IN THE SUPERIOR COURT OF THE VIRGIN ISLANDS

DIVISION OF ST. THOMAS AND ST. JOHN

********************************

GOVERNMENT OF THE UNITED STATES

VIRGIN ISLANDS, Case No.: ST-2020-CV-00014

PLAINTIFF,
ACTION FOR DAMAGES
v.
JURY TRIAL DEMANDED
DARREN K. INDYKE, in his individual capacity
and in his capacity as the EXECUTOR FOR THE
ESTATE OF JEFFREY E. EPSTEIN and
ADMINISTRATOR OF THE 1953 TRUST;
RICHARD D. KAHN, in his individual capacity and
in his capacity as the EXECUTOR FOR THE
ESTATE OF JEFFREY E. EPSTEIN, and
ADMINISTRATOR OF THE 1953 TRUST;
ESTATE OF JEFFREY E. EPSTEIN; THE 1953
TRUST; PLAN D, LLC; GREAT ST. JIM, LLC;
NAUTILUS, INC.; HYPERION AIR, LLC; POPLAR,
Inc.; SOUTHERN TRUST COMPANY, INC.;
CYPRESS, INC.; MAPLE, INC.; LAUREL, INC.;
AND JOHN AND JANE DOES,

DEFENDANTS.
__________________________________________

GOVERNMENT OF THE UNITED STATES VIRGIN ISLANDS’ REPLY

IN SUPPORT OF EMERGENCY MOTION FOR LIFTING OF STAY
AND TO TAKE DISCOVERY OF DEFENDANTS INDYKE AND KAHN

The Government of the Virgin Islands replies to Defendants’ Opposition to its Emergency

Motion for Lifting of Stay and to Take Discovery of Defendants Indyke and Kahn as follows.

ARGUMENT

A. Defendants’ Opposition Arguments Lack Merit.

After the surprisingly abrupt end to the mediation and the filing of the Mediator’s Report

with this Court, the Government immediately moved the Court to lift the stay, which was entered
GOVERNMENT OF THE UNITED STATES VIRGIN ISLANDS’ REPLY IN SUPPORT OF
EMERGENCY MOTION FOR LIFTING OF STAY AND TO TAKE DISCOVERY OF DEFENDANTS
INDYKE AND KAHN
Government of the U.S. Virgin Islands v. Indyke, et al., No. ST-2020-CV-00014
Page 2

by this Court for the sole purpose of facilitating the mediation. The Epstein Estate’s meritless

claim for sanctions for doing so is absurd. The Government filed its motion to lift the stay to allow

discovery in order to ensure that there is a complete record for the Court to rule on Defendants’

pending Motion to Vacate Criminal Activity Liens and to prevent the dissipation of assets before

this case can be heard, which is the purpose of the Criminal Activity Liens as a matter of law. The

Criminally Influenced and Corrupt Organizations Act (“CICO”) authorizes the Government to

place a Criminal Activity Lien on a CICO defendant’s property to preserve it for satisfaction of a

judgment. See 14 V.I.C. § 610(i)-(j). The Government has placed and maintained Criminal

Activity Liens on property of Defendant the Estate of Jeffrey E. Epstein (the “Epstein Estate”) as

a matter of statutory right and out of concerns over the administration of what are and should be

Epstein Estate property or funds. The concerns are well-founded because Defendants have refused

to provide documentation of trusts related to Jeffrey Epstein, while substantial evidence shows that

Co-Executor Defendants Darren Indyke and Richard Kahn as individuals:

• were both deeply involved in the financial activities of Epstein-owned entities,

including the defrauding of the Government of over $80 million in unearned tax
benefits through Defendant Southern Trust Company;

• directed, approved, enabled, and justified millions of dollars in payments that

facilitated the Epstein Enterprise’s sex trafficking;

• failed to disclose millions of dollars in loans made by Epstein to them, which should
be reflected and collected as assets of the Estate;

• are beneficiaries of an Epstein-created trust that in the year after Epstein’s death
received over $13 million that was then transferred not to the Epstein Estate, but to
separate trusts created for the benefit of Defendants Indyke and Kahn, their spouses,
and others, with recognition that these funds were being insulated from the
beneficiaries of and claimants against the Estate.

