Monday, 14 March 2011

Mystery over Jeffrey Epstein’s meeting with a Labour minister

A senior Minister in Gordon Brown’s Government arranged a meeting with convicted paedophile Jeffrey Epstein while he was being held under house arrest at the end of an 18-month jail term.

Convicted paedophile Jeffrey Epstein is facing a new criminal investigation and is involved in a civil suit with a lawyer
Jeffrey Epstein Photo: REX
The disclosure comes in the wake of the controversy over the Duke of York’s close friendship with the disgraced financier. In December, the Duke was photographed walking through central park with Epstein following his release from jail, triggering demands for him to quit his post as the UK’s Special Representative for International Trade and Investment.
A court transcript raises new questions about the reach of Epstein’s power and influence.
The legal documents reveal that Epstein applied to a US judge for special permission to leave his Florida home, where his movements were strictly controlled, in order to fly to New York for a “hands on” meeting with a Labour minister. The identity of the minister has not been revealed.
Epstein requested Florida Criminal Court Judge Jeffrey Colbath grant a motion for “authorization to travel" for an urgent meeting with the unnamed minister.
Epstein’s lawyer Jack Goldberger said the meeting was important but was strongly opposed by Barbara Burns, Florida Assistant State Attorney,
November 2009 at the Palm Beach County Courthouse: “It’s a social event, Judge. He wants to visit with the government official from London.”
However, Mr Goldberger denied this. He said: “It is not a social visit. It is a meeting with a governmental official. He’s actually the Under Secretary to the Prime Minister of Great Britain.”
He added that the meeting had been called to discuss “the university system in Great Britain”.
He told the judge: “That individual cannot travel to South Florida. They need to have a hands on meeting. It would be up and back on the same day.”
But Ms Burns added: “Judge, the problem is he is on house arrest, and house arrest is not something that should be bypassed for this type of thing. I can understand why he wants to go to New York because he is helping his attorney on his civil lawsuit, and I don’t have a problem with that because he has to look at exhibits, exhibits that can’t leave New York.
“I do have a problem with him visiting the Foreign Minister from England.”
The judge agreed and dismissed the request and the meeting never took place.
Mystery surrounds who he was due to meet at the on the weekend of the 12 and 13 December 2009.
Officials in the Florida Assistant State Attorneys office says they were never given the name of the British minister. They said they did not inquire further because the meeting had nothing to do with Epstein’s legal case and so his request to travel was therefore deemed to be unacceptable.
Records of the movements of Ministers in the Labour Government have been transferred to the National Archive at Kew and will not be available for public inspection for many years.
Officials at the British Embassy in Washington could find no trace of any Labour Ministers who were due to have been in the US that weekend.
Intriguingly Lord (Digby) Jones, a former trade minister and one-time business adviser to the Duke of York, was engaged on a speaking tour of Washington, Pittsburgh and Boston on Dec 14, 15 and 16 which had been arranged by UK Trade & Investment, the Government’s business promotion arm.
His spokeswoman said Lord Jones had no knowledge of Epstein prior to recent reports and pointed out the cross-bencher had resigned as a minister in 2008, more than a year before Epstein applied for his meeting. He quit as the Duke’s business adviser in 2007 after being appointed a minister for trade.
They maintain that an extraordinary plea agreement struck between prosecutors and defence lawyers in 2008 that saw Epstein escape with just an 18-month sentence in exchange for him pleading to just two charges and them dropping the rest was unlawful.
Epstein appears on sex offender registers in Florida, New York and the Virgin Islands, where he owns homes.
Based on the 2008 case against him, when police and the FBI discovered around 40 under-age girls who were recruited to service Epstein’s sexual desires, some lured to his Palm Beach mansion from a local school, a judge in Manhattan classified him as a Level 3 sex offender.
Level 3 is the most serious ranking on a basic scale of one to three, and is applied to a sex offender considered to pose a “high risk of repeat offence and a threat to public safety”.
Attempts to set up a meeting between Epstein and a representative of the British government even while he was still on probation and under house arrest in November 2009 prompted horror among many familiar with the case.
Spencer Kuvin, one of the Florida lawyers representing Epstein’s victims, said: “The morals of any person meeting with and doing business with a convicted paedophile, while they are still on probation no less, should be questioned. If this meeting was to be with British government officials, they should be ashamed.”

Did Prince Andrew avoid a £6 million tax bill when he sold Sunninghill to his Kazakh friends?

The Duke of York used a complicated tax avoidance scheme to save up to £6 million in tax on the profit he made on sale of his home to a Kazahk billionaire for £15 million, it can be revealed.

