FINAL RECKONING 6: Myung Ho Lee and HOLLYWOOD MAGIC for Michael Jackson

The Final Reckoning post about the mysterious Myung Ho Lee, Michael Jackson’s chief financial advisor who mishandled his millions in 1998-2001, didn’t turn out to be final after all.

Despite everything we’ve learned about this character and Michael Jackson’s not so lavish real spending, the question where the millions he borrowed from Bank of America were gone is still there.  

In a rare fit of justice towards Jackson the New York Times acknowledged in 2006 that the most probable reason for Michael’s debt mounting in the late 90s was not his ‘flagrant’ spending, which was Myung Ho Lee’s standard narrative and constant media propaganda, but bad advice from Michael’s financial advisors.  

Reporter Timothy O’Brien actually named Myung Ho Lee as the central figure responsible for Michael Jackson’s growing financial trouble. He assumed, and I fully agree with him, that the leading drain on MJ’s wealth may have been ‘the monumentally unwise investments that produced equally colossal losses’.

Myung Ho Lee

Myung Ho Lee certainly put his hand to it as he was head of “Jackson International” that handled all Michael’s funds and investments in 1998-2001.

Here are some excerpts from O’Brien’s article:

Jackson faces demise of a financial Neverland

By Timothy L. O’Brien

May 12, 2006

….Others close to Jackson say that the performer’s finances have not unwound simply because he is a flagrant spender. They say that until the early 1990s, he paid relatively close attention to his accounting and kept a watchful eye on the cash that flowed through his business and creative ventures. After that, they say, Jackson became overly enamored of something that ensnares wealthy people of all types: bad advice.

“I think after me, there were a lot of people that didn’t care. All they were interested in was what they were getting. And they killed the golden goose,” [said] Frank Dileo, who was Jackson’s manager from 1984 to 1989.

At least one of his advisers from the period contends that Jackson kept a lid on his spending until even the late 1990s.
“I didn’t ever see him take all kinds of people all around the world,” said James Morey, who served as one of Jackson’s personal managers from 1990 to 1997 (when Jackson fired him and replaced him with the Saudi sheik Prince Alwaleed bin Talal).

“Michael is very bright, and Michael pretty much knew – even when he was advised something was too expensive – if he felt it was right for the art, he had the means to pay for it. He wasn’t oblivious to what budgets were.”

Jackson also came under the sway of an assorted rotation of new advisers, who apparently convinced him to make heavy bets on sketchy investments that never panned out.

In late 1996, according to court papers, he met a Korean adviser named Myung Ho Lee who emerged as a central figure in the performer’s debt binge.

Although documents indicate that Lee brought at least two risky investment opportunities to Jackson, Lee still castigated the performer in court papers for a lack of financial discipline in 1999 and 2000. “Jackson became fixated on obtaining expensive possessions and feeding his ego by listening to the advice of hucksters and impostors,” Lee said.

The leading drain on Jackson’s ample resources may have been monumentally unwise investments that apparently produced equally colossal losses.
Malnik estimates that some of Jackson’s advisers squandered $50 million to $100 million on deals that never panned out.

Jackson also invested heavily in a short-lived entertainment Web site, hollywoodticket.com, designed to let fans interact with stars. The site’s founders, Derek Rundell and Gary Casey, became advisers to Jackson in 2000; after he dismissed them the following year, they sued him for $25 million.

It is possible that Jackson’s biggest costs may have shifted in early 2000 away from his shopping sprees to simply shouldering enormous monthly interest payments on his debt. According to one executive involved in his affairs, Jackson was making monthly payments of about $4.5 million in 2005 on $270 million in debt.

Derek Rundell and Gary “Court” Coursey were not associated with Myung Ho Lee and were sort of his rivals, but since they were mentioned here they are worth a note too.

COURT AND DEREK

The point in favor of these two young people is that when sorting through MJ’s business papers they uncovered a big fraud Michael had fallen victim to. He was led to believe that he had obtained the controlling stake in Marvel Comics though the deal was never made. The discovery came in spring 2001 and was a crushing blow to Michael – someone had been lying to him all along.

Frank Cascio describes the scene when Court and Derek told Michael that it was a fraud:

 “In their ongoing study of his financial situation, they had discovered bad news about a deal he thought was nearly complete—the move to purchase Marvel Comics. As with the Beatles catalog, which he had acquired in 1985 in a brilliant business maneuver, Michael predicted the value of Marvel, especially the potential of Spider-Man, before the films based on the comic were made. The Marvel deal had in fact fallen through, but Michael had been led to believe that the company was his. Court, Derek, and I met with him and informed him that he did not in fact own Marvel Comics and never had. Michael refused to believe it, and was angry at me—at us—for delivering this news, but finally, he put his hands over his face and started crying.

“Why do I get used and lied to like this?” he kept repeating.

[“My Friend Michael”, chapter 10]

The Marvel scam is probably where many of Michael’s millions borrowed from Bank of America went into, but it still remains to be seen who were the fraudsters behind the deal. Timewise Myung Ho Lee may be to blame as the scam occurred during his tenure with MJ and being his chief financial advisor he was obliged to know, however there is no proof that he was involved.

Besides uncovering the Marvel fraud Court and Derek helped MJ to get rid of some of his excessive business expenditure. The young and inexperienced Frank Cascio, who was Michael’s assistant then, was exasperated by the mess in Michael’s finances and hoped that Derek and Court would sort it out:

“His talent managers would be doing one deal while his business managers were negotiating a conflicting deal elsewhere. One manager was making grandiose promises to him about the deals he was making, but then he would go MIA [Missing From Action] for up to a month at a time. Michael’s organization was in a state of chaos.

The result of all this chaos was that Michael’s finances were a mess. People were taking advantage of him. His organization had umpteen offices with ridiculous expenses. People on his payroll were crisscrossing the world, flying first class, and we had no idea who was flying where or why their trip was even necessary. Michael was paying five hundred cell-phone bills every month!”

