In his second day on the stand, Peter Hoffman defended himself against charges that he had disguised income as a loan, saying he would “not throw a hand grenade” into his carefully structured financial plan by lying on public records.
The government resumed its cross-examination Thursday of the former Carolco Pictures Inc. exec, concentrating on documents it claims show that $400,000 in payments Hoffman received from Carolco were income, not loans.
Asked by Assistant U.S. Attorney Monica Bachner why he did not disclose the loans on the company’s 10K forms, Hoffman said, “I don’t recall exactly, but there are several explanations. I just blew it, or I thought about it and decided that since the company owed me more than I owed them, there was no reason for me to disclose it.”
Just a mistake
Emphasizing that the lack of disclosure was at worst a mistake and not part of a scheme, Hoffman said, “The one thing I didn’t do was throw a hand grenade into my carefully constructed deferred-compensation plan by not disclosing the loans on the 10Ks.”
The government tried to delve into the fact that Hoffman set his monthly draw at $25,000 despite the fact that after a year or two at the company he routinely was spending more than that. The government has contended that use of the payments for normal expenses is evidence they were income.
Question of ‘lifestyle’
“Were the loans to pay for your lifestyle?” Bachner asked. Hoffman, who frequently has argued about the form of the questions during cross-examination, said, “I don’t like the word ‘lifestyle.’ ” He said the money was used for a variety of purposes. The government described payments for building a swimming pool, credit card bills and vacations, before the judge sustained an objection to the questions.
Hoffman is on trial in U.S. District Court in Los Angeles on charges of tax evasion and filing a false income-tax return. In two counts added this year, the government claims Hoffman misreported personal income of $225,000 as income of his new company, CineVisions.
Although questions Wednesday suggested that the cross-examination would delve into tax structures used by former Carolco toppers Andy Vajna and Mario Kassar, which now are the subject of a separate investigation, the topic was virtually absent from questioning Thursday.
Thursday’s hearings took place against the backdrop of a congressional investigation into IRS abuses. At the government’s request, U.S. District Judge John Davies instructed jury members to avoid and ignore all references to those hearings.
At today’s session, it’s expected that cross-examination will end and both sides will finish presenting their evidence. The court does not convene on Mondays, so final arguments should take place Tuesday before the case goes to the jury.