Electric car startup Lucid Motors sought to raise a Series D funding round in 2017. It courted Ford as a potential investor, but Jia Yueting, founder of rival startup Faraday Future, quietly amassed around a 30% stake and essentially blocked new investors.
David Stern, a mysterious businessman and close adviser to the former Prince Andrew, saw an opportunity to break a bad situation: bring in Jeffrey Epstein.
“Ford likely to lead $400 million Series D in Lucid. Big strategic move,” Stern wrote to Epstein in emails released last week as part of the Justice Department’s latest release of 3 million documents related to Epstein. Jia “has a huge cash problem” at Faraday, he wrote, and needs to “sell now to pay the payroll for his next venture.”
It wasn’t the first EV startup Stern pitched to Epstein, and it won’t be the last, according to hundreds of documents reviewed by TechCrunch.
At the time, legacy automakers and fledgling startups, fueled by Tesla’s breakthrough success and the progress of Google’s self-driving project, were jumping into electric and autonomous vehicles. And Stern was clearly hungry to take advantage of the resulting deal flow. The documents show he also invested in Faraday Future and another EV startup, Canoo.
Epstein is unlikely to invest in any of them. Lucid didn’t close its Series D until late 2018, when it raised more than $1 billion from Saudi Arabia’s sovereign wealth fund. Faraday eventually received a major investment from Chinese real estate conglomerate Evergrande in late 2017. Epstein had no “direct” or “indirect” interest in Canoo, according to a 2018 memo included in Justice Department files.
These discussions instead provide greater insight into the many connections Epstein, a convicted sex offender, had with Silicon Valley startups until his arrest and death in 2019. They also provide a snapshot of the relationship that has not been explored in previous reports.
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By the time of the lucid emails, Epstein and Stern had worked closely together for nearly a decade, newly released documents show. For Epstein, Stern was “my Chinese contact”. For Stern, Epstein was “my mentor and I do what he tells me.”
“Spirit” of the merchant
Stern is a mostly digital ghost about whom little information is available before the files are released on the internet.
He is perhaps best known as the director of Prince Andrew’s Pitch@Palace startup competition, which ran for several years until Andrew’s contacts with Epstein were exposed. Andrew even referred to Stern as a “ghost” in one 2010 email.
Stern appears to have first approached Epstein in 2008, according to emails released by the Justice Department — just a month before the financier pleaded guilty to soliciting a minor for prostitution in Florida. Stern was creating a fund called AGC Capital to take advantage of the economic boom in China and wanted Epstein to invest.
It is unclear how Stern was introduced to Epstein. Stern did not respond to a detailed list of questions for this article.
Stern, who is German, attended London University and Shi-Da University in China in the late 1990s and served as chairman of China Millennium Capital, the Chinese arm of Millennium Capital Partners, according to the bio section of AGC Capital’s pitch, which is in Justice Department records.
Stern also worked for Siemens negotiating “industrial joint ventures with Chinese state-owned enterprises” before joining Deutsche Bank’s Shanghai office. In 2001, he founded a company called Asia Gateway that “advised blue chip companies, Chinese enterprises as well as the Chinese government on growth strategies and investments.”
Those jobs appear to have helped Stern establish connections with powerful and wealthy Chinese businessmen, including Li Botan — the son-in-law of China’s fourth-highest leader under Xi Jinping’s predecessor, Hu Jintao. (Li would eventually become a founding investor in Canoo with Stern.)
It is unclear whether Epstein invested in AGC Capital; the financier spent another year in prison. But Stern and Epstein stayed in touch, and in 2009 Stern began pitching more ideas.
The documents reveal a relationship that begins formally and briefly, with Epstein at one point chiding Stern for not properly preparing a potential business deal.
“(I)f you want to make real trades you have to be accurate and careful, every mistake is a fortune,” wrote Epstein. “Your first grade is an F.
One of the first major projects the two men worked on together was to help Duchess of York Sarah Ferguson with her dire finances, according to the emails.
The relationship deepened over the following decade. The two men became so close that Stern felt comfortable asking Epstein to be godfather to one of his children in 2016. (Epstein wrote that he was “flattered” by this but declined because he “promised my goddaughter that I would not be anyone else’s godfather.”)
It’s hard to say how fruitful the relationship was on the business side. But between 2009 and 2019, Stern brought Epstein a number of potential deals in various industries.
