In Washington’s elite business and cultural circles, Frank H. Pearl was known as the richest and most influential man whom no one really knew. Several banks and his own private equity firm are suing to recover $50 million from his estate. (Family photo/FAMILY PHOTO)

In Washington’s elite business and cultural circles, Frank H. Pearl was known as the richest and most influential man whom no one really knew. Since his death a year ago at age 68, the Pearl mystique has begun to unravel.

In his prime, Vice President Al Gore phoned Pearl from the White House. Pearl funded musical productions at the Kennedy Center, where he served as a board member. He was a trustee of the National Gallery of Art. He funded cancer research, served on the Council on Foreign Relations and was a trustee emeritus of the Brookings Institution.

He filled his houses with art and antiques, from Queen Anne walnut window slats in his French bedroom to the 18th-century George III coal grate in the fireplace. His vast art collection included an oil painting by Sir Anthony Van Dyck valued at $3.2 million.

He traveled by private jet and kept homes in Martha’s Vineyard, Washington and Palm Beach. His office included a personal dining room and private chef.

Sustaining this life was Pearl’s work in private equity and Perseus, the Pennsylvania Avenue firm he created. Pearl, its founder and sole owner, was in the business of buying and selling companies with borrowed money. Perseus has directed hundreds of millions of dollars to investments such as Converse sneakers, Ritz-Carlton hotels and book publishers such as PublicAffairs.

Now lawsuits filed by major banks that had extended him loans and his own investment firm allege fraud by the man once known for his Midas touch. Bank of America, TD Bank, Eagle Bank and Perseus have filed claims against Pearl’s estate in D.C. and federal courts.

In all, they are seeking more than $50 million.

The allegations and court actions have rocked a corner of Washington’s financial and social elite and have raised questions about Pearl’s actions in the final months of his life, after he was diagnosed with terminal lung cancer.

“At times his conviction on his conclusions seemed unshakable even in the face of evidence to the contrary,” said Fred Malek, who heads his own local private equity firm. “I’ve invested with Frank Pearl and in Frank Pearl deals over several decades, and found it profitable and found Frank to be a man of soaring intelligence. The picture of court papers does not depict the Frank Pearl I knew.”

Others who worked with him, knew him or knew of him say privately the court claims following Pearl’s death cause them to wonder whether he really was fabulously wealthy, or just lived that way.

It’s hard to know.

“Frank Pearl was like the prince of smoke,” said Bill Regardie, a businessman and the former publisher of Regardie’s, a magazine that chronicled the local business scene in the 1980s and early ’90s. “He was one of the those characters that you never really knew what he was doing. You never knew whether he had any money. He was one of those characters that floated around the businesses of Washington.”

The court documents raise many questions. Was Pearl truthful in 2009 and 2010 when he filed financial statements — including his interests in Perseus companies — to TD Bank and Eagle Bank claiming a personal net worth of more than $400 million?

If not, what were the financial statements based on? Did Pearl use his skills as an attorney and as a financial engineer to outwit his creditors? Did he fraudulently transfer money to a trust, which TD Bank alleges? Or was Pearl simply putting his affairs in order for a smooth distribution after he died?

Just a few years later, as of Sept. 17, 2012, the Frank Pearl estate appeared much diminished, with only $302,480.70, not including a boat, a D.C. condominium and a 4.5 percent preferred equity interest in Perseus, according to a court filing by Pearl’s widow.

As one banker put it: “Where did the money go?”

At the center of legal claims are life insurance policies and a trust that Pearl established after being diagnosed with cancer in November 2011. The claims against his estate allege that Pearl sought to avoid payment to creditors by fraudulently moving $59 million in life insurance proceeds and other assets from his estate into Perseus Trust, which he had created for his wife. The assets in that trust, which may be all that’s left of Pearl’s fortune, are — at least until the resolution of the case, according to court papers — out of the reach of banks and other creditors, including his private equity firm.

