Kelley Lynch's Email To FBI Re: Potential Quid Pro Quo - Leonard Cohen Testimony About Phil Spector During Her 2012 Show Trial

From: Kelley Lynch <kelley.lynch.2013@gmail.com>
Date: Sat, Feb 28, 2015 at 1:20 PM
Subject: Re: Leonard Cohen, IRS, 2012 Trial, & Phil Spector
To: Dennis <Dennis@riordan-horgan.com>, "irs.commissioner" <irs.commissioner@irs.gov>, Washington Field <washington.field@ic.fbi.gov>, "Division, Criminal" <Criminal.Division@usdoj.gov>, "Doug.Davis" <Doug.Davis@ftb.ca.gov>, MollyHale <MollyHale@ucia.gov>, nsapao <nsapao@nsa.gov>, fsb <fsb@fsb.ru>, Robert MacMillan <robert.macmillan@gmail.com>, a <anderson.cooper@cnn.com>, wennermedia <wennermedia@gmail.com>, Mick Brown <mick.brown@telegraph.co.uk>, woodwardb <woodwardb@washpost.com>, "glenn.greenwald" <glenn.greenwald@firstlook.org>, lrohter <lrohter@nytimes.com>, Harriet Ryan <harriet.ryan@latimes.com>, "hailey.branson" <hailey.branson@latimes.com>, "stan.garnett" <stan.garnett@gmail.com>, sedelman <sedelman@gibsondunn.com>, JFeuer <JFeuer@gibsondunn.com>, Feedback <feedback@calbar.ca.gov>
Cc: mike.feuer@lacity.org

Hi FBI,

Still unclear about a potential quid pro quo.  The City Attorney refused to provide me with the required Brady material.  I think it's fairly obvious though.

I've revised this somewhat.

All the best,

Kelley

During my 2012 trial, where the default judgment was used against me, the prosecutor began eliciting testimony about Phil Spector.  The IRS, Phil Spector, and the default judgment were the key issues throughout this trial.  The prosecutor argued that the default judgment is essentially evidence of “theft using a default judgment entered against me when the Court lacked jurisdiction to do so.  Her closing argument included utterly inane comments about my having “sticky fingers” and not having an “exit strategy.”  The two primary things I didn’t have was an excellent attorney and money.  The fact that I have not been represented throughout this matter, and others, is highly relevant and material as well.  The Complaint and default judgment have been used to prosecute me, destroy my reputation, filed and amend federal tax returns, obtain fraudulent IRS and FTB tax refunds, defend Cohen to the head of tax fraud at IRS in Los Angeles, and is now being used to prevent me from requesting/receiving IRS required tax and corporate information for 2004 and 2005 and thereafter. 

Cohen’s testimony about Phil Spector throughout this 2012 trial shows a pattern that tends to prove he is a chronic liar who may have received some form of quid pro quo from the former District Attorney, Steve Cooley, who elected not to prosecute Cohen after I filed a Complaint with his Major Fraud Unit which was evidently headed by Spector prosecutor Alan Jackson.  The prosecutor advised the jurors that I fought with the DA over this issue.  I’ve spoken to Steve Cooley.  I was extremely upset that the DA’s office refused to investigate and/or prosecute the individuals whose criminal negligence led to my son’s horrify accident at Whole Foods.  I think any parent would be and this was a very serious public safety issue.

Although I have no idea why Steve Cooley, Alan Jackson, Phil Spector, and Dennis Riordan, and IRS were constant themes throughout my 2012 trial, the IRS remains a constant theme in the instant matter.  Cohen has advised this Court that the prejudice to him, should the motion be vacated, is the fact that he filed his 2005 tax return and amended his 2004 and 2003 tax returns using the Complaint.  The evidence in the “IRS binder” proves that he did not use the actual default judgment to file his returns, or obtain substantial refunds from IRS, but rather rushed to the IRS with the Complaint.  That’s the primary motive behind this fabricated narrative.

Leonard Cohen testified that he has had no contact with Phil Spector since they worked on the joint album project.  However, in a BBC radio interview, from 1994, he alleges that he and Spector had recently spoken and goes onto say that Spector’s no longer “mad” at him.  Cohen also testified that I accused him of perjuring himself in the Spector Grand Jury.  According to the prosecutor, this was evidently annoying to Cohen.  I have been very clear that Mick Brown, UK Telegraph, advised me that he reviewed the Phil Spector Grand Jury testimony and Cohen’s testimony/statements were presented.  I have spoken with the legal adviser to the Grand Jury who could not advise me what witness presented this testimony or statements.  She advised me to contact Phil Spector’s appellate attorney about the numerous versions of the Leonard Cohen good rock ‘n roll story about Phil Spector before LA Superior Court.  Cohen was under oath during my trial when he testified that Spector held a gun to his head and it was an automatic. 

During the trial, the prosecutor (who had DA Steve Cooley’s investigator in the courtroom) elicited testimony about Phil Spector and a gun.  This was confirmed, as well, during the March 23, 2012 bail hearing when Judge Mayerson asked who was in the courtroom.  At that time, I decided to contact Phil Spector through his trial attorney, Bruce Cutler.  This led the prosecutor to consult a “domestic violence” counselor who decided I should be committed to a mental hospital and drugged.  Streeter felt my letters to Cutler were too chatty.  I ultimately did write Phil Spector directly and he personally responded.  After all, Phil Spector has as much right to confront his accuser as I do.

As of April 5, 2012, according to the evidence the prosecutor provided my lawyers during my high profile trial, the prosecutor was in possession of an email from Leonard Cohen regarding Phil Spector, his Grand Jury, and the alleged Spector gun incident.  The prosecutor elicited testimony from Cohen about an April 18, 2011 email I sent Dennis Riordan, Phil Spector’s appellate attorney.  In that email, I confirmed for Mr. Riordan that Cohen told me for 20 years that Spector never held a gun on him.  The prosecutor asked Cohen to review the email and confirm that he was one of the recipient’s.  He confirmed that he was and then read the portion the prosecutor found relevant:  my comments to Dennis Riordan. 

During cross-examination, my lawyers focused on Cohen’s mental state and asked him if he was afraid of Phil Spector when he allegedly held a gun to Cohen’s head.  Cohen testified that he was not.  He was evidently afraid of my emails that LAPD’s report confirms were generally requests for “tax information.”  His testimony about a gun contradicts the version the DA used in motions filed with the Court in the Phil Spector matter. 

Also during cross-examination, Leonard Cohen confirmed that he was actually not a recipient of the April 18, 2011 email.  This email is highly material and relevant.  The reason for this is due to the fact that 1) the prosecutor concealed the elements of the email addressed to Internal Revenue Service and Cohen’s lawyer, Michelle Rice, by saying she misspoke when she noted that she misspoke and the time was actually 8.11 AM and concealed the relevant 5.44 AM portions of the email; 2) Cohen’s testimony about the gun and Spector contradicts the version he provided the prosecutor at the beginning of my trial (as well as the version the DA used in the Spector case); and, 3) it proves that Cohen continually lies under oath.  He was not copied in on the April 18, 2011 email and he confirmed that he reviewed it and he was.  Exhibit __:  Transcript – Spector testimony; Cohen’s email to Streeter and hers to him re. Spector; Mick Brown emails re. Cohen’s statements/testimony before Grand Jury; DA’s motion in Spector matter that includes a contradictory Cohen gun story; April 18, 2011 email.

