A Senate panel is investigating billionaire Apollo Global Management co-founder Leon Black’s $158 million in payments to the late, disgraced financier Jeffrey Epstein, it revealed in a letter to the private equity scion on Tuesday.
Senate Finance Committee Chairman Ron Wyden’s (D-OR) missive, dated Monday and released by his panel on Tuesday, revealed a yearlong investigation into Black’s financial ties to the convicted sex offender as part of a larger examination into tax avoidance schemes used by the wealthiest U.S. residents.
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Wyden alleged in the Monday letter that Black’s “inadequate responses” to the committee’s questions, which focused on whether the $158 million Black paid to Epstein for tax and estate planning services should have instead been classified as a gift, “raise serious concerns” about whether the arrangement was an effort to evade taxes.
"The Committee believes that payments to Epstein with respect to the step-up-basis transaction merit further investigation," the letter read. "Compensation at these amounts in an estate and tax planning matter is irregular and unusually high, particularly since Epstein’s contributions to the transaction relied on the guidance of other legal advisors."
"In this case, Epstein’s compensation with respect to the transaction was documented to have been significantly higher than your other advisors on these matters," it read.
A separate memo responding to Wyden noted that Black, who is worth an estimated $9 billion, had already responded through counsel to more than a dozen of the committee’s prior questions, which the senator sent in an initial June 2022 letter to the private equity mogul. The missive, sent by Black’s lawyers, called the committee’s latest round of questions “inappropriately invasive.”
A spokesman for Black said in a statement that the Apollo co-founder had “cooperated extensively with the committee.”
“The transactions referenced in the committee’s letter were lawful in all respects; were conceived of, vetted and implemented by reputable law firms and tax and other advisers; and Mr. Black has fully paid all taxes owed to the government,” the statement read.
Apollo’s board retained Dechert LLP to conduct an internal investigation into Black’s ties with Epstein, which concluded in a 2020 report that the convicted sex offender’s work had saved Black and his children $2 billion in estate and gift taxes. The report also detailed Black and Epstein’s longtime social and business attachments, noting their yearslong friendship that continued after the latter’s 2008 arrest and plea deal.
Black and Epstein’s personal and professional relationship began to deteriorate in 2016 “over a payment dispute that had long been brewing,” according to Dechert. The two “ceased communications in or around the fall of 2018, prior to the renewed public revelations of Epstein’s conduct and Epstein’s arrest and suicide.”
Black, who was forced out as Apollo's chairman in 2021 over the news of the $158 million in Epstein payments, has adamantly denied he had any knowledge of Epstein's sex crimes. The report found no evidence to dispute that.
Epstein was found dead in his New York City prison cell in August 2019 while awaiting trial on federal child sex trafficking charges, and the city's medical examiner said Epstein's death was a suicide. A Justice Department watchdog report published in June of this year found that his death was a result of "negligence and misconduct" from prison guards at a time when the sex offender was supposed to be on suicide watch.
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The second Wyden letter comes just days after reports began to circulate that Black had settled a lawsuit with the U.S. Virgin Islands related to its three-year investigation into Epstein’s sex trafficking operation. The settlement, which was reached in January but kept private until last week, is valued at $62.5 million.
“Jeffrey Epstein used the money Black paid him to partially fund his operations in the Virgin Islands,” the settlement read.