Court filings contend that Pearl may not have had the money he said he did. At one point, “Mr. Pearl was insolvent, or he became insolvent as a result of the changes” regarding his life insurance benefits, according to legal documents filed by his own firm.

In an apparent attempt to put his affairs in order, Pearl created the trust to administer his various assets and interests, including Perseus and holding companies that held his assets. The only person who could move assets out of the trust, which was irrevocable, was the sole beneficiary: his wife, Geryl.

Complicated financial firms that largely depend on a key man — an executive whose talent is crucial to the operation — often take out life insurance policies to ensure a seamless transition for the company’s finances in the event of his death. Typically, the beneficiaries are the company and its shareholders, not the family.

Edward L. Weidenfeld, a longtime Washington estate and tax lawyer, said Pearl appears to have left behind a puzzle for his creditors to solve.

“There are some unanswered question here as to why Pearl would go to such extraordinary lengths to avoid what are clearly legitimate debts,” Weidenfeld said. “Lots of wealthy people die, and they certainly all get very sophisticated planning from guys like me. But they don’t get anywhere close to a question of fraudulent transfer. You’ve got some of the best estate lawyers in Washington working on this in an effort that appears to avoid creditors.”

The lawyers involved in the case include some of the highest-priced, highest-profile law firms in Washington, including Williams & Connolly, Arnold & Porter and Hogan Lovells, which is the former Hogan & Hartson firm.

Geryl Pearl, the financier’s widow, is represented by Williams & Connolly. Her attorney, Robert Cary, has argued in court papers that “Mr. Pearl’s creation and funding of the Perseus Trust was not a fraudulent conveyance.” Cary said in a phone call and e-mail that he had no comment, and neither did his client.

Attorney Thomas W. Richardson of Arnold & Porter, who is counsel for Geryl Pearl and a personal representative of the estate, did not return phone calls and e-mail requesting comment.

TD Bank, which has sued Pearl’s estate for $16.4 million to cover principal, interest and late fees on loans, declined through a spokesman to comment, saying the matter is under litigation. In court documents, TD Bank alleges that Pearl planned so that he wouldn’t have to pay his debts.

“As a sophisticated and knowledgeable attorney and financial professional . . . Frank Pearl knew and appreciated what he was doing in transferring the assets to the Perseus Trust and the effect those transfers would have on his financial position and on the ability of his creditors, including TD Bank, to collect the indebtedness due them,” TD Bank said.

Ron Paul, chairman and founder of Eagle Bank, which has filed three claims against the estate seeking $11 million, did not return repeated phone calls seeking comment.

Bank of America, which is seeking $22.6 million, declined to comment on the litigation. Art that Frank Pearl had offered as collateral for the loan was sold this year in a Christie’s auction, yielding millions of dollars, including $13 million for a 15th-century oil painting, “The Madonna and Child.” Money from the sale has been used to pay down the loan, according to court filings.

The loans were taken out for Frank Pearl’s personal and professional obligations, according to court filings.

Perseus-related private equity funds claim that Pearl’s estate owes more than $15 million that Pearl drew from investment funds he controlled — including more than $1 million borrowed in the months before his death. They’re also asking the estate to fulfill Pearl’s commitment to invest in its funds. Perseus-related funds are seeking $8.6 million in “clawbacks” on behalf of investors.

It’s not unusual for a general partner of a private equity fund to withdraw money — such as profits and “carried interest” — from an investment fund before it pays back its investors what they are due and closes. But if at the end the funds lose money, the general partner must repay what he took out.

Although people with knowledge of Pearl’s case said there are questions about his final investments, the estate’s interest in Perseus may yet yield money owed to creditors.

There was no question that Pearl was thought to be wealthy and could borrow money on that premise. TD Bank and Eagle Bank loaned Pearl money without demanding any collateral, according to court filings by Geryl Pearl. Bank of America’s loans were secured by artwork, the filing said.

Perseus also alleges in court papers that Pearl’s change of beneficiaries for his life insurance policies was fraudulent and “an attempt to keep the death benefits out of reach of his creditors, including Perseus and the Perseus funds.”