See Motion at 4-5 and Exhibit A thereto.

GOVERNMENT OF THE UNITED STATES VIRGIN ISLANDS’ REPLY IN SUPPORT OF
EMERGENCY MOTION FOR LIFTING OF STAY AND TO TAKE DISCOVERY OF DEFENDANTS
INDYKE AND KAHN
Government of the U.S. Virgin Islands v. Indyke, et al., No. ST-2020-CV-00014
Page 3

Although they try to brush aside these allegations and evidence as “misleading and

inflammatory” and “disparaging,” Response at 1, 9, Defendants Indyke and Kahn notably do not

rebut the truth of the Government’s compelling allegations. Instead, they turn their fire to making

baseless procedural arguments seemingly designed to distract from the evidence of wrongdoing,

and their deliberate refusal to provide the Government with any discovery from the inception of

this action. To further divert attention from their wrongdoing, Defendants argue that the “financial

terms were agreed upon in August 2021” and the Government’s motion is meant to “punish the

Co-Executors for not agreeing to all of the Government’s demands in settlement discussions.”

Response at 12. In actuality, it is the Co-Executors who have persisted in making settlement

demands in exchange for payment of money, which are either legally and ethically prohibited,

overly broad, or extraneous to this civil CICO action1 thereby contrary to the public policy and

purpose of the CICO laws that govern this enforcement action.

Moreover, Defendants’ contradictory positions further demonstrate their lack of merit.

Defendants simultaneously assert: (1)that the improprieties and self-dealing of the Co-Executors

outlined by the Government are not relevant because they involve non-Estate assets held in a trust,

(which were decanted for the express purpose of avoiding claims against the Estate); (2) that the

Co-Executors could not have not engaged in financial mismanagement or misconduct because the

Government has maintained liens on Estate assets (despite the Government’s plain allegations that

funds outside of the Estate are both connected to the criminal enterprise and subject to the

Government’s claims); and (3) notwithstanding the evidence of the Co-Executors’ improper

1
Unreasonable or extraneous settlement terms have been rightfully and roundly criticized in
previous Epstein litigation nationwide.
GOVERNMENT OF THE UNITED STATES VIRGIN ISLANDS’ REPLY IN SUPPORT OF
EMERGENCY MOTION FOR LIFTING OF STAY AND TO TAKE DISCOVERY OF DEFENDANTS
INDYKE AND KAHN
Government of the U.S. Virgin Islands v. Indyke, et al., No. ST-2020-CV-00014
Page 4

dealings (and the Government’s authority), that the liens that have protected the subset of Estate

assets known to the Government should be dissolved and discovery regarding the extent and

disposition of other assets should be precluded (even in the face of clear evidence that they are

being wrongly dissipated).2

Defendants contend that discovery is not needed to resolve their liens motion because a

fact dispute on the necessity of Lien-covered funds to legitimate Estate administration has been

resolved, and because Estate expenditures are monitored by the Probate Court and an appointed

Special Master and auditor. Id. at 13-14. These arguments ignore the questions of improper

withholding of funds from the Estate, including funds tied to trusts in which Defendants Indyke

and Kahn are beneficiaries or to loans made by Epstein to Defendants Indyke and Kahn for which

they have provided no acknowledgement, let alone accounting to the Epstein Estate. The

Government’s Criminal Activity Liens are meant to ensure that there will be Estate property and/or

sufficient value to satisfy a judgment despite the issues related to these possibly withheld funds.3

Before the Court rules on the continued operation of the Liens, it should allow the Government to

make a full record, through immediate discovery, including depositions, on the status of these

