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Court TV is now called truTV,
so maybe this article is somewhere on their new site, but I haven't found it yet.

The orginal article was: 
The copy in the Google cache is here:


Updated Nov. 18, 2004, 1:51 p.m. ET 
Dimond: $3 million suit against Jackson may hint at prosecutors' strategy   

By Diane Dimond
Court TV

Frederic Marc Schaffel has filed a $3 million lawsuit against Michael Jackson, claiming he was owed that amount for loans Jackson took from him, and for work Jackson hired him to do, but was never paid for.

He charges Jackson with escalating drug and alcohol use, irrational spending sprees, and pitiable payoffs to Marlon Brando and Liz Taylor in return for their public support for the entertainer.

Jackson spokesman Raymone Bain denied all the charges in the suit. At press time, Taylor 's spokesman had no comment.

Since hardly a week goes by without someone suing Jackson , why is Schaffel's suit significant? Because it may signal how prosecutors plan to use some of Jackson 's unindicted co-conspirators at his criminal trial.

When Michael Jackson was indicted for child molestation in April 2004, the grand jury added a charge of "conspiracy to commit child abduction, false imprisonment and extortion." 

The sealed indictment reportedly included the names of at least five unindicted co-conspirators who allegedly assisted Jackson in his quest to manage the movements of the young boy making the molestation charges and his family.

Among the five unindicted co-defendants on the conspiracy charge was Schaffel, a gay-porn producer whom dozens of former friends, business associates, and lawsuits have claimed is a swindler.

Unindicted co-conspirators are a danger to any defendant, because of what they may know and be able to testify about. But an unindicted co-conspirator who also files a $3 million lawsuit against a defendant often becomes a walking billboard, advertising himself to the prosecutor as available to be "flipped."

It can be viewed as a fairly transparent extortion-like threat to the defendant: "Pay up, or be assured I'll rat you out."

It's high-stakes poker.

Dozens of former business associates, friends, and former roommates have told Court TV's investigative unit that Schaffel is the most likely of the five co-conspirators to "flip," because, they say, he has betrayed and swindled almost every friend he ever had.

But my sources in Santa Barbara law enforcement maintain they have plenty of evidence against Jackson without the need to flip any of the unindicted co-conspirators, because the would have to offer them immunity in exchange for testimony.

They indicate that the plan is: After convicting Jackson and sending him to prison, they will move to prosecute all five co-conspirators, and send them to prison, too. They may even add the names of more conspirators to their "must prosecute" list.

Frederic Marc Schaffel's lawsuit claims that his company, Neverland Valley Entertainment (NVE), was set up at Michael Jackson's request, and that Jackson was a signatory on the company's bank account.

That was a question on the prosecutor's mind at one time. Back on Feb. 18, district attorney Tom Sneddon got a search warrant for files that would reveal who had access to the money in the NVE business account. 

Why did Sneddon think that was important? This Schaffel lawsuit gives us clues.

Schaffel's suit seems to imply that NVE itself, and Schaffel's personal loans, were partly motivated by a desire to get around restrictions imposed on Jackson by Bank of America (BOA). 

BOA refinanced its $200 million line of credit loan to the entertainer, and when it did so, it placed stringent conditions on repayment. It's been widely reported that those restrictions require Jackson to pay 50 percent of all new income back to BOA to satisfy the loan, and, Schaffel's suit maintains, also limits the kind of things Jackson can spend money on.

Schaffel's suit appears to argue that NVE and the Schaffel loans were turned into a secret piggybank in order to obscure income from BOA, or at least allow Jackson to spend as he pleased.

From various court documents and published reports, it appears that the Prosecution believes NVE's bank account was a veritable slush fund used to finance the alleged criminal conspiracy to keep the young accuser's family under control. 

There have been reports that two other unindicted co-conspirators, Frank Tyson and Vincent Amen, accompanied Schaffel to withdraw one million dollars in cash from the NVE account to be delivered to Michael Jackson.

Was that the money prosecutors say was used to house the family, move the family and relocate the family to another country?   

The suit also maintains Michael Jackson made a lot more money on the FOX/Home Movies rebuttal specials, produced by Schaffel, in the aftermath of the February 2003 British documentary with Martin Bashir. 

It was widely reported that Jackson got $5 million for the rebuttal videos. But, according to Schaffel's suit, the actual figure, taking into account foreign rights, was actually $13 million €” $13 million for responding to the storm of controversy that erupted after Jackson steadfastly declared it is perfectly acceptable for him to sleep with young boys.

Schaffel's suit claims that even after earning all that money, Jackson  never paid him back for several high-end loans he extended to the pop star €” several hundreds of thousands of dollars for extravagant shopping sprees.

  • Schaffel claims he loaned cash to Jackson so he could pay the late actor Marlon Brando $1 million to appear at Jackson's 30th Anniversary concerts in 2000 and 2001. It was a way for Jackson to give Brando a gift to pay his own overdue bills, Schaffel says.
  • Schaffel alleges that he loaned $600,000 to Jackson to buy jewelry for Elizabeth Taylor, in order to get her to sign a release allowing Jackson to use footage of her in his Home Movies special.
  • In the aftermath of Sept. 11, 2001, Schaffel also claims, he loaned Jackson $500,000 Jackson requested in case he and his family needed to take shelter underground in California.
  • Schaffel claims even Jackson 's mother, Katherine, demanded a payment of $250,000 for family participation in the Home Movies special.

Throughout the suit, Schaffel cites what he claims were occasions of wild spending sprees by Jackson , including overpaying his makeup artist thousands of dollars a day.

The sprees "accelerated when Jackson 's increasingly more frequent excessive use of drugs and alcohol impelled him into irrational demands for large amounts of money and extravagant possessions."


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