The sex-trafficking scandal surrounding the late Jeffrey Epstein already has tarnished the reputations of prominent politicians, businessmen, and the British royal family. Now it’s casting a dark shadow on an estate tax-avoidance strategy popular among Wall Street CEOs and tech entrepreneurs.

The strategy exploits a loophole that Congress unintentionally left open when it passed provisions related to grantor retained annuity trusts, or GRATs, in 1990. Use of these trusts already has cost the IRS—by one estimate—well over $100 billion in just the last two decades. A recent filing with the Securities and Exchange Commission by the private equity firm Apollo Global Management reveals that the firm’s longtime CEO, Leon Black, relied on Epstein’s assistance to extract more than $500 million of tax savings from GRATs.

GRATs—which combine a trust and an annuity to generate supercharged tax benefits—are entirely legal. But they make no sense from a policy perspective, and they only work because Congress in 1990 enacted a valuation formula that defies economic reality. While GRATs aren’t responsible for Epstein’s predation, the appearance of GRATs in the most recent Epstein revelations is one more reminder that Congress and the Biden administration should scrap this tax shelter.

Read more at Inequality.org