Billionaire investor Leon Black agreed to pay the U.S. Virgin Islands $62.5 million in January to be relieved of potential claims resulting from the territory’s three-year investigation into sex trafficking activities of disgraced investor Jeffrey Epstein, according to a copy of the settlement agreement.
The previously undisclosed settlement came after the Virgin Islands reached a $105 million deal with Epstein’s estate in November. The following month, the Territory filed a federal lawsuit against JPMorgan Chase over its 15-year relationship with registered sex offender Epstein, who committed suicide in Manhattan jail in 2019.
The Virgin Islands government prepared a settlement agreement with Mr. Black in response to a New York Times public records request. In January, representatives from both parties held a closed-door arbitration session to settle the claims, according to another document seen by The Times. A $62.5 million settlement was reached after that session. Black agreed to pay in cash, according to the settlement documents.
The settlement shows the extent to which Black, a former private equity giant, sought to limit scrutiny of his decades-long social and business ties to Epstein. These deals, including revelations that Black paid Epstein $158 million for tax and estate planning services, were a source of embarrassment for Black in the years following Epstein’s death.
Black, 71, was forced to step down in early 2021 as chairman and chief executive of the private equity giant Apollo Global Management, which he co-founded. in 1990. Black, a noted art collector who made headlines after buying a $120 million edition of Edvard Munch’s The Scream, has also stepped down as president of the Museum of Modern Art in New York.
Nothing in the four-page settlement proposal should be construed as an admission of liability to Black.
“For several years, the Virgin Islands Department of Justice has made it a top priority to assist trafficking victims and to enforce laws to prevent and deter human trafficking,” said Benicia H. Velázquez, an attorney with the Virgin Islands Attorney General’s Office who negotiated the settlement.
Black spokesman Whit Clay said: Black contracted and paid Jeffrey Epstein for legitimate financial advisory services, which, based on all that is now known, he greatly regrets. As with settlements with other major US banks, Mr. Black settled USVI’s potential claims arising from unintended consequences of these payments. There is no indication in the USVI settlement that Mr. Black was aware of or engaged in any illegal activity. “
According to documents reviewed by The Times, the settlement follows two days of mediation expected to be attended by Black and Virgin Islands attorneys, as well as plaintiffs’ attorneys who have represented many of Epstein’s victims.
Brad Edwards, an attorney for the plaintiffs, said, “We are not at liberty to discuss this matter.”
Epstein committed suicide while in federal custody in Manhattan in August 2019 on sex trafficking charges. Attorneys for Mr. Epstein’s victims said at least 200 women, many of them in their teens at the time, were sexually abused by Mr.
Some victims who received settlement money directly from Epstein’s estate administrators have obtained permission from the estate’s executors to seek claims against a handful of men with whom Epstein interacted, according to people familiar with the matter. Black said he was one of those men.
The Virgin Islands settlement did not include any claims that anyone else might have against Mr. Black. But the document says the settlement itself cannot be used as “evidence of black misconduct.”
The Virgin Islands investigation into Black began with an investigation that led to a $105 million settlement with Epstein’s estate and a lawsuit against JPMorgan Chase pending in the territory. Two people briefed on the matter said the territory was considering a lawsuit accusing Black of facilitating Epstein’s sex trafficking activities by paying large sums of money to Southern Trust, one of Epstein’s major firms in the Virgin Islands.
Black’s decision to leave Apollo came after an article in The Times reported that his relationship with Epstein was more extensive than previously known. Apollo then asked law firm Dechert to investigate the relationship between Black and Epstein. Mr. Dechert acquitted Mr. Black of wrongdoing. But the law firm found that Black paid $158 million to Southern Trust and also provided a $30 million loan to the business.
Mr. Dechart said in the report that Mr. Black paid Epstein, a college dropout, “far in excess of what he paid” other professional advisers.
Planning for an arbitration session with Black began in December, when Dennis N. George was still attorney general of the Virgin Islands. But she was fired by U.S. Territorial Governor Albert Bryan Jr. on New Year’s Eve, days after her office sued JP Morgan.
In its lawsuit against JP Morgan, the Virgin Islands alleges that the country’s largest bank turned a blind eye to Epstein’s trafficking of teenage girls and young women for sex. It is seeking a fine of $190 million.
JP Morgan recently reached a $290 million settlement with Epstein’s victims for similar reasons, but it opposes a lawsuit filed by the Virgin Islands. The bank argues that the territory should not be entitled to any money from the region because government officials have done little to stop Epstein’s activities.
JPMorgan removed Epstein as a client in 2013 after years of red flags from bank compliance officials for dealing with sex offenders, according to court filings in the lawsuit.
But other documents reviewed by The Times show that several bankers continued to talk to Mr. Epstein after 2013 because of Mr. Black’s role as tax adviser, who was also a client of JP Morgan’s private bank. The documents also show that executives at the bank approved the decision to continue working with Epstein because he was an adviser to Black.
“Unlike other individuals, JP Morgan had detailed and comprehensive financial data on Mr. Epstein’s activities and was legally obligated to share that information with law enforcement,” Velázquez said in a statement.
A JPMorgan spokesman was not immediately available for comment.
Part of the settlement will go to mental health programs and fighting sex trafficking in the Virgin Islands, according to the Territory Attorney General’s Office.
Jessica Silver-Greenberg and Maureen Farrell contributed to this report.