dailymail.co.uk | 31 October 2020
Billionaire investor Leon Black denies he was blackmailed by Jeffrey Epstein after ‘he paid up to $75million to the disgraced financier for professional services’
- Financier veteran Leon Black denied that he was blackmailed for millions of dollars by Jeffrey Epstein
- Black called the allegations ‘categorically untrue’ and admitted his relationship with Epstein was a ‘terrible mistake’
- The Apollo Global Management Inc. CEO has come under fire after it was reported he transferred up to $75million to Epstein for ‘professional services’
- He made the payments after the late financier had been convicted of child sex offenses in 2008
- The company’s stock share has declined and one of the biggest US public pension funds has already frozen new investments with Apollo
- Black addressed the allegations during a call with concerned investors
Billionaire investor Leon Black denied allegations that Jeffrey Epstein blackmailed him for millions of dollars over the last decade, saying such claims were ‘categorically untrue.’
The Apollo Global Management, Inc. CEO both acknowledged and defended himself against the accusations on Thursday, when he gave his most comprehensive account to date of his ties with Epstein during the company’s third-quarter earnings call.
The company’s stock plummeted $500million this month after it was revealed that Black reportedly transferred between $50 million and $75 million to Epstein for ‘professional services.’
Several investors in Apollo’s funds expressed concerns as much of the payments to Epstein came after his 2008 conviction for procuring an underage girl for prostitution and of soliciting a prostitute.
One of the biggest US public pension funds froze new investments in the firm in light of the revelation, and stock shares have yet to make a significant rebound.
‘Let me be clear, there has never been an allegation by anyone that I engaged in any wrongdoing, because I did not,’ said Black.
‘Any suggestion of blackmail, or any other connection to Epstein’s reprehensible conduct, is categorically untrue.’
Financial documents showed Wall Street executive Black gave $10 million to one of Epstein’s foundations alone, the New York Times reported.
Black said he first met Epstein two decades ago, when the latter was advising prominent clients, including several heads of state, Nobel laureates, and even a U.S. treasury secretary.
The 69-year-old private equity veteran said he was not aware of Epstein’s criminal conduct until media reports surfaced in late 2006 of U.S. and Florida investigations into Epstein.
Black said that in 2012, three years after Epstein got out of jail following his prostitution conviction, he retained Epstein for ‘personal estate planning, tax structuring and philanthropic advice’ because of ‘misplaced comfort’ in the ‘distinguished reputations’ of the individuals in high society that Epstein continued to associate with.
‘This was a terrible mistake. Had I known any of the facts about Epstein’s sickening and repulsive conduct, which I learned in late 2018, more than a year after I stopped working with them I never would have had anything to do with him,’ Black said.
Epstein was awaiting trial at the Metropolitan Correctional Center jail in New York City when he committed suicide by hanging inside his jail cell in August 2019.
He was held on sex trafficking charges of minors in Florida and New York from 2002 to 2005. He pleaded not guilty to all charges and maintained his innocence until the end.
His alleged ‘madam,’ Ghislaine Maxwell, is currently detained in a Brooklyn prison cell awaiting trial for six federal crimes, including enticement of minors and sex trafficking.
Recently, Maxwell’s family launched a campaign to get her out of jail, claiming she’s lost considerable weight and her human rights were violated.
The figures Black reportedly transferred help shed some light on how Epstein died with a net worth estimated at $634million despite his imprisonment. But it is not clear exactly what role Epstein played to receive such large sums of money; he had no formal legal or tax training.
In January, U.S. Virgin Islands Attorney General Denise George sued the estate, seeking claims on behalf of victims he raped and trafficked on a private Caribbean island.
Black has said he intends to cooperate with the U.S. Virgin Islands inquiry and any other investigation.
Apollo said that Epstein never did any work for the New York-based firm and announced last week that three board directors tasked with probing Black’s ties to Epstein had retained law firm Dechert LLP to launch a full review.
Apollo Chief Financial Officer Martin Kelly said on Thursday the review would include going though emails and interviewing people.
He said he hoped it would be concluded by the end of the year.
As news of Black’s financial transactions with Epstein emerged, Apollo took an immediate hit, forcing the CEO to send a letter to investors in which he confirmed paying Epstein ‘millions of dollars annually for his work’.
In article images show letter to Apollo investors Black is understood to have sent addressing his relationship with Epstein
He also confirmed a family picnic in 2012 with the disgraced financier on his private island residence in the U.S. Virgin Islands, dubbed Pedophile Island.
As concerns over the pair’s involvement grew, Pennsylvania Public School Employees’ Retirement System halted investments with the $414 billion private equity group.
Black and two other Apollo co-founders, Joshua Harris and Marc Rowan, control 52.9 percent of the private equity firm through six intermediate holding companies, according to regulatory filings.
Apollo co-founder and Senior Managing Director Josh Harris, seen as Black’s likely successor were he to step down, said the firm expected fundraising would slow down in the near term, as some investors waited for the review’s findings.
Kelly added that only 3 percent of the investor money Apollo manages could be withdrawn in the next two years, and that the firm’s big insurance investment portfolio buttressed its income from a slowdown in fundraising.
Apollo Global Management Inc.’s stock shares were down 17 per cent at $36.86 for the month of October after the market closed Friday afternoon.
Over a five-day period, the company was down 10.43 per cent as shares continued to tilt downwards.
In article images of stock shares for Apollo Global Management Inc
Distributable earnings (DE) – the cash available for paying dividends to shareholders – fell to $205.1 million from $222.5 million a year earlier, as a big rise in profit in Apollo’s credit businesses was not enough to offset a steep drop in its private equity and real estate divisions.
That translated to DE per share of 47 cents, under-performing Wall Street analysts’ average forecast of 49 cents, according to data from Refinitiv.
Apollo said the value of its credit funds appreciated 3.7 percent in aggregate in the third quarter, with its private equity portfolio rising 8 percent. Its real estate, principal finance and infrastructure funds climbed 3.4 percent in aggregate.
Apollo said total assets under management rose to $433.1 billion as of the end of September, up from $414 billion three months earlier.
It ended the quarter with $45.8 billion in unspent capital and said it would pay a quarterly dividend of 51 cents a share.
Epstein and Black are said to have known each other since at least 1996 and they are reported to have regularly met up for lunches and dinners.
Under a 2008 non-prosecution agreement, Epstein pleaded guilty to state charges in Florida of solicitation of prostitution involving a minor and another similar prostitution charge.
That allowed him to avoid federal prosecution and a possible life sentence, instead serving 13 months in a work-release program. He was required to make payments to victims and register as a sex offender.
In 2018, Black and Epstein are said to have cut ties over ‘a fee dispute’.
In 2019, following Epstein’s arrest for sex trafficking, Black, who is the chairman of the Museum of Modern Art (MoMA), said he had a ‘limited relationship’ with the disgraced financier.
Epstein was known for hobnobbing with the rich, famous and influential, including presidents and a prince.
He owned a private island in the Caribbean, homes in Paris and New York City, a New Mexico ranch, and a fleet of high-price cars. His friends had once included Britain’s Prince Andrew, former President Bill Clinton and President Donald Trump.
In article “Leon Black’s Monday letter to Apollo investors in full” text.