Lawyer: Schaffel a Professional Swindler, Pornographer – MB#310 UPDATE
<i>Past reports and court docs shed light on Schaffel’s history</i>
JUNE 18 2006 – For a while now, the public has been treated to a one sided view of a case involving Michael Jackson and “professional swindler” Marc Schaffel.
It was big news when Schaffel filed a lawsuit against Jackson. However, Jackson’s countersuit got very little if any coverage by broadcast and cable networks.
Jackson’s countersuit accuses Schaffel of concealing and commingling funds, misappropriating funds, providing false books of account, and wrongfully profiting from falsely associating himself with Jackson after he was dismissed as a business associate.
Since the lawsuit and countersuit, the public has been getting nothing but leaks from those associated with Schaffel.
Interestingly enough, Jackson is far from the only person to make claims of being swindled by Schaffel.
Even pro-prosecution tabloid reporter Diane Dimond found, and actually reported on, damaging information from Schaffel’s past. She was all too eager to out Schaffel’s past when she thought he was an “unindicted co-conspirator” who might turn on Jackson.
The tone of her Schaffel reporting at the time seemed to be an attempt to damage Jackson. It backfired, painting Schaffel as a crook, manipulator and porn producer who had a history of taking advantage of those who did business with him.
The glorified tab reporter did a 3-part series on Schaffel for her former employer, Court TV. But more on that later.
The recently released court docs filed by Jackson’s attorneys in the case, Mundell, Odlum & Haws are rather telling.
Needless to say, none of the points and facts written about in Jackson’s attorney’s Trial Brief made it on the air through some of the talking heads who originally talked about the news when Schaffel first filed his lawsuit.
From the document (doc), it’s quite easy to see that Jackson means business. He has brought in a forensic accountant who has gone through the books and records provided by Schaffel during discovery and revealed that Schaffel is the one who owes Jackson millions of dollars. Not the other way around.
In Jackson’s attorney’s Trial Brief, the lawyer calls Schaffel a “professional swindler”, a “pornographer” and says that Schaffel has a long history of “dishonest, immoral, and manipulative behavior,”(pg 2 of Trial Brief ).
__Those who don’t have a case usually take potshots in the media__
That dishonest and immoral behavior may have been on full display recently. Schaffel appeared on entertainment show Access Hollywood (June 19), taking his Jackson-bashing show on the road.
According AH, he claims that he and Jackson were “best friends”. If you believe that, then I can give you a nice price on the Brooklyn Bridge.
The professional swindler apparently didn’t need to swindle his way onto the air. For many media members, all that is required is to make unfounded claims about Jackson’s personal life which have absolutely nothing to do with his lawsuit or Jackson’s lawsuit against him. And the fawning Tony Potts (Mr. Bobblehead) was eating it up.
And as I expected, there was no mention of Jackson’s countersuit against Schaffel. The slipshod report focused mostly on Schaffel talking about Mike’s nose (Oh, that’s never been done before!), complete with shots of Potts and Schaffel strolling through a scenic area together.
The piggish Schaffel is seemingly using an old trick which doesn’t work anymore: bash Jackson in the media and hope that Jackson wants to settle just to get that person out of his hair. Sorry. That trick has long since lost its magic.
He has made claims to the media of drug and alcohol abuse, and made insinuations about Jackson’s relationship to kids.
If that little trick didn’t work for the Santa Barbara County prosecutors, it damn sure ain’t gonna work for Schaffel given his past.
Jackson watched as the collective media lost their damn minds during pre-trial, trial, and post-trial coverage. He sat in a courtroom for over four months as people he once trusted, put his faith in and thought were his friends, leveled false allegations against him in a court of law.
And (here’s where Schaffel better pay attention), Jackson also watched as his attorneys used the opportunity to lay waste to their allegations, their credibility and outed their motives to lie, steal, cheat, defraud, and manipulate him. All while a jury was watching.
The more Schaffel talks to the media, some observers say, the more questions they have about the validity of his allegations. Really, who could blame them? Some of these same observers also watched as media-hyped lies evaporated into thin air as well.
Something tells me that Schaffel really thought Jackson was going to settle this case a long time ago, instead of going after him for the millions of dollars Schaffel owes him.
