Pacquiao’s lawyer Judd Burstein delivered an impassioned 45-minute opening statement to set the case in perspective and immediately brought the jury’s attention to the allegedly systematic skimming of the fighter’s purses from seven US fights by Muhammad since 2001.
Muhammad’s lawyer Julian Friedman spoke in his client’s defense and said Pacquiao was barking up the wrong tree in filing the case.
Jury selection was the first order in the agenda as Preska started proceedings in the morning. Among the witnesses lined up to testify were former world heavyweight champion Lennox Lewis, HBO Sports senior vice president Kerry Davis, trainer Freddie Roach and New York promoter Lou DiBella.
Pacquiao will be called to the witness stand in the second day of hearing.
Last Sunday, Pacquiao spent Father’s Day meeting with lawyers for over eight hours in Burstein’s 15th floor Manhattan office. He was accompanied by friend and interpreter Joe Ramos. The lawyers included Burstein, Keith Davidson, Nicholas Khan, Peter Baje, Mike Quinn and Alex Levy.
After listening to Burstein’s opening statement, Pacquiao said it was like a knockout blow was delivered smack on Muhammad’s jaw.
"Akala nila pababayaan ko lang itong ginawa nila sa akin,’"said Pacquiao. "Hindi nila akalain na ang tapang ko sa ring, ganoon din ang tapang ko sa labas ng ring. Pumunta pa nga ako sa New York para mag-file ng kaso. Parang boksing ito, fight to the end."
Pacquiao said he decided to file the case not only for himself but also for other fighters who are similarly situated. It is the first case ever related to the Muhammad Ali Boxing Reform Act to be decided by a jury.
The Act protects fighters from being shortchanged by promoters and managers in stipulating full disclosure of financial terms. It also establishes a "firewall" between a promoter and manager whose interests are opposed in that a promoter seeks to bring down a fighter’s purse in order to maximize his profits and a manager seeks to bring up the purse because he earns a percentage of the fighter’s income.
Burstein’s lawyers managed to gather bank statements of Muhammad and a limited liability US company called Philippine Boxing where Pacquiao’s US purses were deposited. In attempting to reconcile the statements, the lawyers discovered serious irregularities.
From boxing contracts and bank statements, it was found out that Pacquiao never received his full purses in his seven US fights. It was alleged that at least $7 Million of his purses went to Muhammad and his partners who purportedly conspired to bilk Pacquiao.
Pacquiao was led to believe that he was part owner of Philippine Boxing, which received his purses from Muhammad. Records show Pacquiao has no stock in the company controlled by business manager Rod Nazario and his son Roberto.
Davidson said two days before Pacquiao’s fight against Erik Morales last March, he was informed by the Internal Revenue Service (IRS) of unpaid tax obligations of about $2 Million. Philippine Boxing had withheld 30 percent of his US purses to pay his taxes but no payment was apparently ever made. The company filed to pay taxes but never paid and even if it did, the payments would not have been in Pacquiao’s behalf. About $480,000 was taken from Pacquiao’s purses to pay for the taxes.
Pacquiao said he never imagined people whom he trusted could cheat him of a life’s fortune.
In his fight against Juan Manuel Marquez last year, Pacquiao received a purse of $650,000 but $1,052,296 was deposited in Philippine Boxing. A source said on the basis of bank records, it was discovered that Pacquiao’s actual purse was about $2 Million.
Against Morales, Pacquiao was robbed of his due share of about $2.2 Milllion in the pay-per-view net income. Muhammad allegedly took $1 Million of the share with the balance still being accounted for by promoter Bob Arum.
Burstein also cited several instances where Muhammad failed to deliver on contractual commitments to Pacquiao.
"Manny’s doing the right thing by setting things straight," said Davidson. "His new management team supports him all the way. We want him to provide for his retirement and children. We want only the best for Manny because he works so hard and sacrifices so much as a fighter. He deserves only the best because after all, he’s the one who puts his life on the line in the ring."