Court Records
Case 9:08-cv-80119-KAM Document 198 Entered on FLSD Docket 07/13/2009 Page 1 of 24
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
JANE DOE NO. 2,
Plaintiff,
vs.
JEFFREY EPSTEIN
Defendant.
I
JANE DOE NO. 3,
Plaintiff,
vs.
JEFFREY EPSTEIN
Defendant.
JANE DOE NO. 4,
Plaintiff,
vs.
JEFFREY EPSTEIN
Defendant.
JANE DOE NO. 5,
Plaintiff,
JEFFREY EPSTEIN,
Defendant.
CASE NO.: 08-cv-80119-MARRA/JOHNSON
CASE NO.: 08-CV-80232-MARRA/
CASE NO.: 08-CV-80380-MARRA/
CASE NO.: 08-CV-80381-MARRA
EFTA02745154
Case 9:08-cv-80119-KAM Document 198 Entered on FLSD Docket 07/13/2009 Page 2 of 24
Jane Doe v. &Weill
Case No. 08-CV-80893-Marraf.
Epstein's Memorandum of Law In pposition to lane Doe's Injunction Motion
Page 2 of 24
CASE NO.: 08-80994-CIV-MARRA/a
JANE DOE NO. 6,
Plaintiff,
JEPPREY EPSTEIN,
Defendant.
CASE NO.: 08-80993-CIV-MARRA/Ja
JANE DOE NO. 7,
Plaintiff,
JEFFREY EPSTEIN
Defendant.
C.M.A., CASE NO.: 08-80811-CIV-MARRA/a
Plaintiff,
JEFFREY EPSTEIN
Defendant.
JANE DOE, CASE NO.: 08-80893-CIV-MARRA/a
Plaintiff,
JEFFREY EPSTEIN et al,
Defendants.
EFTA02745155
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Jane Doe v. Epstein
Case No. 08-CV-80893-Manalli.
Epstein's Memorandum of law in Opposition to lane Doe's Injunction Motion
Page 3 of 24
DOE II, CASE NO.: 09-80469-CIV-MARRA-IIMMI
Plaintiff,
JEFFREY EPSTEIN et al,
Defendants.
JANE DOE NO. 101, CASE NO.: 09-80591-CIV-MARRA-
Plaintiff,
JEFFREY EPSTEIN
Defendant.
JANE DOE NO. 102, CASE NO.: 09-80656-CIV-MARRa
Plaintiff,
JEFFREY EPSTEIN,
Defendant.
EPSTEIN'S MEMORANDUM OF LAW IN OPPOSITION TO
JANE DOE'S MOTION FOR INJUNCTION RESTRAINING
FRAUDULENT TRANSFER OF ASSETS, APPOINTMENT OF A
RECEIVER TO TAKE CHARGE OF PROPERTY OF EPSTEIN, AND TO
POST A $15 MILLION BOND TO SECURE POTENTIAL JUDGMENT
Defendant, JEFFERY EPSTEIN ("Epstein"), by and through his undersigned
counsel, submits this Memorandum of Law in Opposition to Plaintiffs, JANE DOE
("Jane Doe"), Motion for Injunction Restraining Fraudulent Transfer of Assets,
Appointment of a Receive to Take Charge of Property of Epstein, and to Post a $15
Million Bond to Secure Potential Judgment (DE #165) ("Injunction Motion"), and states:
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Jane Doe v. EDMCill
Case No. 08-CV-80893-Mara
Epstein's Memorandum of Law in Opposition to Jane Doe's injunction Motion
Page 4 of 24
I. INTRODUCTION
Jane Doe filed her Injunction Motion (DE #165) on June 19, 2009 seeking an
injunction to restrain any transfer of assets by Epstein, appointment of a receiver to take
charge of Epstein's property and a $15,000,000 bond to secure her potential judgment in
this action. The Injunction Motion is essentially a veiled and improper attempt to
circumvent the statutory requirements for pre-judgment attachment set forth in Fla. Stat.
§76.01 et seg. Nowhere in her 18-page motion does Jane Doe cite any authority
supporting the relief she requests — not for an injunction, not for appointment of a
receiver and not for the posting of a $15,000,000 bond.
The Injunction Motion is premised on the wholly unsupported contention that
Epstein is fraudulently transferring his assets. Jane Doe cites to purported facts such as
Epstein being a billionaire, having financial sophistication and international contacts, as
well as invocation of his constitutional rights under the Fifth Amendment in response to
discovery requests, to support her fraudulent transfer claim. Jane Doe has not identified
one asset transferred by Epstein nor pointed to one scintilla of evidence to suggest
Epstein is fraudulently transferring his assets. Rather, she asks the Court to presume
Epstein is fraudulently transferring his assets because he asserted his Fifth Amendment
privilege is response to Jane Doe's Request for Admissions 6, 21 and 22. See Epstein's
Response to Jane Doe's Request for Admissions attached as Exhibit C to Injunction
Motion (DE #165). Based on this unsupported presumption of fraudulent transfer, Jane
Doe asks the Court to impose significant and unjustified restraints on Epstein's assets.
Simply put, Jane Doe is improperly seeking assurance she will be able to collect a
potential judgment. Most importantly, there is no legal authority supporting any of the
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Jane Doe v. Eosteict
Case No. 08-CV.80893-ManaiM
Epstein's Memorandum of Law in Opposition to Jane Doe's Injunction Motion
Page 5 of 24
relief requested by Jane Doe. For the following reasons, the Court must deny Jane Doe's
Injunction Motion.