The “professional swindler” may be afraid of getting eaten alive when he testifies in the civil trial, and this could be why he is choosing to use the media like he is now.
As for any insinuations he could make about Jackson and children, here’s a newsflash: That ship has sailed. If he chooses to pull an “Arvizo” and go there, the first question on everyone’s minds will be “Where the hell were you during the trial?”
This is a much different atmosphere now, which causes the public to naturally be skeptical about people making claims against him.
Jackson being sued now by some woman claiming he is stalking her via GPS, slashing her tires, and sending her secret messages (see story ). Not to mention having a ridiculous-as-hell molestation allegation thrown out of court because he proved to the judge he was no where near this person at the time of the alleged events (Joseph Bartucci ).
And don’t forget the fact that the mother of the accuser about to go on trial for welfare fraud and perjury . Or that the Santa Barbara D.A.’s office is also about to go on trial for massive misconduct they may have engaged in with respect to the $10 million dollar lawsuit filed against them by Gary Dunlap.
__Schaffel steps into the picture__
Schaffel, who has reportedly worked with other famous, legit entertainments on various projects, came into the picture when Jackson wanted to produce a charity song “What More Can I Give”, which he had originally written in 1998.
The accused swindler started a company called “F. Marc Schaffel Productions LLC” (FMSP), which then began doing business as “Neverland Valley Entertainment” (NVE) in connection with the charity song.
Jackson’s attorney says that Schaffel was the sole member and manager of NVE and FMSP, and had initially arranged for financing of NVE by arranging for Jackson to borrow $2M from a factoring company.
Schaffel got a commission from that lender and put the $2M into a bank account for NVE. Though he put Jackson’s name on the account, along with his own, Jackson never wrote a single check, says his attorney. Schaffel also opened up other accounts that Jackson didn’t know anything about.
Over the course of the next 3 years, Jackson’s MJJ Productions and Fire Mountain companies would deposit an additional $4.4M into the Schaffel account and trusted that Schaffel would use the monies as needed for Jackson related projects.
As a rebuttal to the ill-named Bashir trash-documentary, “Living with Michael Jackson”, Schaffel was hired to produce two Jackson specials: one in rebuttal to Bashir’s trash and the second to show old home movies with Jackson narrating.
Both specials grossed over $10M in foreign and domestic proceeds, according to the court papers. Schaffel was offered 20% of that $10,035,252 and was paid over $1.5M, leaving some $482,000 left to be paid.
The court docs state that Schaffel falsely claimed Jackson was to pay expenses which Schaffel himself were supposed to pay, and claimed that he made “loans” to Jackson which he didn’t make. From the Trial Brief:
Those books and records show (and Mr. Jackson’s expert witness will testify) that Schaffel allocated to Mr. Jackson expenses which should have been allocated to Schaffel himself; that many of the advances and “loans” to Mr. Jackson never occurred; and that Schaffel frequently withdrew money from the NVE accounts for his own benefit.
(p5 Trial Brief)
The forensic accountant is not yet finished evaluating Schaffel’s books “because Schaffel has thus far improperly refused to produce certain bank records which will be subpoenaed for trial,” (pg 6).
Is Schaffel stonewalling or trying to hide a paper trail which could reveal where that money really went? This question may get answered at trial.
There are also other witnesses, apparently prepared to testify at trial, that have been close enough to Schaffel to know his book-keeping habits. According to the Trial Brief:
The expert testimony will be corroborated by the testimony of persons close to Schaffel who have personal knowledge of Schaffel’s book-keeping practices and many of the transactions in question. (pg 5 Trial Brief)
Could some of Schaffel’s current or former associates have turned on him?
Also revealed in the Trial Brief is that Jackson terminated all of his business relationships with the accused swindler in mid Nov 2001 when he found out that Schaffel’s other activities included producing gay porn.
According to Schaffel’s deposition, he admitted to producing “hundreds” of gay porn videos. More from the Trial Brief:
Obviously, Mr. Jackson could not afford to be publicly associated with a gay pornographer in connection with the release of a record and had every right to terminate his relationship with Schaffel for Schaffel’s failure to disclose this material fact. (pg 9 Trial Brief)
Jackson’s lawyers say that at trial they will prove Schaffel“abused the trust that had been placed in him by Mr. Jackson”. He also reveals that Schaffel misappropriated expensive artwork and used funds entrusted to him by Jackson for his own benefit. If that weren’t enough, the defense says Schaffel engaged in “self-dealing with respect to Mr. Jackson’s charity single, What More Can I Give”.