There is – the evidence will show that Ms. Lynch was upset and Mr. Cohen and fought with the District Attorney’s office, the LA County District Attorney’s office didn’t file charges against Mr. Cohen.  RT 40  

Kelley Lynch Email To IRS Re: Transcript Of Her Conversation With Steven Machat; Confirmed By Machat

From: Kelley Lynch <kelley.lynch.2010@gmail.com>
Date: Thu, Feb 26, 2015 at 4:31 AM
Subject: Re: Your email dated 2/25/2015 12:51 AM
To: Washington Field <washington.field@ic.fbi.gov>, ASKDOJ <ASKDOJ@usdoj.gov>, "Doug.Davis" <Doug.Davis@ftb.ca.gov>, Dennis <Dennis@riordan-horgan.com>, MollyHale <MollyHale@ucia.gov>, nsapao <nsapao@nsa.gov>, fsb <fsb@fsb.ru>, rbyucaipa <rbyucaipa@yahoo.com>, khuvane <khuvane@caa.com>, blourd <blourd@caa.com>, Robert MacMillan <robert.macmillan@gmail.com>, a <anderson.cooper@cnn.com>, wennermedia <wennermedia@gmail.com>, Mick Brown <mick.brown@telegraph.co.uk>, woodwardb <woodwardb@washpost.com>, "glenn.greenwald" <glenn.greenwald@firstlook.org>, lrohter <lrohter@nytimes.com>, Harriet Ryan <harriet.ryan@latimes.com>, "hailey.branson" <hailey.branson@latimes.com>, "stan.garnett" <stan.garnett@gmail.com>, sedelman <sedelman@gibsondunn.com>, JFeuer <JFeuer@gibsondunn.com>, Feedback <feedback@calbar.ca.gov>, "USLawEnforcement@google.com" <USLawEnforcement@google.com>
Cc: mike.feuer@lacity.org, Jeffrey Korn <jeffkornlaw@live.com>, "Division, Criminal" <Criminal.Division@usdoj.gov>, "*IRS.Commisioner" <*IRS.Commisioner@irs.gov>, "Kelly.Sopko" <Kelly.Sopko@tigta.treas.gov>

IRS,

The transcript of my conversation with Machat will be attached to my declaration.  Machat confirmed that he reviewed it and was only unclear about whether Kory was the individual pretending to be Cohen's gardener or something.  That was the day Cohen lied to Steven that he came back from Mt. Baldy and discovered I took all his money.  In any event, the City Attorney and Cohen said I falsely accused Cohen of perjury re. Phil Spector.  This transcript was attached to the Rice email thread that Streeter raised repeatedly.  She didn't mention Rice's material lie to me, IRS, FBI, Treasury, Dennis Riordan, and Ron Burkle however.  Machat is an attorney and accountant, who knows both Cohen and Machat, and felt Spector should go after Cohen for perjury.  He may have reviewed the Grand Jury testimony/transcripts (which was public) by then.  He thought it was perjury.  Why doesn't Streeter?  Why wasn't Cohen copied in on the April 18th email she used to elicit testimony re. Spector and a gun?  I didn't raise Spector.  She and Cohen did.  My lawyers asked him if Spector held a gun to his head and he said yes and noted that it's an automatic.  They didn't believe he was scared of my emails but not a man with a gun to his head.  Why was this Machat transcript concealed from my jurors?  Machat advises me to sue Cohen for theft and asked Cohen if he is concerned IRS will prosecute him.  Leonard Cohen STOLE Bird On A Wire, the film from Machat, STOLE their share of IP, refused to pay their commissions when Marty died; and Streeter thinks I didn't have an exit strategy from a man who sexually harassed me and exposed his penis to me constantly?  What does IRS call my greeting card company?  I didn't live a fabulous life.  Cohen is a pathological liar.  Who told Gianelli I spent $20K a month at a pharmacy?  Some drug addict?  Who said I took 8 people out 4 times a week and picked up the tab?  Some drug addict?  I never went out?  Who said I got in over my head?  Well, one person - Cohen.  He lied about that in the Complaint.  I just want you to understand how disturbing I find this situation and I do not like being threatened with Agent Tejeda.  I hope IRS is clear.  Review the Objections doc.  I'm not allowed to talk about tax fraud or any of the evidence.  Cohen, Streeter, Cooley, and others, want me silenced.  I am very clear about that and so are many others.

https://www.scribd.com/doc/57415308/Kelley-Lynch-s-Conversation-With-Steven-Machat-Leonard-Cohen-and-Phil-Spector

I will say this:  Agent Sopko told me that the IRS Commissioner's Staff finds this situation complicated.  So did Robb Watts of the State of Kentucky's Fraud Unit.  I wonder why Doug Davis thought Cohen owed me IRS required form 1099, etc?  Maybe the FTB understands that many people are liars.  Machat understands:  the default is evidence of theft, illegal, and the federal tax matters I have raised - vis a vis - my not being able to file or amend my returns - are very serious.

Let's see what Hess does.  For the record, Vanderet, NOT Hess, refused to wait for Agent Tejeda to call back within approximately two hours.  He lied to my lawyers at a sidebar.  I had NO IDEA Cohen used the Complaint to obtain a fraud refund SIX MONTHS BEFORE the planned default.  This is all planned.  Do note - Machat, an attorney/accountant, who views Cohen/Kory as LIARS - is convinced that Cohen and his lawyers do not understand the law.  Ken Cleveland is convinced Kory is a maniac and Anjani Thomas was somehow behind this.  Kory lied about Cleveland:  he told me he views these companies as ENRON and he himself doesn't understand what has occurred and knows that I never could.  I wonder what Cohen's excuse will be for his $6.7 (approximately) loans/expenditures and Kory's letter to my lawyers confirming that they are PROBLEMATIC.  I'll say.  They will never be forgiven.  Ask Streeter if that's okay with her.

All the best,

Kelley

Steven tells me what Cohen and Kory should have done with respect to him:  “We don’t want anything more with the Machat’s … you have 15% of everything Cohen created while Marty was the custodian.” Steven says “He is a fraud” about Cohen. We discuss what Cohen has done to Phil Spector and Steven says Phillip “should go after Cohen” for perjury, etc 

On Thu, Feb 26, 2015 at 3:45 AM, Kelley Lynch <kelley.lynch.2010@gmail.com> wrote:

Jeffrey,

As I've advised you many times, I do not appreciate being criminally harassed over Cohen, federal tax matters, IRS required documents, etc.  I will ask Judge Hass to order you to provide me with the evidence that Agent Tejeda slandered me and lied about me.  He received a subpoena and was meeting with DOJ attorneys re. privacy concerns re third parties.  My appellate attorney, who views my trial as an IRS matter that demands an IRS investigation, spoke to the U.S. Attorney re. this issue.  

The 1977 tax memo (original) was sent to IRS.  Please feel free to subpoena it from them.  

Kelley Lynch

On Thu, Feb 26, 2015 at 3:40 AM, Kelley Lynch <kelley.lynch.2010@gmail.com> wrote:

DOJ,

I just want to make sure you have my case history.  The evidence that Cohen is now referring to as HEARSAY was provided to IRS - including the 1977 tax memo advising Cohen that he didn't have to pay taxes in U.S., Canada, and Greece.  I didn't meet Cohen until the mid-80s and was never his "lover."  Sexual harassment and indecent exposure are NOT a "dating" or "engagement" relationship and the Boulder order I requested is not a domestic violence order so fair faith and credit doesn't apply.

I do hope Gianelli immediately CEASES AND DESIST.  Many people have gone to law enforcement about this man.  I have spoken extensively to FBI, met with LAPD detectives (as did Paulette Brandt); contacted LAPD's TMU (Walsh, Cohen's fan, was copying Korn's co-counsel on criminally harassing emails), etc.  The prosecutor in my probation retaliation matter lied to the judge.  I've been into the FBI to discuss Cohen's tax fraud, SWAT, Killer King, the May 25, 2005 false arrest (my dog was evidently my hostage, per what LAPD told my son, and they were taking precautions), the entirely falsified Killer King file; etc.

