Epstein Estate Agrees to Pay More Than $105 Million to U.S. Virgin Islands

The estate of Jeffrey Epstein has agreed to pay what could amount to more than $105 million to the U.S. Virgin Islands to settle claims that the disgraced financier used the territory for his decades-long sex trafficking operation under the guise of running a financial advisory firm.

The settlement, approved on Wednesday, caps a nearly three-year-old lawsuit brought by the office of Denise N. George, the attorney general for the U.S. Virgin Islands.

After a year of negotiations, Mr. Epstein’s estate agreed to repay in cash more than $80 million in tax benefits that one of his companies had received from the Virgin Islands. The settlement will also permit the government to get about half the proceeds from the estate’s planned sale of Little Saint James, the secluded private island where Mr. Epstein had resided. The sale could fetch around $55 million.

Ms. George, whose office filed a civil racketeering lawsuit against Mr. Epstein’s estate in January 2020, had argued that the U.S. territory was deceived into granting lucrative tax benefits to Mr. Epstein’s Southern Trust Company. That enabled Mr. Epstein to use his island residence as a place to sexually abuse young women and finance his lavish lifestyle, Ms. George argued.

“At the very start of the case, I was so honored to have met three very courageous young women who were trafficked and sexually exploited on Little St. James,” Ms. George said in a statement. “Our work has been inspired, humbled and fortified by the strength and courage of all of those who survived Epstein’s abuse.”

Neither the estate nor Mr. Epstein’s two long business advisers, Darren Indyke and Richard Kahn, admitted any wrongdoing as part of the settlement.

“The coexecutors ultimately concluded that the settlement is in the best interests of the estate, including its creditors and claimants, to avoid the time, expense and inherent uncertainties of protracted litigation,” a lawyer for the estate, Daniel Weiner, said in an email.

The negotiations were complicated by the fact that Mr. Epstein’s onetime $600 million estate had just $22 million in cash on hand at the end of June after paying hundreds of millions of dollars to victims, lawyers and the Internal Revenue Service. Much of the estate’s remaining $159 million in assets are locked up in investments. The estate will have up to a year to come up with the necessary cash to fulfill its settlement terms.

The settlement closes one more chapter in the long and sordid scandal of the secretive financier, who managed to forge close associations with a long list of wealthy men, politicians and celebrities despite whispers and allegations that he had sexually abused teenage girls and young women.

Mr. Epstein, who had pleaded guilty in 2008 in Florida to two counts of soliciting prostitution from a teenage girl, died of an apparent suicide in August 2019 while being held in federal custody on a new set of sex exploitation charges.

Last December, Ghislaine Maxwell, one of Mr. Epstein’s longtime associates and a former girlfriend, was convicted in federal court in Manhattan on charges that she helped him sexually traffic and abuse young women and teenage girls. Ms. Maxwell, a former socialite, was sentenced to 20 years in prison.

Federal authorities have not charged anyone else in connection with Mr. Epstein’s activities, which reportedly occurred at his residences in the Virgin Islands, Manhattan, New Mexico and Palm Beach, Fla., according to court papers and lawsuits.

Mr. Epstein’s estate agreed to provide Ms. George’s office with documents to help with additional investigations. Over the course of the litigation, Ms. George, working with lawyers from Motley Rice, has served subpoenas on banks that worked with Mr. Epstein and some of the wealthy men that did business with him, including the Wall Street billionaire Leon Black.

Mr. Black, a co-founder of Apollo Global Management, a private equity firm, and a friend of Mr. Epstein’s, had paid at least $158 million to Southern Trust for financial and tax advice. Mr. Black accounted for nearly 80 percent of the revenue taken in by Southern Trust, which Mr. Epstein had told Virgin Island officials was developing sophisticated algorithms to mine financial and DNA databases.

On Monday, Mr. Black was sued by Cherie Pierson, who claimed that he raped her while receiving a massage at Mr. Epstein’s Manhattan mansion in 2002. Her lawsuit, filed in New York State Court, said Mr. Epstein had helped arrange the meeting with Mr. Black.

According to the lawsuit, Mr. Epstein told Ms. Pierson, who was a single mother, that he was going to introduce her to a “very powerful and wealthy” man who might be able to provide her with financial help.

Susan Estrich, a lawyer for Mr. Black, said in a statement that the claim was “categorically false” and “part of a scheme to extort money from Mr. Black.”

One of the aims of Ms. George’s litigation was to make sure Mr. Epstein’s victims were appropriately compensated. A restitution fund established by the estate and approved by her office has paid out more $129 million to more than 125 victims. The estate has separately paid out about $30 million to several other victims.

As settlement talks dragged on this year, the estate put Little Saint James and another island Mr. Epstein owned, Great Saint James, up for sale. The asking price for each island is $55 million.

Under the terms of the settlement, half the proceeds from the sale of Little Saint James will go into a government-administered trust that will provide counseling and other social services for victims of sexual abuse in the U.S. Virgin Islands.