Speaking of the charity song, Jackson’s lawyer reveals that Schaffel was supposed to pay all production costs to create it, some $2.8M. Instead, he used Jackson’s money in the NVE account to pay for it.
Thus, Jackson’s lawyer states, “…he is going to have to reimburse Mr. Jackson $2.8M…” which will wipe out that $482,000 left to pay Schaffel based on that generous 20% offered to him by Jackson at the time for producing those two Fox specials. The net judgment to Jackson just on this issue alone should be t least $2.3M.
To make matters worse for Schaffel, while he was side-dealing he entering into a secret deal with a Japanese group called “Music Fighters” for a “large sum of money” which Jackson knew nothing about.
That “large sum of money” was several hundred thousand dollars. And they are prepared to prove it in court, the attorney states. Did this company file suit against Schaffel? Or did they just write off their loss? That’s a question which may get answered at trial.
Apparently the defense found out that <b>“Some, if not all, of these funds were used by Schaffel as part payment on an expensive home in Calabasas”</b> California (pg 12 of Trial Brief). More from the Trial Brief:
Mr. Jackson is entitled to those monies, or, in the alternative, to impress a constructive trust on the real property purchased by Schaffel with those monies. The amount in question exceeds Schaffel’s claim for unpaid fees on the Fox documentaries, and standing alone guarantees an overall verdict in favor of defendants/cross-complainants.</b>
(pg 12 Trial Brief)
Further, Schaffel is attempting to “pile on” unmeritorious claims for money, the court doc states. They brought up this point in the Trial Brief because they say Schaffel may try to use one page of an allegedly two page, photocopied “contract” to make additional claims for money he isn’t owed.
The second page – apparently the page with the signatures – was conveniently missing. Schaffel claims he can’t find it. Surprise, surprise. That “contract” is marked as Exhibit B in the court doc.
Not only is the one page document shady as hell, but it violates the “best evidence rule” according to Jackson’s lawyers:
<blockquote><div class=newsquote><b>It is an incomplete, unsigned photocopy. Schaffel was in possession of the original and has failed to produce it, claiming he cannot find it.
Of course, there is no way to know, given that Schaffel is proffering a photocopy, whether the scribbled initial appears on the original or was “cut and pasted” from another document onto Exhibit B using a photocopier. Under the circumstances, a genuine dispute exists as to the authenticity of Exhibit B.</b>
(pg 8 Trial Brief)</div></blockquote>
Observers who have viewed the court docs say there is a real issue with the authenticity of such a partially produced “contract” anyway. With all of the other accusations surrounding Schaffel – and given previous reports of his past – it may not be a stretch to think he’s not above falsifying evidence.
__Dimond outs Schaffel, so to speak__
Schaffel’s character, and his past before he met Jackson, has been an issue for quite some time. Back in August 2004, pro-prosecution tabloid reporter, Diane Dimond (of all people) used her platform at Court TV to do a 3-part report on Schaffel, as mentioned earlier.
Dimond seemingly tried to use Schaffel’s past to put Jackson in a bad light before the trial. The attempt was to link Jackson to an unsavory character, thereby causing some people to see Jackson as an unsavory character. And, as stated previously, it backfired.
If she knew then what she knows now, it’s questionable whether or not the 3-part report delving into the shady past of Marc Schaffel would have been done. Put into the context of what’s currently going on with Jackson’s countersuit against Schaffel, the report is quite ironic; even serendipitous to some.
The zeal to smear Jackson through Schaffel – at least in the court of public opinion – turned up a plethora of information about Schaffel’s past…if it’s accurate.
She claimed that Schaffel had multiple aliases, “he repeatedly swindled people”, “took money for films he never made”, bounced checks and “skipped out on bills”(CrierLive: Dimond trying to Destroy Marc Schaffel Aug 25 2004).