2
Now that the Estate asserts that the 2013 Butterfly Trust “has nothing whatsoever to do with Mr.
Epstein’s Estate or any funds available to it,” perhaps it may now be able to more fruitfully
participate in mediation going forward. http://www.virginislandsdailynews.com/news/attorney-
for-epstein-executor-says-accusations-in-motion-by-ag-demonstrably-false/article_49a8df21-
6209-5445-ab74-f091cbd5f63a.html.
3
In challenging the Liens’ validity, Defendants continue to argue that the Government does not or
cannot seek forfeiture of Estate assets. See Opposition at 15 (“In fact, the CICO claims at issue
here seek divestiture, not forfeiture, of assets.”). This is wrong. See Second Amended Complaint
at 74, Prayer for Relief ¶¶ D-E (seeking forfeiture of interests in real and personal property and of
proceeds or funds); see also In re Najawicz, 52 V.I. 311, 333 (2009) (“CICO provides for both
civil and criminal forfeitures . . . .”).
GOVERNMENT OF THE UNITED STATES VIRGIN ISLANDS’ REPLY IN SUPPORT OF
EMERGENCY MOTION FOR LIFTING OF STAY AND TO TAKE DISCOVERY OF DEFENDANTS
INDYKE AND KAHN
Government of the U.S. Virgin Islands v. Indyke, et al., No. ST-2020-CV-00014
Page 5

funds and, more generally, the Estate’s ability to satisfy a judgment in light of Defendants’ current

representations about the Estate’s limited assets and decantation.4

Defendants separately argue that discovery should be denied on the grounds that “the

Government is misusing the existing Criminal Activity Liens” so that “discovery is just a

mechanism to improperly extend them.” Id. at 14-15. This argument is baseless. Defendants

wrongly conflate permissible limits on conveyance or disposal of property, id. at 14 (Liens “serve

to prevent property from being ‘conveyed, alienated, or otherwise disposed of’”) (quoting 14

V.I.C. § 610(j)), and purportedly impermissible limits on the use of property, id. at 14-15 (citing

and quoting 14 V.I.C. § 610(n)). This argument fails because Defendants attempt to apply it not

to real or personal property that may be leased for income, but to bank account funds. See id. at

15 (“Here, the Government has treated its liens on the Estate’s bank accounts as pre-judgment

restraints . . . .”). Defendants do not and cannot explain how they could use these account funds

without also disposing of them, which they admit the Liens are designed to prevent. The very

statutory provision they rely upon makes this clear:

The filing of a Criminal Activity Lien Notice shall not affect the use to which
personal or real property . . . may be put or the right of the person to receive any
avails, rents or other proceeds resulting from the use and ownership, but not the
sale, of the property, until a judgment of forfeiture is entered.

14 V.I.C. § 610(n) (entered). Since Defendants cannot lease or rent out Epstein Estate bank

account funds, the Government’s maintenance of Criminal Activity Liens on these remaining

funds to ensure their availability to satisfy a judgment is both appropriate and necessary to enforce

4
The dissipation of Estate assets is particularly troubling in light of Defendants’ statement that the
“critical financial terms were agreed upon in August 2021[.]” Response at 12, which neglects to
disclose that Defendants now are claiming for the first time (and contrary to the referenced
agreement) that they would be unable to make substantial payments until years into the future.
GOVERNMENT OF THE UNITED STATES VIRGIN ISLANDS’ REPLY IN SUPPORT OF
EMERGENCY MOTION FOR LIFTING OF STAY AND TO TAKE DISCOVERY OF DEFENDANTS
INDYKE AND KAHN
Government of the U.S. Virgin Islands v. Indyke, et al., No. ST-2020-CV-00014
Page 6

and uphold CICO’s law-enforcement objectives. Specifically, 14 V.I.C. § 601 provides that “[t]he

purpose of this chapter is to curtail criminal activity and lessen its economic and political

power in the Territory of the Virgin Islands by establishing new penal prohibitions and

providing to law enforcement and the victims of criminal activity new civil sanctions and

remedies.” (emphasis added).

