’s largest private residence, claims to take only billionaires as clients, and flies celebrities including Bill Clinton and Kevin Spacey on his Boeing 727. But pierce his air of mystery and the picture changes. Vicky Ward explores Epstein’s investment career, his ties to retail magnate Leslie Wexner, and his complicated past. )

On Manhattan’s Upper East Side, home to some of the most expensive real estate on earth, exists the crown jewel of the city’s residential town houses. With its 15-foot-high oak door, huge arched windows, and nine floors, it sits on—or, rather, commands—the block of 71st Street between Fifth and Madison Avenues. Almost ludicrously out of proportion with its four- and five-story neighbors, it seems more like an institution than a house. This is perhaps not surprising—until 1989 it was the Birch Wathen private school. Now it is said to be Manhattan’s largest private residence.

Inside, amid the flurry of menservants attired in sober black suits and pristine white gloves, you feel you have stumbled into someone’s private Xanadu. This is no mere rich person’s home, but a high-walled, eclectic, imperious fantasy that seems to have no boundaries.

The entrance hall is decorated not with paintings but with row upon row of individually framed eyeballs; these, the owner tells people with relish, were imported from England, where they were made for injured soldiers. Next comes a marble foyer, which does have a painting, in the manner of Jean Dubuffet … but the host coyly refuses to tell visitors who painted it. In any case, guests are like pygmies next to the nearby twice-life-size sculpture of a naked African warrior.

Despite its eccentricity the house is curiously impersonal, the statement of someone who wants to be known for the scale of his possessions. Its occupant, financier Jeffrey Epstein, 50, admits to friends that he likes it when people think of him this way. A good-looking man, resembling Ralph Lauren, with thick gray-white hair and a weathered face, he usually dresses in jeans, knit shirts, and loafers. He tells people he bought the house because he knew he “could never live anywhere bigger.” He thinks 51,000 square feet is an appropriately large space for someone like himself, who deals mostly in large concepts—especially large sums of money.

Guests are invited to lunch or dinner at the town house—Epstein usually refers to the former as “tea,” since he likes to eat bite-size morsels and drink copious quantities of Earl Grey. (He does not touch alcohol or tobacco.) Tea is served in the “leather room,” so called because of the cordovan-colored fabric on the walls. The chairs are covered in a leopard print, and on the wall hangs a huge, Oriental fantasy of a woman holding an opium pipe and caressing a snarling lionskin. Under her gaze, plates of finger sandwiches are delivered to Epstein and guests by the menservants in white gloves.

Upstairs, to the right of a spiral staircase, is the “office,” an enormous gallery spanning the width of the house. Strangely, it holds no computer. Computers belong in the “computer room” (a smaller room at the back of the house), Epstein has been known to say. The office features a gilded desk (which Epstein tells people belonged to banker J. P. Morgan), 18th-century black lacquered Portuguese cabinets, and a nine-foot ebony Steinway “D” grand. On the desk, a paperback copy of the Marquis de Sade’s The Misfortunes of Virtue was recently spotted. Covering the floor, Epstein has explained, “is the largest Persian rug you’ll ever see in a private home—so big, it must have come from a mosque.” Amid such splendor, much of which reflects the work of the French decorator Alberto Pinto, who has worked for Jacques Chirac and the royal families of Jordan and Saudi Arabia, there is one particularly startling oddity: a stuffed black poodle, standing atop the grand piano. “No decorator would ever tell you to do that,” Epstein brags to visitors. “But I want people to think what it means to stuff a dog.” People can’t help but feel it’s Epstein’s way of saying that he always has the last word.

In addition to the town house, Epstein lives in what is reputed to be the largest private dwelling in New Mexico, on an $18 million, 7,500-acre ranch which he named “Zorro.” “It makes the town house look like a shack,” Epstein has said. He also owns Little St. James, a 70-acre island in the U.S. Virgin Islands, where the main house is currently being renovated by Edward Tuttle, a designer of the Amanresorts. There is also a $6.8 million house in Palm Beach, Florida, and a fleet of aircraft: a Gulfstream IV, a helicopter, and a Boeing 727, replete with trading room, on which Epstein recently flew President Clinton, actors Chris Tucker and Kevin Spacey, supermarket magnate Ron Burkle, Lew Wasserman’s grandson, Casey Wasserman, and a few others, on a mission to explore the problems of AIDS and economic development in Africa.

Epstein is charming, but he doesn’t let the charm slip into his eyes. They are steely and calculating, giving some hint at the steady whir of machinery running behind them. “Let’s play chess,” he said to me, after refusing to give an interview for this article. “You be white. You get the first move.” It was an appropriate metaphor for a man who seems to feel he can win no matter what the advantage of the other side. His advantage is that no one really seems to know him or his history completely or what his arsenal actually consists of. He has carefully engineered it so that he remains one of the few truly baffling mysteries among New York’s moneyed world. People know snippets, but few know the whole.

“He’s very enigmatic,” says Rosa Monckton, the former C.E.O. of Tiffany & Co. in the U.K. and a close friend since the early 1980s. “You think you know him and then you peel off another ring of the onion skin and there’s something else extraordinary underneath. He never reveals his hand…. He’s a classic iceberg. What you see is not what you get.”

Even acquaintances sense a curious dichotomy: Yes, he lives like a “modern maharaja,” as Leah Kleman, one of his art dealers, puts it. Yet he is fastidiously, almost obsessively private—he lists himself in the phone book under a pseudonym. He rarely attends society gatherings or weddings or funerals; he considers eating in restaurants like “eating on the subway”—i.e., something he’d never do. There are many women in his life, mostly young, but there is no one of them to whom he has been able to commit. He describes his most public companion of the last decade, Ghislaine Maxwell, 41, the daughter of the late, disgraced media baron Robert Maxwell, as simply his “best friend.” He says she is not on his payroll, but she seems to organize much of his life—recently she was making telephone inquiries to find a California-based yoga instructor for him. (Epstein is still close to his two other long-term girlfriends, Paula Heil Fisher, a former associate of his at the brokerage firm Bear Stearns and now an opera producer, and Eva Andersson Dubin, a doctor and onetime model. He tells people that when a relationship is over the girlfriend “moves up, not down,” to friendship status.)

Some of the businessmen who dine with him at his home—they include newspaper publisher Mort Zuckerman, banker Louis Ranieri, Revlon chairman Ronald Perelman, real-estate tycoon Leon Black, former Microsoft executive Nathan Myhrvold, Tom Pritzker (of Hyatt Hotels), and real-estate personality Donald Trump—sometimes seem not all that clear as to what he actually does to earn his millions. Certainly, you won’t find Epstein’s transactions written about on Bloomberg or talked about in the trading rooms. “The trading desks don’t seem to know him. It’s unusual for animals that big not to leave any footprints in the snow,” says a high-level investment manager.

Unlike such fund managers as George Soros and Stanley Druckenmiller, whose client lists and stock maneuverings act as their calling cards, Epstein keeps all his deals and clients secret, bar one client: billionaire Leslie Wexner, the respected chairman of Limited Brands. Epstein insists that ever since he left Bear Stearns in 1981 he has managed money only for billionaires—who depend on him for discretion. “I was the only person crazy enough, or arrogant enough, or misplaced enough, to make my limit a billion dollars or more,” he tells people freely. According to him, the flat fees he receives from his clients, combined with his skill at playing the currency markets “with very large sums of money,” have afforded him the lifestyle he enjoys today.

Why do billionaires choose him as their trustee? Because the problems of the mega-rich, he tells people, are different from yours and mine, and his unique philosophy is central to understanding those problems: “Very few people need any more money when they have a billion dollars. The key is not to have it do harm more than anything else…. You don’t want to lose your money.”

He has likened his job to that of an architect—more specifically, one who specializes in remodeling: “I always describe [a billionaire] as someone who started out in a small home and as he became wealthier had add-ons. He added on another addition, he built a room over the garage … until you have a house that is usually a mess…. It’s a large house that has been put together over time where no one could foretell the financial future and their accompanying needs.”

