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Haim Saban Sued for Millions

By imprisoned, impassioned tax lawyer

Allison Hoffman
July 22, 2009
Haim Saban in 2005.(Jan Pitman/Getty Images)
Haim Saban in 2005.(Jan Pitman/Getty Images)

If you’re going to sue one of the richest, most politically connected men in Hollywood, it’s probably a pretty good idea to do it as flamboyantly as possible, so that you get as much attention as you can before the mogul’s machine is inevitably mobilized to crush you and your wild claims. So far, the plan is working for beleaguered tax attorney Matthew Krane, who is currently sitting in a jail cell in Los Angeles awaiting trial on identity-theft and passport-fraud charges. He filed a complaint yesterday in Los Angeles Superior Court against entertainment mogul Haim Saban, and his wife, Cheryl, asserting his right to $36 million sitting in an Austrian bank account that the couple either paid him as a fee or a kickback, depending on who you’re asking. (Krane, who was indicted last month in a Seattle tax evasion case based on his work devising offshore shelters for the $1.5 billion Saban made from the 2001 sale of Fox Family Worldwide, asserts the $36 million was just compensation; the Sabans have sued in Austria to get the money back, since the shelter was ultimately declared illegal.) This new suit accuses Saban—an Egyptian-born Israeli who is friendly with Shimon Peres and is the Democratic Party’s biggest individual donor, and who was recently caught up in a small scandale over Rep. Jane Harman’s alleged offer to lobby on behalf of AIPAC in exchange for Saban’s help getting her a committee chairmanship—of, basically, being a sharp-witted, politically connected, tax-avoiding billionaire who uses his power to his advantage. And it does so in lovely prose. It opens with:

Most Americans pay their income taxes as fair consideration for the privileges citizenship confers. Defendant Haim Saban is not one of them. Despite being one of the richest men in the world, Haim Saban, believing he is above the law, has spent decades trying to avoid paying taxes on the many billions of dollars in income he has received.

The moves on to:

Just as Saban hates paying taxes (while using his political donations to demand special treatment and personal favors), Saban likes to steal even more…. Defendants’ attorneys also 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, all in the hope of depriving Plaintiffs of the fee deservedly earned for Krane’s instrumental role in putting together the Plan.

This theft of another person’s labor conforms to a lifelong pattern of Saban’s. Plaintiffs are informed and believe and based thereon allege that Saban has made hundreds of millions of dollars stealing from recording artists, illicitly claiming authorship of songs to which he likely can’t even read the music, and built his multi-billion dollar fortune through forgery, perjury and fraud. Now, to protect himself and hide his secrets, including secrets that implicate major foreign policy in this country and prominent foreign public officials, Saban seeks to scapegoat Krane.

Through a spokesperson, Saban—who claimed Krane duped him, and wound up paying $250 million in back taxes after a 2006 Senate investigation—dismissed the claims as “frivolous,” and “a transparent attempt to distract from Mr. Saban’s right to recover the money stolen from him by Mr. Krane.” Probably so. But still fun!

Allison Hoffman is a senior editor at Tablet Magazine. Her Twitter feed is @allisont_dc.