Forensic Accountant Cites Invalid Money Claims – MB#314

JULY 13 2006 – The jury is now deliberating in the matter of the civil suit and counter-suit between Marc Schaffel and Michael Jackson. Now Schaffel only wants $1.4 million instead of $1.6 million, which itself was cut down from the initial asking of $3.8 million.

Before closing arguments began, forensic accountant Jan Goren testified to digging through Schaffel’s financial goings-on. The forensic accountant found out a lot of things about the way Schaffel was cooking the books, so to speak, in relation to the bank account filled with Jackson’s money which he controlled.

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What he found by going through the ledger of financial events provided by Schaffel is that he was keeping false books of account. There were a number of bombshells revealed to the jury by Goren.

For example, Schaffel claimed he loaned Jackson $500,000 but Goren found out that wasn’t a loan at all. He also confirmed to the jury that there was no substantiation whatsoever, even from Schaffel’s own bank accounts, that he gave “Mr. X” in Argentina $300,000. Woops!

It is no secret that there is a lack of documentation – any type of independently verifiable documentation – to back up Schaffel’s claims. It was Goren’s job to get to the bottom of it all and figure out if Schaffel was being truthful about his claims.

Needless to say, cacklin’ know-nothing hacks who talked about Jackson last night to help boost Nancy (dis)Grace’s ratings and just about every other cable network, ignored a plethora of absolutely devastating evidence presented by the forensic accountant and by Jackson’s former attorney Zia Modabber.

Aside from a passing admission by tabloid reporter and former Court TV employee, Diane Dimond, there was very little actually reported about the happenings inside the courtroom. Their unspoken job was to throw the audience off the facts and details about the civil trial; namely the fact that Schaffel’s credibility is nonexistent on allegation of money he claims he gave Jackson.

__Where’d the money go__
One of Schaffel’s allegations is that he gave Jackson $500,000 cash after Jackson allegedly came to his house in a bus after the Sept 11 attacks. The forensic accountant found out through his investigation of Schaffel’s accounts that the $500,000 wasn’t a loan at all. Goren told jurors the money was simply transferred from one account to another. It was never taken out of a bank account and given as cash to Jackson.

In fact, there were instances where Schaffel took money out of that Neverland Valley Entertainment (NVE) account and put it into his own personal money market account. The Neverland Valley Entertainment account was started for the business relationship between he and Jackson. Jackson put some $2 million into the account.

It’s the same one which was controlled by Schaffel supposedly for the production around the charity song ‘What More Can I Give’. From the Associated Press report titled “Jackson lawyer tries to show ‘pattern of false claims’ in suit:

Goren said Schaffel did withdraw that amount from a checking account for Neverland Valley Entertainment Co., the business he was in with Jackson, but then deposited the same amount into his personal money market account. Jurors were shown checks and the transaction documents. (see Jackson lawyer tries to show ‘pattern of false claims’ in suit)

Obvious questions arose from stunned observers keeping up with the day to day happenings in the case. One such question is just what in the world was Schaffel doing taking half a million dollars out of that business account and depositing it into his own personal money market account?

In essence, he had taken Jackson’s money and was using it to generate more money for himself, then, claimed he handed the money over to Jackson himself.

As Thomas Mundell showed jurors verifiable proof of the transaction via documentation, the forensic accountant Jan Goren, told jurors “That check did not go for cash. It was actually just moved from one cash account to the money market account,” (see Jackson lawyer tries to show ‘pattern of false claims’ in suit).

__$300,000 claim proven to be bogus__
Goren testified that he identified “numerous” false claims for money made to the court by Schaffel in his lawsuit against Jackson. The forensic accountant told jurors he traced millions of dollars through Schaffel’s many accounts and that he found absolutely no validation of the $300,000 claim made by Schaffel.

Schaffel had previously given different versions of this story. He claimed he got the money from an account in Budapest to buy a condo, according to the AP. Then he claimed he withdrew it from a Brazilian bank account and delivered it to “Mr. X” in Argentina.