He makes it sound as though his job combines the roles of real-estate agent, accountant, lawyer, money manager, trustee, and confidant. But, as with Jay Gatsby, myths and rumor swirl around Epstein.

Here are some of the hard facts about Epstein—ones that he doesn’t mind people knowing: He grew up middle-class in Brooklyn. His father worked for the city’s parks department. His parents viewed education as “the way out” for him and his younger brother, Mark, now working in real estate. Jeffrey started to play the piano—for which he maintains a passion—at five, and he went to Brooklyn’s Lafayette High School. He was good at mathematics, and in his early 20s he got a job teaching physics and math at Dalton, the elite Manhattan private school. While there he began tutoring the son of Bear Stearns chairman Ace Greenberg and was friendly with a daughter of Greenberg’s. Soon he went to Bear Stearns, where, under the mentorship of both Greenberg and current Bear Stearns C.E.O. James Cayne, he did well enough to become a limited partner—a rung beneath full partner. He abruptly departed in 1981 because, he has said, he wanted to run his own business.

Thereafter the details recede into shadow. A few of the handful of current friends who have known him since the early 1980s recall that he used to tell them he was a “bounty hunter,” recovering lost or stolen money for the government or for very rich people. He has a license to carry a firearm. For the last 15 years, he’s been running his business, J. Epstein & Co.

Since Leslie Wexner appeared in his life—Epstein has said this was in 1986; others say it was in 1989, at the earliest—he has gradually, in a way that has not generally made headlines, come to be accepted by the Establishment. He’s a member of various commissions and councils: he is on the Trilateral Commission, the Council on Foreign Relations, and the Institute of International Education.

His current fan club extends to Cayne, Henry Rosovsky, the former dean of Harvard’s Faculty of Arts and Sciences, and Larry Summers, Harvard’s current president. Harvard law professor Alan Dershowitz says, “I’m on my 20th book…. The only person outside of my immediate family that I send drafts to is Jeffrey.” Real-estate developer and philanthropist Marshall Rose, who has worked with Epstein on projects in New Albany, Ohio, for Wexner, says, “He digests and decodes the information very rapidly, which is to me terrific because we have shorter meetings.”

Also on the list of admirers are former senator George Mitchell and a gaggle of distinguished scientists, most of whom Epstein has helped fund in recent years. They include Nobel Prize winners Gerald Edelman and Murray Gell-Mann, and mathematical biologist Martin Nowak. When these men describe Epstein, they talk about “energy” and “curiosity,” as well as a love for theoretical physics that they don’t ordinarily find in laymen. Gell-Mann rather sweetly mentions that “there are always pretty ladies around” when he goes to dinner chez Epstein, and he’s under the impression that Epstein’s clients include the Queen of England. Both Nowak and Dershowitz were thrilled to find themselves shaking the hand of a man named “Andrew” in Epstein’s house. “Andrew” turned out to be Prince Andrew, who subsequently arranged to sit in the back of Dershowitz’s law class.

Epstein gets annoyed when anyone suggests that Wexner “made him.” “I had really rich clients before,” he has said. Yet he does not deny that he and Wexner have a special relationship. Epstein sees it as a partnership of equals. “People have said it’s like we have one brain between two of us: each has a side.”

“I think we both possess the skill of seeing patterns,” says Wexner. “But Jeffrey sees patterns in politics and financial markets, and I see patterns in lifestyle and fashion trends. My skills are not in investment strategy, and, as everyone who knows Jeffrey knows, his are not in fashion and design. We frequently discuss world trends as each of us sees them.”

By the time Epstein met Wexner, the latter was a retail legend who had built a $3 billion empire—one that now includes Victoria’s Secret, Express, and Bath & Body Works—from $5,000 lent him by his aunt. “Wexner saw in Jeffrey the type of person who had the potential to realize his [Jeffrey’s] dreams,” says someone who has worked closely with both men. “He gave Jeffrey the ball, and Jeffrey hit it out of the park.”

Wexner, through a trust, bought the town house in which Epstein now lives for a reported $13.2 million in 1989. In 1993, Wexner married Abigail Koppel, a 31-year-old lawyer, and the newlyweds relocated to Ohio; in 1996, Epstein moved into the town house. Public documents suggest that the house is still owned by the trust that bought it, but Epstein has said that he now owns the house.

Wexner trusts Epstein so completely that he has assigned him the power of fiduciary over all of his private trusts and foundations, says a source close to Wexner. In 1992, Epstein even persuaded Wexner to put him on the board of the Wexner Foundation in place of Wexner’s ailing mother. Bella Wexner recovered and demanded to be reinstated. Epstein has said they settled by splitting the foundation in two.

Epstein does not care that he comes between family members. In fact, he sees it as his job. He tells people, “I am there to represent my client, and if my client needs protecting—sometimes even from his own family—then it’s often better that people hate me, not the client.”

“You’ve probably heard I’m vicious in my representation of my clients,” he tells people proudly; Leah Kleman describes his haggling over art prices as something like a scene out of the movie Mad Max: Beyond Thunderdome. Even a former mentor says he’s seen “the dark side” of Epstein, and a Bear Stearns source recalls a meeting in which Epstein chewed out a team making a presentation for Wexner as being so brutal as to be “irresponsible.”

One reporter, in fact, received three threats from Epstein while preparing a piece. They were delivered in a jocular tone, but the message was clear: There will be trouble for your family if I don’t like the article.

On the other hand, Epstein is clearly very generous with friends. Joe Pagano, an Aspen-based venture capitalist, who has known Epstein since before his Bear Stearns days, can’t say enough nice things: “I have a boy who’s dyslexic, and Jeffrey’s gotten close to him over the years…. Jeffrey got him into music. He bought him his first piano. And then as he got to school he had difficulty … in studying … so Jeffrey got him interested in taking flying lessons.”

Rosa Monckton recalls Epstein telling her that her daughter, Domenica, who suffers from Down syndrome, needed the sun, and that Rosa should feel free to bring her to his house in Palm Beach anytime.

Some friends remember that in the late 80s Epstein would offer to upgrade the airline tickets of good friends by affixing first-class stickers; the only problem was that the stickers turned out to be unofficial. Sometimes the technique worked, but other times it didn’t, and the unwitting recipients found themselves exiled to coach. (Epstein has claimed that he paid for the upgrades, and had no knowledge of the stickers.) Many of those who benefited from Epstein’s largesse claim that his generosity comes with no strings attached. “I never felt he wanted anything from me in return,” says one old friend, who received a first-class upgrade.

Epstein is known about town as a man who loves women—lots of them, mostly young. Model types 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. One young woman recalls being summoned by Ghislaine Maxwell to a concert at Epstein’s town house, where the women seemed to outnumber the men by far. “These were not women you’d see at Upper East Side dinners,” the woman recalls. “Many seemed foreign and dressed a little bizarrely.” This same guest also attended a cocktail party thrown by Maxwell that Prince Andrew attended, which was filled, she says, with young Russian models. “Some of the guests were horrified,” the woman says.

“He’s reckless,” says a former business associate, “and he’s gotten more so. Money does that to you. He’s breaking the oath he made to himself—that he would never do anything that would expose him in the media. Right now, in the wake of the publicity following his trip with Clinton, he must be in a very difficult place.”

According to S.E.C. and other legal documents unearthed by VANITY FAIR, Epstein may have good reason to keep his past cloaked in secrecy: his real mentor, it might seem, was not Leslie Wexner but Steven Jude Hoffenberg, 57, who, for a few months before the S.E.C. sued to freeze his assets in 1993, was trying to buy the New York Post. He is currently incarcerated in the Federal Medical Center in Devens, Massachusetts, serving a 20-year sentence for bilking investors out of more than $450 million in one of the largest Ponzi schemes in American history.

