Former Caesars principal who paid Epstein is reportedly under criminal investigation

Nevada regulators looked away before. Will they again as Apollo takes over Sands?

By: - November 4, 2021 5:55 am

(Apollo Global Management photo of Leon Black; Jeffrey Epstein’s Florida mugshot)

Nevada gaming regulators were either unaware of or unconcerned about payments of $158 million then-Caesars Entertainment principal Leon Black made to convicted sex offender Jeffrey Epstein between 2012 and 2017, after Epstein’s 2008 conviction for sex trafficking a minor, as well as $100,000 monthly payments Black admits making to a woman to keep her quiet about their relationship.  

Black is the co-founder of Apollo Global Management, the publicly traded company that previously owned Caesars Entertainment and the prospective buyer of the Las Vegas Sands’ properties in Las Vegas for $6.25 billion. He stepped down as chairman and CEO earlier this year, after news broke of his payments to Epstein.  

The largest shareholder in Apollo with a 13% stake, Black is now defending himself against the brand of allegations that cost Steve Wynn his gaming empire.   

He is under criminal investigation by the Manhattan District Attorney in connection with sexual assault and rape allegations, according to a story last month in Vanity Fair, which cited sources. The District Attorney declined to comment to the magazine and a spokesman for Black told the magazine they are unaware of the investigation.   

Last week, Black filed a racketeering lawsuit against former model Guzel Ganieva, claiming she extorted him for $100 million. Ganieva says the extortion claim is absurd because Black publicly paraded women other than his wife. 

“Black did not attempt to keep these women hidden from anyone, much less his family,” her complaint alleges.

Ganieva alleges in a complaint filed in June with the New York Supreme Court that Black’s sexual preferences were sadistic and that he raped her in 2015. 

“Black, because of his abnormal and atypical sexual needs, was extremely concerned about keeping this information secret,” Ganieva’s complaint says. “At the same time, Black’s violent sexual behavior was a powerful way for him to exert complete physical, mental and emotional control over Ms. Ganieva and her body.”

An amended version alleges he sexually assaulted another woman while at Epstein’s home in 2001. 

Black, in a Racketeering Influenced and Corrupt Organizations (RICO) lawsuit, denies the allegations and suggests Ganieva is engaged in a wide-ranging conspiracy involving the prominent Wigdor Law firm, unidentified public relation “flacks,” and an unnamed “funder” whom Black suggests is picking up the tab and is out to harm him.  

Nevada gaming regulators won’t say if investigators uncovered Black’s payments to Epstein or Ganieva when the state approved Apollo’s two-year-long bankruptcy restructuring in 2017. The state does not make investigative reports public. 

“Unfortunately, there’s not a huge amount of transparency as to what they (gaming regulators) look at and what the results of their investigations are, unless it gets on the public record somehow at an open meeting,” says Professor Anthony Cabot of UNLV’s Boyd Law School. 

Former California Gambling Control Commissioner and Nevada casino executive Richard Schuetz says investigators missed Black’s payments to Epstein and Ganieva, or didn’t care. 

The New York Times reported in October 2020 that Black had paid tens of millions of dollars to Epstein.  

An investigation ordered by Apollo and prepared by the Dechert law firm concluded Black paid Epstein, “who possessed neither a college degree, nor any advanced degrees related to tax advisement or estate planning” for “advice on trust and estate planning, tax issues, philanthropic issues, and the operation of [Black’s] Family [wealth management] Office,” Ganieva’s suit says.

What makes this all very interesting to me as a student and observer of regulation for almost five decades is that the regulators used to look for this sort of thing,” Schuetz wrote in a column in March. “I am curious if they still do.”

“I have submitted about 120 gaming applications in my life and it is my sense that if I had a transaction sending a bunch of money not evidenced by a contract, to a person who had been jailed as a sex offender with a teen victim, it would have become an issue — even if he did give me good advice on things,” Schuetz wrote. 

Schuetz points out it was a journalist, not a “gold-standard regulatory agency,” who discovered the payments.  

Could the $158 million Black paid to Epstein and allegations leveled by Ganieva still raise eyebrows among Nevada regulators?  

“The nature of the Nevada regulatory process is that the criteria for licensing is very discretionary,” says UNLV’s Cabot, including a requirement the applicant be of ‘good character.’ “What constitutes good character to me and to you may be different than somebody else. It really shifts a lot of discretion as to what constitutes unsuitability to the regulators. And their decision is basically unappealable.  It’s really up to the regulator what they think is important or not.  It’s a strange system.”  

Hotelier Steve Wynn resigned from Wynn Resorts in 2018 after the Wall Street Journal exposed decades of sexual misconduct with employees, and in some cases, monetary settlements requiring them to remain silent. 

Nevada gaming regulators fined Wynn Resorts $20 million because executives failed to investigate claims from multiple women who claimed they’d been sexually harassed by Wynn.  

Gaming officials found in October 2019 that Wynn “is not a person of good character, honesty and/or integrity” and are seeking to impose a lifetime ban on his engagement in the state’s gaming industry.  