In sum, Defendants’ arguments on the merits for denying the Government discovery into

Epstein-related funds withheld from the Epstein Estate and designated for the personal benefit of

its Co-Executors fail. The Government should be permitted this discovery as required by the

Superior Court Rules of Civil Procedure and relevant to Defendants’ motion to vacate.

B. The Request to Strike and Threat of Sanctions are Baseless.

Defendants’ request to strike the Government’s motion is equally baseless and should be

denied. Defendants contend that striking is warranted because the Government’s motion

purportedly violates the Court’s July 7 stay Order in the absence of a true discovery emergency

and because the Government did not meet and confer with Defendants before filing its motion.

See Opposition at 9-13. Both arguments are wrong.

First, there is no meet-and-confer requirement for the Government’s motion. This

requirement applies only to motions to compel responses to specific discovery requests. See V. I.

R. Civ. P. 37(a)(1) (“On notice to other parties and all affected persons, a party may move for an

order compelling disclosure or discovery. The motion must include a certification that the movant

has in good faith conferred or attempted to confer with the person failing to make disclosure or

discovery . . . .”). Here, the Government seeks not to compel responses to specific discovery
GOVERNMENT OF THE UNITED STATES VIRGIN ISLANDS’ REPLY IN SUPPORT OF
EMERGENCY MOTION FOR LIFTING OF STAY AND TO TAKE DISCOVERY OF DEFENDANTS
INDYKE AND KAHN
Government of the U.S. Virgin Islands v. Indyke, et al., No. ST-2020-CV-00014
Page 7

requests, but to obtain leave to take discovery, which, as set forth below, it has not been able to do

throughout the pendency of this action.

Second, and relatedly, there is an emergent need for this discovery. Defendants base their

arguments for striking and threat of sanctions on the pretense that this has been ordinary litigation

where the Government could take discovery and engage in meaningful dialogue with Defendants

over its scope. See id. at 9 (“Defendants’ motion to vacate has been pending for well over two

years and the Government has never before claimed that discovery was needed to make such a

record.”); id. at 10 (“Moreover, the argument could have been made months or years ago.”). This

has not been the case, which Defendants well know because they have obstructed discovery at

every turn of this case, which is no ordinary litigation, but a civil law enforcement action by the

Government. Defendants’ contention that the Government’s argument could have been made

months or years ago is disingenuous.

When the Government sought discovery at the outset of the case into Jeffrey Epstein’s

criminal trafficking and Defendants Indyke and Kahn’s facilitation, Defendants stonewalled from

day one, taking unfair advantage of the absence of an assigned Judge to the case for almost two

years. Even though Rule 26(d)(4) provides that “[t]he filing of any motion – including potentially

dispositive motions such as a motion to dismiss or a motion for summary judgment – shall not stay

discovery in the action unless the judge so orders” (emphasis added), Defendants refused to

provide any discovery whatsoever, standing the Court’s Rules on their head. They responded to

++the Government’s written discovery requests with a blanket refusal as follows:

GOVERNMENT OF THE UNITED STATES VIRGIN ISLANDS’ REPLY IN SUPPORT OF
EMERGENCY MOTION FOR LIFTING OF STAY AND TO TAKE DISCOVERY OF DEFENDANTS
INDYKE AND KAHN
Government of the U.S. Virgin Islands v. Indyke, et al., No. ST-2020-CV-00014
Page 8

THRESHOLD OBJECTION

On April 8, 2020, the Estate moved to stay discovery in this action (the “Motion to
Stay”). The Estate incorporates the Motion to Stay by reference herein. The
Motion to Stay demonstrates why discovery in this action should not proceed at all
or, at a minimum, at this time. Accordingly, the Estate will not produce any
documents until the Court rules on the Motion to Stay.