Court and Derek did indeed manage to get rid of some hangers-on in Michael Jackson’s life but they were not above taking advantage of Michael’s name and riches themselves. In fact, their cooperation with Michael started a year earlier when in May 2000 they convinced him to invest at least $2mln in their hollywoodticket.com project and when it fell through Derek’s only comment was that the project was a “disappointment”.  

It seems that most people around MJ took advantage of his generosity and regarded millions they were entrusted with as money to be freely spent without bearing any responsibility for it. Michael Jackson rarely sued of his own free will unless he had to retaliate an attack.

In 2001 Roger Friedman wrote:

Jackson also may not have been as astute as previously described in his choosing of business partners. Last year, he invested $2 million in a L.A.-based Internet outfit called Rundell & Coursey, which was launching something called HollywoodTicket.com. But that venture, conceded founder Derek Rundell yesterday, has been a “disappointment.”

Rundell and Coursey have their own legal problems. They’ve been battling a lawsuit from WebMD, the online medical site.

The NY Post described those legal problems:

WebMD charged the partners with providing false financial information to deceive WebMD into acquiring it. While the two sides settled the lawsuit, WebMD claimed in court papers that Coursey “did little more than travel on first-class airline tickets and incur business expenses for which he claimed reimbursement.”

Internet analysts say HollywoodTicket.com had the right intentions but didn’t execute them well. Idil Cakim, a senior media analyst at Cyber Dialogue, said it is possible that while the business model looked good, it was not implemented in the right way.

And the Venture Capital provided the details of their lawsuit against Michael Jackson:

“Trading on Jackson’s name didn’t save HollywoodTicket.com, which was out of business less than a year after it had launched. Still, Rundell and Coursey managed to sign a deal with Jackson in May 2001 to provide him financial “advice, consultation, and assistance” over a three-year period. The agreement called for the pair to be paid $60,000 a month. It also stipulated that Jackson had just 60 days to back out of the arrangement, which had been made retroactive to April 2001.

When Jackson fired them roughly two months later, on July 3, 2001, they filed a $25 million lawsuit against him.”

In fact, Jackson did back out 60 days later, in full accordance with the agreement but the lawsuit still claimed a breach of contract. The demand for $25 million was outrageous, especially considering that the two guys had earlier mishandled at least $2 million of Michael’s money.

The lawsuit was dismissed but only after the Jackson side countersued them for fraud in January 2002. The dispute seemed to continue until the beginning of 2003 and ended in a settlement for an unknown sum.

Characteristically, the media gleefully reported the $25 million lawsuit against MJ, but didn’t say a word about Michael Jackson’s counter lawsuit. This was no accident – every new complaint was used by the media to portray him as a conceited star who took advantage of his assistants who selflessly worked for him without getting paid. And the crazy sums of those lawsuits were presented as a sort of ‘proof’ of his guilt.

And Court & Derek’s lawsuit was no different. It was strategically filed on the day of Michael Jackson’s concert on September 7, 2001 at Madison square, and the media certainly went into a frenzy over it.

JACKO GETS WACKOED BY $25M SUIT, rejoiced the anonymous ‘Yahoo Travel’ in the NY Post.

KING OF POP MOUNTS HIS WOBBLY THRONE. A GODFATHER, TWO DRAMA QUEENS… AND ANOTHER NASTY LAWSUIT, echoed the Guardian.

A couple of years later a piece in the UK Telegraph headlined INSIDE THE COURT OF THE KING OF POP presented Michael Jackson as a tyrant and his business advisors as his ‘loyal servants’. Everyone who knew Michael personally must have been shocked to read that

“Jackson has long believed in ruling by fear and intimidation. He has hired and fired his way through hundreds of business advisers. Michael Jackson is master of creating uncertainty and discomfort among his entourage.”

No wonder then that in this shameless media environment, which was constantly craving for Michael Jackson’s blood, Myung Ho Lee and many others felt completely safe and even encouraged to waste away his millions, and when their projects invariably failed, sue him for his money after they themselves grossly mismanaged it.

OTHERS

When Myung Ho Lee sneered at the “charlatans, hangers-on, hucksters, con artists, sycophants and swindlers” around Jackson who squandered his fortune in “bizarre ways”, I imagined that he referred to people like Dieter Wiesner, who operated somewhat apart from Myung Ho Lee and over whom Lee seemed to have no control.

Imagine my shock at the news that Wiesner’s licensing project for using Michael’s likeness on German merchandise was endorsed by Myung Ho Lee himself!

This nuance is revealed by Steve Knopper in his book about Michael Jackson’s finances which lists Lee’s help to Wiesner’s company as part of his accomplishments:

With Lee’s help, Michael paid $7.4 million to MJ Net, a German entertainment-memorabilia company, for use of his likeness on products, including a state-of-the-art audio speaker system with photos of Michael on the front panels.

He invested $2 million in a fuel-cell technology company.  

He was «extremely interested» in a company that had engineered a magnetic motor, for use as a high-efficiency generator, and attempted to invest $10 million before reducing his stake to $2 million.  

For all these deals, Lee took a 2.5 percent fee.  

….“Michael gave him all kinds of ability and authority and power, and he exercised it to push John [Branca] out, any way he could, and push me out,” says Zia Modabber, one of Michael’s longtime lawyers.  

[MJ: The Genius of Michael Jackson, by Steve Knopper]

So Myung Ho Lee ‘helped’ Michael to invest $2 million in a fuel-cell technology company (Neo-Genesis) and another $2 million in a magnetic motor project, and was instrumental in the creation of Wiesner’s company in Germany.  All three ventures brought only losses but Lee still charged Michael a 2.5% fee for his assistance. And this could be the tip of the iceberg only.

The story about Michael investing $7.4 million in MJ Net is disputed by Wiesner whose lawsuit claims exactly the opposite and says that it was he who paid MJ for the exclusive license to use his name and logo on various merchandise, which definitely sounds more logical to me.