II. JANE DOE'S STATEMENT OF MATERIAL FACTS IS BASED ON
SPECULATION AND HEARSAY AND CONTAINS NO MATERIAL
"FACTS"
Jane Doe's "Statement of Material Facts" relies heavily on the affidavit Jane
Doe's own counsel. 5fis Affidavit of Paul Cassell, Esq., attached as Exhibit A to the
Injunction Motion (DE #165). Mr. Cassell's affidavit is riddled with hearsay,
speculation, conjecture and unsupported assumptions and does not contain one material
"fact" based on his personal knowledge. The majority of Mr. Cassell's assertions in his
affidavit are based on a 2005 Vanity Fair article (the "2005 Vanity Fair Article"). See
Vicky "The Talented Mr. Epstein," Vanity Fair
<http://vickvward.com/wordpress/archives/30>, (January 24, 2005; accessed June 24,
2009). Mr. Cassell's affidavit is essentially a recitation of irrelevant, speculative and
hearsay statements contained in an article published over four years ago. The Court
should disregard Mr. Cassell's affidavit in determining the Injunction Motion. See t.L .
U.S. v. Baker, 432 F.3d 1189, 1211-12 (11th Cir. 2005) (holding that newspapers articles
were inadmissible double hearsay when offered to prove the truth of their contents — the
identity of the gunman); Dollar v. State, 685 So. 2d 901, 903 (Fla. 5th DCA 1996)
(holding that a newspaper article, introduced to prove the truth of out of court statements
contained therein, constitutes inadmissible hearsay); Frasher v. Fox Distributing of S.W.
Fla.. Inc., 813 So. 2d 1017, 1020 (Fla. 2d DCA 2002) (holding that an affidavit
supporting a prejudgment writ of attachment "must not be based on hearsay or the
plaintiffs subjective beliefs but rather on the plaintiff's personal knowledge of the
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Jane Doe v. Epstein
Case No. 08-CV -80893-Marr
Epstein's Memorandum of LaA MI pposition to Jane Doe's Injunction Motion
Page 6 of 24
defendant's actions," citing Unique Caterers, Inc. v. Rudy's Farm Co., 338 So. 2d 1067,
1071 (Fla. 1976))
In his affidavit, Mr. Cassell states that "[i]t appears that defendant Jeffery Epstein
is an extremely wealthy individual." See Affidavit of Paul Cassell 12. Mr. Cassell's
affidavit goes on to state that Epstein "has great skills in trading in international currency
markets" and therefore "it is reasonable to infer that he has significant financial
sophistication." Id. 14. This appearance of extreme wealth and sophistication in
international financial matters is based on inadmissible hearsay newspaper reports,
Wikipedia, and the 2005 Vanity Fair Article.
Mr. Cassell asserts that Epstein's "real mentor [Steven Hoffenberg] was sent to
federal prison for twenty years for bilking investors out of more than $450 million on one
of the largest Ponzi schemes in American history." Id. 15. First, the foregoing statement
has absolutely no relevance to the instant case, except to attempt to link Epstein to an
individual convicted of operating a Ponzi scheme. The 2005 Vanity Fair Article reports
on Epstein's business dealings with Steven Hoffenberg during the 1980's and merely
notes that Hoffenberg is "currently ... serving a 20-year sentence" for operating a Ponzi
scheme. Importantly, despite all the questionable and speculative suggestions and
inferences in the 2005 Vanity Fair Article, it does not in any way link Epstein to the
Ponzi scheme. Yet, Mr. Cassell tries to forge a link between Epstein and Hoffenberg's
Ponzi scheme, ultimately to cast Epstein in a negative light and suggest he, like Mr.
Hoffenberg, is committing financial crimes. Even Vanity Fair did not attempt to make
this untenable connection. Similarly, Mr. Cassell states that Epstein was questioned by
the SEC in 1981 regarding an insider trading investigation at Bear Stearns involving
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Jane Doe v. Epstein
Case No. OS-CV-808934%4ms/
Epstein's Memorandum of law in to lane Doe's Injunction Motion
Page 7 of 24
Italian and Swiss investors. Id. 16. This statement is obviously intended to associate
Epstein with Bear Stems, a tarnished financial institution apparently involved in
questionable international transactions in the 1980's, to somehow suggest Epstein is
fraudulently transferring his assets overseas. It is worth noting that the questioning
occurred approximately twenty-eight years ago, in 1981, and that Epstein was merely
questioned because the SEC believed "Epstein had information on insider trading at Bear
Stems." The foregoing assertions in Mr. Cassell's affidavit have absolutely no bearing
on Jane Doe's Injunction Motion.
Then, Mr. Cassell goes beyond the pale and resorts to celebrity gossip to suggest
Epstein may be transferring his assets to Israel. Specifically, in paragraph 8 of his
affidavit, Mr. Cassell cites a May 2008 Vanity Fair article and states "rumors were
circulating (to celebrities such as Dustin Hoffman, Alec Baldwin and filmmaker Michael
Mailer) that Epstein was moving all of his considerable assets to Israel." Id. 18
(emphasis added). The article actually stated "[t]alk that Epstein had moved himself and
his assets to Israel reached the ears of such luminaries as Harvey Weinstein...." See
Vicky S "You Will Have Jeffrey Epstein to Kick Around!" Vanity Fair
>, (May 7, 2008;
accessed June 24, 2009) (emphasis added). Not only does Mr. Cassell rely on utterly
unreliable celebrity "rumors," he cites it out of context to suggest that Epstein is
fraudulently transferring assets to Israel.
