A fund set up to provide money to scores of women who said they were abused by Jeffrey Epstein when they were as young as 14 abruptly suspended payouts.
The Epstein Victims' Compensation Programme said the suspension was because of uncertainty about the liquidity of estate assets needed to finance the payouts.
That prompted the Virgin Islands attorney general to move to freeze the assets of the late financier's estate.
Officials said the fund, which operates independently of the estate, would have up to $630 million when it began operations last June.
It said payments, which exceed $55m, will not resume before March 25, the deadline to file claims. The deadline to register for the programme is Monday.
Late on Thursday, US Virgin Islands Attorney General Denise George said her office was seeking a court order to freeze all payments and sales of assets by the co-executors of Epstein's estate to preserve and protect its assets.
“My office’s worst fears have been realised, as we learned the Epstein estate will not make its currently owed payment to the fund it claimed to have set up to compensate sexual abuse survivors and victims of Jeffrey Epstein," Ms George said.
“The estate has found its way to pay for lawyers, landscaping, and helicopter fees, but not the brave women who stepped forward to participate in the compensation fund. It is, unconscionably, another promise made and broken by Epstein and now, his estate."
Ms George said she had been unaware that the estate was defaulting on deposits it was required to make until the estate informed her on Wednesday that it could not make the payments agreed upon and did not know when it could.
She said the estate had breached an agreement with the government of the Virgin Islands and lawyers for victims that was approved by the Probate Court of the US Virgin Islands.
The estate said it had so far funded the programme with more than $87m to pay claimants and that more than $55m had been paid out.
It said the estate finished 2020 with $240m in assets, but that many of them were residential properties, private investments and aircraft that need to be sold, a process hampered by the coronavirus pandemic and lawsuits.
Estate attorney Daniel Weiner said the payouts since June were "a measure of the programme's remarkable efficiency in hearing and issuing determinations for the benefit of scores of claimants".
He said the attorney general's claims in court were “factually and legally unsupportable” and he called on her to lift liens on two islands in St Thomas that are owned by the estate so that they can be sold and the money disbursed to women through the fund.
According to the fund, the 150 claims to date far exceeded expectations;there were initially expected to be more than 70 claims.
A statement from Jordy Feldman, the fund's administrator, said the suspension of payouts was necessary to protect those who had not yet resolved their claims.
“Issuing a compensation offer that cannot be timely and fully funded and paid, consistent with the way the programme has operated to date, would compromise claimants’ interests and the guiding principles of the programme," he said.
The fund provides an alternative to pursuing claims through the courts. It was established with help from Kenneth Feinberg, a well-known mediator who oversaw compensation funds for victims of the September 11 attacks and of clergy sex abuse in New York’s Roman Catholic archdiocese.
The fund was financed with money from the estate of Epstein, 66, who killed himself in a Manhattan federal jail in August 2019 while awaiting trial on sex-trafficking charges that alleged he abused women and girls under the age 18 at his Florida estate and his Manhattan mansion in the early 2000s.