From the AP report titled “Forensic accountant challenges plaintiff’s claims against Jackson”:

Jan Goren, who showed jurors how he traced millions of dollars through the various bank accounts of F. Marc Schaffel, also said he found no substantiation for a $300,000 payment Schaffel claimed he provided to a mysterious “Mr. X” in South America on Jackson’s behalf.
(see Forensic accountant challenges plaintiff’s claims against Jackson)

Yikes! Well I guess we know now why Nancy (dis)Grace pulled out that art book from 1993 and waved it around on her show last night. If you weren’t watching – and not a lot of people are – (dis)Grace and her favorite lapdog Diane Dimond used the opportunity of the civil trial to talk about everything but the devastating facts coming out about Schaffel’s financial misdeeds. Who wants to be bothered with pesky little details like the fact that the alleged $300,000 delivery to “Mr. X” in Argentina didn’t happen?

This vague reference to $300,000 by Schaffel in the first place sparked speculation from ‘the usual suspects – the ‘Jackson crack-heads’ – who took it and ran with it; linking it to everything from getting rid of the Arvizo family to paying off the family of another phantom ‘boy’.

 A few nights ago, this $300,000 was all the talk of the cable news shows who saturated the airwaves with speculation about what Jackson was allegedly trying to hide in South America. When the lie fell apart, it was like radio silence on that very same issue. No follow up or corrections. The claim was meritless the moment Schaffel made it up earlier this year. And, yes, it was a claim Schaffel had only made for the first time this year, according to AP reports.

Goren confirmed that “there is no check, no moneys leaving a bank…no bank statements, no ledgers” showing this $300,000 anywhere (see Forensic accountant challenges plaintiff’s claims against Jackson).

So what was his conclusion about this mysterious alleged $300,000? He told jurors point blank that after all of the investigation into Schaffel’s accounts, “My conclusion on this is it is not a valid claim,” (see Forensic accountant challenges plaintiff’s claims against Jackson).

You don’t get a much more definitive answer than that.

__Hand-over-fist__
Schaffel was getting money, hand-over-fist, during his business relationship with Jackson. As reported previously, he admitted on the stand that he wrote and backdated 18 checks to get money AFTER he was fired. He claimed he was owed the money, alleging Jackson agreed to pay his rent, utilities and phone bill for 6 months.

Schaffel also alleged Jackson agreed to pay for the lease of a “residence or commercial property” for Schaffel for up to 3 years at no more than $10,000 a month. This was one of those “expenses” Schaffel claimed should have been covered when he was fired.

The problem with these claims is that no one from Schaffel’s side has explained just how in hell Jackson would be paying for Schaffel’s rent and utilities for 6 months, paying up to $10,000 a month to lease a piece of property for Schaffel, AND concurrently be so broke that Schaffel would have to loan him hundreds of thousands of dollars at a time. The two broad lies Schaffel told are conflicting with one another. He wants it both ways, but both things can’t be true.

 

__Japanese company gave Schaffel money__
According to previous reports, Jackson’s attorneys found out that Schaffel was engaging in side-dealing by wrongfully associating himself, business-wise, with Jackson. He was trying to sell the master recording of the single “What More can I give”.

There is a question as to whether or not Schaffel received $900,000 by side-dealing or whether the amount was really $400,000 according to AP reporting about the sum. Either way, Schaffel had absolutely no right to make money for himself with anything related to that charity song. But he did so anyway at the expense of the Japanese company, Music Fighters.

During his testimony Schaffel tried to get off the hook by saying he got the $400,000 from the company and gave half of it to Jackson. However, the forensic accountant found out the truth. Schaffel had the Japanese company wire $400,000 into the Neverland Valley Entertainment (NVE) account.

After which, he promptly transferred the entire amount to his own personal account. From the AP article “Forensic accountant challenges plaintiff’s claims against Jackson”:

Schaffel had testified that he split the amount with Jackson, each taking $200,000, but maintained that he used his half to pay business expenses. Goren said according to his financial detective work that was not true. He said the $400,000 was wired by Music Fighters on Feb. 27, 2002, to Neverland Valley Entertainment, a company Schaffel started with Jackson, and the next day it was transferred into Schaffel’s personal account. (see Forensic accountant challenges plaintiff’s claims against Jackson)

One side issue is why in hell Jackson’s managers ({tag Dieter Weisner} and {tag Ron Konitzer}) and his accoutants at the time weren’t watching the accounts for suspicious activity. Questions still remain unanswered, as far as the public is aware.