Apollo, one of the largest publicly traded private equity firms in the world, partnered with TPG to buy Caesars Entertainment for $30.7 billion in 2008, at the height of the Great Recession. Nevada gaming regulators found Black suitable for licensing in August of that year. 

Ultimately, Apollo was unable to shoulder some $22 billion in debt and filed for bankruptcy in 2015.  

The state would not say if Black, who stepped down as chairman and CEO of Apollo earlier this year but still owns 13% of Apollo stock, must be licensed for the Las Vegas Sands purchase.

“The Nevada Gaming Control Board does not comment on details surrounding our licensing applications,” said Michael Lawton, Senior Economic Analyst of the Control Board. “All we can confirm is if an application has been filed and is in process.”

Nevada gaming law requires a shareholder with more than a 10% stake in a publicly traded company to be licensed. But there are exceptions for institutional investors, who may own up to 25% without triggering licensing requirements, according to Cabot. Institutional investors generally invest on behalf of others.  

Attorney Susan Estrich, who told the Current she wrote Black’s RICO lawsuit, says her client is not required to be licensed in the LV Sands transaction.  

Estrich, once known as a feminist attorney, has played both sides of the gender power equasion, representing former Fox News executive Roger Ailes against sexual harassment allegations.  

“…in 1991 she coined the term ‘nuts and sluts’ to describe the campaign Clarence Thomas supporters waged to discredit Anita Hill,” the New York Times reported in 2016.

“Ms. Estrich took a different position in a 1998 opinion column defending President Bill Clinton. She wrote, ‘The reason men resort to the ‘nuts and sluts’ defense is because it may be the only way to undermine the credibility of a woman who is not, in fact, telling the truth.’”

“… I have put myself and my reputation on the line (twice) on behalf of men who are the subject of complaints of sexual harassment or sexual assault, even though I have spent my entire adult life fighting against the abuse of women,” Estrich wrote in October, five days before filing the RICO suit on behalf of Black. “And I’m about to do it again.”

Ganieva, in her lawsuit, accuses Black of taking her to Epstein’s Palm Beach home in 2008, where she says she was expected but refused to have sex with Epstein, who was in custody but on a work release program. She describes a prison guard standing outside the home.  

She also accuses Black of raping her in 2015, and alleges he raped another woman, a model, two decades ago at Epstein’s New York townhouse. The alleged victim is identified only as Jane Doe. 

Black denies all of those allegations in legal pleadings. But he admits to paying Ganieva $100,000 a month for five years to keep their relationship quiet. 

“A married man, and the founder and head of a major asset management business, Mr. Black was legitimately and understandably concerned that Ganieva would do exactly as she threatened, and that the publicity could have personal and business consequences,” reads Black’s answer in September to a complaint filed by Gainieva in New York’s Supreme Court. “Under this threat, Mr. Black entered into a release and confidentiality agreement with Ganieva in October 2015. As part of their agreement, Mr. Black agreed to give Ganieva what she was demanding: substantial amounts of additional cash beyond the millions Mr. Black already had voluntarily gifted her. In that agreement, Ganieva explicitly admitted that allegations she had made against Mr. Black ‘are not true’; released any possible claims against Mr. Black; and agreed to keep their relationship and the agreement strictly confidential.”

“Suddenly, in March 2021 — after having accepted millions of dollars, month in and month out — Ganieva posted a series of tweets proclaiming, among other things, that Mr. Black had ‘sexually harassed and abused’ her ‘for years,’” Black’s answer says. 

Black alleges Ganieva “threatened to go public about their relationship — explicitly stating that she would harm Mr. Black’s personal and professional life — unless he paid her a sum of one hundred million dollars.” 

“I foolishly had a consensual affair with Ms. Ganieva that ended more than seven years ago,” Black told Bloomberg in April. “Any allegation of harassment or any other inappropriate behavior towards her is completely fabricated. The truth is that I have been extorted by Ms. Ganieva for many years and I made substantial monetary payments to her, based on her threats to go public concerning our relationship, in an attempt to spare my family from public embarrassment.” 

Ganieva, in her lawsuit, says her relationship with Black was not consensual, but rather rooted in control.

“Disgustingly, he used his extreme power and wealth to coerce her into signing a non-disclosure agreement (“NDA”) in October 2015 precisely because he knew what he had done to her was shocking, evil and exposed him to potential criminal charges,“ says her complaint filed with the New York Supreme Court. 

Black alleges recordings of his conversations and texts with Ganieva, including one purportedly from the morning after she alleges Black raped her, prove she is lying.  

“Rather than retract the spurious allegations in her first Complaint, Plaintiff and her counsel have spun a whole new yarn that is even less believable and even more disprovable than their initial story,” Black’s lawsuit says.

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Dana Gentry
Dana Gentry

Dana Gentry is a native Las Vegan and award-winning investigative journalist. She is a graduate of Bishop Gorman High School and holds a Bachelor's degree in Communications from the University of Nevada, Las Vegas.