Prince Andrew, Duke of York
Prince Andrew, Duke of York  Photo: AFP/GETTY IMAGES
Prince Andrew sold the five acre property to an offshore trust which belonged to Timur Kulibayev, the billionaire son-in-law of the Kazakh president, Nursultan Nazarbayev, who he had entertained as part of his Government role as Britain’s trade ambassador. Kulibayev has a child with Andrew’s socialite friend Goga Ashkenazi
The controversy surrounding the sale of the 12 bedroom house in 2003 for £3 million over the market value was compounded when the new owners failed to move in and left the house, built as a wedding gift from the Queen to the Duke and Sarah Ferguson, to fall into a state of disrepair.
Now an examination of the official documents related to the transaction by tax and property barristers suggests the Duke used a complicated legal arrangement to ensure he was not forced to pay 40 per cent capital gains tax for which he could have been liable.
Home owners are allowed to sell their properties without paying tax as long as they can show it is their main home, that they did not buy the property simply for profit and can show they had lived in it at least three years before the sale. But Prince Andrew’s disposal of the Sunninghill house was not this clear cut.
The new analysis reveals:
* The Duke never personally owned Sunninghill.
* The lease on Sunninghill was in the Queen’s name.
* Royal advisers paid just over £12,000 to buy the freehold of the property from the Crown Estate, which had owned it for the benefit of the nation.
* The Queen’s personal lawyer and her most senior financial adviser, not Prince Andrew, signed off on the sale to the new Kazahk owner.
Land registry documents show that in March 2003 the Duke decided to leave Sunninghill for good and had signed a £1 million lease on the late Queen Mother’s former home, Royal Lodge, on the Windsor estate. The house, it was announced, was to be his new official residence.
The Duke could not move in immediately as the pink-washed Lodge needed to be completely refurbished at a cost, according to the National Audit Office, of more than £7.5 million, for which the Prince was apparently liable under the terms of his new lease.
However the Sunninghill sale did not go ahead until September 2007 - more than four years later and longer than the tax exemption rules normally allow.
During this period the Duke was seemingly desperate to secure a buyer and reportedly used trips to Saudi Arabia and Bahrain to drum up interest in the property among wealthy people he met in his official role.
The deal is further complicated by the opaque ownership of Sunninghill. The land was owned by the Crown Estate, whose huge property portfolio is held “to benefit the taxpayer” with revenue going straight to the Treasury.
In 1987 a 125 lease was registered for land in Sunninghill Park in the names of the Queen, The Crown Estate and a company called Tyrolese (83) Limited, whose directors worked for Farrer and Co, the Queen’s lawyers. The price paid for this was not recorded, but it was on this land that the house for the Duke and his new bride was built.
By 1996 the couple had divorced with the Duchess reportedly relinquishing any claim on the house, where the Duke continued to live.
After the death of the Queen Mother in 2002 he began negotiating his move to Royal Lodge and signed a lease early in 2003.
However there was a problem about what to do with Sunninghill, a 1990 unfashionable two-storey red-brick house dubbed “Souhyork”, which was seen as difficult to sell and with a lease which is believed to have restricted its transfer to other members of the royal family.
In September 2003 the freehold of Sunninghill was sold to Mark Bridges, a lawyer at the Queen’s solicitors Farrer and Co, and Sir Alan Reid, Keeper of the Queen’s Privy Purse, who controls her personal income. Both were acting as trustees for The Sunninghill Park Settlement, a secret trust set up three years earlier.
The new freehold, which cost just £12,265, released the house from the constraints previously placed on any future sale.
However, it also raised a number of questions about who was now the owner of Sunninghill. The Sunninghill Park Settlement is private and its beneficiaries secret.
Royal officials have always suggested that the Duke of York owned Sunninghill and that it was he who sold it to the Kazakhs.
But legal experts suggest if he was behind the purchase of the freehold at the same time as he was preparing to move out of the house for good he might fall foul of tax avoidance rules.
Tax law says that you cannot buy an interest in a property which you have no intention of living in and purchase merely to sell on for a profit.
Property barrister Mark Loveday suggested that the sequence of events surrounding the Duke’s purchase of the freehold could fall foul of this law. He said: “There are anti-avoidance provisions in the legislation which prevent you buying a property simply to then sell it on. This is to stop property developers claiming tax relief.
“If, as it appears, the Duke purchased the freehold of the property at a time when he had no intention of living there, there must be a question mark of whether he is liable for tax on any gain which resulted.”
A second tax expert said that the case law in the area also suggested the Duke of York was liable for tax on Sunninghill. The Appeal Court case had ruled that a divorcing husband who moved into a new house, he had originally purchased for him and his wife, for a short period while their separation was finalised had to pay capital gains tax on his profit because he knew that it was a short term acquisition.
However there is a further intriguing possibility. The trustees that purchased the freehold of Sunninghill are two of the Queen’s most trusted advisers.
The document also places a number of new restrictions on the future use of the house in the name of the “Her Majesty and Her Successors and the Commissioners (of the Crown Estate)”.
Both appear to be evidence that the ultimate purchaser of the house was Her Majesty the Queen who is exempt from capital gains tax and would also have been in the position of selling it on and gifting the money to the Duke of York, again with no tax payable.
Last night sources with a detailed knowledge of the transaction claimed that the Duke had no tax liability on the sale of Sunninghill. They said confidential documents made the ownership of the house clear cut.
The decision to buy the freehold making a future sale more straight forward was described as a “normal transaction” which many homeowners with a long and valuable lease did to make selling and alternations to their property easier.
The source also suggested that only a small sum was paid for the freehold because the long lease which it replaced had been costly and reflected the value of the property. However this figure, which would have been paid to the Treasury, is confidential.
The source also disputed any suggestion that the time of the purchase of the lease on Royal Lodge and the purchase of the freehold on Sunninghill made it liable for tax. He added that the owner of Sunninghill qualified for tax relief as it had been their main home for many years.
A Buckingham Palace spokesman said: “It was a private sale between two trusts. All appropriate taxes were paid.”