When Epstein met Hoffenberg in London in the 1980s, the latter was the charismatic, audacious head of the Towers Financial Corporation, a collection agency that was supposed to buy debts that people owed to hospitals, banks, and phone companies. But Hoffenberg began using company funds to pay off earlier investors and service a lavish lifestyle that included a mansion on Long Island, homes on Manhattan’s Sutton Place and in Florida, and a fleet of cars and planes.

Hoffenberg and Epstein had much in common. Both were smart and obsessed with making money. Both were from Brooklyn. According to Hoffenberg, the two men were introduced by Douglas Leese, a defense contractor. Epstein has said they were introduced by John Mitchell, the late attorney general.

Epstein had been running International Assets Group Inc. (I.A.G.), a consulting company, out of his apartment in the Solo building on East 66th Street in New York. Though he has claimed that he managed money for billionaires only, in a 1989 deposition he testified that he spent 80 percent of his time assisting people recover stolen money from fraudulent brokers and lawyers. He was also not above entering into risky, tax-sheltered oil and gas deals with much smaller investors. A lawsuit that Michael Stroll, the former head of Williams Electronics Inc., filed against Epstein shows that in 1982 I.A.G. received an investment from Stroll of $450,000, which Epstein put into oil. In 1984 Stroll asked for his money back; four years later he had received only $10,000. Stroll lost the suit, after Epstein claimed in court, among other things, that the check for $10,000 was for a horse he’d bought from Stroll. “My net worth never exceeded four and a half million dollars,” Stroll has said.

Hoffenberg, says a close friend, “really liked Jeffrey…. Jeffrey has a way of getting under your skin, and he was under Hoffenberg’s.” Also appealing to Hoffenberg were Epstein’s social connections; they included oil mogul Cece Wang (father of the designer Vera) and Mohan Murjani, whose clothing company grew into Gloria Vanderbilt Jeans. Epstein lived large even then. One friend recalls that when he took Canadian heiress Wendy Belzberg on a date he hired a Rolls-Royce especially for the occasion. (Epstein has claimed he owned it.)

In 1987, Hoffenberg, according to sources, set Epstein up in the offices he still occupies in the Villard House, on Madison Avenue, across a courtyard from the restaurant Le Cirque. Hoffenberg hired his new protégé as a consultant at $25,000 a month, and the relationship flourished. “They traveled everywhere together—on Hoffenberg’s plane, all around the world, they were always together,” says a source. Hoffenberg has claimed that Epstein confided in him, saying, for example, that he had left Bear Stearns in 1981 after he was discovered executing “illegal operations.”

Several of Epstein’s Bear Stearns contemporaries recall that Epstein left the company very suddenly. Within the company there were rumors also that he was involved in a technical infringement, and it was thought that the executive committee asked that he resign after his two supporters, Ace Greenberg and Jimmy Cayne, were outnumbered. Greenberg says he can’t recall this; Cayne denies it happened, and Epstein has denied it as well. “Jeffrey Epstein left Bear Stearns of his own volition,” says Cayne. “It was never suggested that he leave by any member of management, and management never looked into any improprieties by him. Jeffrey said specifically, ‘I don’t want to work for anybody else. I want to work for myself.’” Yet, this is not the story that Epstein told to the S.E.C. in 1981 and to lawyers in a 1989 deposition involving a civil business case in Philadelphia.

In 1981 the S.E.C.’s Jonathan Harris and Robert Blackburn took Epstein’s testimony and that of other Bear Stearns employees in part of what became a protracted case about insider trading around a tender offer placed on March 11, 1981, by the Seagram Company Ltd. for St. Joe Minerals Corp. Ultimately several Italian and Swiss investors were found guilty, including Italian financier Giuseppe Tome, who had used his relationship with Seagram owner Edgar Bronfman Sr. to obtain information about the tender offer.

After the tender offer was announced, the S.E.C. began investigating trades involving St. Joe at Bear Stearns and other firms. Epstein resigned from Bear Stearns on March 12. The S.E.C. was tipped off that Epstein had information on insider trading at Bear Stearns, and it was therefore obliged to question him. In his S.E.C. testimony, given on April 1, 1981, Epstein claimed that he had found “offensive” the way Bear Stearns management had handled a disciplinary action following its discovery that he had committed a possible “Reg D” violation—evidently he had lent money to his closest friend. (In the 1989 deposition he said that he’d lent approximately $20,000 to Warren Eisenstein, to buy stock.) Such an action could have been considered improper, although Epstein claimed he had not realized this until afterward.

According to Epstein, Bear Stearns management had questioned him about the loan around March 4. The questioners, Epstein said, were Michael (Mickey) Tarnopol and Alvin Einbender. In his 1989 deposition Epstein recalled that the partner who had made an “issue” of the matter was Marvin Davidson. On March 9, Epstein said, he had met with Tarnopol and Einbender again, and the two partners told him that the executive committee had weighed the offense, together with previous “carelessness” over expenses, and he would be fined $2,500.

“There was discussion whether, in fact, I had ever put in an airline ticket for someone else and not myself and I said that it was possible, … since my secretary handles my expenses,” Epstein told the S.E.C. In his 1989 testimony he stated that the “Reg D” incident had cost him a shot at partnership that year.

What the S.E.C. seemed to be especially interested in was whether there was a connection between Epstein’s leaving and the alleged insider trading in St. Joe Minerals by other people at Bear Stearns:

• Q: Sir, are you aware that certain rumors may have been circulating around your firm in connection with your reasons for leaving the firm?

• A: I’m aware that there were many rumors.

• Q: What were the rumors you heard?

• A: Nothing to do with St. Joe.

• Q: Can you relate what you heard?

• A: It was having to do with an illicit affair with a secretary.

• Q: Have you heard any other rumors suggesting that you had made a presentation or communication to the Executive Committee concerning alleged improprieties by other members or employees of Bear Stearns?

• A: I, in fact, have heard that rumor, but it’s been from Mr. Harris in our conversation last week.

• Q: Have you heard it from anyone else?

• A: No.

• A little later the interview focuses on James Cayne:

• Q: Did you ever hear while you were at Bear Stearns that Mr. Cayne may have trader or insider information in connection with St. Joe Minerals Corporation?

• Q: Did Mr. Cayne ever have any conversation with you about St. Joe Minerals?

• Q: Did you happen to overhear any conversations between Mr. Cayne and anyone else regarding St. Joe Minerals?

• And still later in the questioning comes this exchange:

• Q: Have you had any type of business dealings with Mr. Cayne?

• A: There’s no relationship with Bear Stearns.

• Q: Pardon?

• A: Other than Bear Stearns, no.

• Q: Have you been a participant in any type of business venture with Mr. Cayne?

• Q: Do you have any expectation of participating in any business venture with Mr. Cayne?

• Q: Have you had any business participations with Mr. Theram?

• A: No; nor do I anticipate any.

• Q: Mr. Epstein, did anyone at Bear Stearns tell you in words or substance that you should not divulge anything about St. Joe Minerals to the staff of the Securities and Exchange Commission?

• Q: Has anyone indicated to you in any way, either directly or indirectly, in words or substance, that your compensation for this past year or any future monies coming to you from Bear Stearns will be contingent upon your not divulging information to the Securities and Exchange Commission?

• A: No.

Despite the circumstances of Epstein’s leaving, Bear Stearns agreed to pay him his annual bonus—which he anticipated as being approximately $100,000.

The S.E.C. never brought any charges against anyone at Bear Stearns for insider trading in St. Joe, but its questioning seems to indicate that it was skeptical of Epstein’s answers. Some sources have wondered why, if he was such a big producer at Bear Stearns, he would have given it up over a mere $2,500 fine.

Certainly the years after Epstein left the firm were not obviously prosperous ones. His luck didn’t seem to change until he met Hoffenberg.

