Calif. lawyer admits not paying taxes on $36M kickback from Seattle investment firm

Calif. lawyer pleads guilty in tax evasion case

SEATTLE — A California lawyer has admitted he didn’t pay taxes on a $36 million kickback that prosecutors say he received for helping enroll Hollywood mogul Haim Saban in an illegal tax shelter.

Matthew Krane of Los Angeles pleaded guilty Thursday in U.S. District Court in Seattle to counts of tax evasion and false statements in a passport application. He was indicted in June along with two principals from Seattle-based investment firm Quellos Group LLC.

Quellos allegedly used fictional offshore transactions to erase capital gains their clients might have to pay taxes on. Prosecutors say those clients — including Saban and the philanthropist Robert Wood Johnson IV — were misled about the nature of the tax shelter and have already paid back the $400 million they owed, plus interest.

The 55-year-old Krane is expected to serve up to five years in prison under terms of his plea agreement. He is scheduled to be sentenced in March.