News of the World faces computer hacking claims

Journalists at the News of the World are facing new allegations that they paid private investigators to hack into computers to obtain confidential information.

Journalists at the News of the World are facing new allegations that they paid private investigators to hack into computers to obtain confidential information. Photo: AP
Executives at News International have been alerted to three instances where journalists are alleged to have paid for information, including emails and documents, stolen from individuals’ computers.
The allegations are potentially far more serious than the existing phone hacking cases. Computer hacking is covered by the Computer Misuse Act, which bans any unauthorised access of data and carries a maximum sentence of five years in jail.
Several named journalists, including news executives on the paper, are said to have paid specialist investigators, at least one of whom is a former Army intelligence officer, for their expertise.
The hackers are alleged to have used so-called Trojans viruses, sent in a disguised email, to break into the systems of individuals in whom they were interested.
It is understood that the BBC Panorama programme has been investigating the computer hacking claims and that the allegations centre on at least three separate stories that were being pursued by the News of the World over a long period. One case is said to relate to football transfer dealings and allegations against well known Premiership managers.
A second case focused on the search for an alleged spy who infiltrated the IRA at a high level who was secretly working for the controversial Army Force Research Unit.
A spokesman for the paper said: "Panorama has put vague and unsubstantiated allegations to us but despite several requests, they have yet to provide any evidence to back up these claims. If and when they do so, we can investigate and respond."

Thursday, 10 March 2011

Duke of York

What was the Duke of York thinking?

The Duke of York's friendship with a convicted child sex offender is causing growing embarrassment.