Whatever the case, Myung Ho Lee was still involved in the creation of Wiesner’s company in his hometown Frankfurt, and we even remember Maureen Orth mentioning that Lee travelled there together with Michael Jackson.

The MJ Net was set up on September 30, 2000 which was when Myung Ho Lee still oversaw all Michael’s investments and was supposed to provide legal back-up for his deals. Lee was actually a lawyer trained at the University of Chicago and according to Maureen Orth of the Vanity Fair his sister, So-Yung, was the chief legal officer at Jackson International from 1998 to 2001.

In the absence of John Branca and Zia Modabber, who had been ousted by the two Koreans, the Lees were certainly responsible for the legal side of the MJ Net project same as all other Michael Jackson’s investment deals, at least until June 2001 when Jackson International was dissolved.  

But their legal supervision of the MJ Net deal was so inadequate that it cost millions to Michael.

Wiesner’s complaint said that the contract was giving him the exclusive right to use Michael Jackson’s likeness on various merchandise produced in Germany and worldwide, however it was to come into effect only after Michael Jackson’s written notice that he had terminated his prior merchandising agreement – with Signatures Network, formerly Sony Network.

His lawsuit claimed that:

• “On or about January 8, 2001, Jackson gave MJ Net written notice of the termination of the Signatures Agreement” but “Jackson knew or should have known that Signatures’ position was that its agreement was not terminated, and that Signatures would take legal action against Jackson and MJ Net to preserve its rights.”

• “As a result of Jackson’s breach of the Agreement plaintiff has suffered damages in at least the amount of (1) the $1.4 million deposit; (2) the $6 million in initial advances; and (3) lost profits from the exploitation of the Licenses Marks which plaintiff is informed and believes is in excess of $50,000,000.”

All in all, Wiesner sued Michael Jackson for a crazy sum of $64 million, including the $7.4 mln in the initial investment and pay for the license, the $1.6 mln settlement with Signatures (Sony) Network, plus interest, ‘lost profits’ and whatnot.

Dieter Wiesner sued Michael Jackson for $64 milion

The Spiegel article published in 2011 revealed that the lawsuit ended in September 2007 when Michael Jackson signed a confidential settlement with Wiesner and agreed to pay him $3.48 million.

Those interested may have a look at the details:

26.04.2011

…Wiesner met Jackson in 1994, when he got the singer interested in a peach-flavored energy drink called “MJ Mystery Drink.” Wiesner eventually became Jackson’s manager.

On Sept. 30, 2000, the Frankfurt-based company MJ Net Entertainment managed to obtain a licensing agreement with Jackson and his company Triumph International, possibly through Wiesner’s intercession. The artist wished to produce and merchandise certain products which bear his name, his symbols, logos, brands, designs and images or photographs of him. MJ Net, as the license holder retained the sole and unconditional right to enter into third-party contracts concerning production or matters relating to licensed products. Any T-shirts or other items bearing the artist’s image would garner royalties for MJ Net, and Jackson himself, according to the company’s business plan, was to have a stake in the company.

That euphoria was short-lived. [ ] It appears that the whole business of royalties was never carried out entirely correctly. Signature Network, an American company, claimed similar rights — apparently Jackson had sold off his rights at least twice.

MJ Net had to be dissolved in 2004 and the district court in Frankfurt declined to open insolvency proceedings against the company due to a lack of sufficient assets. The company had made just €871 ($1,270) in revenue in 2002, according to an expert insolvency review.

The courts were unable to ascertain whether fraud had occurred, but in January 2007, Wiesner was sentenced to a fine of €25 per day for 90 days, for delaying insolvency proceedings.

It’s unlikely the fine caused Wiesner many sleepless nights. After Jackson fired him as an advisor, Wiesner sued the musician and his company Triumph in a Los Angeles court, asserting his right to compensation for unpaid work performed in his role as manager.

To settle the disagreement, both parties signed a confidential settlement agreement and mutual statement, not previously revealed to the public, on Sept. 14, 2007. With his large, looping signature, Jackson agreed to pay Wiesner a total of $3.48 million.

Dieter Wiesner should be given merit for not saying a bad word about Michael in his interviews and book “Michael Jackson: The Real Story”, but his narrative definitely misses a chapter about the MJ Net failure and his lawsuit against Michael all of which Wiesner chose to omit. 

But putting aside Wiesner’s role in this unsavory story and the gigantic sum he claimed from Michael Jackson, let us look at a person who provided Michael with that notorious note terminating his previous merchandising agreement, which set the ball rolling and resulted in all the mishaps.

Who could that person be? Was it Michael Jackson himself who sorted out the legal problem with a company called Signatures Network?

Certainly not, so in search for the responsible party let us go over the facts again.

The termination note was submitted on January 8, 2001, when all Michael’s finances and investments were handled by Jackson International which was dissolved only in June 2001, and even after that Myung Ho Lee claimed that he was still working for Michael.

We also remember Zia Modabber’s comment that Myung Ho Lee exercised the power of attorney given to him to push out both Zia and John Branca “any way he could”.

With these two key lawyers out of the picture Myung Ho Lee remained the only person who 1) supervised that deal and 2) could settle a purely legal dispute with the former Sony Network. Apparently, he never did and instead provided MJ with a fake termination note which eventually made him face a multi-million lawsuit.

So the line in Wiesner’s complaint stating that Michael Jackson “knew or should have known” must be actually read as “he didn’t know” and the fault for misinforming Michael surely rests with Myung Ho Lee. This cannot be proven by documents as Lee actually destroyed all records of his business activity for Jackson (see the previous post for that), but all evidence points to him being the central problem in that situation.

For some reason not a single media outlet reported Myung Ho Lee’s misdeeds – his name has always been mysteriously protected from any criticism. As if following the orchestra conductor all media picked up his lurid stories about Jackson told to Maureen Orth of the Vanity Fair and repeated his every lie, but suppressed the truth about Lee’s personality and business activity – so his huge damage to Michael Jackson’s reputation and finances still remains unknown.