Kelley

ason unable to:

1. Pay in the full the promise of full payment of a “put” described in the said; or

2. Causes her to have to make any payment to TH (or the assignee or transferee or successor of TH) with respect to the note, but only to the extent Indemnitee has not theretofore in the year in which indemnification is claimed, received sufficient cash from TH, net of any and all income taxes payable by Indemnitee on such cash, to make good on such liability as to which indemnification hereunder is sought by Indemnitee.

In the event of any cause of action or claim asserted by a party to this Agreement or any third party, the Indemnitee will provide the undersigned timely notice of such claim, dispute or notice.

Thereafter, the undersigned shall, at its own expense, faithfully and completely defend and protect the Indemnitee against any and all liabilities arising from this claim, cause of action and/or notice, and shall at once stand in the shoes of Indemnitee and pay all amounts due as they become payable with no right offset or to her claim for immediate and full payment.

If the undersigned should fail to so successfully defend, the Indemnitee may defend, pay or settle the claim with full rights of recourse against the undersigned for any and all fees, costs, expenses and payments, including but not limited to attorney fees and settlement payments, made or agreed to be paid, in order to discharge the claim, cause of action, dispute or litigation, Indemnitor shall pay, to or for the benefit (as she may direct) Indemnitee, all costs and attorneys’ fees with the enforcement of this agreement.

This agreement is binding upon and is to inure to the benefit of the parties, their successors, assigns, and personal representatives.

Signed under seal this 8 day of January 2001.

Leonard Cohen, Indemnitor

Kelley Lynch

Notarized: January 8, 2001, Richard Bernstein

            The Indemnity Agreement is relevant and material due to the fact that Cohen extinguished Lynch’s promissory note from the federal tax returns in the year 2002.  Richard Westin, Leonard Cohen's tax lawyer, prepared the Traditional Holdings tax returns. In 2001, he failed to report the income from the stock sale to Sony Music; in 2002, he extinguished Lynch's Promissory Note (using a separate tax ID); and, in 2003, he extinguished the annuity itself. These steps were taken without Lynch's knowledge, awareness, permission, or authorization. They were brought to her attention by Dale Burgess and DiMascio & Berardo.

            On April 18, 2001, Don Friedman and Stuart Fried summarized the transaction. As Kelley Lynch advised the IRS, she was asked to read this entire document to Leonard Cohen while he soaked in a bubble bath. This letter confirmed the fact that Richard Westin and Neal Greenberg provided the financial and tax-related advice for Leonard Cohen with respect to this transaction:  “As a separate matter, we also want to advise you and Holdings that this firm is not a financial or tax advisor and has not provided any tax-related advice to you or holdings in connection with this transaction. In addition, we have had no role in the formation of Holdings (and have not reviewed or been provided copies of any of its formation documents) or in structuring the legal arrangement between you and Holdings. While we have prepared certain documents required to implement the tax and financial advice of your other advisors, we have done so at their request and direction. We have also assisted your tax and financial advisors by providing explanations of the relevant entertainment industry and intellectual property issues raised by the transaction. With respect to tax-related issues presented by the Agreement, we have, pursuant to your and Holdings’ request, consulted with and followed the advice of Richard Westin and Neal Greenberg. It is our understanding that you are relying on their advice regarding these matters.”  Lynch provided no financial or tax advice and had no role in the formation of any corporate entity or the structuring of legal arrangements with respect to Cohen-related entities.          

            A letter from Richard Westin to Leonard Cohen and Traditional Holdings dated April 23, 2001 addressed the transfer of assets, under California and federal laws, and how annuities exchanged for properties are taxed. No properties were actually transferred to Traditional Holdings. A federal controversy appears to have arisen because Lynch has asked the IRS for an opinion on this transaction, the default judgment that wrongfully altered her tax returns, and other matters.  As Traditional Holdings, LLC was not held in trust for Leonard Cohen, the “trust” referred to in the default judgment is not addressed.

“You have requested my opinion as to whether the transfers of the following properties and contractual rights are effective under California law, whether the assignments are effective for Federal income tax purposes and as to how private annuities in exchange for such properties are taxed. The subject of the transfers are described below and in the contract with Sony Music under which Sony obtained the properties.

Facts: Traditional Holdings (an entity you do not control, but have an equity interest in) indicated its acceptance of the following contracts by assignment (purchase) at their fair market value (reduced by associated expected fees and charges in the event of subsequent sale) from their holder (yourself) as described in the pertinent documents.

It is not a guarantee that this type of arrangement would not be audited; a guarantee of the outcome of any federal tax controversy, or an undertaking to represent any taxpayer in any federal tax controversy.

Whether the rights you have transferred are “property” - If the sale under the annuity were to be attacked as a sham, then it might be argued that the real transfer was a disposition taxable to Leonard Cohen and not to Traditional Holdings in exchange for a private annuity. Kelley Lynch - as an unrelated majority co-owner has a material stake in assuring that the transaction is genuine. Sony is an adverse party, bargaining against Leonard Cohen and Traditional Holdings and has bargained firmly with the sellers. The documentation shows a genuine transfer.

At a deeper level, the trouble with the assignment of income cases is that the taxpayer is typically at work trying to subvert the progressive income tax by shifting income to a lower bracket family member.

The royalties were paid to a trust that the recording artist DID NOT CONTROL. Sony has repudiated Cohen’s claims to ownership and forced you to declare the works to be “works for hire.” Your lawyers believe your works were not works for hire and question the validity of the contract effort to retroactively recharacterize the works. If they were indeed works for hire, then their character as property as opposed to deferred compensation for services would be less certain. Cole case - was indifferent to whether the works were original with the author or performed at the direction of another (apparently the case). Either way - there was a completed transfer to the entity (a trust in Cole’s case and TH in Cohen’s case).

How the private annuity is taxed. There is no taxable event (hence no income tax) at the time the assets were transferred to the LLC in exchange for the private annuity, provided the transaction was properly structured. The concept of the private annuity is that any tax is deferred until payments begin.”

            This memorandum addressed many issues related to the IRS, tax implications of this transaction, potential tax problems, and addresses why Lynch was asked to help Cohen with this transaction as well as her ownership interest in Traditional Holdings, LLC.  The transaction obviously was not properly structured and Cohen did not validly transfer assets to Traditional Holdings, LLC in exchange for the private annuity.  Leonard Cohen, pursuant to the Annuity Agreement he entered into, was obligated to repay his substantial loans and/or advances (with interest) within 3 years.  Otherwise, Lynch (on behalf of Traditional Holdings, LLC) could withhold future annuity payments until the loans/advances were repaid in full.  

Excerpts from Annuity Agreement dated December 7, 2000 between Traditional Holdings, LLC (Buyer) and Leonard Cohen (Annuitant):

2.  Advances at Discretion of Purchaser:  2.1.  Advances.  Upon the written request of Annuitant, Purchaser agrees that it will consider whether it can make advance payments of amounts due under this Agreement.  Any advances shall be repaid no later than three years after the date of the advance.  Until an advance has been paid in full, the unpaid portion thereof shall bear interest at the lowest rate permitted by the Internal Revenue Code without having to impute interest thereunder under Section 7872.  At the discretion of Purchaser, such advances may be repaid by withholding payments otherwise due under this Agreement.  If Annuitant shall die with advances due and owing Purchaser, then such advances shall be satisfied by Annuitant's estate.

Agreement signed by Kelley Lynch, on behalf of Traditional Holdings, LLC, and Leonard Cohen.  Notarized.

