Epstein Secrets

on of Perry Gruss. 1205876v1/011585 13 EFTA00722321 Timestamp: 8/16/2010 5:38 PM CDT 38. All communications among Counterclaim Respondents and Gruss concerning Gruss's termination or the subsequent litigation filed by Gruss against Zwim, including any pleadings or discovery instruments or docume

l documents concerning any review or investigation of the Fund's operations, finances, or accounting prompted by or occurring after the departure of Perry Gruss from involvement with the Fund or any of the Zwim Entities. 36. All witness statements taken in connection with any internal review or investigat

nagers, managing members, employees, directors, representatives, agents, officers, consultants, attorneys, predecessors, successors or affiliates of D.B. Zwim Special Opportunities Fund, L.P. k/n/a Fortress Value Recovery Fund I LLC, including without limitation the Zwirn Entities. 8. The term "Zwirn En

Inc., including Jeffrey Epstein. I205876vI/011585 2 EFTA00722310 Timestamp: 8/16/2010 5:38 PM CDT 7. The term "Fund" or "On-Shore Fund" means D.B. Zwim Special Opportunities Fund, L.P. k/n/a Fortress Value Recovery Fund I LLC. The term includes past and/or present general partners, managers, managi

a partner in the Company and a member of DBZLLC and was the Chief Financial Officer and Chief Administrative Officer of the Company. 4. Aver that Gruss was effectively terminated from the Company and DBZLLC, resigning on the verge of being fired, on or about October 4, 2006, and otherwise deny the

tence of Paragraph 16. 17. Deny the allegations of Paragraph 17, except admit that the Fund Controllers and the Operations department reported to Gruss and worked under his supervision; that they had responsibilities concerning accounting and record-keeping; that they worked with the Funds' Adminis

. 113. The Company primarily made investments through various funds that it managed: D.B. Zwim Special Opportunities Fund LP (the "Onshore Fund"), D.B. Zwim Special Opportunities Fund Ltd. (the "Offshore Fund"), D.B. Zwim Special Opportunities Fund II Ltd. (the "LTD II Fund"), D.B. Zwim Special Opportun

m contacted Epstein. The two had not spoken about anything of substance since 2002. Zwim informed Epstein that the Fund's Chief Financial Officer, Perry Gruss, had been terminated over an accounting transaction that was "nonmaterial." Zwim specifically mentioned that more than $3 million in investor money

of the Fund. The assignment was made retroactively effective January 1, 2006. Counterclaim and Third-Party Respondents 16. Counterclaim Respondent D.B. Zwim Special Opportunities Fund, L.P. kinia Fortress Value Recovery Fund I LLC was a limited partnership formed under the laws of the State of Delaware.

of these mattes cannot be ascertained at this time. The Securities and Exchange Commission (the "Commission') has filed a civil complaint against Perry Gruss, the former Chief Financial Officer of the Original Manager, alleging improper transfers of client funds between 2004 and 2006. The Fund is not a pa

nsolidated Financial Statements December 31, 2010 1. Organization and Business Fortress Value Recovery Fund I LLC (the "Fund"), formerly known as D.B. Zwim Special Opportunities Fund, L.P. commenced operations on May 1, 2002. Prior to June 1, 2009, D.B. Zwim & Co., L.P. (the "Original Manager"), a Dela

granted both parties the right to take such pre-hearing testimony of third- I57I529vI/011585 EFTA00585338 party witnesses (e.g., Mr. Dubin and Mr. Gruss), although the Zwim Parties and FTC subsequently elected to pass on the opportunity (preferring instead to call these witnesses to the Hearing itse

for July 22-29 in order to hear the testimony of Chris Suan, who was a former partner with Dan Zwim in the management company and general partner of D.B. Zwim Special Opportunities Fund, L.P. The parties have discussed this issue with Your Honor previously, but the issue was tabled so that the parties cou

m contacted Epstein. The two had not spoken about anything of substance since 2002. Zwim informed Epstein that the Fund's Chief Financial Officer, Perry Gruss, had been terminated over an accounting transaction that was "nonmaterial." Zwim specifically mentioned that $3 million in investor money had been u

ancial Trust Company, Inc. ("FTC") and Jeepers, Inc. ("Jeepers") (collectively, "Claimants"), submit the following statement of their claims against D.B. Zwim Special Opportunities Fund, L.P. k/n/a Fortress Value Recovery Fund I LLC, D.B. Zwim Partners, LLC, Zwim Holdings, LLC, D.B. Zwim & Co., L.P., and