MYUNG HO LEE and MARCEL AVRAM

Despite the media effort to cover up for Myung Ho Lee’s misdeeds, there are some clues indicating that the damage he did to Michael was not accidental and that it was malicious sabotage on his part, done in a sophisticated and seemingly innocent way.

Various incidents here and there suggest that sometime around 2000 Lee began to covertly work against Michael to deplete his finances and undermine his credibility and reputation.

The destruction of financial records, his role in providing the invalid termination note, and his several years of vicious slander against Michael in the Vanity Fair are only some instances of the above.

His method was to let Michael down by disinformation and then make him face the music.

A strange incident confirming this conclusion took place when Myung Ho Lee was in cooperation with Marcel Avram, the promoter of Michael Jackson’s charity concerts in Seoul and Munich in June 1999.

Myung Ho Lee boasted that he was part of the deal. This follows from his lawsuit which says that besides the (failed) Neo-Genesis deal on fuel-cell technology he also made deals for Jackson with Cheil Samsung of Korea:

“Besides the loans, Lee says he made deals for Jackson with Cheil (Samsung) of Korea, as well as with Neo Genesis, a company Lee says was involved in fuel cell technology.”

Neo-Genesis disappeared from the Internet without leaving a trace, while Cheil companies are numerous as Cheil translates from Korean as “best”. However, the only Cheil company under Samsung is Cheil Worldwide Inc., a marketing company that offers advertising, public relations, etc.

Until 2008 it was called Cheil Communications, and Cheil Communications was indeed involved with Michael Jackson – initially they promoted his concert in October 1998 in Panmunjom, the truce village between North and South Korea but that plan was cancelled “due to negative public opinion and complications involving military issues”.  

And a year later Cheil Communications promoted Michael’s charity concert in Seoul, which took place on June 25, 1999, and was called “Michael Jackson and friends”. Myung Ho Lee’s part in the project seems to be nothing much – he just brought together Cheil Communications and Marcel Avram who was producing the concerts.

Two days after the charity concert in Seoul, Jackson was performing in Munich and this is where a tragic accident took place – the bridge on which Michael Jackson was standing fell from a 10m height and this resulted in a heavy injury to his spine. Frank Cascio never understood why they were not allowed to call an ambulance and had to cruise around the city in search of a hospital while Michael was in the back seat in a half-conscious state.

The responsibility for the accident certainly rested with the director of the show Kenny Ortega and concert organizer Marcel Avram.

This German TV video reminds us of the accident and says that Michael crashed at a speed of 20km an hour. However, Marvel Avram shrugged off Michael’s injuries as insignificant. “That’s like football”, he said:

Michael Jackson didn’t sue Avram or Ortega for the irreparable damage to his spine that was revealed only later and the incessant back pain that plagued him forever after. As I’ve already said he rarely sued unless he had to counter other people’s complaints.

Instead, it was Marcel Avram who sued Jackson for his alleged refusal to perform at two millennium concerts that were to take place on December 31, 1999, and were meant to compensate for the losses Avram allegedly sustained at the two charity concerts.

Michael Jackson argued that it was Avram who cancelled the millennium shows for fear that they would not be profitable, but in the media hysteria that followed no one was actually listening.

The BBC reported:

Tuesday, 27 June, 2000

Jackson sued over millennium shows

A German concert promoter is suing pop superstar Michael Jackson for over $20m for allegedly pulling out of two concerts to mark the new millennium.

Marcel Avram, who has promoted Jackson since 1972, filed a suit in the California Superior Court in Los Angeles seeking damages of $21.2m (£14.1m) plus interest.

Avram claims Jackson pulled out of a deal signed in the spring of 1999 for him to perform at the millennium events which were to take place in Sydney, Australia, and Honolulu.

A statement issued by Avram’s company, Mama Concerts & Rau, said he had tried for six months to reach an amicable agreement with Jackson – who is said to have received a $1m (£667,000) advance on the deal – but without success, even though there was no get-out clause in the contract.

Avram last hit the headlines in December 1997, when he was jailed for three and a half years in Germany on 12 counts of tax evasion.

By the way, when Marcel Avram was sentenced to three and a half years in jail Michael Jackson didn’t give up on him and visited him in prison though Avram had been abandoned by many of his other clients. Avram was released after serving only 9 months out of his sentence.  

Though Avram lost many clients during his jail stint, Jackson remained and even visited him in prison. Avram was released in April 1999 after serving nine months of a three-and-a-half-year sentence.

Since Michael Jackson’s concerts took place just two months after Avram’s release his friend Michael was obviously the first person Avram turned to in an effort to mend his dire situation.

Frank Cascio commented that:

“Avram was out of pocket again, and so, not surprisingly, he sued Michael for millions of dollars, blaming him for the millennium concert cancellations, as well as for the resulting damages.”

But even the $21 mln claim wasn’t enough for the grateful promoter.

In January 2002 Marcel Avram filed one more lawsuit against Michael Jackson – this time for the damages never sustained but only ‘anticipated’. Upon hearing that Michael was thinking of a tour to promote the Invincible album, Avram claimed that MJ had broken his promise to let him organize his next tour. The promise was allegedly given to Avram when he sued Michael Jackson the first time.

I know it sounds complicated but Marcel Avram actually sued Michael Jackson three times – the first lawsuit was in 1994 for pulling out of the Dangerous tour when Michael was under much stress over the Chandler allegations, was unable to adequately function and needed to go to a rehab. MTV reported that the sum claimed by Avram was more than $40 mln:

In 1994, the promotion firm sued Jackson for more than $40 million, after he canceled a total of 19 dates of the Dangerous tour. At the time, Jackson faced allegations of sexual misconduct with a minor, although the official reason given for the cancellation was that he was addicted to painkillers. The matter was settled out of court.

Other media said that the claim was $20 million, but this was probably the final sum for which Marcel Avram agreed to settle after making Michael promise that his next series of concerts would be promoted by him. And in 2002 Avram somehow managed to link that old promise with the prospect of the Invincible tour.

