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Haim Saban Sued, Accused of $150M Tax Dodge
Hollywood billionaire calls former financial guru's lawsuit "frivolous."
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Hollywood billionaire and prominent Democrat Haim Saban was sued in L.A. Superior Court on Tuesday by his former financial guru, who claimed that the media mogul defrauded the government out of tax money when he sold his company to the Walt Disney Company in October 2001 for $5.3 billion.
The suit was filed by Matt Krane, Saban’s former tax lawyer who has been sitting in the Metropolitan Detention Center in Los Angeles for over a year on charges of identity theft.
He was also recently indicted by the U.S. Attorney in Seattle on a conspiracy count charging that he defrauded Saban and laundered illegal kickbacks he received in connection with recommending and brokering Saban's investment in an illegal tax shelter.
The suit alleges that Saban instructed Krane (pictured at left) to put together a tax plan that would allow him to dodge paying taxes on a $1.5 billion windfall on the sale to Disney.
The alleged tax shelter was based on the Isle of Man and involved investing in losing stocks.
“Saban demanded Krane put together a tax plan to ensure that Saban would pay $0 on his $1.5 billion profit from the impending sale,” the suit alleges.
“The plan thus saved Defendants $150,000,000 or more in tax benefits while, at the same time, placing $60,000,000 in potential stock profit at Saban’s disposal.”
A spokesman for Saban dismissed the lawsuit as coming from an unreliable source in legal jeopardy himself. "The frivolous claims made by Mr. Krane in this lawsuit are a transparent attempt to distract from Mr. Saban's right to recover the money stolen from him by Mr Krane," the spokesman said in a statement issued to TheWrap Tuesday afternoon.
Krane is a controversial figure who awaits trial on charges of passport fraud, and has also been indicted by federal authorities in Seattle on charges of money laundering.
A hedge fund, Quellos, has also been indicted for money laundering in the same case, related to a complicated tax shelter scheme.
Krane’s lawsuit stems from a dispute over $36 million that Saban has had frozen by an Austria court.
Comments
thrown under the bus Says
Thrown under the bus by Saban has a reason to believe.
In the American Lawyer website, here is
http://amlawdaily.typepad.com/amlawdaily/2009/07/indicted-lawyer-slaps-h...
Taste my ass, Haim, and lawyer up.
Seattle Says
Haim Saban says that the 36 million fee paid to Krane is bad, but the 18 million paid to Quellos is okay. Haim needs to explain why he's not going after the whole fee paid for the tax shelter. I hope Haim can reconcile what's going on here. He may be able to snow the feds up here in Seatltle who are basically working for him, but it looks like the journalists down in L.a. got a whole different take on Haim. Interesting.
Boris Ivanov Says
The Billionaire Exemption:
Suit May Blow Lid Off Secrets of Billionaire Saban
July 22, 2009
Boris Ivanov
Behind every great fortune lies a great fraud, or so the proverb goes. A little civil suit in Los Angeles, California may prove this to be true, disclosing for the first time the secrets of one of the world’s richest and most powerful men, Haim Saban. Secrets implicating his long time political patrons, the Clinton family; secrets implicating the shadowy underworld of the music royalty business at BMI; secrets implicating some of Hollywood’s most powerful executives and some of the world’s largest media conglomerates; secrets implicating the netherworld of Israeli political influence on United States foreign policy. Want to know some of the witnesses for this little civil case? Try Bill Clinton, Hillary Clinton, Ariel Sharon, BMI Executive Frances Preston, Rupert Murdoch, just to name a few.
The simple civil suit filed this week in the Superior Court of Los Angeles County, California hinted at these stories to come. According to the complaint, Saban “built his multi-billion dollar fortune through forgery, perjury and fraud” and that Saban “likes to steal even more” than he “hates paying taxes .” The same Saban who demanded, through his Saban Center for the Middle East, that American kids die in foreign wars for Israel, his other citizenship. The suit further alleges Saban has a “lifelong pattern of theft” including “stealing hundreds of millions of dollars from recording artists, illicitly claiming authorship of songs to which he likely can’t even read the music.” Saban, the billionaire “folk singer from Tel Aviv?”