One of Epstein’s first assignments for Hoffenberg was to mastermind doomed bids to take over Pan American World Airways in 1987 and Emery Air Freight Corp. in 1988. Hoffenberg claimed in a 1993 hearing before a grand jury in Illinois that Epstein came up with the idea of financing these bids through Towers’s acquisition of two ailing Illinois insurance companies, Associated Life and United Fire. “He was hired by us to work on the securities side of the insurance companies and Towers Financial, supposedly to make a profit for us and for the companies,” Hoffenberg reportedly told the grand jury. He also alleged that Epstein was the “technician,” executing the schemes, although, having no broker’s license, he had to rely on others to make the trades. Much of Hoffenberg’s subsequent testimony in his criminal case has proven to be false, and Epstein has claimed he was merely asked how the bids could be accomplished and has said he had nothing to do with the financing of them. Yet Richard Allen, the former treasurer of United Fire, recalls seeing Epstein two or three times at the company. He and another executive say they had direct dealing with Epstein over the finances. And in his deposition of 1989, Epstein stated that he was the one who executed “all” Hoffenberg’s instructions to buy and sell the stock. He called it “making the orders.” He could not recall whether he had chosen the brokers used.

To win approval from the Illinois insurance regulators for Towers’s acquisition of the companies, Hoffenberg promised to inject $3 million of new capital into them. In fact, in his grand-jury testimony Hoffenberg claimed that he, his chief operating officer, Mitchell Brater, and Epstein came up with a scheme to steal $3 million of the insurance companies’ bonds to buy Pan Am and Emery stock. “Jeffrey Epstein and Mitch Brater arranged the various brokerage accounts for the bonds to be placed with in New York, and I think one in Chicago, Rodman & Renshaw,” Hoffenberg reportedly said. Then, said Hoffenberg, while making it appear as though they were investing the bonds in much safer financial instruments, they used them as collateral to buy the stock. “Epstein was the person in charge of the transactions, and Mitchell Brater was assisting him with it in coordination on behalf of the insurance companies’ money,” Hoffenberg claimed at the time.

At one point, according to Hoffenberg, a broker forged the documents necessary for a $1.8 million check to be written on insurance-company funds. The check was used to buy more stock in the takeover targets. Meanwhile, in order to throw the insurance regulators off, the $1.8 million was reported as being safely invested in a money-market account.

United Fire’s former chief financial officer Daniel Payton confirms part of Hoffenberg’s account. He says he recalls making one or two telephone calls to Epstein (at Hoffenberg’s direction) about the missing bonds. “He said, ‘Oh, yeah, they still exist.’ But we found out later that he had sold those assets … leveraged them … [and] used some margin account to take some positions in … Emery and Pan Am,” says Payton.

Epstein’s extraordinary creativity was, according to Hoffenberg, responsible for the purchase by the insurance companies of a $500,000 bond, with no money down. “Epstein created a great scheme to purchase a $500,000 treasury bond that would not be shown … [as] margined or collateralized,” he reportedly told the grand jury. “It looked like it was free and clear but it actually wasn’t,” he said.

Epstein has denied he ever had any dealings with anyone from the insurance companies. But Richard Allen says he recalls talking to Epstein at Hoffenberg’s direction and telling him it was urgent they retrieve the missing bonds for a state examination. According to Allen, Epstein said, “We’ll get them back.” He had “kind of a flippant attitude,” says Allen. “They never came back.”

Epstein, according to Hoffenberg, also came up with a scheme to manipulate the price of Emery Freight stock in an attempt to minimize the losses that occurred when Hoffenberg’s bid went wrong and the share price began to fall. This was alleged to have involved multiple clients’ accounts controlled by Epstein.

Eventually, in 1991, insurance regulators in Illinois sued Hoffenberg. He settled the case, and Epstein, who was only a paid consultant, was never deposed or accused of any wrongdoing. Barry Gross, the attorney who was handling the suit for the regulators, says of Epstein, “He was very elusive…. It was hard to really track him down. There were a substantial number of checks for significant dollars that were paid to him, I remember…. He was this character we never got a handle on. Again we presumed that he was involved with the Pan Am and Emery run that Hoffenberg made, but we never got a chance to depose him.”

“From the government’s discovery in the main sentencing against Hoffenberg it would seem the government was perhaps a bit lazy,” says David Lewis, who represented Mitchell Brater. “They went for what they knew they could get … and that was the fraudulent promissory notes [i.e., the much larger and unrelated part of Hoffenberg’s fraud, based in New York State]…. What they couldn’t get, they didn’t bother with.”

Another lawyer involved in the criminal prosecution of Hoffenberg says, “In a criminal investigation like that, when there is a guilty plea, to be quick and dirty about it, discovery is always incomplete…. They don’t have to line up witnesses; they don’t have to learn every fact that might come out on cross-examination.”

Epstein was involved with Hoffenberg in other questionable transactions. Financial records show that in 1988 Epstein invested $1.6 million in Riddell Sports Inc., a company that manufactures football helmets. Among his co-investors were the theater mogul Robert Nederlander and attorney Leonard Toboroff. A source close to this transaction claims that Epstein told Nederlander and Toboroff that he had raised his share of the money from a Swiss banker, whose identity they could not be allowed to know. But Hoffenberg has claimed the money came from him, and Towers’s financial statements for that year show a loan to Epstein of $400,000. (Epstein has said he can’t remember the details and has disputed the accuracy of the Towers financial reports.)

Around the same time, Nederlander and Toboroff let Epstein come in with them on a scheme to make money out of Pennwalt, a Pennsylvania chemical company. The plan was to group together with two other parties to take a substantial declared position in the stock. According to a source, Epstein was supposed to help Nederlander and Toboroff raise $15 million. He seemed to fail to find other investors, say those familiar with the deal. (Epstein has said he was merely an investor.) He invested $1 million, which he told his co-investors was his own money. But in his 1989 deposition he said that he put in only $300,000 of his own money. Where did the rest come from? Hoffenberg has said it came from him, in a loan that Nederlander and Toboroff didn’t know about.

Two things happened that alarmed Nederlander and Toboroff. After the group signaled a possible takeover, the Pennwalt management threatened to sue the would-be raiders. Epstein was reluctant initially to give a deposition about his share of the money, telling Toboroff there were “reasons” he didn’t want to. Then, after the opportunity for new investors was closed, co-investors recall Epstein announcing that he’d found one at last: Dick Snyder, then C.E.O. of the publisher Simon & Schuster, who wanted to put up approximately $500,000. (Neither Epstein nor Snyder can now recall the investment. Yet in the 1989 deposition Epstein said that he had recruited Snyder, whom he had met socially, into the deal.)

According to a source, Toboroff and Nederlander told Epstein that Snyder was too late, but, without their realizing it, Hoffenberg has claimed, Snyder wrote a check to Hoffenberg and bought out some of his investment. But then Snyder wanted out.

“Nederlander started to get these irate calls from [Snyder,] who wasn’t part of the deal, saying he was owed all this money,” says someone close to the deal. Toboroff and Nederlander were baffled.

Eventually, a source close to Hoffenberg says, Hoffenberg paid Snyder off.

Just as Nederlander and Toboroff were growing wary of Epstein, he became increasingly involved with Leslie Wexner, whom he had met through insurance executive Robert Meister and his late wife. Epstein has told people that he met Wexner in 1986 in Palm Beach, and that he won his confidence by persuading him not to invest in the stock market, just as the 1987 crash was approaching. His story has subsequently changed. When asked if Wexner knew about his connection to Hoffenberg, Epstein said that he began working for Wexner in 1989, and that “it was certainly not the same time.”

Wherever and whenever it was that Epstein and Wexner actually met, there was an immediate and strong personal chemistry. Wexner says he thinks Epstein is “very smart with a combination of excellent judgment and unusually high standards. Also, he is always a most loyal friend.”

Sources say Epstein proved that he could be useful to Wexner as well, with “fresh” ideas about investments. “Wexner had a couple of bad investments, and Jeffrey cleaned those up right away,” says a former associate of Epstein’s.