Also during her reports, she made statements and insinuations about Jackson, particularly, which should have gotten her sued for defamation in my opinion. So I’m certainly willing to question just about everything out of Dimond’s mouth. However, even a broken watch is right 2 times a day. On the other hand, you don’t get any more “broken” than Diane Dimond.
She was the head “monkey” to the prosecution’s “organ grinder” throughout the trial, and her lips seemed to be permanently glued to the prosecution’s a$s. Figuratively, of course. So I’m almost laughing out loud as I’m relaying her report about Schaffel.
According to her “sources” (I think I just threw up in my mouth a little just by typing the words “her sources”), Schaffel has been sued several times by former business associates and was thrown out of (evicted from) two houses he failed to pay rent on.
She claimed Schaffel has used at least 11 different names and 5 different social security numbers previously.
In Cubic Zirconia’s…uh… I mean, in Dimond’s report, she used one unsavory character to talk about another. Porn star turned P.I., Paul Barresi, called Schaffel “dishonest”.
However, this is the same man who reportedly sold a false molestation story about Mac Culkin to the tabloids right from under the noses of an ex-Neverland employee who wanted to cash in on the 1993 “molestation” craze himself. But that’s a whole other story (see DA Got Conned with LeMarque ‘Witness’ Story? – MiniBullet #17 (plus video) ).
The accused “prosecution ass-jockey” (Jackson’s fans are so creative) also reported that one major porn distributor claimed that “Schaffel cheated him out of $80,000” and he is still waiting to be paid.
Dimond interviewed Joe Becker. Becker is the CEO of ThinkFilms, Inc, according to her report. Becker was supposedly involved in creating the video for the charity single ‘What More Can I Give’.
He told Court TV: “Marc Schaffel – the crook Schaffel as I call him – ran out without paying us $120,000” (see CrierLive: Dimond trying to Destroy Marc Schaffel Aug 25 2004).
If that weren’t bad enough, Schaffel may have falsely used his association to Jackson “to get an up front personal loan of $34,000” from another company.
Also during her reports, she interview Ian Drew. Drew’s employers haven’t been known for their accurate Jackson reporting either. But really, what mainstream media outlet is? Even he claimed to be a victim of Schaffel’s.
Drew said that he was manipulated by Marc Schaffel into interviewing Debbie Rowe. He claimed he did the Rowe interview for print, and Schaffel taped it and made it part of the ‘Take Two: The Footage You Were Never Meant to See’ Fox special which aired on Fox television.
At the time, Dimond called Schaffel’s past a “fantastic story” and a “tangled web”. Yeah, no kidding. But a “tangled web” for whom? Certainly not for Jackson.
Given the current situation with Jackson’s countersuit against the accused swindler, it just seems funny that her previous attempt to smear Jackson can now be used to show that Schaffel has a long history of swindling lord knows how many people out of millions of dollars. Jackson was apparently one of many.
__Debbie Rowe blasts Schaffel__
During the 2005 trial, Debbie Rowe was called by prosecutors. Much to their chagrin, however, she testified that she was not scripted or bribed by Jackson, and she also got in a few shots at Marc Schaffel.
The mommy-come-lately ex-wife has a history of saying things that come back to bite her in the ass, as well they should. So, again, I find it rather ironic that I’m relaying her testimony about Schaffel at a time when she’s trying to forcibly gain access to Jackson’s children through the courts.
Anyway, on the stand, Rowe testified that she was working with the police to surreptitiously record her phone conversations with Schaffel.
As first discussed in MJEOL Bullet #261 and according to an Associated Press (AP) report titled “Rowe says Jackson a victim of ‘vultures’ ”, she says Marc Schaffel actually bragged to her about how much money he was making off of Jackson.
She also said Schaffel was “full of shit”, then quickly apologized for using the expletive in the courtroom. From the report:
She said they recruited her to make a video praising Jackson, then sold it for millions and kept the money. She said the organizer of the video, Marc Schaffel, bragged to her about how much money he was making off Jackson.
"He was out to hurt Michael and in addition would hurt my children," Rowe said. (see Rowe Says Jackson a Victim of ‘Vultures ‘)
Her seething anger at Schaffel continued through her testimony. More from that article:
She reserved her most vitriolic statements for Schaffel, who she said bragged to her that he was being paid for the video and that he had many plans to make money off Jackson.
