IRS declined to audit billionaire who admitted to funding Epstein’s island operation

A congressional investigation into the assets of millionaire financier and convicted sex offender Jeffrey Epstein revealed Thursday that the IRS has known for years about a major funding source of Epstein’s sex trafficking operation but did nothing about it.

The US Senate Finance Committee, led by Sen. Ron Wyden (D-Ore.), sent a letter to IRS Commissioner Billy Long demanding a report on any audit the agency has done of Epstein’s tax filings “to better understand the full scope of the financing of Epstein’s sex trafficking operation.”

The response is expected to be light, however, as the tax agency has so far failed to inspect Epstein’s finances, despite a number of red flags — both official and unofficial.

“Epstein lacked any professional training or certifications in accounting or tax law, yet was chosen by very wealthy people to execute very complex tax-related financial transactions. Despite this glaring lack of qualifications that might lead anyone to double-check Epstein’s work, it appears that the IRS failed over the course of many years to audit major tax transactions involving Epstein,” Wyden wrote. “Highly complicated tax arrangements between Epstein and one of his billionaire funders have never been audited by the IRS.”

Spokespeople for the IRS and US Treasury did not respond to requests for comment on this story.

The billionaire funder in question is former Wall Street executive Leon Black, who admitted as part of a $65 million settlement with the US Virgin Islands that “Epstein used the money Black paid him to partially fund his operations in the Virgin Islands.” Those operations are alleged to include an extensive, international sex trafficking ring that forced underage women to have sex with Epstein’s wealthy clients.

Over 200 victims have come forward to testify against Epstein, including former Mar-a-Lago employee Virginia Giuffrie. President Donald Trump admitted in late July that he was aware Epstein used Mar-a-Lago to target and groom teens for years before he barred him from the property. Now, as president, Trump has proven to be a roadblock to transparency and accountability, closing the criminal investigation into Epstein and blocking Congress from accessing Treasury documents.

“There has been a concerted effort by the Trump administration to play down these important records that we have worked with for more than three years,” Wyden said. “We saw what was going on in Florida, we saw what was going on in New York. We saw wire transfers that were moving money and young underage girls into sex trafficking all over the world.”

Black told the committee in 2023 that the IRS had not audited his financial ties to Epstein for suspicious activity, even after the billionaire admitted his checks helped keep Epstein’s island up and running; Black had also vastly overpaid Epstein for his high school-level accounting savvy.

Reports from the four banks Epstein had accounts with should also have triggered an audit. In the short time Wyden’s team was allowed Treasury access to review these reports, they found suspicious activity reports filed on nearly 5,000 of Epstein’s transactions. Two of the institutions, JP Morgan Chase and Deutsche Bank, even settled Epstein-related lawsuits for hundreds of millions of dollars over their failure to act responsibly, although both admitted no wrongdoing. Even still, government regulatory bodies declined to investigate.

“At a time when so many Americans think that the political system is rigged, this is about whether there’s going to be accountability for the people who were involved and who enabled it,” Wyden said. “The question is, is the government going to look out for victims — people who have no power — or are they going to keep on protecting the rich and powerful who are part of Epstein’s network, even when those people have committed horrendous crimes?”

Without the support of Republicans on the committee, Wyden lacks the authority to subpoena the suspicious activity reports. Should the IRS comply with his request, it has until September 1 to deliver a report on any audit conducted into Epstein’s financial dealings.

This post first appeared in Below The Beltway, a COURIER Substack by Camaron Stevenson.