At first, he seemed determined to set up a “secret” new fund with Epstein to jointly invest in Chinese businesses, which he referred to as JEDS – the initials of both men combined. (It was also referred to as the “Serpentine Group” in some emails.) Stern later proposed buying farmland in Russia, proposed buying the news organization Al Jazeera and publishing it, discussed buying the troubled music label EMI, and considered acquiring an apparently distressed (and unnamed) undersea cable company.
They also had their eyes on the banks. Stern and Epstein attempted to buy the Luxembourg-based private bank Sal. Oppenheim, the emails show. In 2016, they even discussed the purchase of Deutsche Bank, which had done business with Epstein for years.
In his emails to Epstein and his other contacts, Stern repeatedly bragged about his connections to high-profile businessmen and politicians. In February 2012, Stern suggested Epstein introduce Jes Staley – then head of investment bank JP Morgan – to Malaysian politician Anwar Ibrahim.
“I know Anwar well,” Stern wrote. “If he becomes the prime minister of Malaysia (Staley), he will clean up and it could be a gold mine for JPM.” (Ibrahim lost a disputed election in 2013 but became prime minister in 2022.)
Stern also claimed to have had dinner with Jack Ma, had a scheduled meeting “alone” with United Arab Emirates President Mohammed bin Zayed Al Nahyan and said he was “friends” with the grandson of former Chinese president Jiang Zemin.
Go electric
By 2017, Stern was apparently following a rush to build new mobility companies.
He tried to get Epstein to meet with Faraday Future founder Jia to discuss the investment. It is unclear whether this ever happened; the company and Jia did not respond to requests for comment.
But former BMW and Deutsche Bank CFO Stefan Krause, who was brought in to save Faraday Future, directly challenged Epstein in April 2017.
“Faraday Future (FF) is a great story in itself, unfortunately surrounded by a lot of noise surrounding Jia Yueting (YT) and his other companies (LeEco, LeMall, LeSports to name a few). These businesses are not working, so he ran out of money. FF is starving,” Krause wrote to Epstein. “Great chance to build a better Tesla.”
(Krause is described in the documents as a “friend” and business partner of Stern’s. He did not respond to a request for comment.)
Those talks seem to have died down. Soon after, Stern proposed an investment by Lucid Motors.
In May 2017, a pitch deck landed in Epstein’s inbox. It was put together by a fund called Monstera that Stern created. “Monstera may acquire a 32% stake in Lucid by acquiring the stake currently held by Yueting Jia,” one slide reads. Other emails show that Stern expected to spend about $300 million to acquire a 32% stake.
He referred to it as a “sale” in emails. Monstera could either hold the position or “(o)lay” it “when Ford comes”.
Ford eventually pulled out, and Lucid had to wait until August 2018 to close its Series D, when Saudi Arabia’s Public Investment Fund invested more than $1 billion. (SEC filings show that Saudi Arabia’s sovereign wealth fund bought back shares of Jia over the next few years. Lucid did not respond to a request for comment.)
When Krause left Faraday Future in late 2017 to start a new EV company — first called Evelozcity and later Canoo — Stern was one of the original backers. He contributed just $1 million, along with larger sums from Li, a Chinese businessman with ties to the CCP, and Michael Chiang, a billionaire who runs Taiwanese electronics giant TPK. (Li’s involvement later drew national security scrutiny when Canoo went public in 2020.)
In June 2018, Stern sent Epstein a document about the startup, to which Epstein replied, “fun.”
But Epstein never invested in Canoo either. However, he built powerful people in Stern’s name. Epstein emailed Deepak Chopra in May 2018, telling the self-help guru that “david has a new electric car manufacturer in Los Angeles.” He told Chopra “that they’re going to build next-generation health sensors into the car. you should talk.”
In June 2019, Epstein sent a message to Eduardo Teodorani, an Italian businessman who is a senior vice president at agricultural giant CNH. “My friend David Stern … has an electric car business that I think you should look into before he sells it to someone else,” Epstein wrote. Epstein also put Stern in touch with Sheikh Jabor al Thani, a member of the Qatari royal family, on June 29 to “hear more about your car company.”
A week after receiving this news, Epstein was arrested. He died in prison a month later.
It is unclear when Stern last spoke to Epstein. But in March 2019, he pitched Epstein a story titled: “Warren Buffet: Electric cars are very much in America’s future.” In the body of the email, Stern wrote, “How do we get him?”