U.S. Senators Probe Collector Leon Black’s Payments to Epstein

A committee is questioning Bank of America about its role in $158 million in transactions, some involving art.

Bank of America in San Francisco, California.

The U.S. Senate Finance Committee is continuing to investigate $158 million in payments that billionaire collector and former Museum of Modern Art chairman Leon Black made to disgraced sex offender Jeffrey Epstein for tax-related work between 2012 and 2017.

The complex web of payments and tax avoidance schemes that the government is investigating, also involved the exchange of several pricey seven-figure blue chip artworks, as Artnet News has reported.

The latest development, reported by the New York Times, concerns a letter from the committee’s chair, Senator Ron Wyden of Oregon, to Bank of America and its CEO, Brian Moynihan, asking about the extent of the bank’s due diligence on the payments it processed.

Senator Wyden’s office did not respond to request for comment. A rep for Bank of America declined to comment. Whit Clay, a rep for Leon Black, told Artnet News via email: “The transactions the committee reviewed were both lawful and conceived, vetted and executed by reputable law firms and tax advisors. Mr. Black has paid all taxes owed to the government and has provided detailed information on these matters to the committee.”

According to the Times, the letter asked if any of the bank’s employees had raised concerns about “the purpose of those payments” or the transactions between Black and Epstein that involved art. The payments were linked to a trust that reportedly saved Black more than $1 billion in taxes. The collector has not been accused of wrongdoing.

According to the Times report, when authorities raided Epstein’s compound in the U.S. Virgin Islands in 2019, following his suicide while in federal custody, “they found a raft of Bank of America bank statements belonging to Mr. Black.”

For many years, Bank of America was a key source of art loans for Black, the Times notes. In the letter, Wyden asked if the bank had done any internal reviews into art sales that raised any question of whether Epstein was acting as a straw or “stealth” purchaser.

In a Times report last fall, it emerged that an exchange of blue-chip artworks occurred in late 2016, when Epstein was already a registered sex offender. He pleaded guilty in 2008 to a charge of soliciting prostitution from a teenage girl in Florida.

For instance, in November of that year, Black sold an Alberto Giacometti sculpture, Figure Moyenne II (1947), for $25 million to a trust controlled by Epstein, according to the report.

To pay for the Giacometti, Epstein had his staff wire $23 million into that trust’s account the day before the transaction. The money was wired from an account belonging to Southern Trust, which the Times called “Mr. Epstein’s main moneymaking company in the Virgin Islands [which] received a lucrative tax break from the U.S. territory. Most of Southern Trust’s revenue came from the fees Mr. Black paid,” according to the report.

That same day, a Black-affiliated company used the proceeds from the Giacometti sale to buy a Paul Cezanne watercolor, Portrait de Vallier de Profil (1904–06), for $30 million, the Times reports.

In order to avoid capital gains taxes, which are normally applied to art when an owner sells for a profit, Black, with Epstein’s assistance, took advantage of a 1031 exchange (also known as a “like-kind” exchange), which allows investors to defer tax liability in transactions where they roll the proceeds of a sale into an investment in another asset of the same type.

Congress nixed like-kind exchanges for personal property, including art, in early 2018. Real estate transactions can still qualify for the tax break.

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