            Leonard Cohen owes loans and/or advances to Traditional Holdings, LLC totaling millions of dollars.  Cohen understood that these loans and/or advances were to be repaid within 3 years at 6% interest.  His loans and/or advances include his personal transaction fees, miscellaneous loans and/or advances, and all commissions/fees paid to his financial and investment adviser as Cohen insisted on using Greenberg while Lynch felt his investments were reckless, fraudulent, and aggressive.  Lynch also believes that Cohen is responsible for all assets wasted by Traditional Holdings, LLC, including with respect to all corporate distributions, etc. due to the fact that she agreed to assist Cohen with this entity based on fraudulent misrepresentations and for other reasons.

            Leonard Cohen’s decision to handle the down payment or pre-payment with respect to the Traditional Holdings, LLC deal as a loan became the ongoing source of problems with both the IRS and FTB.  An IRS Notice to Leonard Cohen dated August 13, 2001 questioned the 1999 $1 million Sony pre-payment to Leonard Cohen: “In our review of your 1999 tax return, we found what appear to be differences between income and/or deduction amounts you reported on your tax return and amounts reported to us by others. (Sony) Please use the enclosed envelope to send any supporting documents you want us to consider.”

            On December 21, 2001, Richard Westin prepared and sent Kelley Lynch a Traditional Holdings Management Agreement dated December 21, 2001 addressing her role as manager of this entity.  The management agreement is very clear as to Lynch's compensation which is addressed in two different sections of the agreement although these fees were fraudulently addressed on the expense ledger.

            As of January 2002, the IRS continued to address Leonard Cohen's tax deficiency with respect to the $1 million down payment or pre-payment Cohen personally received with respect to the 2001 Traditional Holdings stock deal.  On January 8, 2002 the IRS sent a Notice to Leonard Cohen.  This notice referred to a tax deficiency for the period December 31, 1999.  The proposed taxes Cohen owed at that time were $587,925.00.  This Notice related to the $1 million pre-payment and/or down payment on the Traditional Holdings, LLC deal that Cohen personally received from Sony.

            The tax issues became alarming in or around February 2002 when Leonard Cohen received a 1099 from Sony (with respect to the Traditional Holdings, LLC stock sale) in the amount of $7 million.  On or around February 7, 2002, Kelley Lynch faxed Ken Cleveland, Cohen‘s accountant, the 1099 and asked him to phone her the following Monday.  Instead, Cleveland immediately sent the following letter to Leonard Cohen. After consulting with Richard Westin over this matter, Cohen personally phoned Ken Cleveland. Cleveland later advised Lynch, in a conference call with Stuart Fried of the Grubman, Indursky firm, that this was a “cover your ass letter.”

Excerpts of Ken Cleveland’s letter to Cohen dated February 7, 2002:  “When your management team retained my services in 1998 my first task was the settlement of the IRS audit of substantial stock donations you have made to your trust and various charities in previous years … 1) In 1999, you received a $1 million advance from Sony. Your management team told me this was a deposit that you had to pay back. The IRS notice states that it is not a deposit but a taxable advance; 2) Tax returns are due April 15th; 3) With regards to the year 2001, we have just received notice that your Sony deal closed and you received over $7 million in income. If this is true, I shudder to think of the money that will be wasted paying penalties to the IRS for underpayment of taxes.”

            Clearly, Lynch became concerned by Cleveland’s statement that he shuddered to think of the penalties due with respect to Cohen’s underpayment of taxes with respect to the Traditional Holdings, LLC deal.  Sony ultimately provided Cohen with a corrected 1099 for the year 2001 which replaced the mistake in the $7 million 1099 previously issued. The income noted on the new 1099 was set at $0. Sony also acknowledged that the $1 million set forth on the 1099 (which became the subject of IRS and FTB inquiries) was a deposit against future royalties and confirmed that the 1099 was mistakenly issued.

            Due to the hysteria and conduct on the part of Leonard Cohen, Richard Westin, Ken Cleveland, Neal Greenberg, and others, following the receipt of the $7 million 1099 from Sony and Kelley Lynch's inquiries re. paying down the promissory note, she asked Richard Westin to prepare a letter clarifying these entities and the assistance she provided Cohen with respect to these deals and these corporate structures. Leonard Cohen acknowledged receiving this letter:

Richard Westin letter to Leonard Cohen dated March 6, 2002:

Dear Leonard,

I have now reviewed all the documents that were forwarded me in order to prepare the Traditional Holdings return. I would like to point out that I did not notice any sloppy record keeping and all the documents were delivered to me in a timely manner.

I would like to review the structure of TH at this time because it is ornate you may need further clarification. I will start at the beginning. TH came about as the result of Neal and myself being approached by Kelley at your request to search for a tax structure that would benefit you with respect to the Sony royalty buy-out. At that time, you were looking at ordinary income that would have been taxed at the rate of 47%. Traditional Holdings purchased your royalty buy-out properties using a private annuity. A private annuity is a contract under which a person sells property in exchange for deferred payments that end when the seller dies. The deferred payments are payments to you (which I will address later in this letter) and it is these deferred payments that allow the tax to be deferred. The payments cease upon your death. Private annuities have been around for decades and are not controversial.

In the year 2011, you will begin receiving about $38,000 a month for the remainder of your life. You will then pay taxes yearly on this amount at whatever the tax rate is on ordinary income.

You have therefore saved tremendously in taxes because you avoided the ordinary income tax of approximately $3.5 million in the year of the sale and will pay taxes as you receive your deferred payments. In the interim, your money is invested and if well managed it is also growing.

All monies you take from TH until 2011 need to be documented as loans. This is why some confusion arose for Kelley in the year 2001 with respect to your personal tax return payment. Neal made the decision that the funds should come from TH and Kelley then contacted me in order to determine what paperwork, if any, was required. I had to prepare a note that was to be placed in the file with a copy of the return. It is important to have these “loans” documented by notes.

To reiterate, TH obtained the properties with a private annuity in order to defer taxes. Kelley had to be brought in, and agreed to do so in order to help you, because you need a third party’s involvement so that this transaction is not viewed as your selling something to yourself. The third party should not be a relative of yours therefore Kelley was selected. We had Kelley sign a promissory note in the amount of $245,000 to TH which shows that she invested in TH. She is to receive $24,000 a year for the first 17 years, then $31,250 a year, which allows her to repay the note; and, $20,000 a year which allows her to pay taxes on the amount she has received.

It complicates things for Kelley and possibly eats into her lifetime gift tax exemption that would benefit her children.

It is possible that estate taxes will change in the future and Kelley will not suffer any penalties. To summarize, Kelley was brought into this situation in order to help you accomplish a beneficial tax structure.

At this time, Kelley needs to begin repaying the note to TH. She must pay $24,000 debt service on the note this year so that the entity remains legitimate. The way we anticipated handling this was to allocate $240,000/year of TH profits to Kelley each year which allows her to pay the taxes on the income that has created for Kelley.

Unfortunately, because Kelley did not make the $24,000 payment in 2001 (she was not aware that she had to do so), this may create hardship for her with respect to taxes. In order to resolve this situation, I propose that Kelley be allocated the sum of $___________________ for the years 2001 and 2002. Out of this amount, Kelley will pay the note (by writing a check to TH) and pay the taxes she incurs by receiving these monies from TH, which we will call a fee for the sake of simplicity.

It is often the case that once a structure has been established and taken out of the realm of theory, it takes time for all parties to understand what its function is and how it operates. I have basically raised three points here: (1) that a private annuity has been established in order to defer taxes; (2) you will eventually begin receiving monthly payments and until that time, all withdrawals from TH need to be documented as loans; (3) Kelley’s participation was essential and requires a yearly payment to her which allows her to repay the note and the taxes she incurs because of the payment.

On a separate note, I am giving some thought to your gift tax situation. I understand that you are giving Adam approximately $42,000 a year in support. This cancels out the possibility of gift him $11,000 a year (which is now the yearly gift amount) with respect to the property you have purchased. I also understand that Anjani Thomas has been given sums possibly in excess of $11,000 permitted yearly gift and need to rethink how the loan to her for the house should be handled.

