July 22, 2009
Haim Saban sued by former attorney, accused of tax evasion
Haim Saban, the billionaire media mogul and prominent Democrat, is being sued by his former tax attorney for an alleged multimillion-dollar tax dodge. The suit was filed Tuesday in L.A. Superior Court by Matthew Krane, a once prominent Hollywood lawyer who now sits in jail awaiting trial for money laundering, passport fraud and/or identity theft, according to various sources. Krane is accusing Saban of instructing him to create a tax shelter that would save $150 million in tax benefits from the $5.3 billion sale of Fox Family Worldwide to The Walt Disney Company in 2001.
According to The Wrap, “the alleged tax shelter was based on the Isle of Man and involved investing in losing stocks.” Saban’s spokesperson has called the lawsuit “frivolous” citing the whole thing is a revenge ploy by Krane who is upset over a $36 million dispute. Allegedly Krane’s profit from the shelter, Saban had the money frozen by an Austrian court. And, according to the New York Times, Krane’s lawsuit also accuses Saban, who is a leading Democratic fundraiser, of “secret foreign-policy dealings, demands for special treatment in return for political donations and what it called ‘perpetual fraudulent and deceptive conduct’ in business and tax strategies.”
Back in 2006, a Senate subcommittee investigated the tax shelter (report here) and left Saban alone. Based on Krane’s own legal track record, what exactly does he plan to do with $36 million from jail?
So much for client/attorney privilege.
UPDATE: A spokesperson from Saban’s crisis management firm just emailed the following statement:
I did get the “frivolous” part right.