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An undated photo of Jeffrey Epstein released by the U.S. Justice Department.<\/p>\n
U.S. Department of Justice<\/p>\n
In the months leading up to Jeffrey Epstein\u2019s arrest on federal sex trafficking charges on July 6, 2019, a small U.S. Virgin Islands bank he owned that had employed no one and lain dormant for years suddenly came alive.<\/p>\n
A flurry of transactions totaling more than $20 million passed through the bank named Southern Country International from April to early July that year, according to a Miami Herald investigation based on the recently released documents by the U.S. Justice Department.<\/p>\n
And months after the disgraced financier was found dead in a Manhattan detention facility on Aug. 10, an additional $25 million was moved through Southern Country, with roughly a quarter of that amount coming from unspecified sources.<\/p>\n
Southern Country ended 2019 with less than $500,000, leading Virgin Islands prosecutors who later sued Epstein\u2019s estate to question in court where nearly $13 million the bank held in mid-December 2019 went in two weeks, according<\/a> to the New York Times.<\/p>\n U.S. federal and local Virgin Islands investigators had also jointly opened a wire fraud probe<\/a> in 2020 into the mysterious transfer of $15 million to Southern Country from an Epstein account at Deutsche Bank in New York the day after the convicted sex offender died.<\/p>\n But the investigation was closed four years later, a Federal Bureau of Investigation memo<\/a> says. The memo does not state any findings or the reason for closure.<\/p>\n The Herald sent detailed questions to the U.S. Justice Department but did not receive any response. The Virgin Islands\u2019 prosecutor\u2019s office also did not answer the Herald\u2019s questions.<\/p>\n The Herald\u2019s reporting provides the first full accounting of how Epstein used his obscure financial institution in the Caribbean \u2060\u2014 likely the first of its kind in the U.S. territory.<\/p>\n In 2012, the U.S. Virgin Islands, where Epstein had established many of his businesses, was moving to allow the creation of \u201cinternational banking entities.\u201d The specialized banks typically offer favorable tax incentives but are not allowed to have customers in the territories in which they are established.<\/p>\n The idea behind these financial institutions \u2060\u2014 effectively offshore banks on U.S. soil \u2060\u2014 is that they encourage foreign investment and generate revenue and employment. But federal authorities have more recently warned that they generally do not have the rigorous background checks of traditional banks and are \u201chigh-risk institutions\u201d that threaten the integrity of the American financial system.<\/p>\n Just a month after John de Jongh, then-governor of the U.S. Virgin Islands, signed the law in September 2012, Epstein\u2019s longtime tax attorney Erika Kellerhals wrote Epstein a memo<\/a> about the advantages of having an offshore bank.<\/p>\n She noted that the islands\u2019 banking and insurance office did not yet have the manpower to finalize the rules that would govern the application process but that the agency\u2019s then-head, John McDonald, had promised to proceed with their application if they got all of their paperwork in order.<\/p>\n \u201cWe anticipate having a leadership role in the formation of the application and the drafting of the regulations,\u201d Kellerhals wrote to Epstein in the Oct. 23, 2012, memo.<\/p>\n Epstein\u2019s bank would be the \u201cfirst existing IBE [International Banking Entity] in the United States Virgin Islands,\u201d an executive summary<\/a> read.<\/p>\n Kellerhals did not respond to the Herald\u2019s requests for comment.<\/p>\n Epstein applied<\/a> for a banking license in March 2013. He called it Financial Strategy Group, Ltd.<\/p>\n Roughly a year later, in January 2014, Epstein was scheduled<\/a> to meet with McDonald in St. Thomas. Another meeting was scheduled in October that year. The agendas for the meetings are unclear from the emails.<\/p>\n McDonald granted<\/a> Epstein a banking license on Dec. 19, 2014, a month after the island\u2019s government finalized<\/a> the regulations governing offshore banks on its territory. McDonald also used his discretionary power to waive the requirement that USVI\u2019s international banking entities employ at least three people. The Herald was unable to find current contact details for McDonald.<\/p>\n Epstein later changed the name of the bank to Southern Country International, Ltd. in 2015.<\/p>\n That Epstein, a registered sex offender, was able to obtain his license at all is unusual.<\/p>\n Traditional bank operators and owners in the United States are subject to rigorous background checks and fall under the oversight of the U.S. Treasury Department and typically, the Federal Reserve system.<\/p>\n But this was not the first time Epstein \u2060\u2014 who employed Cecile de Jongh, the governor\u2019s wife, as the office manager \u2060for several of his businesses \u2014 had received preferential treatment by the government in the Virgin Islands.<\/p>\n While defending itself in court against the Virgin Islands\u2019 accusation that JPMorgan had enabled Epstein, the bank alleged<\/a> that Gov. de Jongh had approved a tax break for Epstein\u2019s similarly named firm, Southern Trust Company, that helped Epstein generate around $300 million in profit over six years.<\/p>\n The bank also alleged that Epstein in 2011 had sent Cecile de Jongh proposed legislation to ease travel restrictions for sex offenders under the territorial laws. Cecile de Jongh, the records show, later apologized<\/a> to Epstein because the law had passed without his suggested amendments.