FC takes another look at the Reade Seligmann tax lien hoax

✔ FC here. Good day.

It's any one's guess what's afoot here. The first question is how a reporter for a Detroit newspaper, Robert Snell who is on the metro staff, managed to get the first word about a tax lien that was filed in New York City. Months earlier. Hmmmm.

One source tells FC that there were more than 25,000 tax liens filed in this period, making it highly unlikely that Snell just happened to ferret it out.


And the story sucked in the way it portrayed Reade. The headline: "Controversial ex-Duke lacrosse player...."

Personally I think the description "Awesome ex-Duke lacrosse player..." is rather appropriate.

Snell also wrote that Reade was involved in a "rape case," which is a rather inaccurate way of describing a hoax in which there was no sexual contact whatsoever. The story had legs too: the Daily News in NY featured a huge file picture of a shifty looking Seligmann.


Snell has done federal tax lien stories before -- but all of them seem to have a hometown angle. For example earlier this year he told how the Miami Heat bailed out Tim Hardaway, who played on five different clubs, noting in the lead that Hardaway's son is very much in the local news as a star on the basketball team at the University of Michigan.

As noted above, the lien was filed in New York City -- apparently because Reade -- who lives in New Jersey -- paid his taxes using the office address of an accountant, David Weiss. We stress apparently, because all we can confirm about Weiss is that the Seligmann family used him as an adviser.

We have been unable to trace the accountant -- Loyal Readers know we tried -- and it is entirely possible the IRS sent correspondence to that address, which, when unanswered, caused the IRS to go off the deep end in estimating taxes, penalties and interest.

Reade's principal lawyer -- Richard Emery -- disclosure: friend of FC -- says all taxes were paid. And thus the unfortunate part of all this is that Reade is once again victim of the government like he was with the disgraced, disbarred prosecutor Mike Nifong and Durham police.

✔ The tantalizing part of course is the estimates of how much Reade would have "earned" -- received -- to merit a tax bill of $6.5 million. First of all we do not know how much in penalties and interest that includes, so it's only an estimate, variously given at between $18.5 and $20 million dollars. Net of any fees for his lawyers, which would be presumably deductible.

Up until now, no one has known, but the whispers have been that each of the three falsely indicted players got between $6 and $8 million in a confidential settlement from Duke. And that's consistent with what Emery said when asked about the $20 million: we got one too many zeroes in the equation.

Beyond the amount of these settlements, with the Brodhead Administration's penchant for secrecy we have gotten only snippets of information on how much Duke's continuing defense is costing. While Duke scampered to settle with the three accused players and with Coach Pressler -- stopping their ability to subpoena Brodhead, board chair Steel and others to set the historical record straight -- two other lawsuits by other players are continuing.

The other day Duke settled with the scandal tarred AIG insurance company, on a policy that apparently covered both defense costs and payments to plaintiffs. Or maybe only lawyers, who knows.

We do know that Duke once rejected $5 million from AIG -- which is the total face amount of the policy. It's anyone's guess how Duke figured it would be entitled to more -- possibly by viewing the lacrosse hoax not as one event, but as separate incidents involving each player. Such disputes with insurance companies are common. For example was the attack on the two towers of the World Trade Center with two different jets one incident or two. Answer: one.

For all we know, the final settlement with AIG was less than $5 million -- or many times that amount.

There is a window into Duke's legal costs on IRS Form 990 -- but it is only a cracked window, not a wide open view. We're talking costs for lawyers here, not settlements.

Post-lax, the annual costs have tripled -- meaning Duke has been spending about $8 million a year on lacrosse lawyers alone.

There is one other figure, and that is a $2 million payment in one year to hot-shot Washington lawyer Jamie Gorelick for her part-time services. Unfortunately disclosure of such payments -- formerly required for the five highest recipients of professional fees each year -- is no longer required. There is continuing provision for disclosing the five highest entities with whom Duke does business -- but inevitably these fall to construction companies.

✔ And finally, Fellow Dukies, we come to the city of Durham, defendant in a lawsuit brought by the three indicted players for the misdeeds of police and prosecutor, and by other players too. We do have some definitive word on what this is costing the city, thanks to WTVD which checked up on this.

Taxpayers paid the first $500,000. Then an insurance company started to pay the bills -- $3.8 million as of January. The city's policy provides for a max payment of $5 million.

If you think the litigation is dragging on, WTVD asked former federal prosecutor Dan Boyce: "Many attorneys jokingly refer to the "P" in plaintiff as "push" and the "D" in defendant as "delay," he explained. "There's all these ways that a defendant can get a case stalled. They hope a defendant runs out of money, gets tired of it, or gives up."