Some other irrelevant, speculative and/or hearsay statements in Mr. Cassell's
affidavit include: (1) Epstein may own a Boeing 727 with a trading room (5O Affidavit
of Paul Cassell 17); (2) Epstein has travelled internationally with Donald Trump and is
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Jane Doe v. Boutin
Case No. 08-CV-80893-Mare
Epstein's Memorandum of Law in Opposition to Jane Doe's Injunction Motion
Page 8 of 24
close friends with Prince Andrew and therefore it is reasonable to infer Epstein has
international financial contacts (14,19); (3) Epstein reportedly limited his clients to those
with a net worth over $1 billion and kept all his deals and clients secret (a. 14); (4) the
current lawsuits could cause Epstein to financial ruin (Id.lio); and (5) Mr. Cassell attests
he was "advised" that Epstein works at managing his financial interests while on a "work
release" program (Id. 111). Mr. Cassell also admittedly relies on unsubstantiated reports
that Epstein is transferring assets out of the country with the intent to make it impossible
for Jane Doe and other plaintiffs to satisfy a potential judgment. Id. 112.
Based on the foregoing irrelevant, speculative and unreliable hearsay information
primarily gleaned and taken out of context from a four-year-old Vanity Fair article as
well as unsubstantiated reports from unnamed individual(s), Mr. Cassell concludes that
Epstein "might" be transferring his assets overseas with the intent to defeat any judgment
that might be entered against him. Id. 112. Mr. Cassell does not attest to one material
fact of which he has personal knowledge that would have any bearing on Jane Doe's
Injunction Motion. For all of the foregoing reasons, the Court should disregard Mr.
Cassell's affidavit.
III. JANE DOE IS NOT ENTITLED TO INJUNCTIVE RELIEF
A. Jane Doe Is Not Entitled To an Adverse Inference Based on Epstein's
Invocation of His Fifth Amendment Privilege
Jane Doe is not entitled to an adverse inference based on Epstein's invocation of
his Fifth Amendment privilege in response to Jane Doe's Request for Admissions 6, 21
and 22. A two-step inquiry must be undertaken to determine whether such an inference is
appropriate. See U.S. v. Custer Battles, LW 415 F.Supp.2d 628, 633 (ED. Va. 2006).
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Jane Doe v. &stein
Case No. 08-CV-80893-Marta_
Epstein's Memorandum of Law in Opposition to Jane Doe's Injunction Motion
Page 9 of 24
First, the court must determine whether there was a valid basis for invocation of the
privilege, which requires only "the existence of a plausible possibility that the person
might be prosecuted in this country." Id. Jane Doe would be hard pressed to contend
that Epstein's invocation of his Fifth Amendment privilege is invalid. However, in an
abundance of caution, Epstein incorporates by reference the argument and authority set
forth in his section "III" of his Motion to Stay And Or Continue Action for Time Certain
Based on Parallel Civil and Criminal Proceedings with Incorporated Memorandum of
Law (DE # 24).
The second step requires an assessment of whether the requested inferences,
which are a form of evidence, comply with the Federal Rules of Evidence. See Custer
Battles, LW, 415 F.Supp.2d at 634. That is, they must be relevant, reliable and not
unfairly prejudicial, confusing or cumulative. Id. An "adverse inference can only be
drawn when independent evidence exists of the fact to which the party refuses to
answer." Id. at 635 (emphasis added) (citations omitted). In Custer Battles, LLC, unlike
the instant case, the court found the record contained "ample evidence of Morris'
involvement in the [fraudulent] billing ... which in turn ensures that the proposed adverse
inferences, should the jury choose to draw them, are not unreliable." Id. See also
Avirgan v. Hull, 932 F.2d 1572, 1580 (11th Cir. 1991) (holding that "the negative
inference to be drawn from the assertion of the fifth amendment does not substitute for
evidence needed to meet the burden of production")' Eagle Hospital Physicians, LW v.
SRO Consulting, Inc., 561 F.3d 1298, 1304 (11th Cir. 2009) (recognizing that "dismissal
following the assertion of the Fifth Amendment violates the Constitution where the
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Case 9:08-cv-80119-KAM Document 198 Entered on FLSD Docket 07/13/2009 Page 10 of 24
Jane Doe v. Epstein
Case No. 08-CV-80893-Marra/Johnson
Epstein's Memorandum of Law in Opposition to Jane Doe's Injunction Motion
Page 10 of 24
inferences drawn from Fifth-Amendment-protected silence are treated as a substitute for
the need for evidence on an ultimate issue of fact," citing Avirgan, supra).
As belabored throughout this memorandum, Jane Doe cites no independent
evidence that Epstein is fraudulently transferring assets. Accordingly, an adverse
inference would be wholly unreliable and is clearly impermissible under the instant
circumstances.
Additionally, granting the relief sought by Jane Doe based solely on an adverse
inference would violate Epstein's Fifth Amendment rights. See LaSalle Bank Lake View
v. Seguban, 54 F.3d 387, 389 (7th Cir. 1995) (noting that "the Supreme Court has
prohibited practices that are coercive in that they make the exercise of the privilege
'costly,' citing Spevack v. Klein, 385 U.S. 511, 515 (1967)). As the LaSalle court
explained, "deeming an allegation of a complaint [or Jane Doe's allegation that Epstein is
fraudulent transferring assets] to be admitted based on the invocation of the Fifth
Amendment privilege without requiring the complainant to produce evidence in support
of its allegations would impose too great a cost and exceed the authorization of Baxter v.
Palmigiano, 425 U.S. 308 (1976)]." See LaSalle Bank Lake View, 54 F.3d at 391; see
also National Acceptance v. Bathalter, 705 F.2d 924, 931-32 (7th Cir. 1983) (holding that
judgment imposing liability cannot rest solely upon a privileged refusal to admit or deny
at the pleading stage. The cost to a defendant of treating his claim of privilege as an
admission would be to excuse a plaintiff of presenting proof of his claim; "[w]e think
Baxter indicates that this is too great a cost"). As Jane Doe fails to present any
independent evidence of fraudulent transfer, the Court must deny her request for an
adverse inference and ultimately deny her Injunction Motion.