I would like to take some time and review the larger picture of your gifts with Kelley - this would include your voluntary monthly gift to the children’s mother which comes to $45,600 per year.

Kelley has advised me that you would like to know if there is some way for you to give gifts to your children in a manner that does not create a gift tax. This is something Reeve Chudd and I need to think through.

Since my involvement in your tax planning, several entities have been created: two charitable remainder trusts (which I understand Neal will address with you separately), and Traditional Holdings. These three entities - the two charitable remainder trusts and TH are really the essence of your tax and estate planning. Last year was a very complex year but going forward everything should be quite smooth and uncomplicated.

            The above letter essentially addresses Cohen’s use of corporations in an attempt to evade taxes.  It also addresses the fact that Cohen elected to use Lynch to assist him and created grave ambiguities for her.  Furthermore, Lynch learned in hindsight that her role in the Traditional Holdings, LLC deal would harm her.  

            Stuart Friend's fax to Richard Westin dated April 1, 2002 transmitted Sony's letter regarding the $1 million 1099 Cohen received in 1999:  Dear Mr. Cohen: As you requested, this letter is to confirm that the $1,000,000 paid to you by Sony Music Entertain, Inc. in November of 1999 was a deposit towards a possible royalty buyout by SMEI and mistakenly reported on Form 1099-Misc as royalty income for the calendar year 1999. Sincerely, Paul Gilbert”

            Leonard Cohen hired Hochman, Rettig to handle the IRS audit of the $1 million 1099 for the year 1999. Lynch once again became very suspicious of Cohen, the IRS matters that continued to arise, the Traditional Holdings deal, and the annuity. She provided Hochman, Rettig with certain documents and asked them to review the annuity agreement and advise her if there was anything wrong with it. When Richard Westin heard about Lynch's discussion with Steve Blanq of Hochman, Rettig he raised issues regarding Leonard Cohen's attorney/client privilege and Steve Blanq advised Lynch that he could not discuss this matter with her. It was around this time that Blanq advised Lynch that Richard Westin's evasiveness made the Ogden, Utah IRS agent "nervous." His activity, conduct, memorandums, etc. made Lynch nervous as well.  After parting ways with Cohen, Lynch contacted Steve Blanq who asked her “Are you being blamed for Richard Westin’s actions?”

            In 2003 and 2004, the Franchise Tax Board sent notices addressing the fact that Leonard Cohen failed to file state tax returns with respect to LC Investments, LLC, a company wholly owned by him. Cohen and Westin also failed to file tax returns with respect to Traditional Holdings in the State of Kentucky.  The FTB’s demands for tax returns created paranoia on the part of Leonard Cohen and Richard Westin and, in turn, caused Lynch to further question the situation with respect to Leonard Cohen, taxes, these deals, and the corporations that were being used.  Hochman Rettig also handled the FTB’s inquiry into Leonard Cohen's 1999 tax return and the ongoing problems with the $1 million 1099 and the apparent tax deficiency.

            Lynch’s concerns with respect to many issues, including Cohen’s failure to file state tax returns, continued to grow.  Westin’s September 24, 2004 email was deeply disturbing to Lynch.  She had no idea what the reference to Neal Greenberg meant but understood that there were serious legal and tax issues with respect to the various entities.  The September 24, 2004 Lynch received from Richard Westin addressed matters related to Traditional Holdings, LLC, LC Investments, LLC, federal and state tax returns, and, Neal Greenberg:  “Nothing is owed for 2003 to the feds as to LCI. I paid the State the $1,131 (please pay me) for LCI for 2002. There will be a small tax due to the State for 2003, according to my slightly out-of-date book on California taxes, for LCI. I have no clue yet as to what TH does to him. Incidentally, this year I plan to stand up and fight for you over your position in TH. Out of kindness (or something) you got into that deal for LC’s benefit and then Neal tried to (pardon me) fuck you. That has to stop. We need to put our heads together about that. Perhaps I am wrong. I hope so.”  

            Richard Westin's letter to Cohen and Lynch dated October 4, 2004 re. Traditional Holdings' 2003 federal tax returns and K-1s raised further alarm on the part of Lynch who had decided, by this time, that she was reporting what she believed was tax fraud on the part of Leonard Cohen (and others) to the IRS: “Kelley Lynch or Leonard Cohen can sign and file it with the Cincinnati IRS - he provides a cover letter and SASE for that purpose. The return reports quite a lot of income to Kelley. He has no information to indicate that there is a compliance with the duty to pay Kelley Lynch a $20,000 management fee. The obligation arises out of a management agreement in the TH binder; the agreement has not been signed.  It has been in the binder since 2001 along with an unsigned amendment to the management agreement. This is in here to give KL some help with the tax burdens this entity creates for her. She should have been paid it and the agreement should have been signed by LC.  There is also an unsigned promissory note [It was signed and notarized] issued by KL for $240,000, prepared for signature December 2000. The LLC agreement calls for a special allocation of profits to KL of at least $24,000. That is why the profit and loss sharing ratios are the odd number 99.55 and .45. The operating agreement calls in Section 9.1 for the distribution in cash of at least $24,000 to Class B shares (all in KL’s hands). TH is a complicated structure. It is important to adhere to it because if it is audited and the Revenue Agent looks closely, what he or she will find will be a disregard for form that could result in significant tax adjustments and deeper tax inquiries that are not desirable.”  At this point in time, Lynch felt she had no alternative but to ask the IRS to review the corporate structures, private annuity agreement, and related tax returns.  

            On October 6, 2004, Richard Westin wrote Cohen and Lynch regarding a 2003 Kentucky tax return of LC Investments, LLC.  LCI is a Delaware entity registered in California and is not, as Westin clearly understood, a Kentucky entity. Lynch believes this was an intentional "mistake" on Westin's part that relates to his absolute concerns about the IRS and FTB with respect to these entities at this point in time. The K-1s, which reflect a 99.5% ownership interest on Lynch's part with respect to LCI, are clearly fraudulent. This letter encloses the 2-page LCI tax return for Kentucky. Attached are Kentucky Schedule K-1s. One is for Leonard Cohen and one for Kelley Lynch. The K-1 for Cohen indicates that he is a .45% owner and shows no share of income. The K-1 for Lynch shows that she is a 99.5% owner. It also shows no ordinary income or net income due. Westin does not explain why Kelley Lynch is listed as a member of LC Investments, LLC in the same percentages as Traditional Holdings. He also does not explain why LCI is filing a Kentucky return when it is a Delaware LLC registered as a foreign entity in California. Lynch remains convinced that this was an intentional mistake.  The K-1 with respect to Lynch, transmitted to the State of Kentucky, is unlawful.  The same is true for the K-1s LC Investments, LLC transmitted to the IRS (with respect to Kelley Lynch) for the years 2004 and 2005.  Lynch LC was not a partner and has no involvement, whatsoever, with LC Investments, LLC although she is still listed as registered agent.  

            Lynch is convinced that the steps with respect to these corporations are a step transaction.  She is also convinced that the steps on the Traditional Holdings, LLC federal tax returns are further evidence of a step transaction.  The step transaction doctrine is a judicial doctrine in the United States that combines a series of formally separate steps, resulting in tax treatment as a single integrated event. The doctrine is often used in combination with other doctrines, such as substance over form. The doctrine is applied to prevent tax abuse, such as tax shelters or bailing assets out of a corporation. The step transaction doctrine originated from a common law principle in Gregory v. Helvering, 293 U.S. 465 (1935) that allowed the court to recharacterize a tax-motivated transaction. Gregory v. Helvering was a landmark decision by the United States Supreme Court concerned with U.S. income tax law. The case is cited as part of the basis for two legal doctrines: the business purpose doctrine and the doctrine of substance over form. The business purpose doctrine is essentially that where a transaction has no substantial business purpose other than the avoidance or reduction of Federal tax, the tax law will not regard the transaction. The doctrine of substance over form is essentially that, for Federal tax purposes, a taxpayer is bound by the economic substance of a transaction where the economic substance varies from its form.