Before he signed on with Wexner, Epstein had several meetings with Harold Levin, then head of Wexner Investments, in which he enunciated ideas about currencies that Levin found incomprehensible. “In fact,” says someone who used to work very closely with Wexner, “almost everyone at the Limited wondered who Epstein was; he literally came out of nowhere.”

“Everyone was mystified as to what his appeal was,” says Robert Morosky, a former vice-chairman of the Limited.

Much of Epstein’s work is related to cleaning up, tightening budgets, and efficiencies. One person who worked for Wexner and who saw a contract drawn up between the two men says Epstein is involved in “everything, not just a little here, a little there. Everything!” In addition, he says, “Wexner likes having a hatchet man…. Whenever there is dirty work to be done he’d stick Jeffrey on it…. He has a reputation for being ruthless but he gets the job done.”

Epstein has evidently been asked to fire personal-staff members when needed. “He was that mysterious person that everyone was scared to death of,” says a former employee.

Meanwhile, he is also less than popular with some people outside Wexner’s company with whom he now deals. “He ‘inserted’ himself into the construction process of Leslie Wexner’s yacht…. That resulted in litigation down the road between Mr. Wexner and the shipyard that eventually built the vessel,” says Lars Forsberg, a lawyer whose firm at the time, Dickerson and Reily, was hired to deal with litigation stemming from the construction of Wexner’s Limitless—at 315 feet, one of the largest private yachts in the world. Evidently, Epstein stalled on paying Dickerson and Reily for its work. “It’s probably once or twice in my legal career that I’ve had to sue a client for payment of services that he’d requested and we’d performed … without issue on the performance,” says Forsberg. In the end the matter was settled, but Epstein claims he now has no recollection of it.

The incident is one of a number of disputes Epstein has become embroiled in. Some are for sums so tiny as to be baffling; for instance, Epstein sued investment adviser Herbert Glass, who sold him the Palm Beach house in 1990, for $13,444—Epstein claimed this was owed him for furnishings removed by Glass.

In 1998 the U.S. Attorney’s Office sued Epstein for illegally subletting the former home of the deputy consul general of Iran to attorney Ivan Fisher and others. Epstein paid $15,000 a month in rent to the State Department, but he charged Fisher and his colleagues $20,000. Though the exact terms of the agreement are sealed, the court ruled against Epstein.

Wexner offers some insight into his friend’s combative style. “Many times people confuse winning and losing,” Wexner says. “Jeffrey has the unusual quality of knowing when he is winning. Whether in conversations or negotiations, he always stands back and lets the other person determine the style and manner of the conversation or negotiation. And then he responds in their style. Jeffrey sees it in chivalrous terms. He does not pick a fight, but if there is a fight, he will let you choose your weapon.”

One case is rather more serious. Currently, Citibank is suing Epstein for defaulting on loans from its private-banking arm for $20 million. Epstein claims that Citibank “fraudulently induced” him into borrowing the money for investments. Citibank disputes this charge.

The legal papers for another case offer a rare window into Epstein’s finances. In 1995, Epstein stopped paying rent to his landlord, the nonprofit Municipal Arts Society, for his office in the Villard House. He claimed that they were breaking the terms of the lease by not letting his staff in at night. The case was eventually settled. However, one of the papers filed in this dispute is Epstein’s financial statement for 1988, in which he claimed to be worth $20 million. He listed that he owned $7 million in securities, $1 million in cash, zero in residential property (although he told sources that he had already bought the home in Palm Beach), and $11 million in other assets, including his investment in Riddell. A co-investor in Riddell says: “The company had been bought with a huge amount of debt, and it wasn’t public, so it was meaningless to attach a figure like that to it … the price it cost was about $1.2 million.” The co-investors bought out Epstein’s share in Riddell in 1995 for approximately $3 million. At that time, when Epstein was asked, as a routine matter, to sign a paper guaranteeing he had access to a few million dollars in case of any subsequent disputes over the sale price, Wexner signed for him. Epstein has explained that this was because the co-investors wanted an indemnity against being sued by Wexner. One of the investors calls this “bullshit.”

Epstein’s appointment to the board of New York’s Rockefeller University in 2000 brought him into greater social prominence. Boasting such social names as Nancy Kissinger, Brooke  Astor, and Robert Bass, the board also includes such pre-eminent scientists as Nobel laureate Joseph Goldstein. “Epstein was thrilled to be elected,” says someone who knows him.

After one term Epstein resigned. According to New York magazine, this was because he didn’t like to wear a suit to meetings. A spokesperson for the Rockefeller board says Epstein left because he had insufficient time to commit; a board member recalls that he was “arrogant” and “not a good fit.” The spokesperson admits that it is “infrequent” for board members not to be renominated after only one term.

Still, the recent spate of publicity Epstein has inspired does not seem to have fazed him. In November he was spotted in the front row of the Victoria’s Secret fashion show at New York’s Lexington Avenue Armory; around the same time the usual coterie of friends and beautiful women were whisked off to Little St. James (which he tells people has been renamed Little St. Jeff) for a long weekend.

Thanks to Epstein’s introductions, says Martin Nowak, the biologist finds himself moving from Princeton to Harvard, where he is assuming the joint position of professor of mathematics and professor of biology. Epstein has pledged at least $25 million to Harvard to create the Epstein Program for Mathematical Biology and Evolutionary Dynamics, and Epstein will have an office at the university. The program will be dedicated to searching for nature’s algorithms, a pursuit that is a specialty of Nowak’s. For Epstein this must be the summit of everything he has worked toward: he has been seen proudly displaying Harvard president Larry Summers’s letter of commitment as if he can’t quite believe it is real. He says he was reluctant to have his name attached to the program, but Summers persuaded him. He rang his mentor Wexner about it, and Wexner told him it was all right.

An insatiable, restless soul, always on the move, Epstein builds a tremendous amount of downtime into his hectic work schedule. Yet there is something almost programmed about his relaxation: it’s as if even pleasure has to be measured in terms of self-improvement. Nowak says that, when he goes to stay with Epstein in the Caribbean, they’ll get up at six and, as the sun rises, have three-hour conversations about theoretical physics. “Then he’ll go off and do some work, re-appear, and we’ll talk some more.”

Another person who went to the island with Epstein, Maxwell, and several beautiful women remembers that the women “sat around one night teasing him about the kinds of grasping women who might want to date him. He was amused by the idea…. He’s like a king in his own world.”

Many people comment there is something innocent, almost childlike about Jeffrey Epstein. They see this as refreshing, given the sophistication of his surroundings. Alan Dershowitz says that, as he was getting to know Epstein, his wife asked him if he would still be close to him if Epstein suddenly filed for bankruptcy. Dershowitz says he replied, “Absolutely. I would be as interested in him as a friend if we had hamburgers on the boardwalk in Coney Island and talked about his ideas.”

EDITOR’S NOTE: The original version of this story stated that Jeffrey Epstein was a member of the New York Academy of Sciences. The academy has since notified Vanity Fair that it has no record of Epstein’s membership.

Last Monday, Donny Deutsch, the advertising executive, and Michael Wolff, the often-caustic media columnist, were the toast of the New York Magazine Awards at the Four Seasons restaurant. Seated at a table along with Caroline Miller, editor in chief of the magazine, and Senator Hillary Rodham Clinton, the two men, visible representatives of Mortimer B. Zuckerman's much-followed bid to buy New York, found themselves accepting early congratulations for their seemingly inevitable victory.

What Mr. Deutsch and Mr. Wolff did not know was that Ms. Miller had spent five hours the night before, along with other executives at the magazine, briefing a less outspoken bidder.

The bidder, Bruce Wasserstein, a longtime Wall Street deal maker, swooped in and took the magazine off the auction table with a $55 million bid -- more than $10 million over the Zuckerman offer -- leaving the Zuckerman team wondering where their bid had gone astray.

Mr. Zuckerman and his partners -- Mr. Deutsch, the investor Nelson Peltz, the film executive Harvey Weinstein and the money manager Jeffrey Epstein -- had campaigned publicly and confidently for the magazine, openly speculating about the changes to come once they took over.

