Southern Financial LLC

ISDA derivatives master agreement between Deutsche Bank AG (London branch) and Southern Financial LLC. Key details: (1) Southern Financial LLC address: 6100 Red Hook Quarter B3, St Thomas USVI 00802, (2) Attention: Jeffrey Epstein, (3) Fax: 340-775-2528, (4) Deutsche Bank AG London Winchester House as counterparty. This confirms Southern Financial LLC was the entity used for derivatives/swap trading with Deutsche Bank. Separately, account statements show Southern Financial holding Global Mortgage Securitization 2005-A Class B2 bonds ($8.25M face value at 5.250%, maturing 2032) traded through JPMorgan Securities LLC, confirming cross-bank trading activity.

JEE portfolio summary as of 6/30/2013 (EFTA02678941) shows total cash across entities: Southern Financial LLC USD 14.59M, J.Epstein USD 2.23M, Haze Trust USD 28K, Southern Trust Company USD 24.75M, Jeepers USD 28.02M, J.Epstein VI Foundation USD 4.62M, Total Cash USD 74.24M. Comparison with Aug 2014 snapshot (EFTA02435864 / finding #221): Southern Trust USD 70.78M, Southern Financial USD 48.77M, Jeepers USD 22.68M, Haze Trust USD 9.86M — showing Southern Financial grew from USD 14.59M (June 2013) to USD 48.77M (Aug 2014), a USD 34M increase in 14 months, while Southern Trust grew from USD 24.75M to USD 70.78M. Combined Southern Financial + Southern Trust balances: USD 39.3M (June 2013) to USD 119.55M (Aug 2014) to over USD 230M at peak per DB characterization. This demonstrates rapid asset growth in the 2013-2014 period.

Southern Financial LLC was Epstein's primary trading and derivatives vehicle at Deutsche Bank. Key documented activities: (1) Twitter IPO allocation: 1,500 shares at USD 26 allocated by Tazia Smith (DB Director, Key Client Partners), EFTA02577080; (2) Twitter equity swap: 100,000 share TWTR position with monthly resets and Libor+75bps spread (EFTA02348007); (3) Currency derivatives: JPY/USD put at 102.5 strike, USD 10M notional, USD 190K premium on 1/31/2014 (EFTA02383565); (4) DB internal note (EFTA02719222): Vahe Stepanian flagged sizeable equity gains in SFLLC account x804, 'SPX > 2,000'; (5) Wire authority: Harry Beller managed verbal approval for all wires from Southern Financial LLC, Haze Trust, Jeepers, and Southern Trust Co at DB (EFTA02575944); (6) DB KYC/onboarding documents for Southern Financial LLC: ISDA uncleared margin, Volcker screening, account opening checklist (EFTA01368144-EFTA01368146). Southern Financial operated as a brokerage/derivatives overlay vehicle distinct from Southern Trust Company (the cash/investment entity).

Aug 31, 2014 comprehensive valuation report shows Southern Financial LLC fixed income portfolio holding $16.7M+ in bonds including: Bank of America 8.125% (Dec 2049) $2M face, Barclays 7.75% (2023) $300K, Earthlink 8.875% (2019) $1M, GE Capital 7.125% (Dec 2049) $2M, Headwaters 7.625% (2019) $1M, HSBC structured notes, JPM structured notes, multiple JP Morgan Chase preferred 7.9% (Apr 2049) $5M total, LBG Capital bonds $3.1M. Southern Trust Co held separate fixed income: Ally Financial 8.5% preferred, Nationwide 6.875% GBP callable 2019, and Petroleos de Venezuela (PDVSA) 10/28/15 $2M position (sovereign risk). Total STC fixed income: $6.9M. Combined SFL+STC investment portfolios plus cash ($163.4M) plus hedge funds ($105.7M) totaled $403.8M across all entities. This shows SFL as the primary bond/derivatives vehicle and STC as the primary cash/money market vehicle — deliberate functional separation.

Richard Kahn forwarded a $1,000,000 capital call for Neoteny 3 LP (Joi Ito's venture fund) to Epstein on April 10-13, 2015. Kahn asked 'please advise if ok to send from SFL LLC' confirming Southern Financial LLC (abbreviated SFL LLC) was the investment vehicle for this capital call. The capital call notice came from Danielle Prague at Neoteny. Kahn managed this from HBRK Associates Inc at 575 Lexington Avenue 4th Floor. This connects: (1) Southern Financial LLC to Joi Ito's venture fund, (2) Richard Kahn/HBRK as the operational fund administration center, (3) Epstein having approval authority over all fund disbursements.

DS10 confirms Southern Financial LLC operated as the DERIVATIVES/TRADING vehicle with distinctive patterns. DS10 captures 6 transactions ($602K out, $59K in) but the balance data reveals far more: peak cash balance $10.72M (Jun 2015), portfolio value peaked at $16.72M (Dec 2018-Jan 2019). KEY FLOWS: (1) $500K to JPMorgan Chase (May 5, 2017 — likely an investment payment), (2) $51K received from Harlequin Dane LLC (May 2, 2019 — an entity not seen elsewhere in the investigation), (3) $51K immediately passed through to Citibank (May 3, 2019 — same-day pass-through). (4) Two Bear Stearns Asset Management payments received ($8.2K Aug 2015, $0.78 Jun 2015 — legacy distributions from collapsed Bear Stearns funds). The Harlequin Dane LLC pass-through is notable: $51K in from an unknown entity, $51K out next day to Citibank — classic conduit behavior. Harlequin Dane LLC needs investigation. The Bear Stearns distributions confirm SFL inherited legacy BS positions. The ISDA derivatives master agreement with Deutsche Bank AG London branch (finding #648) confirms SFL as the counterparty for swaps/options. SFL balance trajectory: zero (Nov 2013) -> $10.7M (Jun 2015) -> $8K (May 2017) -> $157K (May 2019) -> zero (May 2019 closure).