            In the instant matter, Leonard Cohen and Kelley Lynch owned shares of a company called Blue Mist. Blue Mist, in turn, owned intellectual property. On October 19, 1999, Leonard Cohen created a new company called LC Investments, LLC for the sole purpose of pursuing a bond securitization deal with CAK. On October 15, 2000, Cohen attempted to transfer intellectual properties owned by Blue Mist Touring Company, Inc. to LC Investments, LLC. All shares of LC Investments were owned by Leonard Cohen, as trustee. Sometime after this failed attempt to transfer the assets to LCI, Richard Westin wrote a letter or memorandum confirming that Lynch should have been compensated with 15% of LC Investments. She was not.  On September 19, 2000, Don Friedman confirmed that “Blue Mist is a Delaware corporation, the capital stock of which is owned 85% by Leonard Cohen and 15% by Kelley Lynch. Cohen owns 425 shares and Lynch owns 75 shares. Sony will purchase Cohen and Lynch’s stock in Blue Mist (representing 100% of the equity interest in any other unreleased recordings or in Cohen’s future recording services)." This memorandum is a confirmation that the parties intended to sell their ownership interests in Blue Mist and the intellectual property assets to Sony.  On September 21, 2000 Don Friedman confirmed that Sony had begun their due diligence with Blue Mist. They understood that the beneficial owners of Blue Mist were Leonard Cohen (85%) and Kelley Lynch (15%). The ongoing problems with respect to Cohen's demand for stock deals were also raised.  On December 7, 2000, Leonard Cohen entered into a Private Annuity Agreement with Traditional Holdings, an entity that did not exist and induced Lynch to execute that document as well as a Promissory Note that his tax lawyer extinguished from the federal tax return in 2002. On December 18, 2000, Traditional Holdings was formed as a Kentucky LLC. Lynch was made a 99.5% member and Cohen a .5% member. Leonard Cohen attempted to sell intellectual property owned by Blue Mist to Lynch in exchange for an Annuity that his tax lawyer extinguished in 2003. Lynch asked for and received an Indemnity Agreement that was executed on January 8, 2001. Leonard Cohen, whose tax lawyer prepared the Traditional Holdings income tax returns failed to report the income from the 2001 Sony sale. Lynch and her lawyers were ultimately advised, by Robert Kory, that Leonard Cohen planned to roll Traditional Holdings, LLC into LC Investments, LLC. Lynch maintains that this convoluted set of transactions is a step transaction whose sole purpose was to avoid and evade taxation. Leonard Cohen controlled all entities.

            Leonard Cohen did not own the assets he ultimately attempted to assign and/or sell to both LC Investments, LLC and/or Traditional Holdings, LLC.  Cohen had nothing to assign and/or sell to either of these entities.  These assets are owned by Blue Mist Touring Company, Inc.  No trust documents exist with respect to Blue Mist Touring Company, Inc. and/or Traditional Holdings, LLC and Lynch’s ownership interest in these entities was not held in trust for Leonard Cohen.

            The step transaction doctrine states that: interrelated yet formally distinct steps in an integrated transaction may not be considered independently of the overall transaction. By thus linking together all interdependent steps with legal or business significance, rather than taking them in isolation, federal liability may be based on a realistic view of the entire transaction. The Traditional Holdings tax returns also appear to involve a step transaction: In 2001, Cohen failed to declare the income from the Sony sale; in 2002 (using a separate tax ID number) Cohen extinguished Lynch's Promissory Note; and, in 2003, Cohen extinguished the annuity itself. Lynch was unaware of this activity and it was brought to her attention by her lawyers and accountant in the fall of 2004.

            In Gregory v. Helvering , the U.S. Supreme Court ruled as follows with respect to elaborate and devious forms created to conceal the real nature of a transaction and addressed the fact that the activity was tax motivated and nothing other than a contrivance. The same is true with respect to Leonard Cohen and his related entities:  "It is earnestly contended on behalf of the taxpayer that since every element required by [the statute] is to be found in what was done, a statutory reorganization was effected; and that the motive of the taxpayer thereby to escape payment of a tax will not alter the result or make unlawful what the statute allows. It is quite true that if a reorganization in reality was effected within the meaning of [the statute], the ulterior purpose mentioned will be disregarded. The legal right of a taxpayer to decrease the amount of what otherwise would be his [or her] taxes, or altogether avoid them, by means which the law permits, cannot be doubted. [ . . . ] But the question for determination is whether what was done, apart from the tax motive, was the thing which the statute intended. The reasoning of the court below [i.e., the reasoning of the Court of Appeals] in justification of a negative answer leaves little to be said. When [the statute] speaks of a transfer of assets by one corporation to another, it means a transfer made 'in pursuance of a plan of reorganization' [ . . . ] of corporate business; and not a transfer of assets by one corporation to another in pursuance of a plan having no relation to the business of either, as plainly is the case here. Putting aside, then, the question of motive in respect of taxation altogether, and fixing the character of the proceeding by what actually occurred, what do we find? Simply an operation having no business or corporate purpose-a mere device which put on the form of a corporate reorganization as a disguise for concealing its real character, and the sole object and accomplishment of which was the consummation of a preconceived plan, not to reorganize a business or any part of a business, but to transfer a parcel of corporate shares to the petitioner. No doubt, a new and valid corporation was created. But that corporation was nothing more than a contrivance to the end last described. It was brought into existence for no other purpose; it performed, as it was intended from the beginning it should perform, no other function. When that limited function had been exercised, it immediately was put to death. In these circumstances, the facts speak for themselves and are susceptible of but one interpretation. The whole undertaking, though conducted according to the terms of [the statute], was in fact an elaborate and devious form of conveyance masquerading as a corporate reorganization, and nothing else. [ . . . T]he transaction upon its face lies outside the plain intent of the statute. To hold otherwise would be to exalt artifice above reality and to deprive the statutory provision in question of all serious purpose."

            Lynch obviously has many legal issues with respect to Leonard Cohen. In 2005, Boies Schiller, who reviewed three boxes of, advised Lynch to sue Cohen for conversion, fraud, and intentional torts.  Boies Schiller also believed Cohen and Kory attempted to engage her in criminal conduct.  In 2011, after speaking with Lynch, Steven Machat advised her to sue Cohen for theft. She clearly has issues related to malpractice with respect to Richard Westin who advised her by email in October 2004 that he never represented her and only represented Leonard Cohen. Cohen and his representatives set up an invalid legal structure potentially exposing Lynch to liability. They failed to properly advise Lynch how to implement the legal structure which she does not feel was her job in any event. Leonard Cohen and Westin failed to obtain conflict waivers needed to represent me, Traditional Holdings, and Leonard Cohen. Westin, working on behalf of Leonard Cohen negligently (and probably intentionally) prepared the Management Agreement causing uncertainty (or, at the very least, allegations of "uncertainty" which have now arisen) in the amount of Lynch's management fees with respect to Traditional Holdings. Westin, on behalf of Leonard Cohen, negligently and fraudulently prepared tax returns with respect to Traditional Holdings, LC Investments, and issued a fraudulent K-1 to Lynch with respect to LCI and the State of Kentucky. Leonard Cohen, on behalf of LCI issued fraudulent K-1s to Lynch with respect to LCI and the Internal Revenue Service. These are just some of the issues Lynch has attempted to address with Cohen and his representatives.