Such behavior made their resulting empty-handedness all the more remarkable. No doubt a hefty serving of crow, with a side dish of comeuppance, will fuel much table talk in coming weeks among New York City media watchers.

The members of the Zuckerman team have blamed what they say was a fickle auction process, where they were not allowed to respond to a higher bid in a second round. But in a telephone interview on Friday, Mr. Zuckerman played down the significance of the loss.

''I don't mean to sound casual,'' he said, ''but anybody who has been active in business knows that you win some and you lose some. You'd like to win every one, but we are all grown-ups.''

Mr. Zuckerman's strategy of joining up with many of the moneyed individuals interested in the magazine and then low-balling the owner, Primedia Inc., had seemed like a savvy move. None of the biggest magazine-publishing companies, like Time Inc. and Condé Nast, were pursuing New York, mainly because its size (about 440,000 circulation) and reliance on regional advertising did not mesh with their other properties.

But it soon became apparent that others with money wanted the magazine badly. In the end, the Zuckerman bid came in third, behind Mr. Wasserstein's and that by CurtCo Robb Media, a West Coast publisher of luxury magazines including The Robb Report. Only American Media, the publishers of tabloid newspapers like The National Enquirer and enthusiast magazines like Shape, submitted a lower bid.

Mr. Zuckerman responded emphatically when it was suggested that he had played the wrong cards. ''We made it clear that we were willing to put more money on the table,'' he said, ''but after they had a handshake, they were not willing to entertain other offers. It was inconsistent with the normal bidding process.''

''Best and final'' bids were due on Dec. 11. Mr. Zuckerman and his team submitted a bid for $44 million and waited for a response from Allen & Company, which ran the auction. Meanwhile, Mr. Wasserstein submitted a bid above $50 million and then sent a team to conduct further due diligence on Sunday. After a day of negotiations on Monday, a deal in principle took shape and the deal makers shook hands on Tuesday.

Mr. Deutsch, the chief executive of Deutsch Inc., maintained that being in the game was as important as winning.

''We were laughing our way through the meetings, having a great time along the way, so I don't think there are going to be any tears in the end,'' he said. ''We might have played it too cute in the bidding process, but then again it might have been wired from the start. It's not really that big of a deal.''

If the property in play represented a different city, perhaps that comment could be taken at face value. After all, New York barely makes any money -- about $1 million in profit on revenue of about $43 million last year.

''Certainly, if you look at it from any business point of view, it is insignificant,'' said John Huey, editorial director of Time Inc. ''But because it is New York, with the New York media covering the sale of New York magazine, it takes on an aura that defies all logic.''

And the loss of face after the public posturing seems very real. The motives behind the bid in the first place -- ego, power and cachet -- have been dented by the failed effort.

''These kind of players like to continually prove they are vital,'' said Jeffrey A. Sonnenfeld, associate dean for executive programs at the Yale School of Management. ''What was motivating this deal was not a good financial outcome, but a demonstration of power. If it was no big deal, they would not have gotten involved in the first place.''

''These are media mammoths at play,'' he added, ''and the dream team just lost.''

Mr. Wolff, the media columnist for New York magazine who inserted himself into the process by rounding up investors like Mr. Epstein and Mr. Deutsch, writes a great deal about mogul semiotics. He was blunt in his self-assessment.

''We got outplayed,'' Mr. Wolff said. ''The idea of bringing together many interested parties seemed like a good idea, until it turned out to be a bad idea. It was less efficient than doing it with just one guy.''

Although there was plenty of immediate speculation that Mr. Wasserstein would soon rid the magazine of a man who nominally competed against him, Mr. Wolff said he had no concerns about working for the victor.

''I haven't spoken to the new owner, but I don't think I am tainted by my involvement,'' he said. ''At some point, it is all just fodder for the column.''

Meanwhile, as Mr. Wasserstein and Primedia work to put the finishing touches on the deal, Mr. Wolff has resumed his customary table at Michael's restaurant, and his role as a well-paid observer of the New York media world is little changed. But some of the people he has written about seem to be enjoying that his trip through the looking glass of the world he covers has come to naught.

Steven Rattner, a principal of the Quadrangle Group, a media investment firm, who has been at the receiving end of Mr. Wolff's occasionally brutal commentary, thinks that Mr. Wasserstein's victory will have practical implications.

''Bruce is a very serious person and my guess is that he bought this to do very serious things,'' he said. ''The problem with New York magazine is that it has not been a serious publication for a number of years, and my prediction is that you will see significant changes.''

But Gil Schwartz, a CBS executive who chronicles the byways of business power as Stanley Bing in his column in Fortune magazine and in a recent book, ''The Big Bing,'' thinks the collective pratfall will disappear quickly for the principals involved.

''They are all very busy people and I think they will be happy moguling away very soon,'' he said. ''Being in the hunt is at the core of being a mogul. They made an offer that they thought was appropriate and someone came in with a little richer bid, so no harm, no foul. I think everybody can walk away from this with their self-aggrandizing instincts intact.''

NEW YORK -- After disappearing from view, Radar Magazine is back on the radar -- and with some high-profile backers.

Publishing and real-estate chieftain Mortimer B. Zuckerman is teaming up with money manager Jeffrey Epstein to relaunch Radar, a general-interest title aimed at young, urban professionals.

The April debut of Radar Magazine is likely to be one of the most closely watched launches since the 1999 debut of [Talk Magazine], the ill-fated collaboration between Walt DisneyCo.'s Miramax Films and media conglomerate Hearst Corp.

The top editor at Radar will be Maer Roshan, the former editorial director of [Talk Magazine]. Since 2002, Mr. Roshan has been seeking a financial backer for Radar, which published two prototype issues last year but never landed the financial muscle it needed to get off the ground until now.

"This is essentially about talent," said Mr. Zuckerman. "More than anything, I'm backing Maer Roshan."

Mr. Zuckerman, owner of U.S. News and World Report and the New York Daily News, and Mr. Epstein were part of a consortium of investors that came up short earlier this year in a bidding war to acquire New York magazine. Wall Street financier Bruce Wasserstein purchased that title.

Mr. Roshan had been approached by the Zuckerman/Epstein coalition about editing New York. When that deal fell through, he says, the three men turned their attention to Radar. Mr. Roshan said the new Radar -- like its prototypes -- will be aimed at young readers with a " 'Sex and the City'/Jon Stewart sensibility."

Radar will be Mr. Zuckerman's first major magazine launch since Fast Company, the New Economy title he helped create in 1995.

Linda Sepp, former publisher of Fast Company, will be Radar's publisher.

Mortimer B. Zuckerman, the owner of The Daily News, and Jeffrey Epstein, a Wall Street financier, yesterday agreed to finance Radar, a celebrity and pop culture magazine that published two test issues last year.

Two executives involved in the negotiations said the backers, who were part of an unsuccessful bid for New York magazine last year, are committed to spending up to $25 million to back Radar and Maer Roshan, its editor in chief and founder.

Radar's cheeky, sometimes snarky approach to celebrity and culture attracted news media attention when the magazine was first published, but attempts to line up financing fizzled. "It will be fun to get back to assigning stories," Mr. Roshan said.

The first issue under new ownership will appear next April, with issues to follow every other month for the rest of the year before the magazine moves to a monthly schedule in 2006. But Mr. Roshan and the new owners of Radar face a magazine industry that has only slowly recovered from recession and has proved inhospitable to both general-interest publications and magazines not part of large media companies.

The three men say they believe that a magazine that captures the interest of young, single people who live in urban areas and are tastemakers in their own right will find not just a readership, but also a group of reliable advertisers.

"In this business, to say that it is not a sure thing does not even begin to capture what a crapshoot starting a magazine can be, but I've had some success," Mr. Zuckerman said. "Still, we think that there is real interest in reaching these kind of consumers, and Maer is better suited to doing that than almost anyone I can think of."

