Federal prosecutors investigate Epstein estate co-executors over alleged role in sex trafficking

Federal prosecutors in New York have opened an investigation into two co-executors of the estate of convicted sex offender Jeffrey Epstein, The Wall Street Journal reported Wednesday.

No charges have been filed against the co-executors, Epstein's longtime lawyer Darren Indyke and accountant Richard Kahn.

The Journal said that in recent months, prosecutors in the U.S. attorney's office for the Southern District of New York have scheduled interviews with potential witnesses and requested documents about those witnesses' dealings with Indyke and Kahn.

The Journal also cited a report it published last year saying the two men "were officers of Epstein entities that obscured transactions, arranged cash for Epstein, made payments to women and facilitated Epstein's immigration schemes."

Neither Indyke nor Kahn, who have denied wrongdoing, has been charged with any crime.

The Journal, citing documents, reported that Indyke could receive $50 million and Kahn could get $25 million from Epstein's estate because they are beneficiaries of a trust that will collect Epstein's remaining assets after claims against the estate are settled.

CNBC has requested comment from a spokesman for the U.S. Attorney's Office and from Indyke and Kahn about the Journal's report.

Epstein, 66, killed himself in a federal jail in Manhattan in August 2019, weeks after he was arrested on child sex trafficking charges.

Epstein's estate in February agreed to pay out as much as $35 million to settle a class action lawsuit in U.S. District Court in Manhattan that had accused Indyke and Kahn of aiding and abetting Epstein's sex trafficking of young women and teenage girls.

The proposed settlement does not include any admission of misconduct by either Indyke or Kahn. The judge handling the case on Sept. 18 endorsed a proposal by the suit's plaintiff to notify potential class members to submit claims on the settlement by conducting a four-week-long social media campaign on Facebook and Instagram.

The estate earlier established a restitution fund for Epstein victims that paid out $121 million to more than 130 women and has paid or committed to pay $48 million to nearly 60 additional women in separate settlements.

Lauren Hersh, CEO of World Without Exploitation, an advocacy group for Epstein survivors, in a statement Wednesday said, "We welcome the news that federal prosecutors are investigating Darren Indyke and Richard Kahn and asking questions that should have been asked years ago."

"Survivors deserve a full accounting of how Epstein and those in his orbit were able to operate for so long, and accountability for everyone who enabled or participated in their exploitation," Hersh said.

New Mexico Attorney General Raúl Torrez, whose office is conducting its own investigation into Epstein, said in a statement that he was aware of the Journal's report. Epstein maintained a residence in New Mexico.

"While we cannot comment on any potential federal investigation, this reporting only underscores the importance of full transparency and cooperation among all agencies charged with pursuing accountability," Torrez said.

"Our office has repeatedly sought access to the complete, unredacted records that may be relevant to New Mexico's ongoing work. We hope that federal authorities will now be willing to share any pertinent information without further delay," the attorney general said. "Survivors and the public deserve answers, and no institution should withhold information that could help advance justice."

Kahn and Indyke earlier this year testified behind closed doors to the House Oversight and Government Reform Committee, which has been investigating Epstein and his connections to various individuals.

"Both Mr. Indyke and Mr. Kahn reject as categorically false the suggestion that they knowingly facilitated or assisted Mr. Epstein in his sexual abuse or trafficking of women, or that they were aware of that abuse while they provided professional services for him," Daniel Weiner, an attorney for Epstein's estate, told MS NOW in a statement in March.

Rep. Robert Garcia of California, the ranking Democrat on the House oversight panel, said in a statement after Kahn testified in March, "Jeffrey Epstein's massive sex trafficking ring would not have been possible without the consistent payments and services of his long-time accountant Richard Kahn."

"It's not credible that he had no knowledge of Epstein's activities, and his testimony today only raises more questions," Garcia said.