PLAINTI6.5F.7F6.7 JA4.2NE DO6E?S REPLY4.2 IN 6SUPP6.7ORT 6OF FOR4.2 Case Document Entered on FLSD Docket Page of Case Document Entered on FLSD Docket Page of UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK CITIBANK N.A Plaintiff JEFFREY EPSTEIN and FINANCIAL TRUST COMPANY INC Defendants Index No Civ SHS DECLARATION OF JEFFREY EPSTEIN JEFFREY EPSTEIN declares under penalty of perjury pursuant to U.S.C I that the following is true and correct I I am one of the Defendants in the above-captioned action and the sole shareholder the President and a Director ofDefendanf Financial Trust Company Inc FTCI and make this Declaration based upon my personal knowledge of lhe facts set forth herein I submit this Declaration in opposition to Plaintiffs Motion for Summary Judgment I have been a legal resident of the U.S Virgin Islands since I reside at Little St James Island in the U.S Virgin Islands which is an approximately acre island that I have owned through a wholly,owned limited.liability company since I am registered to vote and have voted in the U.S Virgin Islands I have a current and valid U.S Virgin Islands drivers license and firearms license and maintain a personal bank account and IRA account in the U.S Virgin Islands Through my wholly-owned limited liability company which is also resident in the U.S Virgin Islands I employ approximately people maintain two more bank accounts own two cars and three boats and maintain several telephone numbers all in the U.S Virgin Islands Case Document Entered on FLSD Docket Page of My only business is a U.S Virgin slan ls corponnio11 organi;,c:d in tile U.S 267virgin Islands in as 225Financial Trust Company Inc FTC m,iiniain its principal and only _place of business consisting or square reel of office spa in St Thc Virgin lsl.u,ds All eleven of FTCTs employees_ including myself arc U.S Virgin Islands residents __ FTCI is quaHfied nnder the U.S Virgin Islands Economic De1 267elopmen1 Co1ission as authorized under the laws of the U.S Virgin Islands I FTC maintains three local bank accounts a local IRA a.:ull1ta11d it books and records in the U.S Virgin Islands Between May I and farch FTC maintained 1,vo hank accounts with the St Thomas branch of Citibank FTCI is engaged the business of providing financial and business conssilting scn 267iccs rro,n the U.S Virgin Islands to its clients In connection with its consulting business FTC makes investments in securities and other investments which we n::asnnably expect lo be pro Ii lab le anti appropriatc for ourselves and our clients My business dealings and relationship with Citigroup und its predecessor Citicorp date back to the iSOs I became a client of the Citibank Prh Bank in or about I For approximately years Citicorp Citibank and ultimately Citigroup provided hanking and financial services to me and my business clients through the itibunk lriv.ite Bank hich upon infonnation and belief changed its name to the Citigroup Privmc Bank some time in collectively Citigroup or the Private Bank The Citigroup relationship manager responsible for these services during most of that period was Dayle DaYison In early I learned from Ms Davison an employee of the Private Bank that Citigroup had targeted me as one of its most important individual clients and 1rns seeking to Case Document Entered on FLSD Docket Page of i I I capitalize on its longstanding"relatioriship with me to persuade me to purchase a wide array of additional financial products and financial services which were now available from Citigroup Citibank began the hard-sell of their new products and services in or around-late April of Vlhile I was in the U.S Virgin Islands At that time Citibank first introduced me to what was characterized as an exceptional investment opportunity involving a fund to be managed by Ald Global Investment Corp AIG a series of telephone calls which I received in the U.S Virgin Islands between on or about April and on or about May employees of the Private Bank including Ms Davison aggressively solicited my participation in this opportunity ultimately resulting in a substantial investment by FTC in the amount of million die AIG Investment Puring that period I remember telephone co.nversations with Ms Davison in which she counseled me to subscribe for the AIG Investment She tpld me that it was an exceptional opportunity which has already generated so much preliminary interest that it will be substantially over-subscribed Ms Davison told me that Citigroup was offering this opportunity first to me as one the Private Banks most important clients to ensure that I have an opportunity to subscribe N1s Davison also stated in essence that I was virtu!l!y assured of receiving ants return on my investment with a possible return of as much as She further emphasized that Citibank really did their due diligence on this deal and was anticipating putting its own money in as an investor Fin.;lly Ms Davison made affirmative assurances regarding my ability to protect my interest in the investment she advis1Jd that I should not wony because Citibank was going to remain actively involved in the deal including possibly as an investor Case Document Entered on FLSD Docket Page of In light of Ms Davisons statements regarding the exceptional merits of the AIG Investment and particularly the fact that Citibank was anticipating making its own investment in the deal I inqqired whether Citibank was confident enough in the assurances Ms Davison had made to me to loan me the necessary funds foi the AIG Investment After further discussion be en me Ms Davison and other representatives of FTC Citibank offered to loan me million on the express condition that the loan be exclusively to fund FTCIs investment in the AIG Investm nt did not need to borrow the money for FTCI to make the AIG Investment However Citibank offered the loan at an interest rate substantially lower than the rate of the return that Ms Davison assured would result from the AIO Investment Moreover Citibank promised to loan me the funds for the life of the AlG Investment Consequently on the basis of Ms Davisons assurances I understood Citigroup to be offeripg me as one of the Private Banks most important clients th opportunity to use Citibanks money to fund an investment by FTCI in a transaction that was assured of yielding a substantial net positive return was backed by Citibanks extensive due diligem;e and would be protected by the continued involvement of citibank which was anticipating making an investment in the deal Under the circumstances I could not refuse such an offer At some voint prior to August of I was provided with a so-called Pitch Book promoting the AlG Investment I arn certain that such materials did not contain any information that even remotely suggested to me that I had any reason to doubt Ms Davisons assurances or raise any concern that my long-standing bankers and now advisors were not The loon was originally structured as a I 0-year loan ill order to be coterminous with the AIG Investn enl However Ms