<\/p>\n Danny Cevallos, John de Jongh\u2019s attorney, told the Herald that de Jongh had not extended any personal favor to Epstein and had not had any conversations with McDonald about Southern Country International.<\/p>\n \u201cGovernor de Jongh had no role in the operations of Southern Country International,\u201d Cevallos said. \u201cHe had no involvement in its banking-license application or in any subsequent review of its operations.\u201d<\/p>\n De Jongh declined to discuss his wife\u2019s relationship and employment with Epstein.<\/p>\n The Herald sent questions to attorneys of Cecile de Jongh but did not receive any response. The islands\u2019 banking and financial regulations agency, which issued the license and has oversight over the territory\u2019s offshore banks, also did not respond.<\/p>\n The bank comes alive<\/p>\n Why exactly Epstein created an offshore bank is unclear.<\/p>\n Besides paying for occasional operating expenses, Southern Country International remained dormant for years, business and accounting records show. The bank held a little less than $500,000 in its checking account at First Bank in San Juan, Puerto Rico, and by December 2017 had yet to hire a single employee<\/a>.<\/p>\n But in 2019, it suddenly came alive with a dizzying series of transactions worth tens of millions of dollars.<\/p>\n Epstein wired<\/a> $2.6 million in three installments in April of that year to Southern Country.<\/p>\n In June and July, he deposited<\/a> $17.7 million after cashing out an investment portfolio. Those funds were then debited to Southern Trust Company, the similarly named firm he owned. Why he did not send the funds directly to Southern Trust after selling his investments is unclear.<\/p>\n On July 31, less than two weeks before he was found dead, Epstein\u2019s Southern Country bank wired<\/a> $2 million to a third firm he owned and paid $1.6 million to Richard Kahn, Epstein\u2019s longtime accountant.<\/p>\n The transactions continued after Epstein\u2019s death.<\/p>\n In November 2019, around $9.3 million \u2060\u2014 $4.6 million from a trust<\/a> controlled by his longtime business counsel Darren Indyke, and the rest from unknown sources<\/a> \u2014 was deposited to Southern Country.<\/p>\n And two days before Christmas, Southern Country received<\/a> $15.5 million from Epstein\u2019s estate and sent back $2.6 million. Khan and Indyke, who together manage his estate, told a Virgin Islands court that it was for a loan Southern Country had issued to Epstein to pay for his legal defense. Local prosecutors did not find any loan agreement.<\/p>\n That same day, Dec. 23, 2019, Epstein\u2019s Southern Country bank also paid<\/a> out a $24 million check to his Southern Trust Company.<\/p>\n Southern Country\u2019s ending balance, according to legal documents at the end of the year, returned to its initial value of less than $500,000.<\/p>\n Some of the transactions may have been improper.<\/p>\n Under the territorial law, Southern Country was only allowed to do business with people or companies that were not from the Virgin Islands. But the similarly named Southern Trust Company was incorporated in and operated out of the islands.<\/p>\n Indyke did not answer the Herald\u2019s questions about the transactions. The Herald could not find current contact information for accountant Kahn.<\/p>\n Southern Country\u2019s activities raised eyebrows among compliance officers at traditional banks where it maintained checking and brokerage accounts \u2060\u2014 but only after Epstein\u2019s death.<\/p>\n \u201cA majority of the affected accounts were opened in 2019 and the subsequent funding of those accounts appears to have been conducted in a willfully deceitful manner intended to disguise the sources of funds as originating with Jeffrey Epstein,\u201d TD Bank noted in a report to the U.S. Treasury Department after conducting a review a month after Epstein\u2019s death.<\/p>\n That report, known as a Suspicious Activity Report, and another filed by the bank Charles Schwab were initially released by the U.S. Justice Department as part of the \u201cEpstein Files\u201d but have since been completely redacted.<\/p>\n The U.S. Justice Department did not respond when the Herald asked why the reports had been redacted.<\/p>\n The Virgin Islands settled<\/a> its lawsuit with Epstein\u2019s estate in 2022 for $105 million.<\/p>\n This story was originally published July 6, 2026 at 5:00 AM.<\/p>\n![\"Jeffrey](\"https:\/\/www.newsbeep.com\/us-fl\/wp-content\/uploads\/2026\/07\/EPS-USVI01.JPG\" "\\"EPS-USVI01.JPG\\"")
Jeffrey Epstein’s former home on the island of Little St. James in the U.S. Virgin Islands. Emily Michot Miami Herald A bank in the Caribbean<\/p>\n![\"Law](\"https:\/\/www.newsbeep.com\/us-fl\/wp-content\/uploads\/2026\/07\/EPS-USVI02.JPG\" "\\"EPS-USVI02.JPG\\"")
Law enforcement officers from New York City, the U.S. Virgin Islands, U.S. Customs agents and FBI agents in 2019 took part in a joint raid at Little St. James \u2014 Jeffrey Epstein\u2019s private island. Todd Hecht Special for the Miami Herald <\/p>\n![\"An](\"https:\/\/www.newsbeep.com\/us-fl\/wp-content\/uploads\/2026\/07\/EPSCOV03.png\" "\\"EPSCOV03.png\\"")
An undated photo of Jeffrey Epstein released by the U.S. Justice Department. U.S. Department of Justice <\/p>\n![\"Extract](\"https:\/\/www.newsbeep.com\/us-fl\/wp-content\/uploads\/2026\/07\/kellerhalsmemo.jpg\" "\\"kellerhalsmemo.jpg\\"")
Excerpt from a memo to Jeffrey Epstein by his attorney Erika Kellerhals, advising him about the U.S. Virgin Islands\u2019 law allowing the formation of international banking entities. The memo was released by the U.S. Justice Department earlier this year. U.S. Department of Justice <\/p>\n
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