I think there are two possible solutions
Epicurus paradox is actually correct in stating that Evil and an omnipotent, omnipresent, omniscient benevolent God cannot simultaneously exist.
And according to this approach Ishwara is benevolent, omniscient, omnipresent entity. But he is not omnipotent in that he can't do anything and everything he wants. He can do so many things and he is the strongest entity, but he can't break fundamental physical law of Karma and mathematics. If he could have broken the law of karma, everyone would be granted Moksha immediately. But it is not so, so one of the possible answer Ishwara is not Sarvashaktha, he can't do anything he wants, he is Mahashaktha and Ananthashaktha. He is great and can do everything possible with in the laws of Karma.
Many have pointed out in many answers, it is stated in Brahma sutra bhashya that Ishwara is bound by rules. He is 'bound by rules'. He cannot transgress the rules.
God is not omnipotent, he is Superpotent. He is the most powerful entity and can do great things. He can't do anything and everything. Ishwara out of his Karuna is doing everything possible to help us. Now there is no paradox.
There may be another possible way to solve it, which states God is indeed omnipotent, but he does not grant everyone Mukthi because of his benevolence. Here he can break all the laws and he will not break them because of his Karuna.
This approach also assumes that there is no starting point for samsara but samsara is eternal, that is souls did not enter into samsara at particular instant, instead the non liberated souls were always in samsara. And Ishwara values freedom and taking away freedom is considered malicious in this approach. So as long as the soul does not want to get liberated from evil he does not liberate it, when the soul truly wants to get free of evil, he will liberate it. In this approach Ishwara did not create matter he is rearranging it inorder to facilitate the soul obtain Mukthi.
References (Copied from another answer):
Brahma Sutra 2.1.34 states as:
Inequality (of dispensation) and cruelty (the Lord can) not (be reproached with), on account of his regarding (merit and demerit); for so (Scripture) declares.
While commenting on this sutra Adi Shankara first presents view of opponent as:
The Lord, it is said, cannot be the cause of the world, because, on that hypothesis, the reproach of inequality of dispensation and cruelty would attach to him. Some beings, viz. the gods and others, he renders eminently happy; others, as for instance the animals, eminently unhappy; to some again, as for instance men, he allots an intermediate position. To a Lord bringing about such an unequal condition of things, passion and malice would have to be ascribed, just as to any common person acting similarly; which attributes would be contrary to the essential goodness of the Lord affirmed by Sruti and Smriti. Moreover, as the infliction of pain and the final destruction of all creatures would form part of his dispensation, he would have to be taxed with great cruelty, a quality abhorred by low people even. For these two reasons Brahman cannot be the cause of the world.
Then Shankara refutes the opponent view as:
The Lord, we reply, cannot be reproached with inequality of dispensation and cruelty, "because he is bound by regards." If the Lord on his own account, without any extraneous regards, produced this unequal creation, he would expose himself to blame; but the fact is, that in creating he is bound by certain regards, i.e. he has to look to merit and demerit. Hence the circumstance of the creation being unequal is due to the merit and demerit of the living creatures created, and is not a fault for which the Lord is to blame. *&The position of the Lord is to be looked on as analogous to that of Parjanya, the Giver of rain. For as Parjanya is the common cause of the production of rice, barley, and other plants, while the difference between the various species is due to the various potentialities lying hidden in the respective seeds, so the Lord is the common cause of the creation of gods, men, &c., while the differences between these classes of beings are due to the different merit belonging to the individual souls.** Hence the Lord, being bound by regards, cannot be reproached with inequality of dispensation and cruelty.-- And if we are asked how we come to know that the Lord, in creating this world with its various conditions, is bound by regards, we reply that Scripture declares that; compare, for instance, the two following passages, 'For he (the Lord) makes him, whom he wishes to lead up from these worlds, do a good deed; and the same makes him, whom he wishes to lead down from these worlds, do a bad deed' (Kaush. Up. III, 8); and, 'A man becomes good by good work, bad by bad work' (Bri. Up. III, 2, 13). Smriti passages also declare the favour of the Lord and its opposite to depend on the different quality of the works of living beings; so, for instance, 'I serve men in the way in which they approach me' (Bha. Gî. IV, 11).
Similarly Ramanujacharya also comments on it as:
But the assumption of his having actually created the world would lay him open to the charge of partiality, in so far as the world contains beings of high, middle, and low station--gods, men, animals, immovable beings; and to that of cruelty, in so far as he would be instrumental in making his creatures experience pain of the most dreadful kind.--The reply to this is 'not so, on account of there being regard'; i.e. 'on account of the inequality of creation depending on the deeds of the intelligent beings, gods, and so on, about to be created.'--Sruti and Smriti alike declare that the connexion of the individual souls with bodies of different kinds--divine, human, animal, and so on--depends on the karman of those souls; compare 'He who performs good works becomes good, he who performs bad works becomes bad. He becomes pure by pure deeds, bad by bad deeds' (Bri. Up. IV, 4, 5). In the same way the reverend Parâsara declares that what causes the difference in nature and status between gods, men, and so on, is the power of the former deeds of the souls about to enter into a new creation--'He (the Lord) is the operative cause only in the creation of new beings; the material cause is constituted by the potentialities of the beings to be created. The being to be embodied requires nothing but an operative cause; it is its own potentiality which leads its being into that condition of being (which it is to occupy in the new creation).' Potentiality here means karman.