Forensic accountant disputes claims against Jackson
Michael Jackson's lawyer hired a forensic accountant who testified Wednesday and said that a former associate who is now suing the singer used money from a Japanese record production company for the down payment on his own $1.9 million home rather than for the business expenses he claimed.
Jan Goren showed jurors how he traced millions of dollars through the various bank accounts of F. Marc Schaffel. He 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.
The testimony was presented as the trial neared the closing arguments phase.
Schaffel's lawsuit claims Jackson owes him $1.6 million for various endeavors he worked on for the pop star.
Jackson's side has sought to show Schaffel enriched himself at the singer's expense, outweighing any sums that might actually be owed.
Goren challenged Schaffel's claim that he received $400,000 from a Japanese company called Music Fighters which was seeking to buy rights to Jackson's "What More Can I Give", an ill-fated charity recording intended to raise money for victims of the terrorist attacks - September, 11th 2001.
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 that was not true according to his financial detective work.
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.
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.
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."
On the purported delivering of $300,000 to "Mr. X" in South America, Goren testified that Schaffel never claimed the amount until this year and "there is no check, no moneys leaving a bank ... no bank statements, no ledgers."
"I have nothing that corroborates it from a documentary point of view," he said.
He noted that the entry was coded "EFT," which refers to an electronic fund transfer to another account. But he said the amount was never transferred to or from any account.
"My conclusion on this is it is not a valid claim," Goren said.
Cross Examination
Schaffel's attorney, Howard King, on cross-examination, challenged some of the accountant's opinions and asked if he considered testimony by other witnesses who said they knew about some of the disputed transactions.
Goren said he read depositions by Jackson's business manager, Allan Whitman, but had not questioned him about any of the records.
"You didn't ask Mr. Whitman to see any of Michael Jackson's records or Michael Jackson's tax returns?" asked King.
"I did not," said Goren.
"Would you have liked to have seen them?" King asked.
"I would like to see Mr. Schaffel's tax returns," Goren said.
Despite of King's claim that he was wrong on some figures, Goren consistently asserted that there were no documents to support some of Schaffel's claimed expenses.
"Even when there are documents that slightly support it," he said of one charge, "it fails and it fails miserably."
Asked why Whitman and others in Jackson's financial inner circle would have approved some large payments to Schaffel, Goren said, "I think they trusted Mr. Schaffel."
King asked if Goren had seen a receipt from a Hungarian bank, on the issue of the $300,000,
"No, you can show me," said Goren.
But it wasn't until redirect examination by Mundell that the receipt was displayed in court. It showed a withdrawal of $258,000 from a Hungarian bank three years before Schaffel claims he was dispatched to South America on a mission for Jackson.
"Of course this does not influence my opinion," Goren said. "This transaction took place three years before. So what? How does it end up in South America? I don't see the connection at all."
King asked Goren if he ever asked Mundell why no one had asked for the name of the recipient of the purported $300,000 payment. Goren said he had not.