"He just bragged about how he had taken advantage of an opportunity," she said. "He said he was going to make sure Michael’s career was saved."
At one point she used an expletive to describe Schaffel, then turned to the judge and apologized.
Rowe said she considered Schaffel, Konitzer and Wiesner to be liars. (see Rowe Says Jackson a Victim of ‘Vultures’)
Continuing to rake Schaffel over the coals on the stand, Rowe also testified it was Schaffel who set up a meeting between her, him, and Weisner at the famed Ivy restaurant where she was photographed. Those now infamous photographs and video of her lunching with the two were broadcast all over the world.
She said it was Schaffel’s way of getting even because he and Dieter Weisner were ousted from Jackson’s inner circle.
So add another person to the list of people who felt screwed by Schaffel’s opportunistic behavior.
__LeGrand’s suspicious of Schaffel grew as well__
Also during the 2005 trial, attorney David LeGrand testified as to his suspicions about people around Jackson. LeGrand started a secret investigation into many of Jackson’s business associates who were in control of his finances.
According to LeGrand’s testimony, he began suspicious that Schaffel was using an association to Jackson for his own benefit. From his testimony:
MESEREAU: You grew suspicious of what Marc Schaffel was doing to Mr. Jackson at some point, correct?
LEGRAND: I grew suspicious that Mr. Schaffel was seeking to benefit from Mr. Jackson or being – in relationship to Mr. Jackson. My suspicion of Mr. Schaffel was different than my suspicion of Mr. Konitzer or Mr. Weizner.
MESEREAU: Did you have much involvement with Mr. Schaffel in your work?
LEGRAND: I had a fair amount of involvement with Mr. Schaffel at the very beginning of the development of the “Take 2” production. And I was constantly trying to get Marc Schaffel out of the loop.
I was trying to avoid his involvement or minimize his involvement in Mr. Jackson’s affairs, and it was a struggle.
(pg 10046, lines 9-25)
Also during his testimony, LeGrand flat-out admitted that “it seems everybody wanted to try to benefit from Mr. Jackson on way or another” (pg 10046 lines 1-3)
Schaffel was one of many people who had fallen under the radar of suspicion. Dieter Wiesner and RonKonitzer were also part of that investigation. More from his testimony:
MESEREAU:.At some point, did you have Schaffel, Konitzer and Weizner investigated?
LEGRAND: I — again, on behalf of Mr. Jackson, I engaged an independent private investigative company, and asked them to investigate the backgrounds of Mr. Konitzer and Mr. Weizner and Mr. Schaffel.
LEGRAND: Because I was suspicious of their motives, and some of their statements didn’t quite seem to add up.
MESEREAU: Did you think they were stealing from Mr. Jackson?
MR. AUCHINCLOSS: Objection. Improper opinion; no foundation.
THE COURT: Sustained.
MESEREAU: What did you do to have Schaffel, Konitzer and Weizner investigated?
LEGRAND: Working with one of my partners at Hale Lane who had the — he’s a former U.S. Assistant Prosecutor and had good relationships with a couple of private investigating firms, we selected a firm, got them a retainer and asked them to do background checks and let us know what they found.
MESEREAU: You hired an investigative firm, correct?
MESEREAU: To start investigating these people, right?
MESEREAU: And others involving Mr. Jackson, right?
MESEREAU: You were doing it on behalf of Mr. Jackson, correct?
LEGRAND: Yes. (lines 3-10, 14-28, 1, 6-15 pgs 10011-10013)
Obviously there were many people around Jackson who thought Schaffel was engaged in some form of self-dealing and taking advantage of Jackson for his own purposes without Jackson’s knowledge.
This is not a putdown in any way, but if Jackson’s current attorney is only half as skilled as Thomas Mesereau, it appears the jury may find that Schaffel should pay a judgment to Jackson for millions of dollars. The trial is set to begin Monday, June 19.
All of the reported scamming, conniving and deceitful behavior Schaffel has engaged in could become a huge issue at trial. Possibly, there are people who were scammed by him in the past who also would be quite interested in this trial. Not because of Michael Jackson necessarily, but to watch someone — who has finally swindled the wrong person – get his just desserts.
If that were to happen, maybe Schaffel could file for bankruptcy and flee to Brazil……in a hot air balloon.