Leon Black’s nine-figure payments to alleged convicted pedophile sex trafficker Jeffrey Epstein have the legal world scratching their heads.
Apollo Global Management of Black revealed on Monday that the CEO and his billionaire co-founder paid Epstein – who committed suicide in prison in August 2019 – $ 158 million between 2013 and 2017 for professional advice on tax audits, wealth management and real estate planning.
This is more than Black’s paid counselors, including Paul Weiss, the preeminent real estate and tax planners Black hired to execute Epstein’s ideas, according to a report by law firm Dechert, which was hired by Apollo to investigate the links. of Black with Epstein.
“It is clear that Black’s compensation to Epstein far exceeded any amount Black paid to his other professional advisers,” Dechert reported.
Black justified this by explaining that he paid Epstein “in amounts that were intended to be proportionate to the value offered,” Dechert said. And Black, says Dechert, believed that Epstein “offered advice that provided more than $ 1 billion and a value of up to $ 2 billion or more.”
But the report, released on Monday, also raises questions about how much Epstein deserved, painting a picture of a counselor who sometimes caused more headaches than offered solutions.
In Epstein’s employment, 69-year-old Black ignored a 2008 conviction for a 17-year-old for sex because “he thought Epstein had misunderstood that he was older,” the report said.
“Black viewed Epstein as a confirmed bachelor with eclectic tastes who often employ attractive women. However, Black did not believe that any of the women employed by Epstein would be a minor. ”
The report applauded some of Epstein’s work, including his “fire drill” plans to test how Black’s estate could be treated. “Despite Epstein’s lack of formal training in law or accounting, his plans for fire drills were … detailed and comprehensive,” witnesses said.
But people also complained that Epstein launched ideas that sounded brilliant just to fall apart quickly.
“Epstein presented a variety of ideas on many different tasks by disseminating long lists of ideas that he thought should be pursued,” the report said. “Many of these ideas would seem plausible at face value, but they have not gone under control.”
“There was a general consensus that some of Epstein’s ideas were creatively unique and useful, while others were not remarkable or viable,” the report said.
Some witnesses also described Epstein as creating a toxic and destructive work environment for Black’s family office, saying he deserved good ideas regardless of his involvement, the report said.
The report also said that the killer tried to use the personal information he collected during his time with Black to extract more money from the billionaire amid a tax dispute that led to the separation of the men.
“Epstein … would invoke his friendship with Black in these emails,” the report says. “Even by referring to personal matters that Black had confidently shared with Epstein.”
And while Epstein allegedly told Black that his taxes, which amounted to about $ 31.6 million a year over four years, would be tax deductible, they were not, according to the report.
Tax and real estate experts say they are confused. “Paying tens of millions to a novice is beyond strange,” said a lawyer from a leading law firm.
A tax lawyer added: “Maybe there is a justification, but I would like to see what it is.”
“Honestly, I’m offended on behalf of Paul Weiss,” said Joe Patrice, editor of the legal news site Above the Law and former litigant at Cleary Gottlieb. “Imagine giving advice as a global leader and finding out that he gives millions of people to this guy.”
Neither Black nor Paul Weiss responded to a request for comment.