Thursday, January 28, 2021

$158 million for tax advice

 Leon Black is a very successful financier, co-founder of Apollo Global Management, a group that ranks among the most powerful on Wall Street. The billionaire attributes a sizeable part of his wealth to Jeffrey Epstein, estimating that as much as $2bn in benefits can be traced back to Epstein's financial acumen. Epstein committed suicide in jail while awaiting trial on sex charges committed against underage girls.

Leon Black paid $158m to Epstein over a five-year period ending in 2017 during which the disgraced businessman served as Mr Black’s high-priced adviser on issues ranging from audits by the tax authorities, management of his yacht and private plane and a dispute over the ownership of a sculpture by Pablo Picasso.  They socialised or held meetings at Epstein’s Caribbean island and his other properties in New York, Paris, Florida and New Mexico.

Epstein was convicted in 2008 of soliciting sex from a minor that resulted in a lenient 13-month prison sentence. Rather than ending the business relationship after the conviction, Leon Black employed Epstein as an adviser in 2012. Black described himself as someone who “believes in . . . giving people second chances”. Black thought of Epstein as a 'confirmed bachelor with eclectic tastes'. 

Epstein’s “most valuable” assignment was to design a trust structure that had been designed to allow Mr Black to transfer some assets to his heirs without paying estate or gift tax. One sleight of hand involved a series of loans between Black and some trusts. Epstein said that alone saved Black $600 million. On went the scams  from 2012 to 2017 

report by law firm Dechert, which was hired by Apollo to probe Black’s ties to Epstein said, “It is clear that the compensation paid by Black to Epstein far exceeded any amounts Black paid to his other professional advisors,” despite Epstein’s lack of formal training in law or accounting. .

 “Paying tens of millions to a novice is beyond strange,” a lawyer at a top law firm said. “Maybe there’s some justification, but I’d love to see what it is.”

Black's social relationship with Epstein deteriorated in 2017 over a dispute surrounding money Epstein said he was owed.  

Black stepped down this week as chief executive after an internal power struggle  following the firm’s inquiry into his relationship with Epstein. Black is staying on as chairman in what may prove to be little more than a ceremonial role.

No comments: