Former Michael Jackson Associate: I Never Got Receipt

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A former associate suing Michael Jackson testified Thursday that he never got a receipt for a $300,000 payment he claims he delivered in South America on the pop star's behalf.

The issue of the mysterious payment was used by Jackson attorney Thomas Mundell as an example of big-ticket claims made by plaintiff F. Marc Schaffel that are not documented.

Schaffel, who worked with Jackson on various projects for three years, has claimed the pop star owes him $3.8 million in royalties, expenses and other debts. But outside court Thursday, Schaffel's lawyer, Howard King, said disputes over receipts, statutes of limitations and work agreements led him to cut the claim by more than half, to $1.6 million.

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Schaffel testified Wednesday that he took the $300,000 from one of his own accounts and was never fully repaid. He said Thursday that he had loaned Jackson millions of dollars and never once got a receipt.

In court, Mundell showed jurors enlargements of ledgers that Schaffel submitted and pointed out discrepancies in accounting.

Mundell asked if Schaffel had any documentary proof of the $300,000 payment. Schaffel said he did and handed a paper to the lawyer. But after a private conference with the judge it was not shown to the jurors.

King said outside court that the paper was a withdrawal slip from a bank in Brazil.

Later on the stand, Schaffel added more details, saying he initially took money from an account in Budapest to Brazil to buy a condo, but later withdrew it and at Jackson's request "delivered it to its final destination in Argentina."

Referring to the molestation charges Jackson was acquitted of last year, Schaffel added, "The criminal case was at hand and it was a sensitive time. It was a very, very private transaction of a very sensitive nature for Mr. Jackson. And I never imagined he would not pay it back to me."

Schaffel also testified that when he and Jackson decided to work together the pop star gave him $2 million for use in the business and discussed making a charity record.

Mundell pointed out that Jackson did not have checks for the account in which the money was deposited and never made a withdrawal, but that Schaffel did.

In testimony and a declaration read to the jury, Schaffel also told of loaning Jackson $500,000 after the Sept. 11, 2001, attacks on the World Trade Center. He said Jackson was initially stuck in New York, then took a bus across the country and called along the way, saying he needed the money to find shelter underground.

Schaffel said Jackson pulled up to his house in the bus and collected the cash.

Jackson's attorney challenged the story as a lie and noted there was a financial entry for $500,000 on Sept. 18 but it was just a transfer from one Schaffel account to another. Schaffel denied lying.

At day's end jurors were watching a videotaped deposition by Jackson, who will not testify in person. He claimed a poor memory about his finances but recalled Schaffel as a man "who came to me with ideas."

Jackson said he became disenchanted with his new associate in November 2001 when someone gave him a video showing Schaffel directing an episode of a gay porn movie.

"What shocked me was that he was involved in that whole circle and I didn't know. It surprised me," he said.

Click Here for the Michael Jackson Celebrity Center