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Jane Doe v. Epstein
Case No. 08-CV-80893-Mara Johnson
Epstein's Memorandum of Law in Opposition to Jane Doe's Injunction Motion
Page 11 of 24
B. Jane Doe Has Not Properly Pled a Claim for Nor Requested
Injunctive Relief
Jane Doe does not properly plead a claim for an injunction. While the title of
Jane Doe's motion appears to request injunctive relief, nowhere in the motion does Jane
Doe set forth the elements of an injunction. Moreover, the ad damn= clause of the
motion does not request injunctive relief. It is well settled that the party seeking an
injunction must establish: (1) substantial likelihood of success on the merits; (2)
irreparable injury unless an injunction issues; (3) the threatened injury outweighs the
harm to the defendant if the injunction issues; and (4) that the injunction will not disserve
the public interest. See N. Am. Med. Corp. v. Axiom Worldwide, Inc., 522 F.3d 1211,
1217 (11th Cir. 2008). An injunction is a drastic and extraordinary remedy which should
be granted sparingly and only after the moving party has alleged and proven facts
entitling it to relief. See Shands at Lake Shore, Inc. v. Ferrero, 898 So. 2d 1037, 1038
(Fla. 1st DCA 2005); Wade v. , 928 So. 2d 1260, 1262 (Fla. 4th DCA 2006).
As a threshold matter, the Court should disregard Jane Doe's motion for
injunctive relief as she has not properly pled the claim. She does not even attempt to
allege any of the elements set forth in Axiom Worldwide. Inc. supra, and does not
request injunctive relief in her motion. Moreover, in her First Amended Complaint (DE
#38), Jane Doe does not seek an injunction nor does she assert a claim under Fla. Stat.
§726.101 et seq. See Lawhon v. Mason, 611 So. 2d 1367, 1368 (Fla. 2d DCA 1993)
(holding that a party must `file suit under the Uniform Fraudulent Transfer Act" to enjoin
fraudulent transfer of assets) (emphasis added).
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Jane Doe v. Eosteiu
Case No, 08-CV-80893-Mama/
Epstein's Memorandum of Lawn losition to Jane Doe's Injunction Motion
Page 12 of 24
As Jane Doe has not properly pled a claim for injunctive relief, the Court should
deny Jane Doe's motion, if in fact she intended to make one, for an injunction.
C. Injunctive Relief is Unavailable as Jane Doe Seeks Only Money
Damages
Even assuming arguendo Jane Doe properly pled the elements of an injunction,
cases in which the plaintiff seeks only to recover money damages do not fall within the
jurisdiction of equity and injunctive relief is therefore unavailable. See =s_cLis iile
Int'l Inc., 21 F.3d 1520, 1529-30 (11th Cir. 1994) (holding that the district court lacked
the general equitable authority to issue an injunction where the plaintiff sought only the
award of monetary damages). Jane Doe's First Amended Complaint (DE #38) does not
seek equitable relief. Rather, Jane Doe demands judgment against Epstein for
compensatory damages (Counts I, II, III and V), punitive damages (Counts I - III),
attorney's fees (Counts II, IV and V), minimum damages authorized by law and all actual
damages sustained (to be trebled as authorized by law) (Count IV) and such other relief
as the Court deems just and proper (Counts I - V).1 See ad damnum clauses of Counts I
— V, Plaintiff's First Amended Complaint (DE #38). The Court should deny Jane Doe's
Injunction Motion as her pleadings do not invoke the Court's equity jurisdiction.
D. The Court is Without Authority to Issue an Injunction Restraining
Epstein's Use of His Assets
Jane Doe is not entitled to the injunctive relief requested. Preliminary injunctive
relief freezing a defendant's assets to establish a fund with which to satisfy a potential
judgment for money damages is not an appropriate exercise of a federal district court's
' The Eleventh Circuit in -rejected appellees' suggestion that they successfully invoked the district
court's equitable jurisdiction ough their requests for any additional relief as may appear 'just and proper'
at the conclusion of each complaint. The mere incantation of such boilerplate language does not convert a
legal cause of action into a legitimate request for equitable relief." 21 F.3d at 1526.
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lane Doe v. Epstein
Case No. 08-CV-80893-MarraM
Epstein's Memorandum of Law in Opposition to Jane Doe's Injunction Motion
Page I3 of 24
authority. See , 21 F.3d at 1530. It is well settled by a long and unbroken line of
Florida cases that in an action at law for money damages there is no judicial authority for
an order requiring the deposit of the amount in controversy into the registry of the court,
or indeed for any restraint upon the use of a defendant's assets prior to the entry of
judgment. Id. at 1531 (citations omitted); see also Proctor v. Eason, 651 So. 2d 1301,
1301-02 (Fla. 2d DCA 1995). In , plaintiffs brought a securities fraud action to
recover money damages. See 21 F.3d at 1522. To ensure they could collect their
potential judgment, plaintiffs moved for, and the court granted, preliminary injunctive
relief freezing the defendant's assets. Id. at 1525. The Eleventh Circuit vacated the
injunction and held the district court did not have the authority to issue an injunction
simply to tie up the defendant's assets during the pendency of the litigation. The court
noted, "[t]he general federal rule of equity is that a court may not reach a defendant's
assets unrelated to the underlying litigation and freeze them so that they may be
preserved to satisfy a potential judgment." Id. at 1527. The court went on to cite an oft-
quoted passage from the United States Supreme Court in De Beers Consol. Mines, Ltd. v.
