Daddy´s Dog

Elena McMahan is disarmingly soft-spoken. She keeps her head lowered as she begins a conversation barely above a whisper. She wears a headscarf that identifies her as a member of the Russian Orthodox Church, and she speaks to her two unusually well-behaved children, Vladimir, 5, and Elizabeth, 3, in Russian. Elena is slender, and she has striking blue-green eyes. In the Brooklyn penthouse apartment she considers a refuge, the Ukrainian beauty talks quietly about her ill-fated 2002 marriage to Fisher Island millionaire D. Bruce McMahan.

¨The day we got home [from the wedding], he lost interest in me,¨ she says. ¨I became his dog. He said, If you don´t keep your mouth shut, I will take Vladimir.´ Then I got pregnant with Elizabeth.¨

McMahan, you may remember from the September 2006 New Times cover story ¨Daddy´s Girl,¨ is a Wall Street hedge-fund multimillionaire who married his own daughter. He declined to comment for this article.

Elena´s account provides new details about the bizarre incestuous relationship between McMahan and his daughter Linda.

A few weeks ago, Elena McMahan asked to meet with New Times in Brighton Beach. Her husband was out of the country, she said, and it was the best time to discuss the thing that had made him the talk of Wall Street last fall: the story New Times published last September about how McMahan, while legally married to Elena, carried on an incestuous relationship with a grown daughter, Linda, that culminated in a faux 2004 wedding ceremony in London´s Westminster Abbey.

For the first time, Elena gave her own side of the story, even though it may have serious legal repercussions in her current battle over custody of their children.

Elena had grown increasingly suspicious of the relationship between her husband and his daughter, she said, and in 2004, she found the evidence of that relationship in McMahan´s computer: eye-opening e-mails between the two of them and photographs from the Westminster Abbey nuptials.

When McMahan tried to divorce her in January 2005, Elena put that evidence into a court affidavit. The affair eventually led to a furious legal campaign by McMahan, resulting in five lawsuits in five U.S. states.

Documents in those lawsuits spelled out the extraordinary facts in the sordid matter: McMahan, now 68, had learned of his daughter Linda´s existence only in 1990, when she was a 21-year-old college student. As a baby, she had been put up for adoption by a woman with whom McMahan had a brief fling in the late 1960s, and she had contacted him when she wanted to learn the identities of her biological parents. After a paternity test established their biological tie, McMahan welcomed Linda into his family and funded her college and post-graduate endeavors.

McMahan already had six other children by three women (he has nine children today). He was a rich money manager, with homes in Pelham in Westchester County and on Fisher Island, a luxurious enclave off Miami. It was at the Pelham house that, according to Linda´s testimony, her father first began seducing her in 1998. She testified that they had sex for the first time in a hotel in London that year on a business trip. They carried on an incestuous relationship, she said, practically up to the day she married another man, Sargent Schutt, in 1999. After breaking off their affair for a few years, the two got together again when McMahan brought her to Fisher Island to recuperate after an illness, Linda testified.

Linda claimed that McMahan then intensified the relationship and even tried to woo her away from Schutt, her legal husband. Their e-mails, included in court records, document the salacious way the father-daughter couple spoke about having sex and how they called each other h and w for husband and wife.

Most gruesomely, Schutt discovered a vibrator in Linda´s luggage after one of her trips to Fisher Island and had it analyzed for DNA. The sex toy tested positive for Linda´s skin cells and the sperm cells of her biological father.

McMahan not only denied the allegations in the lawsuits but he also did what he could to prevent the publication of ¨Daddy´s Girl.¨ He tried to convince the judges in the lawsuits to seal them, but he was initially rebuffed.

Shortly before publication of the story, McMahan forked over $5 million to $8 million to settle all five suits and then persuaded four of the judges to seal them forever (one judge, in Connecticut, refused, and the documents in that federal case are still free for the public to view by visiting

As ¨Daddy´s Girl¨ was being prepared for publication, Elena reconciled with McMahan -- she was coerced, she says now -- and she refused to talk about her role in the drama. Still, reporters who cover the hedge-fund market say, the story was the talk of Wall Street, where McMahan was a well-known player. Since then, some of McMahan´s investors have reportedly pulled out of his fund, McMahan rarely appears on Fisher Island anymore, and he has been spending more and more time in a place where few, if any, know about the details of ¨Daddy´s Girl¨: the Persian Gulf superrich enclave of Dubai.