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What Jeffrey Epstein Did to Earn $158 Million From Leon Black

  • January 27, 2021

The Dechert report conceded that the compensation that Mr. Black had paid to Mr. Epstein “far exceeded any amounts” paid to his other professional advisers.

Mr. Black has repeatedly said all of Mr. Epstein’s work was thoroughly vetted by outside lawyers and accountants. The only law firm mentioned in the Dechert report is Paul, Weiss, Rifkind, Wharton Garrison, which has done tax and estate work for Mr. Black for many years. It also is one of Apollo’s main outside law firms.

The Dechert report does not identify who drew up what it described as the problematic trust for Mr. Black, except to say the person was a tax and estate expert whom Mr. Epstein had recommended. The lawyer who did most of the early work for Mr. Black was Carlyn McCaffrey, a tax and estate partner at McDermott Will Emery, according to three people familiar with the matter, who spoke on the condition of anonymity.

Ms. McCaffrey, who is widely acknowledged as a leading expert on GRATs, said, “We will not comment on any issues relating to Jeffrey Epstein.”

Mr. Epstein frequently functioned as an ideas generator who would then outsource some of the work to high-powered law firms or to his clients’ current financial and tax advisers, according to five people familiar with the arrangements.

That was how it worked when Mr. Epstein advised a technology executive on a tax matter, according to a representative of the executive who agreed to discuss the matter on the condition of anonymity. Mr. Epstein offered his help after learning that the executive — an acquaintance he once deemed not rich enough to qualify for his services — needed help reducing his taxes on a large stock grant from his employer. The executive believed Mr. Epstein was offering his services as a favor to a friend, because Mr. Epstein referred much of the work to a large law firm, which billed the executive for the assignment.

The executive and Mr. Epstein had never discussed any payment, according to the representative, so the executive was surprised when Mr. Epstein sent his own bill — for a sum that was 10 percent of the tax dollars saved. The executive initially balked but ultimately paid up to avoid a public spat with Mr. Epstein and never worked with him again.

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