Epstein was arrested last month and charged with sex trafficking and conspiracy to commit sex trafficking. He pleaded not guilty and has been denied bail. If convicted, he faces up to 45 years in prison.
In the early 1990s Mr. Epstein became a trustee of The Wexner Foundation, but he had no executive responsibilities in the running of the Foundation.
It is unclear whether Mr Wexner reported the allegations to law enforcement. Epstein, meanwhile, is embroiled in a new scandal: He now faces additional charges of sex-trafficking and misconduct, with prosecutors in NY alleging that he paid girls as young as 14 hundreds of dollars for massages before molesting them at his homes in NY and Palm Beach, Fla., from 2002 through 2005.
Some wondered what Wexner saw in Epstein, whom they described as charismatic but also arrogant and without much formal education in money management.
Wexner used his letter on on Wednesday, addressed to the "Wexner Foundation Community" and distributed to the press, to cast himself as an unwitting victim of his former adviser's financial impropriety, after weeks of questions about his deep ties to Epstein.
Wexner disclosed the "misappropriation" of funds for the first time on Wednesday in a letter to his family foundation.More news: Thursday forecast: Morning storms, mainly dry this afternoon
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Epstein's lawyer, Martin Weinberg, didn't respond to a request for comment from The Epoch Times about Wexner's claim.
He added that he was "sickened" by Epstein's alleged abuse of dozens of under-age girls in NY and Florida.
It was through Mr Wexner that Epstein acquired his seven-storey Manhattan mansion less than a block from Central Park, a 21,000-square-foot residence valued at about 77 million dollars.
The close relationship between the men spans two decades.
"I know now that my trust in him was grossly misplaced and I deeply regret having ever crossed his path".
That trust included a so-called power of attorney, which enabled Epstein to hire people, sign cheques, buy and sell properties, and borrow money - all on Wexner's behalf.
The latest investigation, reports the Miami Herald, is likely to focus on the lenient work privileges Epstein enjoyed while serving a 13-month sentence for soliciting prostitution from underage girls, the product of a controversial 2008 deal with federal authorities.