An accountant's innocent mistake sparked a scheme by boxing promoter Don King to evade thousands of dollars in federal income taxes, a federal prosecutor said at the opening of King's trial in New York.
Assistant U.S. Attorney Roanne L. Mann told jurors that King and his top aide and codefendant, Constance Harper, kept more than $1 million in payments that were supposed to have gone to King's company between 1978 and 1980. After the accountant's error made them realize that the "skimming" of cash could go undetected, King and Harper allegedly conspired to keep company bookkeepers in the dark about their activities.
King's defense lawyer, Vincent Fuller, countered that his client, untrained in accounting rules or tax laws, relied on his bookkeepers to handle the accounts and became a victim of their errors.
King and Harper, who is a vice president at Don King Productions, face 20 counts charging them with tax evasion, conspiracy and filing false tax returns. Their trial before U.S. District Judge Thomas P. Griesa is expected to last between one and two months.
Mann said King's tax scheme had its origins in 1977 when King began promoting fights at Caesars Palace in Las Vegas. Caesars Palace officials allowed King to withdraw cash from the casino's cashiers, she said, and treated the withdrawals as an advance on the money that King's company was to be paid. The cash advances King took were deducted from the later payments to his company.
At about the same time, Don King Productions hired a new comptroller who did not notice that because of King's advances, the company was not receiving all the money called for in the contracts with Caesars Palace.