Leon Black saw Jeffrey Epstein as a “confirmed bachelor with eclectic tastes who often hire attractive women.”
The privately held titan was quick to overlook the fact that Epstein served 13 months in a Florida prison after soliciting a minor prostitute. This was partly due to Epstein claiming that the girl lied about her age, while Black, co-founder of Apollo Global Management Inc. believed in second chances, especially for its well-connected friend.
Thus continued a relationship between men which was presented in a report published on Monday by the law firm Dechert, commissioned by the board of Apollo after news about their financial ties. The investigation found that Black paid Epstein $ 158 million between 2012 and 2017 – after the sex offender pleaded guilty to felony charges in 2008 – for counseling services that helped expand the wealth of one of America’s richest men. .
The report made it clear that Apollo never withheld Epstein for any service and never invested in funds managed by Apollo. Dechert found no evidence that Black, 69, was involved in any of Epstein’s criminal activities, and the billionaire claims he was unaware of Epstein’s abuse of underage girls. However, the findings showed how the embarrassed adviser’s knowledge of the tax system and ability to manage the ultra-rich’s business helped Negru save at least $ 1 billion and potentially more than $ 2 billion.
At the same time, Apollo revealed details about the report, the company said Black will do so resigns as Executive Director. He will remain president.
Tax savings
The Dechert report details a friendship dating back to the 1990s, with Black impressed by Epstein’s ties to prominent figures in business, politics, and science, including researchers at Harvard University and the Massachusetts Institute of Technology. Black was a frequent visitor to Epstein’s mansion in Manhattan, entrusted him with personal belongings, and visited homes around the world.
Dechert also outlined ways in which Epstein was useful to Black, who is worth nearly $ 10 billion, according to the publication. Bloomberg Billionaires Index.
The business arrangement began in 2012, according to the law firm, which analyzed more than 60,000 documents.
A few years earlier, Black had established a Grantor Retained Annuity Trust, or GRATOR. These vehicles, which are popular with extremely wealthy Americans, are structured so that the appreciation of assets placed in a GRAT can go to heirs without paying taxes on US estates and gifts. But Black’s had a flaw and there was a risk of a $ 500 million tax assessment, which could rise to $ 1 billion or more if not resolved.
Epstein offered what the report described as a “single solution.” It was the first project Epstein worked on for Black and probably the most valuable.
In 2015, Epstein helped with another transaction designed to save Black’s children from taxes, known as a growth-based transaction. The complicated arrangement, which lasted nine months until execution, involved loans between blacks and trusts and the avoidance of capital gains taxes for its beneficiaries. Epstein claimed the move saved $ 600 million.
Yachts, plane
Epstein, originally from Brooklyn, has been an enigma to many inside and outside finances. He attended Cooper Union and the Courant Institute of Mathematical Sciences at New York University, but left both without a degree. He briefly had a job at Bear Stearns Basket. And before his first arrest he worked hard for the lingerie mogul Les Wexner. Founder L Brands severed ties with Epstein after his first conviction and later accused him of embezzling “huge sums of money from me and my family.” But Epstein helped Wexner with his finances and acquisitions, such as real estate.
He did many of the same things for Black.
Photographer: Patrick T. Fallon / Bloomberg
Epstein helped respond to the audits and advised on how to manage Black’s art, yacht and plane, according to the Dechert report.
“Epstein would get into trouble over obscure issues that the otherwise competent Family Office employees were unaware of,” the report said.
One of Epstein’s contributions, according to the report, was convincing Black to focus on these issues, as well as meeting with his family and explaining how the estate was organized. He will prepare detailed plans for “fire drills”, testing how Black’s property would be taxed in different scenarios.
“Caustic force”
Black’s full-time staff did not always appreciate Epstein’s contributions. He was “generally a disruptive and caustic force in the family office,” the report said, one that “used to overdramatize even perceived minor mistakes.”
Epstein will give credit to the ideas of others, while compiling long lists of his own suggestions. Many of his creative property plans systemIt was not kept under control. According to witnesses, including Black, “part of the challenge of working with Epstein was separating good ideas from bad ones.”
But the payments have accumulated. Black paid Epstein $ 50 million in 2013, $ 70 million in 2014 and $ 30 million the following year. He also made a $ 10 million donation to Gratitude America in October 2015, an Epstein-affiliated charity.
But since 2016, “Black and Epstein’s professional and personal relationship has deteriorated,” according to the report. The dispute was linked to a payment related to the intensified transaction, and Black refused to pay Epstein tens of millions of dollars that Epstein believed he had won. Epstein rejected the issue in emails invoking his friendship with the billionaire and referring to personal issues shared in confidentiality.
Black’s last payment to Epstein was made in April 2017, and in 2018, Epstein repaid some of the two outstanding loans to Black, but never repaid the balance, according to the report. Black and Epstein stopped communicating in 2018, a year before Epstein was arrested on child trafficking charges and later died in prison. His death was considered a suicide.