Leon Black’s nine-figure payout to convicted pedophile alleged sex trafficker Jeffrey Epstein has the legal world scratching its head.
Black’s Apollo Global Management on Monday revealed that billionaire CEO and co-founder Epstein – who committed suicide in August 2019 – paid $ 158 million between 2013 and 2017 for professional advice on tax audits, asset management, and wealth planning.
That’s more than Black’s paid consultants, including Paul Weiss, the leading estate and tax planners Black hired to carry out Epstein’s ideas, according to a report by law firm Dechert, hired by Apollo to investigate Black’s ties to Epstein. .
“It is clear that the compensation Black paid to Epstein was much higher than the amounts Black paid to his other professional advisers,” Dechert reported.
Black justified this by explaining that he paid Epstein “in amounts intended to be commensurate with the value offered,” Dechert said. And Black, Dechert says, believed that Epstein was “giving advice that put in more than $ 1 billion and a whopping $ 2 billion or more in value.”
But the report, released Monday, also raises questions about how much Epstein was really worth painting a picture of a consultant who sometimes caused more headaches than he offered solutions.
In hiring Epstein, Black, 69, ignored his 2008 conviction for asking a 17-year-old for sex because he “believed Epstein had falsely understood he was older,” the report said.
Black saw Epstein as a confirmed bachelor with an eclectic taste, who often employed attractive women. However, Black did not believe that any of the women in Epstein’s employment were underage. ”
The report praised some of Epstein’s work, including his ‘fire drill’ plans to test how Black’s legacy could be handled. “Despite Epstein’s lack of formal law or accounting training, his fire plans were … detailed and comprehensive,” witnesses said.
But people also complained that Epstein was putting forward ideas that sounded brilliant only to fall apart quickly.
“Epstein put forward a variety of ideas on many different tasks by spreading long lists of ideas he thought should be pursued,” the report said. “Many of those ideas seemed plausible at first glance, but have not been scrutinized.”
“There was a general consensus that some of Epstein’s ideas were uniquely creative and useful, while others were unremarkable or unviable,” the report said.
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 attempted to use personal information gathered during his time with Black to get more money from the billionaire amid a fee dispute that led to the men breaking up.
“Epstein … would evoke his friendship with Black in those emails,” the report says. “Including by referring to personal matters that Black had shared with Epstein in confidence.”
And while Epstein would have told Black that his fees, which amounted to about $ 31.6 million a year over four years, would be tax-deductible, they were not, the report said.
Tax and wealth experts say they are confused. “Paying tens of millions to a novice is not strange,” said a lawyer from a leading law firm.
A tax attorney added: “Maybe there is justification, but I’d like to see what it is.”
“To be honest, I am offended on behalf of Paul Weiss,” said Joe Patrice, editor at Above the Law legal news site and former attorney at Cleary Gottlieb. “Imagine as a world leader giving informed advice and discovering that he is giving this man millions.”
Neither Black nor Paul Weiss responded to a request for comment.