Objections and Responses to Plaintiff’s First Request for Production (“RFP Objections”) (Ex. C)

at 2 (emphasis added). Defendants then renewed this objection as to each request. For example,

in response to the Government’s request for:

All deposition transcripts or other testimony produced, obtained or created in

criminal or civil litigation related to allegations that Jeffrey Epstein participated in
rape, sexual abuse or assault, human trafficking, or prostitution-related offenses in
the possession, custody or control of Epstein, his Estate, the Personal
Representatives, or his counsel.

Id. at 7-8 (Document Request No. 1), Defendants answered that “[t]he Estate objects to this

Document Request because all discovery in this action should be stayed for the reasons provided

in the Estate’s Motion to Stay[,]” and refused to provide responsive documents. Id. at 8 (Response

to Document Request No. 1). Defendants thus exploited the absence of an appointed Judge to

conceal evidence of Epstein’s criminal sex-trafficking and deprive the Government of evidence

for almost two years.

Defendants continued to stonewall in response to the Government’s Requests for

Admission focused on Defendants Indyke and Kahn’s involvement in the financial transactions

that facilitated Epstein’s criminal sex-trafficking. Defendants again responded to the

Government’s written discovery requests with a blanket refusal as follows:

THRESHOLD OBJECTIONS

First, on March 17, 2020, Defendants—including the Estate, Darren K. Indyke and
Richard D. Kahn (the “Co-Executors)—moved to dismiss the Amended Complaint,
GOVERNMENT OF THE UNITED STATES VIRGIN ISLANDS’ REPLY IN SUPPORT OF
EMERGENCY MOTION FOR LIFTING OF STAY AND TO TAKE DISCOVERY OF DEFENDANTS
INDYKE AND KAHN
Government of the U.S. Virgin Islands v. Indyke, et al., No. ST-2020-CV-00014
Page 9

in whole or in part, on fourteen grounds (the “Motion to Dismiss”), and on April 8,

2020, the Co-Executors moved to stay discovery pending the Court’s ruling on the
Motion to Dismiss (the “Motion to Stay”). Both motions are fully briefed and
pending. If the Court grants the Motion to Dismiss, the Requests will be moot.
Even if the Court grants that motion in part, some or all of the Requests may be
moot. Further, the Motion to Stay demonstrates why discovery in this action should
not proceed at all, or at a minimum, at this time. (The Estate incorporates the
Motion to Stay by reference herein.) Accordingly, the Estate objects to the Requests
in their entirety and will not respond to any Request until the Court rules on the
Motion to Stay.

Objections to Plaintiff’s First Set of Requests for Admission to the Estate of Jeffrey E. Epstein

(“RFA Objections”) (Ex. D) at 2-3 (emphasis added). Defendants then renewed this objection in

refusing to respond to each Request for Admission as to Defendants Indyke and Kahn’s facilitation

of Epstein’s criminal sex-trafficking. For example, in response to the Government’s request to:

Admit that, on at least one occasion, Darren Indyke arranged or facilitated

marriages among females associated with Epstein and/or at the request of Epstein.

Id. at 6 (Request for Admission No. 1), Defendants responded that “[t]he Estate objects to this

Request because: (i) all discovery in this action should be stayed for the reasons provided in the

Estate’s Motion to Stay[,]” and refused to provide any response. Id. at 6-7. For another example,

in response to the Government’s request to:

Admit that Richard Kahn confirmed outgoing wires from Banco Popular account
ending #7567 on Epstein’s behalf.

Id. at 10 (Request for Admission No. 9), Defendants again responded that “[t]he Estate objects to

this Request because: (i) all discovery in this action should be stayed for the reasons provided in

the Estate’s Motion to Stay[,]” and refused to provide any response. Id. at 10-11.

It is deeply unfortunate that Defendants could exploit the absence of judicial oversight to

conceal evidence of Epstein’s criminal sex-trafficking and their own involvement in the financial

transactions that facilitated it, all in violation of Virgin Islands Court Rules. It would be tragic if
GOVERNMENT OF THE UNITED STATES VIRGIN ISLANDS’ REPLY IN SUPPORT OF
EMERGENCY MOTION FOR LIFTING OF STAY AND TO TAKE DISCOVERY OF DEFENDANTS
INDYKE AND KAHN
Government of the U.S. Virgin Islands v. Indyke, et al., No. ST-2020-CV-00014
Page 10

they now are allowed to continue doing so when there is an appointed Judge. The request to strike

should be denied, and the Government’s motion to take discovery should be granted.

CONCLUSION

For all of the reasons set forth, the Government’s Emergency Motion for Lifting of Stay

and to Take Discovery of Defendants Indyke and Kahn should be granted, and the Defendants’

request to strike should be denied.

Respectfully submitted,

DENISE N. GEORGE, ESQUIRE

ATTORNEY GENERAL
VIRGIN ISLANDS DEPARTMENT OF JUSTICE

Dated: August 11, 2022 By: /s/ Carol Thomas-Jacobs

CAROL THOMAS-JACOBS, ESQUIRE
Chief Deputy Attorney General
Virgin Islands Department of Justice
Office of the Attorney General
34-38 Kronprindsens Gade
G.E.R.S. Complex, 2nd Floor
St. Thomas, U.S. Virgin Islands 00802
Email: carol.jacobs@doj.vi.gov
(340) 774-5666 ext. 10101

/s/ Linda Singer

Linda Singer (pro hac vice)
MOTLEY RICE LLC
401 9th Street NW, Suite 630
Washington, DC 20004
Tel: 202-232-5504
Fax: 202-386-9622
lsinger@motleyrice.com
GOVERNMENT OF THE UNITED STATES VIRGIN ISLANDS’ REPLY IN SUPPORT OF
EMERGENCY MOTION FOR LIFTING OF STAY AND TO TAKE DISCOVERY OF DEFENDANTS
INDYKE AND KAHN
Government of the U.S. Virgin Islands v. Indyke, et al., No. ST-2020-CV-00014
Page 11

CERTIFICATE OF SERVICE

I HEREBY CERTIFY this document complies with the page limitation set forth in Rule 6-

1(e) and that on August 11, 2022, I caused a true and correct copy of the foregoing Combined

Reply in Support of Emergency Motion for Lifting of Stay and to Take Discovery of Defendants

Indyke and Kahn, and Response in Opposition to Motion for Sanctions to be served via the Virgin

Islands Judiciary Electronic Filing System upon:

CHRISTOPHER ALLEN KROBLIN, ESQ. GORDON C. RHEA, ESQ.

ANDREW W. HEYMANN, ESQ., GORDON C. RHEA, P.C.
WILLIAM BLUM, ESQ. 1533 Appling Dr.
SHARI D’ANDRADE, ESQ. Mt. Pleasant, S.C. 29464
KELLERHALS FERGUSON KROBLIN Email: grhea@rpwb.com
PLLC
Royal Palms Professional Building DANIEL S. RUZUMNA, ESQ.
9053 Estate Thomas, Suite 101 PATTERSON BELKNAP WEBB &
St. Thomas, V.I. 00802-3602 TYLER, LLP
Email: ckroblin@kellfer.com 1133 Avenue of the Americas
aheymann@solblum.com New York, New York 10583
wblum@solblum.com Email: druzumna@pbwt.com
sdandrade@kellfer.com
mwhalen@kellfer.com

DANIEL WEINER
MARC A. WEINSTEIN
HUGHES HUBBARD & REID, LLP
One Battery Park Plaza
New York, NY 10004-1482
United States
Email: daniel.weiner@hugheshubbard.com
marc.weinstein@hugheshubbard.com

/s/ Carol Thomas-Jacobs

Carol Thomas-Jacobs