I was convinced Jeffrey Epstein couldn’t have made his fortune without doing something illegal or blackmail.

But, after reading this NYT article I can now piece together how he did it.

He LEGALLY exploited the legal profession. Here’s how https://www.nytimes.com/2021/01/26/business/jeffrey-epstein-leon-black-apollo.html

The first thing to understand is the difference between the legal world and the financial world.

Most attorneys charge by the hour. They may charge $100k or so for a complex estate plan for a billionaire.

In finance, you can charge for VALUE. This is where it gets funny.

Epstein was a "financial advisor". But he legitimately knew how to reduce estate tax for billionaires. But any decent estate attorney could. So what was Epstein's trick?

He presented the estate strategies FIRST (before the attorneys) and he manipulated billionaires.

Epstein's scheme involved creating scarcity and presenting himself as a tax/estate planning whiz. He only worked with billionaires and turned down ultra-wealthy people who weren't "rich enough."

This allowed him to charge a huge percentage on very large amounts of money .

According to the Leon Black investigation, Epstein came up with some good, but not-genius estate planning ideas.

GRATs are a complex, but standard estate planning tool. Any good estate attorney would have come up with the same thing if Black went to them first.

So Epstein's manipulation formula was presenting himself as an exclusive whiz, getting to the client before attorneys, and charging a big percentage of the potential tax savings.

And here is the kicker...he OUTSOURCED the actual legal work to attorneys for an hourly rate.

For an estate like Leon Black's, Epstein hoodwinked him into standard high net-worth estate planning, but charged him a huge percentage fee, while leveraging attorneys to do the grunt work for their standard fees.

Everything he did was legal and he knew his stuff. But he was essentially a HIGHLY EXPENSIVE middle man that didn't need to be there.

He exploited the fact that estate planning is opaque and hard to understand

He exploited the attorney's hourly billing model

He may not have blackmailed Leon Black, but he definitely played him for a fool

And it was all legal

But Epstein didn’t kill himself.