United States, 325 U.S. 212, 221 (1945):
To sustain the challenged order would create a precedent of
sweeping effect. This suit, as we have said, is not to be
distinguished from any other suit in equity. What applies
to it applies to all such. Every suitor who resorts to
chancery for any sort of relief by injunction may, on a mere
statement of belief that the defendant can easily make away
with or transport his money or goods, impose an injunction
on him, indefinite in duration, disabling him to use so much
of his funds or property as the court deems necessary for
security or compliance with its possible decree. And, if so,
it is difficult to see why a plaintiff in any action for a
personal judgment in tort or contract may not, also, apply
to the chancellor for a so-called injunction sequestrating
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Jane Doe v. Engel°
Case No. OS-CV-80893-
Epstein's Memorandum olli lli al pposition to Jane Doe's Injunction Motion
Page 14 of 24
his opponent's assets pending recovery and satisfaction of
a judgment in such a law action. No relief of this
character has been thought justified in the long history of
equity jurisprudence.
(Emphasis added).
Accordingly, the court held that preliminary injunctive relief freezing a
defendant's assets to establish a fund with which to satisfy a potential money judgment is
not an appropriate exercise of a district court's authority. See a 21 F.3d at 1530.
The court also noted the injunctive remedy sought was equivalent to a writ of
attachment. Id. at 1530. "Rule 64 [governing seizure of persons or property], and not
Rule 65 (which governs injunctions generally), provides the standard for evaluating a
request for preliminary injunctive relief that is, in reality, no more than a request for
prejudgment attachment." Id. (Citations omitted). In actions at law, plaintiffs "possess
an adequate, exclusive prejudgment remedy for the sequestration of assets under [Fla.
Stat. §76.01 a seq.] provided that they can satisfy the enumerated statutory grounds for
relief. Accordingly, the use of injunctive relief as a substitute for the remedy of
prejudgment attachment, with its attendant safeguards, is improper." Id. at 1531
(emphasis added) (citations omitted). See also SME Racks, Inc. v. Sistemas Mecanicos
Para. Electroncia, S.A., 243 Fed. Appx. 502, 504 (11th Cir. 2007) (affirming district
court's refusal to grant a preliminary injunction freezing defendant's assets).
Similarly, in Lawhon v. Mason, 611 So. 2d 1367, 1368 (Ha. 2d DCA 1993),
plaintiffs filed a "motion to prohibit defendant from transferring assets." The motion
cited plaintiffs' extensive injuries, defendant's perceived lack of insurance coverage, a
belief that defendant had "substantial assets," and that defendant "had hired personal
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Jane Doe v. Epstein
Case No. 08-CV-80893-Marra/
Epstein's Memorandum of Lawftlosition to Jane Doe's Injunction Motion
Page I5 of 24
counsel skilled in the area of execution of judgment." Id. The trial court granted
plaintiffs' motion, which the Second District Court of Appeals characterized as "a series
of temporary injunctions without the necessary showing of entitlement to injunctive
relief." Id. The Second District quashed the order granting the injunction and held that
"[a]n injunction cannot be used to enforce money damages or prevent a party of
disposing of assets prior to the conclusion of an action at law." Id. See also Briceno v.
Bryden Investment, Ltd., 973 So. 2d 614, 616 (Fla. 3d DCA 2008) (noting that in Florida,
an injunction cannot be entered to prevent a party of disposing of assets prior to
judgment, even where the party seeking the injunction alleges the defendant may be
dissipating assets; a judgment for money damages is adequate and injunctive relief is
improper) (citations omitted). The Lawhon court also noted that the order was similar to
a pre-judgment writ of attachment. 611 So. 2d at 1368. "A writ of attachment cannot
issue unless there is a debt due or an existing debt not yet due" and plaintiff must file a
"verified complaint or sworn allegation that the defendant is removing or disposing of
property. Hearsay or `subjective belief will not suffice." Id. (Emphasis added). See
also Frasher, 813 So. 2d at 1020 (holding that an affidavit supporting a prejudgment writ
of attachment "must not be based on hearsay or the plaintiff's subjective beliefs but rather
on the plaintiff's personal knowledge of the defendant's actions, citing Unique Caterers,
338 So. 2d at 1071).
In the instant case, Jane Doe seeks the same relief the courts in and
Lawhon prohibited — an injunction freezing Epstein's assets during the pendency of the
litigation so Jane Doe will have a fund with which to satisfy her potential judgment. If
the court granted the relief sought by Jane Doe based on a "mere statement of belief that
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Jane Doe v. Eosteig
Case No. 08-CV-80893-Maa
Epstein's Memorandwn of law in Opposition to Jane Doe's Injunction Motion
Page 16 of 24
[Epstein] can easily make away with or transport his money or goods ... it is difficult to
see why a plaintiff in any action for a personal judgment in tort or contract may not, also,
apply to the chancellor for a so-called injunction sequestrating his opponent's assets
pending recovery and satisfaction of a judgment in such a law action." See DeBeers, 325
U.S. at 221. Since Jane Doe is not seeking prejudgment attachment under Fla. Stat.
§76.01 et seq.. there is no authority to enjoin Epstein's use of his assets. The Court must
therefore deny Jane Doe's Injunction Motion.
