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Mr. Lerner is a highly educated, sophisticated tax attorney.
He worked for many years at O’Melveny & Myers; at one point, he
established and ran the firm’s London office. Mr. Lerner also
worked as a clerk/attorney-advisor with the U.S. Tax Court and as
an attorney advisor for the U.S. Treasury Department.
Mr. Lerner personally engineered a plan to transfer the
built-in losses in the defunct MGM Group Holdings from Generale
Bank and CLIS to the Ackerman group. This transaction had no
economic substance for Federal tax purposes. Instead, the
transaction was the equivalent of a sale of approximately $1.7
billion in tax attributes from Generale Bank and CLIS to
Somerville S Trust for $10 million. To exploit these tax
attributes, Mr. Lerner devised a second plan whereby SMP
purportedly sold portions of the receivables from Generale Bank
to TroMetro, which was owned by his friend, colleague, and
business associate, Mr. van Merkensteijn. Mr. Lerner also
devised a third plan whereby SMP transferred the $79 million
receivable to Corona for a membership interest, sold portions of
its Corona membership interest to Imperial, and caused Corona to
sell the $79 million receivable to TroMetro, effectively
duplicating the built-in losses in that receivable. In the
course of these various transactions, SMP reaped approximately
$300 million in tax losses and Corona reaped $79 million. SMP
also received a $14.5 million fee from Corona for the latter’s
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