With his initial investment, Epstein secured a lifetime membership to the exclusive members-only club. And more than a decade later, as Core Club grew into a hub for the real estate elite, Epstein remained involved in high-level business activities, introducing Enterprise to potential partners and providing advice on potential business structures. Enterprise also maintained a warm personal relationship with the disgraced financier and sex offender, who was accused of sexually abusing dozens of underage girls.
Epstein’s co-founders included Aby Rosen of RFR, Steven Roth of Vornado Realty Trust and Stephen Schwarzman of Blackstone Group. The club also made headlines for a high-profile lawsuit with developer Michael Shvo, as well as disagreements with Rosen and RFR.
The real deal previously reported that Epstein took credit for the club’s success, writing in 2018: “I helped bring them into the business.” A Core spokesperson at the time denied that Epstein had any business development role at the club.
But the latest batch of files released by the Justice Department show that when the Core Club’s finances were dire in 2015, Epstein stepped in as a confidant and connector.
“[Just] to keep you informed,” Enterprise wrote to Epstein in 2016, in the midst of business negotiations. Attached in the email appear to be sheets of corporate tax returns and income statements for the club.
“Updating my guardian angel….love you!” she wrote that same year.
In response to the latest set of emails, the spokesperson repeated the claim that Epstein had no business development role in Core Club.
“We stand by our initial statement that this individual had nothing to do with the founding of the company, or with ‘commissioning CORE,’” the spokesperson said in a statement.
An early business partner
Epstein first became involved with Core Club since its inception in the early 2000s. According to a Core spokesperson, he paid $100,000 as a founding member, along with 150 other investors.
Emails between Epstein’s staff reference his investment in an entity called Core Club 55th Street LLC, most likely referring to the club’s first location at RFR’s 66 East 55th Street.
In 2014, Enterprise began a campaign to ask the founders to withdraw their promissory notes to help the club pursue debt restructuring, according to paperwork in Epstein’s files.
“Based on the Club’s own financial analysis, the Club has determined that to be viable, among other things, it requires at least 90% of our founders to execute and return the settlement agreement and confirm the cancellation of their promissory notes,” Enterprise wrote to the founders.
Epstein appears to have gone through with the cancellation and is paying a reduced annual rate of $7,600 for his Core Club membership.
The Core spokesperson said Epstein rarely used the Club’s member facilities and usually received skin treatments, which are available to non-members.
There are dozens of emails detailing Epstein’s facial appointments with Dangene Enterprise, Jennie’s wife.
Dangene and her associates sent Epstein a birthday email in 2019, months after a Miami Herald investigation created widespread awareness of Epstein’s role as a serial abuser of children.
They wrote in big purple letters: ‘WE LOVE YOU VERY MUCH.’
An almost training plan
In 2015, Epstein had introduced Core Club to a personal collaborator: inventor and investor Nathan Myhrvold.
Emails detail that Myhrvold visited Epstein’s island in 2011 and sent him books and pistachio ice cream in 2013. “Pussy is not doing well with FedEx,” he wrote the financier, who pleaded guilty five years earlier to procuring a minor for prostitution.
A spokesman for Myhrvold said he knew the funder of TED conferences and as a donor of basic scientific research. “He regrets ever meeting him,” the spokesperson said.
Epstein first named Myhrvold as a member of the club, a club spokesman said. Enterprise then made a business deal with him.
It was a difficult time for Core Club, which owed its landlord about $6.8 million in unpaid rent and was pursuing a debt restructuring plan, according to correspondence obtained by Enterprise.
Emails indicate that Enterprise kept Epstein informed about her conversations with Myhrvold, sometimes asking for advice or jumping on the phone to get information and prepare for meetings. He seemed to offer ideas on how they could structure the deal.
At one point, Enterprise sent him a draft term sheet for Myhrvold’s investment. Epstein approved the file and told her to send it before the potential investor got cold feet.
“Don’t copy me, just send it to him,” Epstein wrote to Enterprise, “with a note saying you’re very excited to have him as a partner.”
At least once during the negotiations, Epstein met face-to-face with Myhrvold.
Enterprise, which was assisted by Rick Ross, chairman of hotels and leisure at global law firm Dentons, tried to get out of a business deal with Aby Rosen, who Epstein separately claimed to have known for 20 years.
Enterprise, Myhrvold and their teams worked out a possible plan: they would start a new company together, with Myhrvold providing a $6 million convertible loan. They would move Core Club’s intellectual property to the new company and license it to the old LLC. The new company would purchase existing debt from AES Holdings and then cancel it. Enterprise would receive $100,000 for past services and then use that same money to pay off Rosen and RFR.
The parties explained via email that they designed the deal to protect Myhrvold and the new company from assuming Core Club’s tax risk.
The goal specifically appears to be to allow Myhrvold’s investment to avoid extinguishing debt income but still use existing net operating losses to shield earnings from taxes, said Michael Meisler, a tax lecturer at Baruch College and a former partner at Ernst & Young, who reviewed a selection of emails but was otherwise unfamiliar with the deal or the parties.
Debt income forgiveness occurs when a person’s debt is forgiven, and those forgiven debts can then be taxed as income by the IRS.
Net operating losses can be carried forward over time to reduce taxable income. The deal was intended to protect that asset to protect the new income from Myhrvold’s investment.
“If you have a highly structured transaction where you say, ‘We’re just doing this to achieve this desired tax outcome,’ that’s usually a red flag for something that is likely to have a lot of risk,” Meisler said.
Spokespeople for Core Club and Myhrvold said no deal was ever reached between the parties.
“CORE: has consistently provided business opportunities throughout our 20-year history,” the spokesperson said in a statement. “This person [Epstein] referred a member who presented a business opportunity ten years after the company was founded.”
Neither Dentons, Ross nor representatives for Rosen responded to a request for comment.
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