Southern Financial LLC operated as internal lending vehicle: Lesley Groff had 3 personal loans from Southern Financial LLC (not Southern Trust), with interest payments due monthly. Dec 2018 email chain reveals Groff wrote check to wrong entity (Southern Trust) for $2,110 interest payment (2.11% on $100,000). Bella Klein (office admin) instructed rewrite to Southern Financial LLC. Kahn directed 'deposit in SFL.' Groff's next payment was $1,970 (1.97% on $100,000). Promissory notes were drafted by Kahn at HBRK Associates (Dec 19, 2017 note template 'Promissory Note of Lesley Groff to Southern Financial, LLC'). Additionally, $51,000 flowed from Harlequin Dane LLC to Southern Financial LLC on May 2, 2019, then immediately out ($51,000) to Citibank on May 3 — pass-through transaction. This confirms SFL operated as both a lending and pass-through vehicle.

Deutsche Bank KYC/NCA document for Southern Financial LLC reveals: (1) Jeffrey Epstein sole owner - 100% of 100 shares issued, (2) Darren Indyke is co-signor on account, (3) Southern Trust Company Inc is sole member of Southern Financial LLC, (4) PEP flag cites 'Connection with Prince Andrew and Bill Clinton', (5) Estimated annual income $10,000,000+, (6) Investable assets $50M-$100M, (7) Source of wealth: 'High Risk financial Institutions', (8) Business Owner + Investment as wealth categories, (9) Expected monthly flows: 10-15/month at $100K-$350K, (10) Relationship Manager: Stewart Oldfield, (11) Account status: Approved in 2018 periodic review. This is the most detailed primary source on Southern Financial's structure at Deutsche Bank.

Southern Financial LLC was the subject of Charles Schwab AML investigation alongside Southern Trust Company Inc, Southern Country International Ltd, Jeffrey Epstein, and Richard Kahn. Opened Schwab accounts April 2019 (3 months before arrest). Also referenced in Deutsche Bank periodic reviews as the SOUTHERN FINANCIAL RELATIONSHIP that grouped multiple Epstein entities including Prytanee LLC. The Southern Financial relationship at DB was classified as HIGH RISK requiring enhanced due diligence and periodic KYC reviews.

On May 31, 2019 (5 weeks before Epstein's July 6 arrest), Richard Kahn at HBRK Associates was transferring money out of SF LLC (Southern Financial LLC) through Aloha Group Capital. Kahn wrote 'great news, thank you again for your help, i will transfer out money now as well.' A processor had been working to 'correct the transfer' which was 'in queue for this evening to process.' Cc: Jeanne Brennan at Aloha Group Capital. This suggests pre-arrest asset movement through an intermediary financial institution, with urgency ('now as well'). Combined with the $52.5M Valar wire and other fund subscriptions, Southern Financial LLC served as the primary disbursement vehicle for Epstein's investment operations.

Pre-arrest asset extraction from Southern Financial LLC through TD Ameritrade brokerage (May 31, 2019 -- 5 weeks before arrest). Richard Kahn at HBRK Associates urgently coordinated with Chad Markland (Senior Financial Consultant, TD Ameritrade) to transfer remaining stock positions out of SF LLC. The email chain reveals: (1) A processor had incorrectly handled the transfer -- Markland found the error and corrected it. (2) The correction was for 'the remaining shares to move the remaining full amount of that position.' (3) Once stocks transferred, Kahn immediately stated 'i will transfer out money now as well' -- indicating both securities AND cash were being extracted. (4) Jeanne Brennan was Cc'd as 'Aloha Group Capital' -- this appears to be a brokerage account name/alias at TD Ameritrade, not a separate financial institution. (5) This follows an earlier Oct 2017 asset transfer where Kahn moved stocks into the same account, asking about a credit for bringing in new money. The SF LLC extraction coincides with DS10 records showing SF LLC balance going to zero in May 2019, and Schwab accounts being opened in April 2019 for STC/SFL/SCI. Kahn was simultaneously zeroing DB accounts and TD Ameritrade positions.

Southern Financial LLC was pitched for investment in Glendower Capital Secondary Opportunities Fund IV LP, a $1.75 billion secondaries fund. The full Confidential Private Placement Memorandum (PPM) was prepared specifically for 'GLOUS238 SOUTHERN FINANCIAL LLC' (the GLOUS238 appears to be a Deutsche Bank client code). This documents Southern Financial as an active institutional-scale investor being marketed to by major PE fund-of-funds, consistent with DB's description of accounts holding 'marketable securities and cash' and 'invest long term.' Documents span EFTA01383008 through EFTA01383032+.

Per NYDFS Consent Order (2020), Southern Financial LLC was a wholly owned subsidiary of Southern Trust Company Inc. The DB-Epstein relationship officially began August 19, 2013 when DB opened brokerage accounts for both Southern Trust Company Inc. (self-described 'database company and services' founded in USVI 2011) and Southern Financial LLC. KYC purposes: Southern Trust to 'hold marketable securities and cash,' Southern Financial to 'invest long term with the bank.' Over the relationship, Epstein/entities/associates opened 40+ accounts at DB. Classified 'high-risk' from onset with enhanced due diligence. Designated 'Honorary PEP' due to connections to prominent political figures. ARRC reviewed in Jan 2015, was 'comfortable with things continuing' despite 40 underage victims and co-conspirators as Butterfly Trust beneficiaries.