The complaint goes deeper -- it alleges Saban's illicit influence extends to federal prosecutors, who let Saban skate, while locking up (and keeping from the public) his former confidante and secret-bearer, Krane. According to the complaint, Saban's attorneys "bragged about special influence over and collusion with prosecuting attorneys for the Western District of Washington in facilitating the prosecutorial charging, arrest and bail decisions of the federal prosecutors concerning criminal charges brought against Krane."
The plaintiff, Matthew Krane, is a little known Hollywood lawyer, but he was the decade-long confidante and tax lawyer of Haim Saban. Leave it to a tax lawyer – they know where all the bodies are buried. Today, Krane sits quietly in a federal jail cell awaiting trial on various charges, where the warden controls who Krane can and can’t talk to, and so far that has been everyone. The media has been denied access to Krane for more than a year in an apparently successful attempt to keep Krane silent. Until now.
Krane is represented in the civil suit by legendary bulldog Marty Singer and represented in his criminal cases by Bernhoft Law Firm, of Wesley Snipes defense fame. The civil suit appears to be about the $36 million Saban wants to take back from Krane concerning tax and business advice, but the scope of the suit suggests Krane wants his chance to prove just how he earned that fee, including detailing all that business advice. This opens the door to all the secrets Krane kept and knew about.
This case will be set for trial sometime later this year and will prove to be very interesting for one of the world’s wealthiest men. Until then, many people will be asking themselves the question: What does Krane know? We’ll soon find out….
tax guru Says
Memo to Haim Saban:
You should have quit while you were ahead. You talked your way out of a criminal indictment on the Quellos fiasco by throwing everyone under the bus to a starstruck US attorney.
Now you want to roll with Marty Singer, who's gonna hand you ass to you in a hat because you're going after money that's not yours? You got a lot more to lose than $36 million, hombre.
You are a man of secrets, Saban. That's why you need all that security.
You're walking on the wrong side of the street.
consumer Says
Let's not mislead -- although somewhat independent and not strictly part of the U.K., the Isle of Man is a dependency of the British crown, and its residents are considered British citizens.
Alabama Balaban Says
The plaintiff Matt Krane has a very significant lawyer who simply wouldn't go up against the forces behind Saban if he didn't believe there would be a settlement. And think about it. Krane was the numbers man for Saban for years. He would, no doubt, have a treasure chest of emails and documents galore. Oh happy day! Wouldn't you love to see old Haim in prison stripes? There may be a god afterall.
Manxman Says
Oh and if you look at the document the objection is the use of a Delaware company. For those who don't bother the read the document, the Isle of Man isn't listed.
Delaware is the USA's very own tax haven! Wake up people.
Manxman Says
Once again, your country proves itself incapable of looking at a map "on the Isle of Man, in England".
Some further information:
The Isle of Man is a self-governing jurisdiction
The Isle of Man parliament was founded in AD 979 and is the oldest continuous parliament in the world
The Isle of Man is not part of the United Kingdom
The Isle of Man is not a part of the European Union
The Isle of Man was the first country to give women the right to the vote in 1880
The Bee Gees were born on the Isle of Man
The rate of corporation tax is 0% for almost all types of income; the only exceptions are that the profits of banks are taxed at 10%
The Isle of Man has a low tax economy with no capital gains tax, wealth tax, stamp duty, or inheritance tax and a top rate of income tax of 18%.
The maximum amount of tax payable by an individual is £100,000
The Isle of Man is a popular e-gaming location, with PokerStars having its headquarters on the Island
The Isle of Man is a popular film location with such films as; Stormbreaker, The Libertine, Harry Potter and the Chamber of Secrets, Miss Potter and many others