Radar's seemingly endless search for financing became something of a running joke in New York publishing. The staff held a celebration with one owner, an investor from Morocco, at Mr. Roshan's home, only to find out that the money that was always about to be wired was not forthcoming. Even yesterday, when Mr. Roshan sat with a reporter and some of his staff at the Coffee Shop in Union Square, giving an interview about finally obtaining financing, a last-minute glitch developed, a legal issue involving the magazine's name, that briefly put the press offensive on hold.

Mr. Epstein and Mr. Zuckerman will be equal partners in the new venture, and Mr. Roshan will retain a small ownership stake. The magazine will use some of the publishing resources of Mr. Zuckerman's company, which also publishes U.S. News and World Report.

Mr. Zuckerman's track record with media investments is mixed. The Atlantic Monthly made little if any money during the years he owned it, and U.S. News is a distant third to Time and Newsweek. But he did very well by investing $20 million in Fast Company, a magazine that he sold four years ago to Gruner & Jahr USA Publishing for $360 million. He also invested in a magazine called Family Fun and sold it for a profit to the Walt Disney Company.

"No one I know has a better track record of buying properties cheap and then selling them for a big profit," said Mark Edmiston, managing director of AdMedia Partners, a media investment bank.

Still, Mr. Edmiston said: "The world has not been kind to general-interest magazines. Increasingly, it is the narrowly focused magazines which are doing very well."

An argument has been made that at a time of hundreds of cable channels, many of them catering to niches, there is little room for a general-interest magazine. Talk magazine, where Mr. Roshan was editorial director under Tina Brown, spent more than $50 million and struggled mightily before closing in 2002.

But Mr. Roshan said he believed that Radar's focus on young, urban readers and relatively small circulation -- executives expect to sell 125,000 copies per issue next year, with that growing to 175,000 in 2006 -- would allow it to beat punishing odds. Radar executives said that given the growing popularity of Jon Stewart's "Daily Show" and The Onion, a satire of a newspaper, they believed there was a market for a magazine that takes on serious matters in unserious ways. To help Radar forge an identity, Mr. Roshan said, its Web site (www.radarmagazine.com) will incorporate some of the voice and style that has developed in blogs.

"In some ways, this is going to be a new magazine," Mr. Roshan said. "Some significant time has lapsed since, and we need to update what we are trying to do. This is a magazine that is trying to be irreverent, provocative and literate. We think there's room, especially for a magazine that is not trying to get to one million circulation, for something that doesn't talk down to its readers. And we want it to be very commercial."

Mr. Epstein, a money manager, said his investment was meant to finance a business, not a hobby.

"I think that Maer did a great job with practically no funds," he said. "When I invest in companies, I invest in the people, and I don't think that anybody has the track record with start-ups that Mort does."

"I always focus on the potential downside of an investment," he added, "and I don't think this is something that is going to lose money."

Donald Trump picked up an oceanfront estate in Palm Beach, Fla., for what he called "a bargain" price of nearly $41.4 million at an auction yesterday.

Mr. Trump beat out money manager Jeffrey Epstein and a luxury home builder for the 43,279-square-foot estate, which sits on 6.5 acres, according to Joseph Luzinski, a senior vice president at Development Specialists Inc. The Chicago management-consulting firm, which specializes in bankruptcy and restructuring matters, auctioned off the 17-bedroom, 16-bathroom property on behalf of the creditors of Abraham Gosman. Mr. Gosman, a Palm Beach developer, declared personal bankruptcy in 2001.

Mr. Trump plans to flip the property, known as Maison de L'Amitie, or House of Friendship, next year after he renovates the home and possibly subdivides the property. Declining to divulge his plans for the property, other than saying he will "bring it to a level that no house in the country has attained," Mr. Trump estimates it will take six months for him to renovate the property with 500 feet of ocean frontage.

"This is a terrific development project," he says. "This house sits on a better piece of land and it's in a better location" than a 20,000-square-foot oceanfront estate in Palm Beach that financier Ron Perelman sold last week for just under $70 million, Mr. Trump adds. "It will keep me busy on weekends."

Mr. Trump maintains a home in Palm Beach at Mar-a-Lago, a historic estate he converted into a country club.

Jeffrey Epstein, the financier charged with sex trafficking, made his fortune managing the fortunes of billionaires. But in 2003 and 2004, during the same time prosecutors say he was paying underage girls for sex, Epstein also tried to establish himself as a media mogul — twice.

Epstein, now 66, was part of a group that made an unsuccessful bid to purchase New York Magazine in 2003, The New York Times  [See [HN02NA][GDrive]],  reported at the time. Former advertising executive Donny Deutsch, investor Nelson Peltz, U.S. News & World Report owner Mortimer Zuckerman, and Harvey Weinstein were also members of that group.

According to The New York Times [See [HN02NA][GDrive]], the group bid $45 million for the magazine, but investment banker Bruce Wasserstein outbid them by $10 million. The group, led by Zuckerman, blamed their loss on the rules of the auction.

"We made it clear that we were willing to put more money on the table,'' Zuckerman told The New York Times [See [HN02NA][GDrive]] in 2003, ''but after they had a handshake, they were not willing to entertain other offers.''

The New York Times [See [HN02NA][GDrive]]  wrote that the motives behind the bid were "ego, power and cachet."

And that was not Epstein's only attempt to enter the media business. In 2004, Epstein and Zuckerman invested $25 million in pop-culture focused Radar Magazine, according to The New York Times. Epstein and Zuckerman became equal partners in the company. Radar's founder and editor-in-chief Maer Roshan kept a minority stake. The trio told The New York Times that they thought the magazine would appeal to trendy urban singles.

"I always focus on the potential downside of an investment," Epstein told The New York Times [See https://www.nytimes.com/2004/10/19/arts/radar-magazine-lines-up-financing.html ] in 2004, "and I don't think this is something that is going to lose money."

Read more: How Jeffrey Epstein, the mysterious hedge-fund manager arrested on sex-trafficking charges, made his fortune

Under their leadership, the celebrity news magazine went from publishing in print bi-monthly to every month but continued to struggle. Radar stopped publishing a print magazine in 2008. That same year, Radar was sold to American Media, Inc., which still publishes an online edition.

Epstein made most of his fortune as a hedge-fund manager, Business Insider previously reported. After spending a decade at Bear Sterns, he launched his own investment firm that he claimed only catered to billionaires. L Brands CEO Les Wexner was his only confirmed client.

Epstein was arrested on charges of sex trafficking in New Jersey on July 6, and pleaded not guilty on July 8. Prosecutors said that, from 2002 to 2005, Epstein lured girls as young as 14 into his homes and paid them for massages that became increasingly sexual in nature. Business Insider previously reported that Epstein served 13 months in prison after confessing to felony sexual solicitation of underage girls.

In March 2018, Business Insider reported that New York Police charged Weinstein with rape, criminal sex conduct act, sex abuse, and sexual misconduct against two women, following over 70 accusations of sexual misconduct.   [...]

In the mid-1970s, students at one of New York’s most esteemed prep schools were surprised to encounter a new teacher who pushed the limits on the school’s strict dress code, wandering the halls in a fur coat, gold chains and an open shirt that exposed his chest.

The teacher, Jeffrey Epstein, would decades later face allegations that he coerced and trafficked teenagers for sex. At the Dalton School on the Upper East Side, some students saw Mr. Epstein as an unusual and unsettling figure, willing to violate the norms in his encounters with girls. 

Eight former students who attended the prestigious school during [Jeffrey Edward Epstein (born 1953)]'s Mr. Epstein’s [Referen ce here to https://www.nytimes.com/2019/07/15/nyregion/jeffrey-epstein-news.html ] short tenure there said that his conduct with teenage girls had left an impression that had lingered for decades. One former student recalled him showing up at a party where students were drinking, while most remembered his persistent attention on the girls in hallways and classrooms. 