Perseus’s managing director, Kenneth M. Socha, did not return phone calls seeking comment.

Pearl, who died May 4, 2012, was an adroit real estate attorney who helped launch the leveraged buyout boom of the 1980s. While still in his 30s, he charted the financial structuring for a seminal deal. With Pearl’s help, Wesray Capital used mostly borrowed money to “leverage” an $80 million investment in Gibson Greetings into a $290 million public offering.

Pearl left Wesray and started Perseus in 1995, where he was chairman and owner. Perseus managed seven private equity funds that invested in industries such as energy, environmental technologies, health care and branded consumer products.

Perseus has 17 employees and runs eight private equity funds managing $468 million of investors’ money. Perseus Partners VII, one of those funds, required a $1 million minimum investment from its 72 owners and had around $282 million under management, according to documents filed with the Securities and Exchange Commission.

Like many private equity firms, Perseus had its share of big hits and misses. Its portfolio has included Perseus Books Group; VGP Holdings, which designed, developed and marketed vehicles to aid disabled people; and Haggar, the apparel company.

Its ambitious publishing enterprise, Perseus Books, includes publishing houses such as PublicAffairs — a respected force on current affairs, politics, history and biography.

Pearl stocked Perseus with some of Washington’s marquee names, following the model set by the Carlyle Group. The late diplomat Richard Holbrooke, chief architect of the 1995 Dayton peace accords, which ended the war in Bosnia, worked at Perseus between stints for Democratic administrations. Former Kennedy Center and Fannie Mae chairman James A. Johnson worked at Perseus as well. Pearl’s friends included Washington power broker Vernon Jordan and conductor Leonard Slatkin.

Indeed, among many in Washington, it was a given that Pearl was a man of great financial resources.

Pearl played the harpsichord, collected Renaissance oil paintings and was a connoisseur of ancient Greek philosophers, from which he took the name of Perseus — who according to myth slew monsters — for both his private equity firm and his publishing arm. He owned a yacht and sailed the world with his wife.

The court papers paint a man who was putting up his own personal wealth to get loans for his business and his personal life.

TD Bank says that in September 2010, more than a year before Pearl was diagnosed with terminal cancer, it extended $17.5 million in credit to Perseus, personally guaranteed by Pearl.

To get the money, Pearl produced financial statements claiming a net worth of about $400 million, including $33.5 million in residential property, $65 million in antiques and artwork and a $351 million interest in Perseus funds.

So what happened to the $400 million Pearl guaranteed to cover his loans? That question may be answered as the case winds its way through the court system, which could take years.

TD Bank lost a first round in court when a judge denied its claim for a preliminary injunction to keep Geryl Pearl from selling or transferring any assets her late husband left behind.

“TD Bank has failed to show a likelihood of success on the merits of its claim that the creation and funding of the Perseus Trust was actually fraudulent,” the judge ruled.

TD Bank is appealing.

“I’m not going to say anything,” said Bruce Parmley, an attorney at Hogan Lovells who is co-trustee of Geryl Pearl’s trust. “Good luck.”

If Pearl died owing millions to banks, funds and his own company, where does that leave Perseus?

The company has moved from its Pennsylvania Avenue offices to East-West Highway in Bethesda. According to a recent SEC filing, Perseus and its funds have received clean audits by PriceWaterhouseCooper, although the firm has noted it will need between $6 million and $7 million “to meet its contractual obligations to clients through mid-2016.”

A former associate said Pearl always took the more complicated paths in life.

As he put it: “If Frank had a choice of picking the easy way of doing something or the uber-difficult way, he would pick the uber-difficult way.”

How difficult? Worthy of a textbook.

“This is a tour de force of asset protection techniques that will definitely be a law school final exam,” Weidenfeld said. “And final exams are always an effort to find the most complicated cases and see how well law students can take them apart.”

Research editor Alice Crites contributed to this report.