The Duke of York held top-level talks in Whitehall as he battled to save his job as a trade ambassador for Britain, amid a growing scandal over his close friendship with a convicted paedophile.
The Duke of York with his close friend Goga Ashkenazi, who bore the son of Timur Kulibayev, the Kazakh billionaire who bought the Duke's former home Sunninghill Park  Photo: REX
It was a disaster that had been waiting to happen. Except that the Duke of York, accused by his critics of boorishness and arrogance at the best of times, never saw it coming.
Instead of steering clear of Jeffrey Epstein, when the wealthy financier was convicted and jailed for child sex crimes, Prince Andrew maintained the friendship.
So much so that as recently as December the Duke flew to New York and stayed with Epstein for four days, attending a party that followed his release from jail. At the same time, Epstein, The Sunday Telegraph can disclose, intervened in an attempt to settle debts owed by Sarah, Duchess of York, the Duke's ex-wife.
A photograph of the Duke strolling through Central Park with Epstein in December was damaging enough; another photo, taken in 2001 but which only emerged last week, of the Duke with his arm around the waist of a 17-year-old "masseuse" – who later accused Epstein of sexual exploitation – was frankly calamitous.
Throw into the peculiar mélange the Duke's close relationship with Ghislaine Maxwell, the daughter of the disgraced media tycoon Robert Maxwell, and the surprise is only that the lid was not blown off sooner.
Miss Maxwell is accused in court papers of introducing young women to Epstein at his Florida mansion, although she has never been arrested nor charged with any offence.
Back in London last week, even Buckingham Palace was admitting the Duke had got it wrong, displaying a terrible "lapse of judgment" in remaining friends with the financier.
"There is a question mark over his choice of friends and that is quite difficult for him," a senior royal aide told The Sunday Telegraph. "People may legitimately question the judgment of [him] seeing Epstein once after he emerged from his conviction.
"There is a question mark over his choice of friends and that is quite difficult for him.
"There is definitely some type of soul-searching going on. Certainly there is a recognition by the Prince that the December meeting was unwise. He genuinely views it as unwise."
It is not the first time questions have been asked over his friendships. His former home Sunninghill Park was sold for £15 million – £3 million more than the asking price – to Timur Kulibayev, a Kazakh billionaire who had a child with Goga Ashkenazi, a close friend of the Duke. Sunninghill remains empty more than three years after the sale. Epstein has remained seemingly unrepentant. In his only public comment since his release, he told the New York Post: "I'm not a sexual predator, I'm an offender. It's the difference between a murderer and a person who steals a bagel." The Duke was not Epstein's only powerful friend. The 57 year-old, who owned an island in the Caribbean as well as the Manhattan and Palm Beach properties, counted former presidents, Nobel laureates and Hollywood stars among his close acquaintances. But events in 2005 changed all that. The case against Epstein began when, in March of that year, a woman contacted Palm Beach police concerned that her 14-year-old stepdaughter had been taken to Epstein's mansion and paid $300 (£185) to strip while he performed a sex act.
It would spark an investigation that resulted in at least 40 girls, aged between 13 and 17 (18 is the legal age of consent in Florida) coming forward with similar stories of sexual impropriety at the mansion.
This is the same Florida mansion where the walls were decorated with pictures of naked girls; where even the soap in bathrooms was shaped like male and female genitalia and where until 2006, when the allegations against Epstein began surfacing, the Duke was a regular guest. Indeed in 2000, Epstein and Miss Maxwell had been guests themselves at Sandringham, the Queen's estate in Norfolk.
Last night, the royal aide admitted for the first time that the Duke had also received massages at the Florida mansion, but said that they had no sexual overtones. The aide said: "He is not denying having a massage, but that in itself does not represent impropriety. If he is guilty of having a massage then he is guilty of having a massage." For Epstein the massages were certainly more than a mere rub down. Some court papers paint a sordid picture of the goings on in Palm Beach, where Miss Maxwell allegedly ran the household.
Witness statements in one civil action allege that Miss Maxwell recruited some of the young girls on Epstein's staff, and even kept albums of photographs she took of topless girls at the house. She is also alleged to have had regular massages herself and to have kept sex toys in her room.
A plea bargain deal eventually resulted in Epstein admitting one count of soliciting under-age prostitutes. He was jailed for 18 months, swapping his jet-set lifestyle for a more simple existence in the Palm Beach County Jail where his only luxuries were the "treats" he purchased from the guards. He spent $1,250 in three months on a wide variety of snacks including "Moon Pies, BBQ chips, cheddar cheese squeezers". According to a receipts released under Freedom of Information rules, Epstein also spent $7.50 on a single-serve pack of Spam. He completed the sentence under house arrest in Florida, but as part of the deal his alleged victims have been allowed to bring civil actions against him and Epstein has already agreed undisclosed out-of-court settlements with 17 of them.
Last week a photograph emerged of the Duke with his arm around 17-year-old Virginia Roberts, one of Epstein's alleged victims.
There is no suggestion that the Duke had any sexual contact with Miss Roberts or knew anything of Mr Epstein's illegal activities. Miss Roberts said she met the Duke during her four years as Epstein's personal masseuse. She said she had once been flown across the world by Epstein to be introduced to the Duke and that she was subsequently paid $15,000.
Giving evidence under the name "Jane Doe 102" in her civil case, Miss Roberts said that her duties included being "sexually exploited by Epstein's adult peers including royalty". There is no evidence the royalty she refers to means the Duke of York.
She told how she had joined Epstein's staff as a masseuse at the behest of Miss Maxwell and that massage sessions often developed into sexual encounters with Epstein and others. She said that she had felt "under immense pressure to please them".
Another witness who lodged court papers was Juan Alessi, Epstein's maintenance man. His deposition says the Duke spent "weeks" at the Florida house sleeping in the main guest bedroom and having "daily massages".
Last week he told The Sunday Telegraph that the Duke had visited the house "three or four times". Buckingham Palace denies the Duke was ever at the house for longer than a few days at a time, pointing out that an absence of weeks would have been noted by royal watchers.
Mr Alessi paints a picture of debauchery. There were regularly young women frolicking naked in the pool or even turning up topless in the kitchen while he and his wife Maria worked, he said.
"European girls particularly, they were always taking their clothes off. I'd have to tell them 'Look, go away, put something on, and then come back in here'," he recalled.
House guests were always offered a daily massage as a courtesy he said. "Was it innocent? What happened in those rooms was absolutely between the people in them, I had absolutely no idea what was going on. Those corridors were sealed by three doors that were closed, closed, closed, so it's impossible to know what's going on."
The Duke, he insisted, was the kindest of guests. "There were some people I didn't care for but Prince Andrew was a gentleman … very ordinary, very easy-going. He was probably the best guest we ever had and we had thousands.
"He would get up and make his own bed, tidy things up. He didn't want nothing [sic] to be done for him. He was the only guy who left us a tip – and a key chain from the royal palace as a souvenir. I would be a liar if I said something bad about him.
"He was a gentleman, he treated us very well."