Incidentally, the many millions paid by Michael Jackson to Marcel Avram for cancelling the Dangerous dates, coupled with the $15,3 mln paid to the Chandler extortionists, were actually a trigger for Jackson’s further financial trouble.

Here is a summary of all Avram’s litigation against Jackson in case you are still confused:

Marcel Avram: “He had some pain, but that’s like football”

MICHAEL JACKSON TAKES STAND IN MILLENNIUM CONCERT LAWSUIT

JENNIFER VINEYARD  November 13, 2002

Michael Jackson took the stand Wednesday to defend himself against a concert promoter’s lawsuit accusing him of fraud and breach of contract.
Marcel Avram, a European concert promoter who has worked with Jackson since 1972, filed suit in June 2000, claiming the singer cost him $21 million when he allegedly abandoned plans to perform two millennium concerts on both sides of the international date line.

Attorney Louis “Skip” Miller told the court that Avram was left with hundreds of thousands of dollars in expenses after Jackson backed out of the shows. Jackson attorney Zia Modabber countered by saying Avram wanted out of the shows after two charity concerts also involving Jackson failed to make a profit. Those shows were held in Seoul, South Korea, and Munich, Germany, in June 1999.

Avram testified that his contract with Jackson called for two for-profit millennium concerts and two charity concerts and that when the charity shows lost money, he expected to recoup his losses with the millennium concerts but could not when Jackson backed out in October 1999. He said he lost even more money on advance event and production costs — about $10 million — as well as a $1.2 million advance paid to Jackson for the millennium shows. The promoter estimated he lost another $10 million in earnings for the two concerts and the worldwide television rights he had secured.

The suit isn’t the first Avram has filed against Jackson.

In 1994 Avram’s promotion firm sued Jackson for $20 million after the singer failed to complete his 1993 Dangerous world tour, claiming fraud, negligent misrepresentation and breach of fiduciary duty. Jackson had canceled 19 Avram-promoted concerts.

Avram settled the lawsuit after obtaining an agreement that he would have the rights to promote the singer’s next series of concerts.
So when Jackson allegedly went shopping around for a new promoter when it came time to promote Invincible, Avram sued him again. Though the tour never came to pass, Avram filed a $20 million complaint for anticipatory breach of contract, breach of contract and fraud. That suit is still pending.

As a side note please compare the above with a short piece below – will you notice anything wrong there?

Fake news about MJ claiming that Avram paid Michael Jackson the advance of $11.2 million instead of $1.2m.

Fake news didn’t start yesterday – it started with the media’s massive lies about Michael Jackson. The above was just one example out of many from the Irish times quoting AFP (Agence France-Presse). Look at the easy way they turned the $1.2 million advance into $11.2 million – just by increasing it tenfold!

~

Within a short period around 2000 lawsuits against Michael were piling up in a kind of an avalanche – $25 mln were claimed by Court and Derek, $13 mln by Myung Ho Lee, $64 mln by Dieter Weisner, $21 mln by Marcel Avram and then $20 mln again – and these were only some of the lawsuits filed by 2003.

The media were ecstatic. The very least they lied about MJ was that he was a wildly extravagant spender whose lifestyle allegedly demanded $8 mln per month (another fake as the sum was per year) but didn’t pay to all those wonderful people who did him so much ‘good’.

The jurors are susceptible to public pressure, so it is no surprise that amid all the hysteria in March 2003 the Santa Barbara jury decided against Jackson and ordered him to pay Avram $5.3 million.

Three months later, in June 2003 just as the judge was about to throw out Myung Ho Lee’s lawsuit, Michael settled with Myung Ho Lee for a sum “well into seven figures” though his contract with Michael as a basis for his lawsuit was obviously fake – it was signed in Michael’s absence, had a forged signature under it and was invalid at least due to his lack of license to act as a financial advisor.

But Myung Ho Lee threatened to divulge the secrets of Michael’s explosive financial situation and, same as in the Chandler case, if it came to a civil trial it was to be televised…

This fear-for-bad-publicity trend started in 1994 with a settlement agreement with the Chandlers despite Michael’s complete innocence, and since that time it went on and on until his dying day. Michael found himself in a vicious circle – the bigger the number of lawsuits and the crazier the sums, the less chance he had to win the case. Struck by the sheer number of lawsuits, the huge money they claimed, and guided by the media in blaming MJ irrespective of the circumstances, the jury and public considered him responsible almost by default.

But what about Myung Ho Lee and his part in the Avram drama?

Avram accused Michael of cancelling the millennium concerts, and Michael said that Avram cancelled them himself for fear of no profit. However, Frank Cascio gives away the big secret that it was neither Avram nor Michael, but Myung Ho Lee who misinformed Michael about that cancellation.

Cascio was a direct witness to a conversation with Myung Ho Lee when the latter called Michael at Neverland:

“I was in Michael’s room at Neverland when Myung-Ho Lee called to tell Michael that the shows had been canceled. I never knew whether it was Michael or Avram who called them off—later, in court, each would contend that it was the other—but when Michael took the call, he seemed both happy that he would now be able to spend Christmas with his kids and the family and a bit regretful to be letting down his fans.” [“My Friend Michael”, chapter 10]

The above could be regarded as a chance mishap and unfortunate misunderstanding, but you remember that Myung Ho Lee let Michael down in January 2001 again and in a similar way too – by providing him with an invalid termination note of the earlier license agreement and misinforming Michael about its status.

It seems that misinforming Michael Jackson on some crucial issue and then making him reap the resulting lawsuits became a pattern with Myung Ho Lee and his signature style with Jackson. And each time it could be explained as a mere misunderstanding.

Besides all that Myung Ho Lee devised one more project for Michael Jackson that evidently created a big hole in his budget, but it is totally unknown to the public as there isn’t a single mention of it in the press.

MYUNG HO LEE’S MAGIC

This secret project was launched in May 2000 and was probably Lee’s biggest enterprise that ripped Michael Jackson of the bulk of his money.

