Leon Black Agreed to Pay $62.5 Million to Settle Epstein-Related Claims


The billionaire investor Leon Black agreed to pay $62.5 million to the U.S. Virgin Islands in January to be released from any potential claims arising out of the territory’s three-year investigation into the sex trafficking operation of the disgraced financier Jeffrey Epstein, according to a copy of the settlement agreement.

The previously undisclosed settlement came after the Virgin Islands reached a $105 million deal in November with Mr. Epstein’s estate. The next month, the territory sued JPMorgan Chase in federal court over the bank’s 15-year relationship with Mr. Epstein, a registered sex offender who killed himself in a Manhattan jail cell in 2019.

The Virgin Islands government produced its settlement agreement with Mr. Black in response to a public records request by The New York Times. In January, representatives of the two parties held a private mediation session to settle claims, according to another document reviewed by The Times. The $62.5 million settlement followed that session. Mr. Black agreed to pay in cash, according the settlement document.

The settlement shows the extent to which Mr. Black, once a titan of the private equity industry, has gone to limit scrutiny of his decades-long social and business ties to Mr. Epstein. Those dealings, including the revelation that he paid $158 million to Mr. Epstein for tax and estate planning services, had become a source of embarrassment for Mr. Black in the years after Mr. Epstein’s death.

Mr. Black, 71, was forced to step down in early 2021 as chairman and chief executive of Apollo Global Management, the giant private equity firm he co-founded in 1990. A major art collector who made news for his $120 million purchase of a version of Edvard Munch’s “The Scream,” Mr. Black also stepped down as chairman of the Museum of Modern Art in New York.

The four-page settlement said nothing in it should be construed as an “admission of liability” by Mr. Black.

Venetia H. Velazquez, a lawyer with the Virgin Islands attorney general’s office, which negotiated the settlement, said, “For the past several years, the Virgin Islands Department of Justice has made it a priority to support human trafficking victims and to enforce the law to prevent and deter human trafficking.”

Whit Clay, a spokesman for Mr. Black, said: “Mr. Black engaged and made payments to Jeffrey Epstein for legitimate financial advisory services, which, based on everything now known, he very much regrets. Consistent with settlements of other major U.S. banks, Mr. Black resolved the U.S.V.I.’s potential claims arising out of the unintended consequences of those payments. There is no suggestion in the U.S.V.I. settlement that Mr. Black was aware of or participated in any misconduct.”

The settlement occurred after a scheduled two-day mediation attended by lawyers for Mr. Black and the Virgin Islands, as well as a plaintiffs’ lawyer who had represented many of Mr. Epstein’s victims, according to the document reviewed by The Times.

Brad Edwards, the plaintiffs’ lawyer, said he was “not at liberty to discuss the topic.”

Mr. Epstein killed himself in August 2019 while being held in federal custody in Manhattan on sex trafficking charges. Lawyers for Mr. Epstein’s victims have said at least 200 women — many of them teenagers at the time — were sexually abused by Mr. Epstein at his private island residence in the Virgin Islands, as well as his homes in Manhattan, Florida and elsewhere.

Some victims of Mr. Epstein who had received settlements directly from his estate were granted permission by the estate’s executors to pursue claims against a handful of men who had socialized with Mr. Epstein, according to a person with knowledge of the matter. Mr. Black was one of those men, the person said.

The settlement with the Virgin Islands did not cover claims anyone else might have against Mr. Black. But the settlement itself could not be used as “evidence of wrongdoing by Black,” the document said.

The Virgin Islands’ investigation of Mr. Black arose from an inquiry that led to the $105 million settlement with Mr. Epstein’s estate and the territory’s pending lawsuit against JPMorgan Chase. The territory had been weighing a suit that would have accused Mr. Black of facilitating Mr. Epstein’s sex trafficking operation by paying large sums of money to Southern Trust, which was one of Mr. Epstein’s main companies in the Virgin Islands, said two people briefed on the matter.

Mr. Black’s decision to step down at Apollo followed an article in The Times that reported his ties to Mr. Epstein were more extensive than previously known. Apollo subsequently hired the law firm Dechert to investigate Mr. Black’s relationship with Mr. Epstein. Dechert cleared Mr. Black of any wrongdoing. But the law firm found Mr. Black had paid $158 million to Southern Trust and also provided the business with a $30 million loan.

In its report, Dechert noted that the compensation paid by Mr. Black to Mr. Epstein, a college dropout, “far exceeded any amounts” paid to his other professional advisers.

Planning for the mediation session with Mr. Black began in December while Denise N. George was still attorney general of the Virgin Islands. But she was fired on New Year’s Eve by the governor of the U.S. territory — Albert Bryan Jr. — just days after her office sued JPMorgan.

In its lawsuit against JPMorgan, the Virgin Islands claims that the nation’s largest bank turned a blind eye to Mr. Epstein’s trafficking of teenage girls and young women for sex. It is seeking $190 million in penalties.

JPMorgan, which recently reached a $290 million settlement with Mr. Epstein’s victims on similar grounds, is opposing the lawsuit filed by the Virgin Islands. The bank claims the territory should not be entitled to any money from it because government officials did little to deter Mr. Epstein’s activities.

In 2013, JPMorgan dropped Mr. Epstein as a customer, after years of red flags raised by bank compliance employees about it doing business with a registered sex offender, according to court filings in the lawsuit.

But other documents reviewed by The Times show that several bank employees continued to talk to Mr. Epstein after 2013 because of his role as a tax adviser to Mr. Black, who had also been a customer of JPMorgan’s private bank. These documents also show that the decision to continue to work with Mr. Epstein because he was Mr. Black’s adviser was approved by top executives at the bank.

Ms. Velazquez said in her statement, “Unlike any single individual, JPMorgan had detailed and comprehensive financial data on Epstein’s activities and a legal obligation to share that information with law enforcement.”

A JPMorgan spokesman wasn’t available for comment.

Some of the settlement money will go toward mental health programs and to combat sex trafficking on the Virgin Islands, the territory’s attorney general’s office said.

Jessica Silver-Greenberg and Maureen Farrell contributed to this report.



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