Did Schaffel ask the Japanese company to wire the money into that NVE account specifically to make the transaction look legit because the name on the account included the words “Neverland Valley”? Did Schaffel have any basis at all in claiming he gave Jackson $200,000 of that money from that Japanese company?

According to the forensic accountant, Schaffel was lying about that claim as well. As the documentation showed, he is the only one who received the money. More from the AP report:

The accountant noted that in a deposition Schaffel said Jackson was given $200,000 in cash and the rest was kept in the Neverland Valley account to pay bills. “That did not happen,” said the witness.
 
“Is there any support that 200,000 (dollars) went out to Mr. Jackson?” asked Thomas Mundell, Jackson’s attorney.
 
“Nothing,” said the witness.
(see Forensic accountant challenges plaintiff’s claims against Jackson)

If the money didn’t go to Jackson, where did it go? Into Schaffel’s pockets, of course. Goren, who did an extensive investigation into Schaffel’s accounts, found Schaffel used the full amount to help buy himself a $1.9 million dollar house. More from the report:

Goren then used an easel and marker to trace Schaffel’s home purchase, showing the down payment, escrow fees, mortgages and the full price of the home at $1.9 million. He said the source of the down payment was the personal money market account, “and 400,000 that went into that account was Music Fighters money.”
(see Forensic accountant challenges plaintiff’s claims against Jackson)

The more information the public gets about this case, the more it seems obvious that people who were hired to protect Jackson’s assets were, instead, looting his coffers.

 

__In the jury’s hands__
Before the jury began deliberating, closing arguments were heard. Jackson’s attorney said that it is Schaffel who owes Jackson money; over half a million dollars.

According to reports today (July 13), Jackson’s attorney said Schaffel was guilty of “breach of fiduciary duty”, and “fraud” with respect to Jackson. From the AP titled “Attorney says Jackson ‘useless’ in own business matters”:

…Thomas Mundell outlined every bill and claim by Schaffel and said the former associate was guilty of a breach of fiduciary duty and fraud in his handling of accounts for a business he formed to do work for the pop star.

He showed jurors evidence that accounts with millions of dollars in them were “virtually empty” within a month after Schaffel was terminated. As stated previously, Schaffel admitted on the stand to backdating some 18 checks to get money from the account after he was fired.

Mundell also made sure jurors remembered that Schaffel engaged in side-dealing by using Jackson’s charity song to getting $400,000 from a Japanese company. Then he used the money to make a down payment on his house, according to the AP.

As per previous agreements he made, he was not supposed to engage in any deals about the charity song without Jackson’s permission and knowledge, or engage in any activities which were not solely to make money for charity.

Jackson’s attorney readily admitted that Jackson is forgetful and can be “useless in his own business affairs”. But that fact didn’t hinder the defense from proving their case because the records of transactions or the lack thereof, were more than enough to prove Schaffel’s wrongdoing.

As stated previously, this wasn’t a he-said/he-said case. This was a ‘Schaffel-claimed/Jackson’s-records-proved’ type of case.

In essence, the jury doesn’t have to just take Jackson’s word that Schaffel got money he wasn’t owed. They can look at the financial records and see it.

The forensic account did, and dropped bombshell after bombshell about what Schaffel was up to with Jackson’s money. Mundell said the accounts were “looted” and called Schaffel’s claims for money “preposterous”.

In light of everything known about the case, those words pretty much summed it up. What’s worse is that Jackson once left of a message to Schaffel where he talked about being betrayed by so many people in the past. An emotional Jackson could be heard telling Schaffel:

JACKSON: Marc, please, please, never let me down. I have been betrayed so much by people. I want us to be friends and I want us to conquer the business world. Be my loyal, loyal, loyal friend.”

Jackson was certainly disappointed just like he has been so many times before.

All that’s left now is for the jury to send a message to those who seek to profit from their association with Jackson, steal his money, use his name to get more money, then have the audacity to sue him.

Regardless of the outcome of the case, quite frankly I think Schaffel can rot in hell for the way he’s treated Jackson.

Stay tuned.

-MJEOL

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