The Internet provides zero information about it, and the only clue that it ever took place was left by none other than Maureen Orth.

Her “Losing his grip” article published in April 2003 – which certainly accidentally coincided with the media storm around MJ and Bashir’s film – opened with Myung Ho Lee’s story that David Geffen and Steven Spielberg were on the top of Michael’s enemy list and a crazy description of a blood bath voodoo ritual against these people attributed to MJ.

Maureen Orth was so carried away by Lee’s fairy tales that in her zeal mentioned a certain Tim Nelson who ridiculed Michael Jackson and turned him into a laughing stock in connection with a multitude of his business projects.  

Here is an excerpt:

“In May 2000, Tim Nelson of the St. Paul Pioneer Press, upon hearing that Jackson was taking “the helm of a $100 million Korea-based venture fund that will invest in entertainment-oriented Internet companies,” listed nine other Jackson projects and asked readers to guess which ones were “actually in the pipeline.” His answer: “All of them! Every one! Coming soon to a vacant lot near you!”

Wait a minute, so Michael Jackson “took the helm of a $100 million Korea-based venture fund in May 2000″?

The fact-check confirmed that Tim Nelson indeed used to be a correspondent for St. Paul Pioneer Press, however the respective piece about MJ was missing from his reports.

Maureen Orth also mentioned a certain Kathleen A. Kelly, “an investment banker who in 2000 went to work for Jackson International” who had a mandate from “Magic2 Venture Partners to raise a pool of money to invest in companies and provide Michael an outlet for other ventures he wanted to pursue.”

“[Kelly] lined up as advisory executives Kathleen Kennedy, a co-producer of many of Steven Spielberg’s films, and Casey Silver, former chairman of Universal Pictures. Jackson was supposed to contribute $5 million to the fund, but Kelly says that never happened. She got the salary she was promised, $20,000 a month, only “four or five times.” Kelly, whose $1.95 million lawsuit was dismissed in Los Angeles last December because of venue, is now resubmitting it in New York, the locale where she conducted much of her business.” [“Losing his grip”]

Maureen Orth’s article is the only source available on the Internet regarding the mysterious $100 mln fund that involved Jackson International and its Magic2 partners. Surprisingly, this particular segment of her story was not even copy-pasted by others and was repeated nowhere else.

However the laborious process of translating the search words into Korean and then back did bring some results – it turned out that in May 2000 the Korean media published several articles reporting that venture.

All the articles are Google translated from Korean, so it is not always easy to figure out the details of the project. Some may contradict the other, but if the most informative of them is correct, we may be sure that in 2000 Myung Ho Lee embezzled over $30 million of Michael Jackson’s money.

Below is a guide through the Korean press which reported the story on May 9, 2000:

‘Magic Square Fund’ worth 200 billion won, created simultaneously in Korea and the US

2000-05-09

A venture fund worth 200 billion won to intensively foster digital entertainment will be created in Korea and the United States at the same time.

Wise-Tomorrow Investment, a start-up investment company, and Union Financial Investment, an international financial advisory company, announced on the 9th that they plan to create a 100 billion won fund each in Korea and the US under the name of ‘Magic Square’.

In particular, the fund created this time attracts attention of Hollywood celebrities such as world-famous pop singer Michael Jackson and ‘Jurassic Park’ producer Casey Silver, Korean producer Joo Cheol-hwan, and writer Jin-na Song [who will] participate as advisors. Among them, Michael Jackson and Casey Silver are known to be pursuing direct investments worth $10 million.

The organizers of the fund plan to establish Magic Square Korea and Magic Square USA respectively to operate the fund locally. In particular, [they] plan to invest mainly in venture companies at the start-up stage before going public.

The first fund formation is by the end of this month, and the second fund is [to be] created in June. Of the funds created, 30% will be cross-invested in Korea and the US, and the remaining 70% will be managed in their own countries.

The Magic Square Fund, with a management period of 5 years, is worth 50 million won or more per share, and more than one subscription is possible. The investment briefing session will be held at the Ritz-Carlton Hotel in Gangnam, Seoul on the 12th at 4 pm.

https://www.donga.com/news/Economy/article/all/20000509/7533617/1

Let us start with the 200 billion won first.

Today 200 billion won are equal to approximately $170,270,000. In May 2000 the exchange rate was different ($1 =1110 won) and the same 200 billion came to about $180,200,000. So the planned budget of the project was roughly $180 mln.

Now here is the rest of the story.

In May 2000 a startup company named Wise-Tomorrow Investment (now defunct) and the barely unknown Myung Ho Lee’s company Union Finance Investment set up in 1998 (defunct too), created a joint venture called “Magic Square Fund” which was to operate in the two countries as Magic Square Korea and Magic Square USA.

Each was supposed to raise 100 billion won or approximately 90 million US dollars.

30% of the funds were to be cross-invested (the US fund would invest 30% of its money in the Korean fund, and vice versa).

The project attracted several celebrities including Michael Jackson and Casey Silver, former chairman of Universal Pictures, who were to make a direct investment worth $10 million.  Some other people were mentioned but probably as the fund’s potential advisors only.

~

The next article provided more detail.

It said that the main partner of Magic Square USA was Jackson International run by Myung Ho Lee, and that from that moment on Lee would manage Magic Square USA too.  

In fact, Myung Ho Lee looked like the central figure of the whole thing as his own company Union Finance Investment was to act as an advisor to both Magic Square Korea and USA:

Video-specialized fund, established at the same time in Korea and the United States [by] Wise Tomorrow / Union Finance worth 100 million dollars each

2000.05.09 

A video-specialized venture fund in which world-famous pop singer Michael Jackson and broadcast writer Ji-na Song participate as investment advisors will be created at the same time in Korea and the United States.

Wise Tomorrow Investment (CEO Kim Jung-sil and Kim Tae-han), a start-up investment company, and Union Financial Investment (CEO Lee Myung-ho), an international financial advisory firm, are jointly working on a 100 billion won domestic venture fund “Magic Square Korea.”