            Robert Kory advised DiMascio & Berardo that Blue Mist is an issue and the Assignments should not be respected. He advised DiMascio & Berardo that the assignments were part of a bigger scheme and that there was never an intention for Blue Mist to own the assets. Lynch understood that she was given stock in Blue Mist to compensate her for her services (unrelated to her commissions as Cohen's personal manager) and if the assignments are invalid and the stock is worthless, she was defrauded. Lynch owns 15% of Blue Mist and/or all assets, wherever they have gone. She also owns, according to the corporate books and records 99.5% of Traditional Holdings. Lynch is entitled to a 15% commission, dating back to 1988, for her services as Cohen's personal manager, including those commissions he continues to wrongfully withhold from her.  Lynch and the corporate entities themselves are entitled to an accounting.

            In order for Cohen to explain his wrongful conduct, he had to raise fraudulent allegations of fraud and/or recission. This is one of the only ways in which Cohen could attempt to unwind the transaction involving the sale of assets to Sony re. the 2001 Traditional Holdings stock sale while taking the position that Lynch's ownership interest in Blue Mist is invalid. Lynch relied on Cohen and his representatives misrepresentations of many facts which turned out to be false and were known by these parties making the representations to be false. This has resulted in tremendous damage to Lynch, her sons, and others. On a final note, Leonard Cohen and Richard Westin never discussed a trust with Lynch regarding Traditional Holdings. No trust was set up and no trust documents exist. No verbal promises were made between Lynch and Cohen with respect to a trust, preserving assets (that Cohen raided) in Traditional Holdings, or with respect to other entities, and no document evidences any such alleged promises.

            In a meeting with DiMascio & Berardo, Kory referenced the fact that this was a community property state and Lynch may be entitled to palimony (50% of LC’s assets). At that time, Kory was working towards a meditation with Westin, Greenberg, and others. Ira Reiner was handling the litigation aspects of the proposed meditations. Kory He "invited" Lynch and her representatives to attend the mediations. DiMascio & Berardo and Kory were attempting to reach a mutually beneficial settlement between you and Cohen and Lynch and were evidently discussing how to unwind Traditional Holdings. These parties agreed that Traditional Holdings should be unwound and Lynch has asked the IRS for a formal opinion with respect to that plan which involved merging Traditional Holdings into LCI.  Kory also confirmed that Lynch was entitled to her 15% commission and owns 15% of the intellectual property.  He advised Lynch personally that she has a cause of action against every one of Cohen’s representatives/advisers and assured her that he and Cohen would assist her with those matters.

            In January 2005, DiMascio & Berardo set forth the criminal and civil liability Cohen was facing with respect to his tax fraud re. Traditional Holdings, LLC alone.  It seems overwhelmingly obvious that Cohen’s criminal tax fraud, penalties and interest, and civil penalties show bias and motive on his part.  It does not, however, explain why Cohen would further defraud Lynch and attempt to profit from his tax fraud and wrongdoing.  

“Criminal Liability: Leonard Cohen used an Annuity in order to defer the payment of taxes on the asset sale. There is nothing inherently wrong with an annuity transaction. However, criminal tax liability could arise if the IRS makes a determination that the annuity transaction had no substance and was designed for the sole purpose of evading tax liability. [IRC Section 7201 (the IRS is referred to as “the Code”).] In order to convict under Section 7201 of the Code, the basic elements that must be proven are (1) the existence of a tax deficiency, (2) an affirmative act constituting an evasion or attempted evasion of the tax, and (3) willfulness. An example of an affirmative act is the filing of a false return. Proof of willfulness is often unavailable and must be proven by circumstantial evidence, such as failure to report a substantial amount of income, the expenditure of large amounts of cash that cannot be reconciled with reported income, keeping false account books or other badges of fraud set forth in the Internal Revenue Manual. Reckless disregard for the truth or negligent failure to inquire into the facts underlying criminal activity is insufficient to support a conviction. A good faith misunderstanding of the law is a defense to a tax crime. Further, good faith reliance on the advice of counsel, after complete disclosure of all relevant facts, is also a defense to tax evasion. Under the Code, the defendant may be fined, imprisoned not more than 5 years, or both and made to pay the costs of prosecution and any special assessments. The maximum fine is $250,000 for individuals and $500,000 for corporations. The statute of limitations is 6 years from the commission of the offense. [IRC Section 6531.] In addition, there are two separate offenses under Section 371 of Title 18 that are typically asserted in cases of tax code violations involving several defendants, such as where corporate officers participate in the filing of the corporate tax returns. These offenses are (1) conspiracy to commit an offense against the U.S. and (2) conspiracy to defraud the U.S. Both offenses require (1) an agreement between two or more persons; (2) to achieve an illegal goal; (3) with knowledge of the conspiracy and with actual participation in the conspiracy; and, (4) at least one conspirator committing an overt act in furtherance of the agreement. In a tax conspiracy case, it must be shown that each defendant was not only aware of the tax consequences of his actions, but also that he had the specific intent to violate the tax laws. The conspiracy statute, along with the charge of aiding and assisting in the preparation of false returns (IRC Section 7206(2)), is among the government’s most used tools in prosecuting attorneys, accountants, and other tax advisors who may have been involved in the activities of a taxpayer. Under a Title 18 violation involving conspiracy, each conspirator faces a fine, or imprisonment for up to 5 years, or both. The maximum fines are generally the same as those noted above.”

“Civil Tax Penalties: There are over 150 civil penalties in the Code. They cover everything from the failure to file or pay a tax, to accuracy-related penalties, to information returns, to special penalties covering the activities of tax return preparers, tax shelter activities and beyond: Focusing solely on the obvious, we see the following potential problems with TH: (1) Accuracy Related Penalties where the amount of the penalty is 20% of the underpayment, (2) Substantial Understatement of Income Tax where the amount of the penalty is 20% of the underpayment, (3) fraud where the amount of the penalty is 75% of the portion of the underpayment attributable to the fraud, and (4) failure to pay taxes due where the penalty is ½ of 1% for each month the tax is unpaid for a maximum penalty of 25%. Applying these penalties and acknowledging that the math is extremely rough, there is potential approximate tax liability as follows: $880,000 for substantial understatement and accuracy related penalties; $440,000 for fraud and $1,100,000 for failure to pay taxes for total penalties of approximately $7,260,000. This does not include interest which, at a rate of 5% per annum compounded and without effective compounding, equals about $650,000 for a total penalty and interest bill of $7,910,000. In addition, if the transaction is unwound and LC is determined to be the owner of the assets, he would have to pay tax on the sale which is the basis for the penalties and interest which amounts to about $2,500,000 (state and federal combined). Thus and in summary, at the end of the day, if the TH transaction is reported to the IRS, Leonard Cohen will be liable for taxes on the sale in the sum of about $2,5000,000, penalties of $7,260,000 and interest of $650,000 totaling $10,410,000.”

            Additionally, among other issues, there is a tax deficiency resulting from Cohen’s failure to report the income from the Sony sale; an affirmative act constituting an evasion or attempted evasion of the tax; and willfulness involving, among other things, the fact that Cohen the annuity obligation to disappear from the 2003 federal tax return; Cohen’s failure to document and repay his loans within 3 years as required; and, Cohen’s failure to report the sale of certain assets to Sony on the 2001 tax return. Pursuant to Lynch’s lawyers, similar penalties and interest existed with respect to at least two other Cohen entities.