Damon Mked me if would not mind structuring the loan as a short-tenn loan because she said short-term loans are accounted for more favorably on-the banks books than long term loans She assured me that Case Document Entered on FLSD Docket Page of acting in my or FTCls best interests in recommending this investment To the contrary I was persuaded by Ms Davisons assurances that the Private Bank would be involved in the deal including potentially as an investor I Based upon all of the foregoing I decided to proceed with the transaction that I had discussed with Ms Davison and on cir about August I executed a promissory note in the face amount of million in favor of Citibank the Note and then with the Private Banks knowledge and approval and as required by Citibank the loan proceeds we wired by Citibank to my Citibank account and then transferred to FTCIs Citibank account and then transferred to the bank account designated by Citibank for making the AIG Investment At some point I also received an Offering Circular describing the AIG Investment Based upon what I recall receiving I understood that investors such as FTCI would have the right to change the manager of the fund AIG by vote of a certain percentage of the investment or note holders This fact was very important to me since it represented the.most significan way in which FTCIs interest in the AIG Investment could be protected in the event that the fund manager was not pursuing a favorable or successful investment su-ategy In fact I beHeved based upon Ms Davisons assurance that the Private Bank was going to be involved coupled with the fact that I understood that Citibanks affiliate Salomon Smith Barney was acting as Placement Agent that if there was ever a problem with the funds man gement in order to protect the collective interests of FTCI Citigroup other important clients and the Private Bank itself the Private Bank would have the ability tci 267either influence the fund manager appropriately or amass the consent of the necessary interests in the fund to promptly replace the fund manager the maturity date of the loan would be extended annually so that neither I nor FTC would o"Ver have to come out of pocket in connection with this invcstmont Case Document Entered on FLSD Docket Page of I During Ms Davison spoke td me about another similarinves_tment fund this one to be managed by MassMutual the MassMutual Fund I understood based upon my prior discussions with Ms Davison in that th.ere would be additional investment opportunities similar to the AIG Investment and I further understood the MassMutual Fund to such an opportunity There were negotiations between my representatives and legal advisors including while they and I were in the U.S Virgin Islands and Ms Davison and other representatives of Citigroup including but not limited to the Private Bank concerning the MassMutual Fund Ultimately and based upon discussions substantially similar to those.that occurred in borrowed another IO million from Citibank which funds were expre ly required to be contemporaneously used by me to fund FTCIs investment in the MassMutual Fund Again I signed a promissory note payable to Citibank the Note and the underlying funds were transferred from Citibank to my Citibank account to FTC account and then to the account designated by Citibank for the investment in the MassMutual Fund By the Spring of we made a shocking discovery Largely through the review of monthly statements furnished by AIG we discovered that the AIG Investment was suddenly and rapidly deteriorating at a time when the similarly-structure MassMutual Fund appeared to be perfoQJ1ing as expected These inconsistent results suggested to me that the problems resided with the manager of the AIG Investment as opposed to prevailing market conditions,2 and that my bankers and advisors at the Private Bank were not monitoring the progress of this fund as Ms Davison assured me th would At my insistence in order to protect FTCIs sizeablefavestment FTCls advisors promptly initiated commU11ications with Ms Daviso!l and other employees of the Private Bank to I note that FTCIs investment jn the MassMutual Fund now also has drastically declined in value Case Document Entered on FLSD Docket Page of share our concerns find out what was transpiring with the AIG Investment and to request that the Private Bank take action including coordinating the replacement of the fund manager I understand that Ms Davison initially indicated to FTCIs representatives that she would cooperate with FTCI in pursuing the removal of AIG as manager However subsequently learned the horrifying truth of Citibanks betrayal I was informed that not only was Ms Davison unable to timely provide FTC with the information we needed to pursue a change of managers but that Citigroup/Citibank was unwilling to assist us at all since to do so would jeopardize an apparently more lucrative relationship that Citibanks affiliate SSB had with AIG Citibanks inability and ultimately unwillingness to assist FTCI in pursuing its rights in order to protect its interests delayed FTC from effectively pursuing its rights to change the manager of the AIG Investment until such time that changing the manager would have been futile since the investment apidly deteriorated to near zero Prior to I I had every reason to believe that the assurances on which I had based my decision to borrow the investment funds from Citibank and cause FTC to subscribe for the AIG Investment were truthful Prior to that time I was never was informed by Ms Davison or anyone else at Citigroup/Citibank and never learned through my review of any of the materials provided to me that Citigroup or Citibank or the Private Bank would in any way be unable or unwilling to assist me or FTCI in pursuing our rights with respC to the AIG Investment Nor did ever learn prior to that SSB had an investment banking relationship with AIG much less a relationship that my bankers and advisors would hold in higher regard than my long-standing relationship with the Private Bartle Case Document Entered on FLSD Docket Page of I i Had I known of these conflicts and the fact that the Private Banks advice and recommendation was impaired and tainted in such a meaningful way or that Ms Davisons assurances that Citibank would be involved in the deal we un rue in any way I never would have proceeded with either the AIG Investment or the MassMutual Fund never would have executed either the Note or the Note and never would have caused FTCI to invest million in the investments that were being placed by SSB now understand that FTCls interest in the AIG Investment is nearly worthless and further that FTCIs interest in the MassMutua Fund has drastically decreased in value Case Document Entered on FLSD Docket Page of For the for;egoing reasons and those set forth in the accompanying memorandum oflaw and other submissions made on my and FTCIs behalf I respectfully request that the Court deny Citibanks motion in its entirety Executed this_ day of October
