Leon Black, President and CEO of Apollo Global Management LLC, at the Milken Institute Annual Global Conference in Beverly Hills, California, USA, on Monday, April 27, 2015.
Patrick T. Fallon | Mayor Bloomberg | fake images
A Senate panel on Tuesday revealed a year-long investigation into Apollo Global Management co-founder Leon Black’s ties to the late disgraced financier Jeffrey Epstein, with a focus on the $158 million Black allegedly paid Epstein for tax and estate planning services.
Black has so far provided “inadequate responses” to the committee and declined to detail his payments to Epstein, raising concerns about whether those payments “were properly characterized as income or donations for tax purposes,” Senate Finance Committee Chairman Ron Wyden, D-Ore, said. wrote in a letter dated Monday.
The inquiry into Black’s tax schemes is one of a series of investigations by the committee into how ultra-rich people dodge their tax bills, Wyden’s letter. saying.
Black, a billionairehe refuses to give the committee any more personal information.
A Black spokesman said the private equity investor “has cooperated extensively with the Committee, providing detailed information on the matters under review.”
“The transactions referred to in the Committee’s letter were legal in all respects, were conceived, vetted and implemented by reputable law firms and tax and other advisers, and Mr Black has paid in full all taxes due to the government,” the spokesperson said.
A separate memo responding to Wyden notes that Black has already answered more than a dozen previous questions from the committee and produced more than 150 pages of his personal tax and estate documents. The committee’s latest round of questions is “inappropriately intrusive” and potentially oversteps the panel’s oversight role, Black’s memo states.
The recently revealed congressional scrutiny into Black’s relationship with Epstein marks just the latest example of the ongoing backlash facing high-profile contacts of the money manager, who hanged himself in jail in 2019 while facing child sex trafficking charges.
Overnight, the US Virgin Islands launched new accusations against JPMorgan Chase in a lawsuit accusing the bank of enabling Epstein’s criminal activity.
The territory in new court documents alleged that JPMorgan in 2004 had opened accounts and credit cards for two teenagers described as models and friends of Epstein.
A bank report from one of the girls, whose name is redacted, indicates that she is a Slovak citizen and that “Epstein has asked us the favor of opening a checking account for her and will guarantee her credit card application,” according to the court file.
The Virgin Islands filing also revealed that JPMorgan’s chief financial officer for asset and wealth management David Brigstocke compared a client’s home to Epstein’s, calling it “sleeker and less nymphet.”
Both the Virgin Islands and JPMorgan filed overnight motions for partial summary judgment in the lawsuit.
The Finance Committee opened its investigation in June 2022, Wyden wrote. The investigation sought information about a review of Black’s financial relationship with Epstein that had been commissioned by Apollo’s board of directors in 2020 in the wake of Epstein’s federal indictment.
That review, conducted by the law firm Dechert LLP and filed with the second in 2021, it discovered that Black paid Epstein $158 million between 2012 and 2017. Witnesses told the firm that Epstein had helped Black resolve a potential estate planning issue that could have resulted in a tax liability of $1 billion or more if not resolved. The firm also reported that Epstein provided additional tax advice to Black that he estimated had saved him $600 million worth.
“As a result of Epstein’s work, Black believed, and witnesses generally agreed, that Epstein provided advice that conferred more than $1 billion and up to $2 billion or more in value on Black,” the law firm reported.
Wyden’s letter alleges that Black declined to address some of the committee’s questions, leaving them without the information needed to assess how Black retained the income from his Apollo holdings “while avoiding gift and inheritance taxes on the transfer of enormous wealth to his children.”
The chairman also said his committee has not heard a sufficient reason why Epstein “was paid amounts far in excess of those paid to other attorneys and accountants involved in these transactions, and why he was willing to pay Epstein more than $100 million without a written contract or service agreement.”
Wyden added that he has long been concerned about “sophisticated tax evasion schemes” used by the wealthy “to circumvent federal gift and inheritance tax laws.”
“With the help of sophisticated advisers, the wealthiest one percent of Americans often exploit estate planning and tax code loopholes to avoid paying hundreds of millions or billions of dollars in gift and inheritance taxes,” he wrote.
The case of the Virgin Islands
The territory has accused the bank of facilitating and concealing Epstein’s human-trafficking operation for more than a decade by ignoring extensive evidence of his criminal activity. JPMorgan’s top executives “turned a blind eye” to Epstein’s misconduct, the Virgin Islands allege, because of the money and high-profile clients the well-connected financier brought to the bank.
American financier Jeffrey Epstein (center) appears in court to plead guilty to two counts of prostitution in West Palm Beach, Florida, USA, on July 30, 2008.
Uma Sanghvi | Palm Beach Post | Reuters
JPMorgan has denied any wrongdoing and accused the USVI of helping Epstein, who owned a private island in the territory, carry out his crimes. In May, the bank alleged in a court filing that the former first lady of the Virgin Islands helped obtain student visas for some of Epstein’s victims.
The USVI motion for summary judgment came less than two weeks after the government revealed it was seeking at least $190 million from JPMorgan, in addition to an injunction that would protect potential future trafficking victims.
The USVI’s case against the bank is scheduled to go to trial on October 23.
Epstein committed suicide at age 66 in a federal jail in Manhattan in August 2019, weeks after he was arrested on federal child sex trafficking charges.
He had previously pleaded guilty in 2008 to a Florida state charge of soliciting sex from an underage girl. He registered as a sex offender and served about 13 months in jail, although he was allowed out on probation for much of that sentence.
JPMorgan ended its banking relationship with Epstein in 2013.
Last month, JPMorgan agreed to pay about $290 million to settle a lawsuit brought by Epstein’s victims.