Leon Black’s nine-digit payment to the convicted pedophile, alleged sex trafficker Jeffrey Epstein, makes the legal world scratch his head.
Black’s Apollo Global Management revealed on Monday that its billionaire CEO and 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 planning real estate.
This is more than Black paid advisors, including Paul Weiss, the preeminent estate and tax planner Black hired to execute Epstein’s ideas, according to a report by the law firm Dechert, who was hired by Apollo to investigate the ties of Black with Epstein.
“It is clear that the compensation paid by Black to Epstein far exceeded any amount Black paid to his other professional consultants,” reported Dechert.
Black justified this by explaining that he paid Epstein “in amounts that should be commensurate with the amount provided,” said Dechert. And Black, says Dechert, believed that Epstein “provided advice that amounted to more than $ 1 billion and up to $ 2 billion or more in value.”
But the report, released on Monday, also raises questions about how much Epstein really was worth in painting the image of a consultant who sometimes caused more headaches than he provided solutions.
In hiring Epstein, Black, 69, neglected his 2008 sentence for soliciting a 17-year-old for sex because he “believed Epstein had mistakenly understood that he was older,” the report said.
“Black saw Epstein as a staunch bachelor with eclectic tastes, who often employed attractive women. However, Black did not believe that any of the women employed by Epstein were underage. ”
The report applauded part of Epstein’s work, including his “fire simulation” plans to test how Black’s property could be treated. “Despite Epstein’s lack of formal training in law or accounting, his fire simulation plans were … detailed and comprehensive,” witnesses said.
But people also complained that Epstein came up with ideas that seemed brilliant only to fall apart quickly.
“Epstein presented a variety of ideas on many different tasks, circulating long lists of ideas that he thought should be followed,” said the report. “Many of these ideas would seem plausible at first, but they have not withstood close scrutiny.”
“There was a general consensus that some of Epstein’s ideas were exceptionally creative and useful, while others were common or unworkable,” said the report.
Some witnesses also described Epstein as creating a toxic and destructive work environment for Black’s family office, saying he would take credit for good ideas regardless of his involvement, the report said.
The report also said the criminal tried to use the personal information he gathered in his time with Black to extract more money from the billionaire in the middle of a fee dispute that resulted in the separation of the men.
“Epstein … invoked his friendship with Black in those emails,” says the report. “Including reference to personal matters that Black shared with Epstein confidentially.”
And while Epstein allegedly told Black that his fees, which amounted to about $ 31.6 million a year for four years, would be tax-deductible, they were not, the report said.
Tax and real estate experts say they are confused. “Paying tens of millions to a novice is very strange,” said a lawyer at a leading law firm.
A tax attorney added: “Perhaps there is some justification, but I would love to see what it is.”
“Frankly, I’m offended on behalf of Paul Weiss,” said Joe Patrice, editor of the legal news website Above the Law and a former litigator at Cleary Gottlieb. “Imagine giving thoughtful advice as a global leader and finding out that he is giving this guy millions.”
Neither Black nor Paul Weiss responded to a request for comment.