“I can remember thinking at the time, ‘This is wrong,’” said Scott Spizer, who graduated from Dalton in 1976.

None of the female students who spoke to The New York Times in recent days remembered Mr. Epstein making unwanted physical contact with them, and he has not been accused of any crimes related to his time at the school. 

But a few students said they had been discomfited by a close relationship he had with one of their female peers, a concern that had escalated so much that one of them had raised the issue then to a school administrator.

Dalton has long been known for its rigorous academics, repeatedly ranking among the nation’s best private schools while drawing the sons and daughters of New York titans of finance, media and art. Among the alumni are the CNN journalist Anderson Cooper, the actress Claire Danes and the comedian Chevy Chase. 

Mr. Epstein’s time at Dalton was brief, and an administrator said it ended in a dismissal. While Mr. Epstein later developed a reputation in the world of finance as a man of brilliance — “He was a Brooklyn guy with a motor for a brain,” New York magazine wrote in a 2002 profile — the administrator told The Times that he had dismissed Mr. Epstein for poor performance.

But the accounts offer a window into Mr. Epstein’s early adulthood, before he developed extensive private wealth that allowed him to acquire a $56 million mansion just a mile south of the Dalton School. It was there, prosecutors said this week, that Mr. Epstein and his employees paid “numerous” underage girls to engage in sex acts with him. 

Federal prosecutors in New York charged Mr. Epstein, 66, with sex trafficking on Monday. He has pleaded not guilty. His lawyer did not respond to a request for comment. 

• Read the latest developments on the Epstein case.  :   Epstein Paid $350,000 to Possible Witnesses Against Him, Prosecutors Say

Officials with the Dalton School also did not respond to requests for comment, but news of the charges has led alumni to reconnect and swap memories of a young teacher who sometimes seemed to defy the expectations of behavior for an authority figure.

A school in turmoil

Like much of the rest of the country, the Dalton School in the 1970s was in the midst of a culture war.

The school, which had been a progressive haven for the children of artists and writers, was undergoing a shift under a new headmaster. [Donald Barr (born 1921)], the father of Attorney General William Barr, came in as a disciplinarian focused on beefing up the academics of the school, and on enforcing a strict code of conduct.

In a school known for creativity, administrators had prohibited denim jeans and “bizarre and eccentric costumes.” If Mr. Barr caught students using marijuana, he would often send them to therapy as a condition of staying in the school. He himself described his leadership style as “by ukase,” using the Imperial Russian term for an edict from the czar.

Staff members would sometimes turn students away from their morning classes; girls for skirts that were too short, and boys for hair that was too long. 

Some students and parents balked at the constraints. Still, the school continued to draw families of fame. Around the years of Mr. Epstein’s tenure, records show the student roster included Prudence Murdoch, the daughter of the media mogul Rupert Murdoch; the fashion designer Jill Stuart; and several future actresses, including Jennifer Grey, Tracy Pollan and Maggie Wheeler.

While [Donald Barr (born 1921)] was strict on the school culture, he made it a point to hire teachers from unconventional backgrounds, recalled Susan Semel, a social studies teacher at Dalton from the 1960s to 1980s who later wrote a book on the history of the school.

“Barr didn’t care about credentials as long as you were interesting and knew your stuff,” Ms. Semel said. 

In February 1974, Mr. Barr had announced that he was resigning as headmaster, protesting the meddling by the board of trustees, but that he would stay on until the end of the school year. It is unclear whether [Donald Barr (born 1921)] hired Mr. Epstein during that time.

Mr. Epstein, from Brooklyn, was just 21 when he joined the faculty at Dalton, arriving without a college degree. The school’s student newspaper reported in September 1974 that he was starting that year as a math and physics teacher.

The next year, he participated in a school musical for parents and faculty, and he appeared in later editions of the paper as the coach of the Dalton Tigers math team until the beginning of 1976.

The school had new leadership under Gardner Dunnan, who tentatively explored a rollback of some of its strict rules. Mr. Dunnan announced in early 1975 a policy that would allow denim inside the building, although students were still told to be neat and clean. 

In the years since, however, Mr. Dunnan has faced allegations of his own inappropriate conduct. A former Dalton student said in a lawsuit that she had been invited to live with Mr. Dunnan at age 14, and had suffered repeated sexual assaults under his care. Mr. Dunnan denied the allegations. The lawsuit was dropped, but the woman’s lawyer, Mariann Meier Wang, said she intended to refile it. 

‘Everyone talked about it’

At Dalton, Mr. Epstein was known as a charismatic, young teacher who at times acted more like a friend than an authority figure to students. 

The urban school inside a brick building did not have outdoor spaces to congregate, so students gathered in halls and in rooms that spanned the building’s many stories. That included lab rooms dedicated to various subjects, providing a more informal and intimate setting for students to get help outside of class from their teachers.

It was in one of these lab rooms that Leslie Kitziger, who graduated from Dalton in 1978, first met Mr. Epstein. 

Ms. Kitziger remembered him as a flamboyant dresser and lively jokester. “He was goofy and like a kid himself,” she recalled.

Ms. Kitziger said she became close to Mr. Epstein at a time when she was struggling at home with her parents’ divorce. She confided in him, and remembered him as caring and attentive. 

“He listened,” Ms. Kitziger recalled. “I was a 14-year-old and he helped me through a time when there wasn’t anybody else to talk to. I felt like he really cared that I was having a rough go.”

She stressed that Mr. Epstein was always professional with her.

But other students, including Millicent Young, a graduate of the school’s 1976 class, saw things differently. Ms. Young never had Mr. Epstein as a teacher, but the school was small enough that she would spend time around him. She recalled observing Mr. Epstein flirting with the girls at the school, which drew her attention because it was so different from how other teachers behaved.

“There was a real clarity of the inappropriateness of the behavior — that this isn’t how adult male teachers conduct themselves,” Ms. Young said.

Mr. Spizer, the fellow student who graduated the same year, said he had a clear recollection of disliking Mr. Epstein because he was spending so much time with girls in the school.

Some other students spoke on condition of anonymity, fearing retribution from Mr. Epstein. One recalled that he had made efforts to spend time with her outside the school, and she remembered raising concerns about Mr. Epstein’s conduct with another student to Mr. Dunnan. An attorney for Mr. Dunnan said the former headmaster had not been aware of any concerns about Mr. Epstein’s conduct at the school.

Another student, who also requested anonymity, fearing reprisals from Mr. Epstein, recalled seeing Mr. Epstein at a high school party in an apartment on the Upper East Side where students were drinking and socializing. Mr. Epstein was the only teacher there, which raised eyebrows among the students.

“It was weird,” said another former student, Paul Grossman, a 1978 graduate who did not attend the party but remembered hearing about it. “Everyone talked about it,” he said.

Peter Thomas Roth, who graduated from Dalton in 1975 and later founded a cosmetics and skin care company with his name, said Mr. Epstein was such a “brilliant” teacher that his father later hired him to tutor Mr. Roth in statistics.

Mr. Roth said he never heard of any rumors about misconduct at the school.

“He was like your friend, you know?” Mr. Roth said. 

But Peter Branch, who was an interim headmaster after [Donald Barr (born 1921)] and later the head of the high school, was not as fond of Mr. Epstein’s teaching. He said that he did not recall anyone raising concerns to him about Mr. Epstein’s conduct with students, but that he had heard concerns from the faculty about Mr. Epstein’s teaching, and eventually determined that the teacher needed to go.

“Epstein was a young teacher who didn’t come up to snuff,” Mr. Branch said. “So, ultimately, he was asked to leave.”

Mr. Roth, the former student, said he and Mr. Epstein did not stay in close touch. But a couple of years ago, he got an invitation to Mr. Epstein’s home after running into him.

It was the only time he had been invited to Mr. Epstein’s palatial townhouse, he said, and so he went over for an afternoon gathering. Everyone present was in their 40s and 50s, Mr. Roth said, and there was no untoward behavior.

Michael Gold contributed reporting.