IV. JANE DOE'S MOTION FOR APPOINTMENT OF A RECEIVER AND
FOR A $15,000,000 BOND IS NOT SUPPORTED BY LAW
Jane Doe moves the Court, pursuant to Fla. Stat. §726.108(1)(c), to appoint a
receiver to take charge of and account for Epstein's assets. However, Jane Doe's reliance
on the foregoing statute is misplaced in that §726.108(1)(c) does not provide for the
appointment of a receiver to take charge of the debtor's assets. To the contrary, the
statute permits "[a]ppointment of a receiver to take charge of the asset transferred or of
other property of the transferee." See Fla. Stat. §726.108(1)(c) (emphasis added).
Epstein is clearly not a "transferee" and the court should deny Jane Doe's motion to
appoint a receiver to take control of Epstein's assets.
Jane Doe also improperly attempts to obtain an accounting of Epstein's assets
through the receiver. She states, "[a] receiver is the only way to start to block further
dissipation of assets — by, first, gaining control over Epstein's assets and then, second,
making an accounting of what assets of Epstein's remain in this country or are otherwise
subject to control by this Court." See Injunction Motion (DE #165) at 15. However,
Jane Doe does not properly plead a claim for an accounting or set forth any facts which
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Jane Doe v. Epstein
Case No. 08-CV-80893-Marrar
Epstein's Memorandum of Law in to Jane Doe's Injunction Motion
Page 17 of 24
would entitle her to an accounting; she just asks for one. See Florida Software Systems,
Inc. v. Columbia/HCA Healthcare Corp., 46 F.Supp.2d 1276, 1285 (M.D. Fla. 1999)
(holding that a party seeking an equitable accounting must show the existence of a
fiduciary relationship or a complex transaction and must demonstrate that the remedy at
law is inadequate); Nautica Int'l Inc. v. Intermarine USA, L.P., 5 F.Supp.2d 1333, 1343
(S.D. Fla. 1998) (holding that plaintiff failed to state a claim for equitable accounting as
plaintiff failed to allege the remedy at law was inadequate). The Court should deny Jane
Doe's motion to the extent it requests an accounting as she has not properly pled a claim
for an accounting.
In addition, not unlike her motion for an injunction and to appoint a receiver to
take control of Epstein's assets, there is no authority for Jane Doe's motion to require
Epstein post a $15,000,000 bond to secure a potential judgment. Jane Doe does not cite
one case or statute that addresses posting a bond to secure a potential judgment. Instead,
Jane Doe references cases generally addressing the court's power to grant equitable
relief.2 The request for a bond is akin to Jane Doe's motion for an injunction in that it
seeks to "establish a fund with which to satisfy a potential judgment for money
damages," which the court in held was beyond the authority of the district court.
See S 21 F.3d at 1530. "There is simply no judicial authority for an order requiring
the deposit of the amount in controversy into the registry of the court, or indeed for any
restraint upon the use of a defendant's assets prior to the entry of judgment." Id. at 1531
(citations omitted). Accordingly, the Court should deny Jane Doe's motion to require
Epstein to post a $15,000,000 bond.
2 See also section III.B, supra, discussing the impropriety of granting equitable relief where there are no
equitable claims pending before the court.
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Case 9:08-cv-80119-KAM Document 198 Entered on FLSD Docket 07/13/2009 Page 18 of 24
Jane Doe v Easteig
Case No 08-CV•80893-Nlarra/
Epstein's Memorandum of Lawl.tosition to Jane Doe's Injunction Motion
Page 18 of 24
V. RELIEF UNDER THE UFTA IS INAPPROPRIATE AS THERE IS NO
EVIDENCE EPSTEIN IS FRAUDULENTLY TRANSFERRING ASSETS
The crux of Jane Doe's Injunction Motion is premised on the unsupported
assumption that Epstein is fraudulently transferring his assets. Jane Doe asks the Court to
infer, based on Epstein's invocation of his Fifth Amendment privilege in response to Jane
Doe's Request for Admissions 6, 21 and 22, and the irrelevant, hearsay and speculative
assertions in Paul Cassell's affidavit, that Epstein is fraudulently transferring assets. Jane
Doe has not, and cannot, point to any evidence which would suggest Epstein fraudulently
transferred anything. For the reasons set forth below, Jane Doe is not entitled to any
relief under Fla. Stat. §726.101 et seq. — the Uniform Fraudulent Transfer Act ("UFTA").
A. Jane Doe's Burden of Proof Under the UFTA
1. The "Badges of Fraud" and Proof of Fraudulent Intent
To prove a fraudulent transfer, Jane Doe must demonstrate: (1) a transfer of
property has in fact occurred; (2) the property transferred belonged to the debtors; (3) the
transfer occurred within certain statutory time periods; and (4) the debtor made the
transfer with the intent to hinder, delay or defraud creditors. See In re Leneve, 341 B.R.
53, 56 (S.D. Fla. 2006). Courts typically resort to the "badges of fraud," to determine
fraudulent intent. Id. at 61. The Eleventh Circuit has adopted the badges of fraud
contained in Fla. Stat. §726.105(2) in determining a debtor's actual intent with regarding
a transfer. See In re Ramsurat, 361 B.R. 246, 254 (M.D. Fla. 2006) (citations omitted).
The badges of fraud are whether: (a) the transfer or obligation was to an insider; (b) the
debtor retained possession or control of the property transferred after the transfer; (c) the
transfer or obligation was disclosed or concealed; (d) before the transfer was made or
EFTA02745171
Case 9:08-cv-80119-KAM Document 198 Entered on FLSD Docket 07/13/2009 Page 19 of 24
Jane Doc v. ENteitl
Case No. 08-CV-80893-Marc
Epstein's Memorandum of Law in Opposition to Jane Doe's Injunction Motion
Page 19 of 24
obligation was incurred, the debtor had been sued or threatened with suit; (e) the transfer
was of substantially all of the debtor's assets; (f) the debtor absconded; (g) the debtor
removed or concealed assets; (h) the value of the consideration received by the debtor
was reasonably equivalent to the value of the asset transferred or the amount of the
obligation incurred; (i) the debtor was insolvent or became insolvent after the transfer
was made or obligation incurred; and (j) the transfer occurred shortly before or shortly
after a substantial debt was incurred. See In re Ramsurat, 361 B.R. at 254; In re Dealers
Agency Services. Inc., 380 B.R. 608, 613 (M.D. Fla. 2007) (recognizing that the Eleventh
Circuit adopted the "badges of fraud" to determine fraudulent intent); Fla. Stat.