Wise Tomorrow is in charge of the recruitment and operation of Magic Square Korea.
In the case of Magic Square [USA], Jackson International, in which Michael Jackson holds a 100% stake, will participate as a general partner and manage the fund.
Union Financial Investment will act as an advisor to the two funds.

In particular, Magic Square Korea will invest 30% of the amount raised in Magic Square in the United States, paving the way for domestic investors to indirectly invest in promising venture companies in the United States.

In these funds, Hollywood celebrities such as Michael Jackson, former chairman of Universal Studios Casey Silver, who produced Jurassic Park, and Kassie [Kathleen] Kennedy, who produced Star Wars, Sixth Sense, etc. will not only discover promising digital entertainment ventures in the startup stage and before IPO, but also support overseas expansion of domestic investment companies and strategic alliances between investment companies.

In addition, as these advisors plan to invest directly in the fund, active activities are expected, said Wise Tomorrow.
Wise Tomorrow Investment and Union Financial Investment will hold an investment briefing session at the Ritz-Carlton Hotel in Seoul on the 12th. On this day, investment management members of Magic Square in the US will visit Korea and introduce activities in the US and the growth of the entertainment industry around the world.
https://www.hankyung.com/news/article/2000050863261

Now we learn that within the mutual program of “cross investments” Magic Square Korea was to invest 30% of its money in Magic Square USA.  Michael Jackson, Casey Silver and Kathleen Kennedy were mentioned as advisors who would “discover promising entertainment ventures” on the Internet and also “plan to invest directly in the fund”.

Kathleen Kelly was mentioned too – among the project organizers as a “member of the fund management committee” who was supposed to come to Korea and hold an investment briefing there.

See here:

The Magic Square Korea Fund has a management period of five years, and Kathryn Kelly, a member of the fund management committee on the US side, and Louis Gillivalty, a consultant in the media field, will visit Korea and hold an investment briefing session at the Ritz-Carlton Hotel in Seoul on the 12th . 

https://www.mk.co.kr/news/home/view/2000/05/51854/

~

The third article was even more informative and added to the above a crucial piece of news.

It turned out that besides the plan to mutually invest in each other’s funds, Myung Ho Lee’s company Union Finance was also acting separately and had already received its 30%. And the investment came from Jackson International, Michael’s company headed by Myung Ho Lee!

Simultaneous formation of global digital entertainment in Korea and the United States

Issue Date: 2000.05.09

A large-scale digital entertainment venture fund dedicated to investing in entertainment fields such as movies, games, animations, the Internet, and related solutions with the participation of domestic and foreign celebrities will be formed simultaneously in Korea and the United States.

Separately, Union Financial Investment received a 30% investment as a general partner from Jackson International, where global pop star Michael Jackson owns 100% of the shares, and is developing businesses such as licensing and theme park projects, to create a “Magic Square” worth 100 million dollars and plans to link and operate it with “Magic Square Korea Fund”.

The US “Magic Square Fund” to be established and managed will mainly invest in venture companies related to overseas entertainment. The two funds also plan to mutually invest 30% of the total amount raised.

This fund formation is noteworthy in that it is the first case in the United States and Korea to be established with the same name at the same time.

In particular, Hollywood giants such as Michael Jackson, former president of Universal Studios who produced Jurassic Park and Schindler’s List, Kassie [Kathleen] Kennedy, producer of Star Wars and The Sixth Sense, and Carrie Fisher, an actor and writer as the owner of the Hollywood Network. A large number of domestic experts such as producer Joo Cheol-hwan, and writer Song Ji-na have participated in the investment and review advisory committee and are attracting attention.

Wise Tomorrow Vice President Kang Hee-bong said, “Strategic alliances between the companies invested by Magic Square Korea and the companies invested by Magic Square are possible, which will help domestic venture companies to establish a foundation for becoming a global company from the initial stage.” Union’s Dr. Sehwan Lee expected that “Magic Square Korea Fund will contribute to raising the level of the Korean Internet industry and entertainment industry to the next level”.

Meanwhile, it is known that Magic Square and Magic Square Korea Fund’s manager are already conducting investment reviews for 10 domestic and foreign venture companies related to media, content, and solutions, including B2C in the Internet entertainment field, prior to the formation of the fund.

https://www-etnews-com.translate.goog/200005090151?m=1&_x_tr_sl=auto&_x_tr_tl=en&_x_tr_hl=ru&_x_tr_pto=nui

Now it turns out that Carrie Fisher, an actress, writer and owner of the Hollywood Network, was also part of the team, but probably as an advisor only. Two people on the Korean side are said to have participated in the investments.

But the key point in the above piece is, of course, the following part which requires a second look:

Each word in the above is important, so let them sink in: Union Finance – received – separately – 30% – from Jackson International – plans – link with Magic Square Korea – $100 million.

When brought together they mean that Myung Ho Lee, who was head of Jackson International, took 30% of the required $90-$100 mln sum from Michael Jackson’s company as some kind of ‘investment’ and transferred it to the account of his company, and this was done separately, under the pretext of only planning to invest it into “Magic Square Korea Fund”!

30% of the budget of each fund amounted to $30 million or more, and this means that by May 2000 at least $30 million had been stolen from Michael Jackson and transferred to Lee’s account. 

All that time Myung Ho Lee was said to be working on licensing projects (Wiesner’s company?) and the development of some theme parks in an alleged effort to create the Magic Square USA sometime later.

Of course, we remember Kathleen Kelly claiming that MJ didn’t pay his promised share of $5 mln, but one thing does not rule out the other – Michael may have not paid the official contribution same as other US investors didn’t, but $30 million of his money could be still embezzled by Myung Ho Lee, and it is highly unlikely that Lee would have disclosed this fact to his partner Kathleen Kelly.

