Manny sues Murad for tax scam

Six weeks after losing to Mexican champ Erik Morales at the MGM Grand in Las Vegas, Filipino ring idol Manny Pacquiao is fighting again — not in the ring but in a courtroom.

The former two-time world champion announced yesterday that he has filed a suit against his promoters M&M Sports, Inc. and Murad Muhammad in a New York court for allegedly withholding earnings from his fights even as he vowed that he will never fight for the controversial American promoter again.

The suit alleges the tax money was never paid, leaving Pacquiao with a massive bill for back taxes, penalties and interest.

In legal terms, Pacquiao claimed that Muhammad aided and abetted his business managers’ — Rod and Roberto Nazario — efforts to steal from Pacquiao. However, the Nazarios were not sued, perhaps a strategy by Pacquiao’s lawyer Judd Burstein to make sure the case gets tried in an American courtroom instead of a Philippine one, according to Boxingtalk.com.

"It has taken me awhile to come to terms with the fact that I have been cheated by people whom I trusted," said Pacquiao. "I intend to see this suit to the bitter end so that I can recover every dollar that was stolen from me, as well as help protect other fighters from being taken advantage of by Mr. Muhammad."

According to the complaint, this scheme against Pacquiao was furthered by M&M Sports’ refusal to provide the boxer the disclosures to which he is entitled by the Ali Act.

But Muhammad denied Pacquiao’s accusations.

"When I first signed him, no one cared about Manny Pacquiao. I made him rich and famous," said Muhammad. "With me, he got paid more than the heavyweight champion is making this weekend, and he’s a featherweight. I should be saluted for the job I’ve done, but instead I am getting sued."

When told that the lawsuit accused him of conspiring with the Nazarios to divert Pacquiao’s purses to a shell company that left the boxer on the hook for unpaid taxes, Muhammad said that for Pacquiao’s most recent bout, a loss to Morales for which Pacquiao was paid a reported $1.75 million, the proper withholding was made for United States taxes. For previous fights, Muhammad said the law required that taxes be withheld if payment was made to a foreigner like Pacquiao, but if an American corporation was paid, taxes could be paid at a later date.

"Under the old law, the check could go to the corporation instead of the individual and 30 percent did not have to be withheld. I had nothing to do with that (shell) company. If Manny’s in trouble, then it’s his trouble." 

Muhammad said he viewed the case as a conspiracy against him.

"Now that Pacquiao’s making big money, everybody’s trying to get a piece of him by stealing him from me. I maneuvered him into the money position by taking a gamble on the Juan Manuel Marquez fight (which was fought to a draw in 2004).  Manny made $750,000 for that fight and I made no money. Then, it was a miracle that I got him $1.75 million for Morales and now I have to clean up my name. I never cheated a fighter in my life, and I ain’t settling or compromising this case. Hell no, I will win this case," said Murad.

As for his immediate plans, the 26-year-old General Santos native, who broke into the world consciousness when he demolished Mexican legend Marco Antonio Barrera in 2003, assured his fans that he would be fighting soon.

"I have instructed my new management to begin negotiating for my next fight and fights thereafter," said Pacquiao. "But I will never fight again for Muhammad and M&M Sports."

"The complaint we filed today is just a first salvo, fired with only limited available information," said Burstein.

"If the discovery process in the case proceeds as I expect it will, we will be amending the complaint by adding extensive new factual allegations and a likely claim under the federal racketeering law," he added. — With report from AFP