§726.105(2).
Moreover, Fla. Stat. §726.106, which applies to creditors whose claims arose
before the transfer was made or the obligation was incurred, provides that a transfer is
fraudulent "if the debtor made the transfer or incurred the obligation without receiving a
reasonably equivalent value ... and the debtor was insolvent at that time or the debtor
became insolvent as a result of the transfer or obligation." See Fla. Stat. §726.106(1).
Subsection (2) provides that the transfer is fraudulent "if the transfer was made to an
insider for an antecedent debt, the debtor was insolvent at that time, and the insider had
reasonable cause to believe that the debtor was insolvent." See Fla. Stat. §726.106(2).
2. Jane Doe's "Means, Motive and Opportunity" Test is
Unfounded
Despite the well-settled statutory framework to determine fraudulent transfer,
Jane Doe appears to have conveniently made up her own test, likely because Jane Doe
cannot point to a single badge of fraud contained in Fla. Stat. §726.105(2) that would
EFTA02745172
Case 9:08-cv-80119-KAM Document 198 Entered on FLSD Docket 07/13/2009 Page 20 of 24
Jane Doe v. Epstein
Case No. 08-CV-80893-Mara
Epstein's Memorandum of Law in Opposition to Jane Doe's Injunction Motion
Page 20 of 24
apply to Epstein. Indeed, Jane Doe cannot identify a single transfer made by Epstein.
Yet Jane Doe urges the Court to conclude Epstein is fraudulently transferring assets
because he purportedly has the means, the motive and the opportunity to do so, citing
United States v. Sparks, 265 F.3d 825, 830 (9th Cir. 2001). See Injunction Motion (DE
#165) at 11. Sparks is completely inapposite as it concerned whether probable cause for
an arrest can be based on a showing of means, motive and opportunity. No court has
recognized the "means, motive and opportunity test" to determine fraudulent transfer.
B. Jane Doe Cannot Make The Requisite Showing for Relief Under the
UFTA; There Is No Evidence of Fraudulent Transfer
As set forth above, there are various ways, set forth in the UFTA and applicable
case law, in which a creditor could prove a debtor is fraudulently transferring assets.
Jane Doe fails to point to one iota of evidence that Epstein is fraudulently transferring
assets. In In re Stewart 280 B.R. 268 (M.D. Fla. 2001), proceedings were brought to set
aside certain transfers of the debtor as fraudulent to creditors. The bankruptcy trustee
claimed, among other things, that the debtor made a series of transfers to his wife totaling
$392,691. Id. at 273. There were deposits into the wife's securities accounts in the sum
of $392,691 which were not explained by the entries on the account statements. Id. at
274. The trustee concluded the funds must have originated from the debtor and pointed
to the debtor's income to show that he had the financial means and the financial
wherewithal to supply the funds. Id. No other evidence was presented to establish the
debtor transferred $392,691 to his wife. Under these circumstances, the court held that
the trustee had "not established the existence of any transfer of the Debtor's interest in
property as required by ... §726.105 of the Florida Statutes." Id. See also In re Energy
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Case 9:08-cv-80119-KAM Document 198 Entered on FLSD Docket 07/13/2009 Page 21 of 24
Jane Doe
Case No. 08-CV-80893-Marra
Epstein's Memorandum of Law m'—dWosition to lane Doe's Injunction Motion
Page 21 of 24
Smart. Inc., 381 B.R. 359, 382 (M.D. Fla. 2007) (holding that bankruptcy trustee failed to
establish a fraudulent transfer claim as the trustee failed to establish that the debtor made
any transfers).;
Moreover, the court refused to enter a final default judgment against the debtor
because the complaint contained "virtually no allegations of fact." See In re Stewart, 280
B.R. at 285. The court noted that "[n]owhere in the Complaint does Barbara Stewart
allege that an identifiable asset was transferred on a specific date pursuant to a specific
transfer. Further, nowhere in the Complaint does Barbara Stewart allege any specific
facts which, even if admitted, would support a finding that a transfer was made with the
actual intent to defraud a creditor." Id. at 285-86.
As in In re Stewart Jane Doe does not allege "an identifiable asset was
transferred on a specific date pursuant to a specific transfer" or allege any facts which
"would support a finding that a transfer was made with the actual intent to defraud a
creditor." See In re Stewart 280 B.R. at 285-86. Moreover, the only "evidence" Jane
Doe presents to prove fraudulent transfer is her assertion that Epstein "has the financial
means and the financial wherewithal" to fraudulently transfer his assets. As the court in
In re Stewart rejected such an argument and found that the trustee did not establish the
existence of a transfer of property as required by Fla. Stat. §726.105, so should the Court
here.
3 In so holding, the court cited 1.1 U.S.C. §548. 50 in re Energy Smart. Inc., 381 B.R. 359 at 382. Section
548 of the Bankruptcy Code and §726.105, Florida Statutes, "are substantially the same, with the result that
'the analysis of what must be show to prove actual fraud under both the bankruptcy and state law
fraudulent transfer provisions is the same."' ags In re Dealer's Agency Services, Inc. 380 B.R. at 612
(citations omitted).