Actually, the embezzlement of Michael’s money was mentioned even in the “Losing his Grip” article. Despite the absence of financial documentation destroyed by Myung Ho Lee, Michael’s lawyers established that Lee had transferred millions of Jackson’s money to Korean accounts and stolen millions from him that way.

Maureen Orth was reckless enough to let us know about the lawyers’ discovery, but she brushed it aside as some nonsense:

“Lee’s $12-million-plus suit claims “Jackson’s extravagant lifestyle had all but bankrupted him. [ ] Jackson’s lawyers counter that Lee duped Jackson and “stole millions of dollars of Jackson’s money by … authorizing wire transfers from Jackson International to Union’s Korean accounts.”

Robert Silverman, Lee’s lawyer, scoffs at these charges. “Can you believe this guy? My client saves his life and gets him all this new financing. Michael even gives him a $400,000 car. But when it comes time to pay him, he practically denies even knowing him.”

And now we know that this was TRUE.

Apparently, the whole idea of Myung Ho Lee’s project was to steal Michael Jackson’s money by making legal transfers to his Korean accounts and this is probably the real reason why those two funds were created. If tens of millions of dollars were sent from one fund to the other within their so-called program of “mutual investments”, these operations would be subject to no suspicion and could look like perfectly legitimate business.

The transfer of millions from the US to Lee’s company in Korea was also in line with his plans to turn himself into a Korean “Goldman Sachs” by “borrowing money from overseas and lending it to domestic companies at a commission.” 

It seems that no other Americans except Michael Jackson were robbed of their money, otherwise we would have heard of their lawsuits, at least from Casey Silver who was also supposed to contribute $5 million. But there were no complaints, same as there was no sign that the funds ever existed, with one exception though – these two documents from the Delaware official records which are provided below.

One document is for Magic2 Venture Partners and the other is for Jackson Magic 2 Venture Partners L.L.C. Both companies were created on May 3, 2000, were never closed and are still there on the Delaware register:

If we are to believe the above records the two companies have been operating for 21 years already (!), only their address is wrong, status unknown and nobody knows what they do and who is running this business.

In short, the Magic Square project was pure magic, and one more piece from the Korean press added to all this witchcraft the final and somewhat ridiculous touch – it named Cher as one of the Fund’s investment advisors.

“Hollywood giants such as Sher [Cher] participated as investment advisors.“

http://m.inews24.com/v/4197

Cher may be a ‘Hollywood giant’ but she is definitely no investment advisor. Cher herself made poor financial choices and in 2016 sued her own financial managers, claiming that they defrauded her of $1.3 mln with bad investments.

In other words, now it is absolutely clear that the Magic Square Fund was a sham, which was probably created for the sole purpose of defrauding Michael Jackson.

This reminds me of Project M which was devised by Jeffrey Katzenberg and apparently David Geffen with the sole purpose to mislead Michael Jackson into believing that he was about to get the main role in a Peter Pan movie that was never meant to exist.

The people drawn into this Magic scam – Cher, Carrie Fisher, Casey Silver and Kathleen Kennedy as well as some famous Korean personalities – could be used as pawns in the game to represent a glorious front and give the allure of respectability to the fake project.  

It is a puzzle though how Myung Ho Lee managed to persuade them to participate – of course, if they knew that they were participating.  Was the Korean national no one knew anything about so influential that he could talk the top Hollywood people into investing their millions?

Another puzzle is the choice of personalities for that Magic scheme which really makes me wonder. Each name is associated with at least one of two Hollywood bigwigs – Cher is a great friend of David Geffen, same as Carrie Fisher was; and Kathleen Kennedy and Casey Silver are very close to Steven Spielberg.

This may suggest that Myung Ho Lee had a certain reason for dropping those two particular names to Maureen Orth.

If Michael followed the same trail as we did, he could put those names on his “enemy list” as soon as he realized that he had been swindled out of his money in a scam that was arranged by Myung Ho Lee but was masterminded by someone in Hollywood.

In fact, Myung Ho Lee was no personal friend of Michael Jackson and though Michael did suspect some people in the entertainment business of the intention to ruin his career and deplete his finances, there was no reason for him to confide in Lee regarding his enemies unless Lee disclosed those names himself.

My opinion is that one of the two could indeed be involved or inspire a scam against MJ as Michael named him as his worst enemy, while the other could be a side victim of the other guy’s usual machinations.

But the biggest puzzle of it all is why Myung Ho Lee decided to approach Maureen Orth in April 2003 and start his career with the Vanity Fair with a strange voodoo story regarding Geffen and Spielberg.

The answer to the first question is easy – Lee wanted to drag Michael Jackson through the mud to induce him to settle the lawsuit (the settlement took place two months later, in June 2003).

But the second point is more difficult to decipher. Simple logic suggests that pouring all that voodoo stuff on Michael Jackson’s head was a kind of a preemptive move, meant to restrain Michael from telling the public about the foul play against him and from dropping the names of those big Hollywood personalities and other participants.

Indeed, what if Michael Jackson revealed to the press that he was in a great project with Kathleen Kennedy, Casey Silver, Carrie Fisher and Cher, run by his Korean manager? What could Lee answer to that? That all of it was a smokescreen and nothing was for real?

Hence the need to strike first and tell some insane story to portray Michael as a complete lunatic, to smear and vilify him through and through, and turn him into a laughing stock no one would ever listen to.

Whether Myung Ho Lee thought of it himself or someone suggested to him this idea, this ‘bloodbath’ method did work. It struck people’s imagination, did enormous damage to Michael’s name and image, prevented him from saying a single word in his defense and simultaneously covered up Lee’s and other people’s evil activity against him.

As to the fact that all of it was a deliberate campaign to defame and ruin Michael Jackson, orchestrated by someone on the top of the world hierarchy, it is actually an axiom not requiring any proof.

If you are still in doubt ask yourself a question why the corporate media is suppressing all information about Myung Ho Lee and the damage he did to Michael Jackson’s life, reputation and finances, and why any trace of those Magic funds disappeared from the Internet as if by a magic wand.