Core finding. The documentary record proves both an aggregate repricing—from $18 million to $5.5 million—and a later reallocation among the same three assets inside the $5.5 million total. The recovered record does not establish why either change was made.
Source provenance
See the repricing sequence in the source files
The story depends on three distinct stages: an $18 million draft, a later $5.5 million allocation schedule, and the bank-settled closing amount.
First page of the 17-page draft agreement. The $18 million aggregate-price clause appears inside this document; the linked viewer exposes the complete file.
This one-page schedule carries the $3.5M / $1M / $1M allocation that was later superseded by another contemporaneous allocation.
The one-page JPMorgan record shows the $5,500,030 Black Family Partners credit that closes the cash side.
Receipt images are source/PDF viewer renders. Use the linked viewer for the controlling document and page navigation.
October 31: Financial Trust models the three positions together
EFTA00593830 is a Financial Trust worksheet titled “Summary of Leon Black deals” as of October 31, 2012. It groups Environmental Solutions Worldwide, AP Technology and AP SHL and models values using monthly compounded-return assumptions from 5% through 10%.
The worksheet is useful context, but it is not an independent appraisal. It is an internal return-modeling exercise. The same file records historical net-investment figures of $3,359,710.13 for ESWW, $1,228,776 for AP Technology and $526,437 for AP SHL.
November 2: the draft says $18 million
The unsigned November 2 draft purchase-and-sale agreement at EFTA00586106 identifies Financial Trust as seller and “[Leon Black or Black Family Partnership]” as purchaser. Section 3.1 sets an aggregate price of $18,000,000:
- ESWW shares — $7,793,608
- AP SHL interest — $3,496,424
- AP Technology interest — $6,709,968
The agreement says the purchase price would be paid by wire at closing. But it is plainly a draft: party fields and signature blocks remain incomplete. It proves an $18 million contemplated transaction, not an $18 million closing.
November 26: counsel says the aggregate is now $5.5 million
By November 26, the number had changed. In EFTA00634299, Paul Weiss partner Kenneth Schneider says the attached purchase-and-sale agreement covers Environmental Solutions, AP SHL and AP Technology and that, “As discussed, the aggregate purchase price for the shares and interests is $5,500,000.”
Schneider adds that the price would be allocated according to Schedule 3.2 and that closing was to occur by November 30. The record therefore documents a $12.5 million aggregate reduction from the Nov. 2 draft—69.44%—before closing.
The first $5.5 million allocation: $3.5M / $1M / $1M
A standalone Schedule 3.2 at EFTA00585575 allocates the same $5.5 million total as:
- ESWW shares — $3,500,000
- AP SHL interest — $1,000,000
- AP Technology interest — $1,000,000
Its provenance does not establish that this was the final operative closing schedule. That matters because another contemporaneous chain supplies a different allocation while preserving the same total purchase price.
November 28: the allocation changes again
In EFTA00693690, Darren Indyke forwards a Schedule 3.2 allocation received from Eileen Alexanderson. His email summarizes the $5.5 million purchase price as:
- ESWW shares — $5,000,000
- AP SHL interest — $250,000
- AP Technology interest — $250,000
Compared with the standalone $3.5M/$1M/$1M schedule, the total stays fixed while $1.5 million moves onto ESWW and $750,000 comes off each AP interest.
The same record later reappears in 2014 accounting correspondence. Richard Kahn asks Jeanne Brennan to confirm that the November 2012 prices were the sales prices used; Brennan replies that they were correct and references an adjusting journal entry.
November 30: the bank records $5,500,030 from Black Family Partners
Two JPMorgan statement representations—EFTA01510783 and EFTA01510763—show a November 30 CHIPS credit of $5,500,030 into Financial Trust Company. The originator field identifies Black Family Partners, L.P.
That bank record closes the cash side of the narrow transaction question: the package did not merely remain at the $5.5 million discussion stage. The bank credit is $30 above the stated $5.5 million purchase price. The recovered records do not explain the difference, so GAH leaves it unresolved rather than assigning a cause without documentary support.
The two changes are analytically separate
| Stage | ESWW | AP SHL | AP Tech | Total |
|---|---|---|---|---|
| Nov. 2 draft | $7,793,608 | $3,496,424 | $6,709,968 | $18,000,000 |
| Standalone $5.5M Schedule 3.2 | $3,500,000 | $1,000,000 | $1,000,000 | $5,500,000 |
| Nov. 28 allocation | $5,000,000 | $250,000 | $250,000 | $5,500,000 |
The first change is an aggregate repricing: $18 million to $5.5 million. The second is an intra-package reallocation: $3.5M/$1M/$1M to $5M/$250K/$250K without changing the total.
Historical economics do not explain the final allocation by themselves
The October 31 worksheet records combined historical net-investment figures of $5,114,923.13 across the three positions. The final $5.5 million package is therefore only $385,076.87 above that combined historical figure. But the asset-by-asset allocations diverge sharply: ESWW's final allocation is above its historical net-investment figure, while the two AP interests are below theirs.
This is arithmetic only. Historical investment is not automatically tax basis, fair market value, or an appraisal. The comparison identifies a forensic-accounting question; it does not answer it.
What Run 15 tested—and did not establish
Run 15 applied a transaction-specific money-laundering screen to the package. It found the sale, counterparties, assets and bank settlement were real. It did not establish criminal-proceeds origin, knowledge of criminal derivation, concealment, layering, round-tripping, structuring or a sham transaction.
The large repricing and reallocation therefore remain forensic-accounting leads, not evidence by themselves of laundering, tax fraud or another criminal purpose.
Claim / source / limit / open slot
| Claim | Source | Limit | Open slot |
|---|---|---|---|
| FTC modeled the three positions together before the draft. | EFTA00593830 | Internal compounded-return model, not independent appraisal. | Who selected the return assumptions and why. |
| Nov. 2 draft contemplated $18M. | EFTA00586106 | Unsigned draft; not closing proof. | Negotiations after Nov. 2. |
| By Nov. 26 the package price was $5.5M. | EFTA00634299 | Closing instruction; signatures not proved by this email alone. | Why aggregate price fell $12.5M. |
| Two different $5.5M allocation schedules survive. | EFTA00585575; EFTA00693690 | Standalone schedule provenance is incomplete. | Why $1.5M shifted to ESWW. |
| Black Family Partners sent a $5,500,030 CHIPS credit to Financial Trust on Nov. 30. | EFTA01510783; EFTA01510763 | Bank settlement proves amount/originator; the $30 above stated price is unexplained. | Buyer-side debit/tax treatment, final executed agreement, and explanation for the $30 difference. |
What this investigation does not claim
- It does not claim the $18 million draft was ever funded.
- It does not claim the standalone $3.5M/$1M/$1M schedule was the final operative allocation.
- It does not infer that the repricing or reallocation was tax-driven, valuation-driven, negotiation-driven, or accounting-driven.
- It does not characterize the transaction as money laundering, tax fraud, concealment, or a sham sale.
- It does not treat historical net-investment figures as fair market value or formal tax basis.
The missing explanation
The biggest remaining atom is not another amount. It is the negotiation record that explains why the package moved from $18 million to $5.5 million, and then why $1.5 million of the unchanged $5.5 million was moved onto ESWW while $750,000 was removed from each AP interest.
The machine-readable source list and open questions are published at source-manifest.json.
Related: November 2012 transaction evidence brief · ESW investment lifecycle · Methodology