WASHINGTON (Reuters) — A former chief financial officer for Black Entertainment Television on Wednesday accused the company and two of its top officials of tax evasion and other illegalities in a $21 million lawsuit.
Dwight Crawford, in the suit filed in Washington, D.C., Superior Court, said many of BET’s executives regularly used corporate funds and credit cards for personal use. Crawford said he was fired when he refused to play along with the fraud.
But the television company, whose founder and chairman Robert Johnson, has turned it into an enterprise that sells everything from hair products to financial services, said the claims were “frivolous” and described Crawford as a “disgruntled former employee.”
The suit, which names BET, Johnson and BET president Debra Lee, said the irregularities included sponsorship of Johnson’s daughter’s competitive-horseback-riding activities. Also, expenses were treated as tax deductible by BET: Individuals involved paid no income tax on those goods and services, the suit said.
The suit alleged fraudulent billing for advertising spots and a company conspiracy to defraud the federal government by setting up a dummy firm to avoid withholding payroll taxes and avoid paying benefits to company employees.
BET said Crawford, senior vice president and treasurer of the Discovery Channel’s parent company Discovery Communications Inc. until he joined BET in 1998, was in a dispute with the company over a severance settlement.
Crawford’s employment at BET ended in January.