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Trial Delves Into Odd Finances of Pop Star

July 12, 2006|Peter Y. Hong | Times Staff Writer

Michael Jackson borrowed $2 million from a finance company at 4%-per-month interest to make a charity record for victims of the Sept. 11, 2001, terrorist attacks, one of his lawyers acknowledged Tuesday during testimony in a business dispute between the pop star and a former associate.

The loan was one of several accounts of the pop superstar's unorthodox business practices that have surfaced as Jackson has been in court fighting claims that he owes F. Marc Schaffel, whom he hired to produce record and TV projects, $1.6 million. Closing arguments in the Santa Monica jury trial are expected today.

Thomas Mundell, who is representing Jackson, said outside the courtroom that his client obtained the loan at Schaffel's behest to finance production of the record "What More Can I Give."

"When you are close to Michael Jackson he will do anything for you," Mundell said. "He is amazingly trusting."

Jackson's lawyers have said the singer cut his business dealings with Schaffel when he learned the producer had once made pornographic films.

Another portrayal of Jackson's financial habits surfaced in a discussion of the days following the Sept. 11 attacks. Schaffel had said in a deposition that Jackson asked him to obtain $500,000 in cash in case Jackson decided he needed to "take his family underground."

But Jan Goren, an accountant retained by Jackson's lawyers, testified Tuesday that the $500,000 went into a money market account Schaffel controlled.

Schaffel's lawyer, Howard King, said outside the courtroom his client can "independently verify" his accounting.

But Mundell said Schaffel has "a pattern of claiming large cash loans to Mr. Jackson he never made."

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