EFTA02745174
Case 9:08-cv-80119-KAM Document 198 Entered on FLSD Docket 07/13/2009 Page 22 of 24
lane Doe v. Epstein
Case No. OECV-80893•Marra/
Epstein's Memorandum of Law,Mosition to Jane Doe's Injunction Motion
Page 22 of 24
V. CONCLUSION
For the foregoing reasons, Epstein respectfully requests the Court deny Jane
Doe's Injunction Motion.
By:
ROBERT D. CRFI TO,fQ, JR., ESQ.
Florida Bar No. 224162
MICHAEL J. PIKE, ESQ.
Florida Bar #617296
DAVID A. YAREMA, ESQ.
Florida Bar No. 12492
Certificate of Service
I HEREBY CERTIFY that a true copy of the foregoing was electronically filed
with the Clerk of the Court using CWECF. I also certify that the foregoing document is
being served this day on all counsel of record identified on the following Service List in
• the manner specified by CM/ECF on this ti th day of July 2009
Respect ted,
By:
ROBE T D. CRITTON, JR., ESQ.
Florida Bar No. 224162
[Email Redacted]
DAVID A. YAREMA, ESQ.
Florida Bar No. 12492
[Email Redacted]
BURMAN, CRITTON, LUTHER & COLEMAN
515 N. Flagler Drive, Suite 400
West Palm Beach, FL 33401
561/842-2820 Phone
561/515-3148 Fax
Counsel for Defendant, Jeffrey Epstein
EFTA02745175
Case 9:08-cv-80119-KAM Document 198 Entered on FLSD Docket 07/13/2009 Page 23 of 24
Stuart S. Mermelstein, Esq.
Adam D. Horowitz, Esq.
Mermelstein & Horowitz, P.A.
18205 Biscayne Boulevard
Suite 2218
Miami, FL 33160
[Phone Redacted]
Fax: [Phone Redacted]
[Email Redacted]
[Email Redacted]
Counsel for Plaintiffs
In related Cases Nos. 08-80069, 08-80119,
08-80232, 08-80380, 08-80381, 08-80993,
08-80994
Richard Horace Willits, Esq.
Richard H. Willits, P.A.
2290 10th Avenue North
Suite 404
Lake Worth, FL 33461
[Phone Redacted]
Fax: [Phone Redacted]
Counsel for Plaintiff in Related Case No.
08-80811
[Email Redacted]
Jack Scarola, Esq.
Jack P. S Esq.
Searcy Denney Scarola Barnhart &
P.A.
2139 Palm Beach Lakes Boulevard
West Palm Beach, FL 33409
[Phone Redacted]
Fax: [Phone Redacted]
[Email Redacted]
[Email Redacted]
Counsel for Plaintiff, C.M.A.
Bruce Reinhart, Esq.
Jane Doc v. Epstein
Case No. 08-CV-80893-Marran.
Epstein's Memorandum of taw mOpposition to Jane Doe's Injunction Motion
Page 23 of 24
Certificate of Service
Jane Doe No. 2 v. Jeffrey Epstein
Case No. 08-CV-80119-MARRA/
Brad cl•
Rothstein osenfeldt Adler
401 East Las Olas Boulevard
Suite 1650
Fort Lauderdale, FL 33301
Phone: [Phone Redacted]
Fax: [Phone Redacted]
[Email Redacted]
Counsel for Plaintiff in Related Case No.
08-80893
Paul G. Cassell, Esq.
Pro Hat Vice
332 South 1400 E, Room 101
Salt Lake City, UT 84112
[Phone Redacted]
[Phone Redacted] Fax
[Email Redacted]
Co-counsel for Plaintiff Jane Doe
Isidro M. I. Esq.
Law irm, P.A.
224 Datura Street, Suite 900
West Palm Beach, FL 33401
[Phone Redacted]
[Phone Redacted] F
[Email Redacted]
Counsel for Plaintiff in Related Case No.
Shipley, 08-80469
Robert C. Josefsberg, Esq.
Katherine W. Ezell, Esq.
Podhurst Orseck, P.A.
25 West Flagler Street, Suite 800
Miami, FL 33130
[Phone Redacted]
Fax: [Phone Redacted]
[Email Redacted]
[Email Redacted]
Counsel for Plaintiffs in Related Cases
EFTA02745176
Case 9:08-cv-80119-KAM Document 198 Entered on FLSD Docket 07/13/2009 Page 24 of 24
Jane Doe v. Epstein
Case No. 08-CV-80893-MarrafJohnson
Epstein's Memorandum of taw in Opposition to Jane Doe's Injunction Motion
Page 24 of 24
Bruce E. Reinhart, P.A.
250 S. Australian Avenue
Suite 1400
West Palm Beach, FL 33401
[Phone Redacted]
Fax: [Phone Redacted]
ecf @brucereinhartlaw com
Counsel for Defendant
Theodore J. Leopold, Esq.
Spencer T. Kuvin, Esq.
Ricci-Leopold, P.A.
2925 PGA Blvd., Suite 200
Palm Beach Gardens, FL 33410
[Phone Redacted]
Fax: [Phone Redacted]
Counsel for Plaintiff in Related Case No.
08-08804
[Email Redacted]
[Email Redacted]
Nos. 09-80591 and 09-80656
Jack Alan Goldberger, Esq.
Atterbury Goldberger & Weiss, P.A.
250 Australian Avenue South
Suite 1400
West Palm Beach, FL 33401-5012
[Phone Redacted]
Fax: [Phone Redacted]
[Email Redacted]
Counsel for Defendant Jeffrey Epstein
EFTA02745177