            On February 7, 2005, DiMascio & Berardo wrote Lynch that they met with Kory and his associate. DiMascio & Berardo advised them that Lynch always relied on Cohen's advisers, Cohen was fully informed, and Lynch owned 99.5% of Traditional Holdings. Kory acknowledged that he did not have any clarity on what to do in the tax arena, had not been able to identify any causes of action, did not know the extent of the potential liability for any of the parties, let alone how the 2001 transaction was reported, and did not know how to unravel the entities so that the parties could go their separate ways. Kory was meeting with Michael Mesnick, a CPA formerly with the IRS, for guidance and assistance in evaluating the situation. DiMascio & Berardo further advised Lynch that Traditional Holdings had been suspended in Kentucky for failure to file statement of information and state tax returns had not been filed. DiMascio & Berardo discussed the fact that three sets of federal tax returns existed with respect to Traditional Holdings. These returns were dated March 3, 2001, March 5, 2001, and March 9, 2001. Lynch does not know what return was filed. Neither Kory nor DiMascio & Berardo felt comfortable contacting the IRS for copies of filed tax returns as they did not know whether this would alert the Service to possible inquiry into Traditional Holdings. They all agreed that they wanted to avoid this result. DiMascio & Berardo advised Robert Kory, once again, to look closely at the Indemnity Agreement Leonard Cohen and Traditional Holdings provided Lynch, at her request.  Lynch felt that this letter, including the discomfort all parties felt with respect to contacting the IRS, was further evidence that she should report Cohen’s tax fraud to the IRS.

            In September 2010, the SEC charged Neal R. Greenberg with fraud and breach of fiduciary duty in the marketing and recommendation of his firm's hedge funds to investors.  

“Greenberg misrepresented the diversification, risks and fees involved with investing in the Agile hedge funds to conservative investors who were dependent upon their investment income for some or all of their living expenses” said Donald M. Hoerl, Director of the SEC's Denver Regional Office. “Greenberg's unsuitable recommendations and misrepresentations deceived his advisory clients into believing their money was safe with him.”  Lynch met with representatives of City National Bank, and other investors, in an attempt to move the investments from Greenberg to a more reliable and suitable company but Cohen refused to entertain this possibility. 

            Lynch remains convinced that Cohen, Greenberg, and Westin, planned and coordinated their lawsuits and responses.  

            In the instant matter, Leonard Cohen, filed a declaration which states, in pertinent part: “I am the sole owner of ... Leonard Cohen Investments, LLC (LCILLC), a limited liability company established in 2000 to hold certain of my intellectual property assets” and “I am also the beneficial owner of Traditional Holdings, LLC (Traditional Holdings), a limited liability company formed in 2000 to hold the proceeds of a sale of certain of my artist royalties to Sony and to provide an annuity income to me for the remainder of my life.”  The attachment to the judgment, Item 6, reads, in pertinent part: “It is declared that (1) Lynch is not the rightful owner of any assets in Traditional Holdings, LLC, Blue Mist Touring Company, Inc., or any other entity related to Cohen; (2) that any interest she has in any legal entities set up for the benefit of Cohen she holds as trustee for Cohen’s equitable title; (3) that she must return that which she improperly took, including but not limited to “loans,” and (4) that Cohen has no obligations or responsibilities to her.”

            Leonard Cohen is not the sole beneficial owner of either Traditional Holdings, LLC or Blue Mist Touring Company, Inc.  Lynch does indeed have an ownership interest in these entities which were not held in trust for Cohen.  Furthermore, Leonard Cohen owes Lynch commissions and fees for services rendered so he does indeed have obligations and responsibilities to her.  He also had obligations and responsibilities to Traditional Holdings, LLC and Blue Mist Touring Company, Inc., and other entities, as well.

            Leonard Cohen is indeed the sole owner of LC Investments, LLC.  

            In his 2008 book, Gods, Gangsters & Honour, Steven Machat (entertainment industry manager, attorney, Marty Machat’s son and former partner), highlights some of Cohen’s questionable attributes and illicit conduct. This side of Cohen is concealed from the news media, adoring journalists, fans, and others.

Excerpts from Gods, Gangsters & Honour by Steven Machat

The headline wasn’t promising: “Leonard Cohen’s Troubles May Be A Theme Come True.” But the story was outrageous. Cohen had filed suit against his personal manager Kelley Lynch, accusing her of stealing more than $5 million while he spent five years at a Zen Buddhist retreat.

I first met Leonard Cohen in October 1970 when I was at the University of Miami and I wasn’t impressed.

I found his songs and records depressing and, worse, Cohen seemed to wallow in his morbid tales of unrequited love, loss and so on. He always seemed to cast himself as the helpless victim.

Leonard was desperate to get rid of his two managers, Judy Berger and Mary Martin, who he believed had stolen the rights to his songs and records early on in his career. Even back then, Cohen was convinced that women were ripping him off. He signed an agreement, and when he wanted to get rid of the contract, he accused everyone of ripping him off. You could say it became repeat behavior. My father duly got rid of Berger and Martin, set up a new company called Stranger Music for Cohen and agreed to manage Leonard for 15% as well as 15% of Stranger. The idea of the company was twofold: one, to maintain ownership of the copyrights duly created; and two, to minimize Leonard’s exposure to American tax, just like any other rich individual trying to minimize their tax liabilities.

Then I got a call from Leonard, and it was a perfect example of how to tell when someone is lying. He said: “Steven, you have a best friend in me forever. I will never harm you and I will always be there for you …” Why would he offer not to harm me? It suggested to me that he was thinking of harming me, and if he was thinking it, he would probably do it.

Leonard sees truth only inside his illusions.

I met up with Leonard at a Chinese restaurant on Wilshire in LA. Even by his standards, he was nervous. He was drinking whiskey, which I’d never seen before, and it was only 12 PM. He appeared terrified. Unable to even look me in the eye, Cohen came to the point quickly: “Your Dad ripped me off.” Leonard told me he was convinced that my father had failed to exploit Cohen’s copyright to its full potential. But to me it was all bullshit. Leonard had to justify to himself why he was fucking us.

Cohen controlled his copyright, not my father. The irony was that Cohen had total control over my father … Do you know what happened to the $400,000 worth of bearer bonds in my father’s office? Bearer bonds are just unregistered bonds or paper money that are used to conceal ownership and, with it, tax liabilities. Cristini told me (who knows if this is true?) that he had found the bonds in my father’s office hours after he had died but the next day they disappeared.

Cohen denied any knowledge of these bonds. I was unsure if they existed or were part of my father’s schemes cooked up to conceal Leonard’s money.

I’ve no problem with people trying to avoid tax, but as the years have passed, I couldn’t help but smile at the apparent contradiction between Leonard’s public persona and his private business arrangements.

This was a supposedly devout Buddhist with no interest in material possessions, who was all the same happy to put his trust in business managers and companies he created with his knowledge and consent whose sole aim was to minimize tax liability.

Leonard then sold Stranger Music for a small fortune and I’ve seen nothing from Cohen.

Cohen said: “Steven, you remember the 1988 tour? Flemming extorted $100,000 from me. He wanted 20% managerial commission, in addition to his promoter’s fees. He thought he was doing extra work for me and wanted me to pay him.” Later, Flemming told me that Cohen was lying … Leonard told me he would pay me a management commission. When I went to get the money after the tour, Leonard told me he couldn’t pay me because he owed it to the Machats. So we settled on $100,000.

Far from being the poet of the spirits, Leonard was a hustler using Buddhism as a facade.

The next time I would see Leonard … We’d just seen The Hand That Rocks The Cradle where Rebecca De Mornay plays the psychopathic nanny who stalks this family. Who should walk along but Cohen, who was holding hands with DeMornay, his girlfriend at the time. Cohen was extremely uncomfortable because he knew he had stolen from me and it was clear he couldn’t get away quick enough. Neither could my son, because he took one look at DeMornay and ran. He was terrified because he thought she was the nanny in the film!

It was clear that Leonard was also wary of me because, I guess, he thought I might be planning to sue him.

Leonard told me that when he had gone off on his Buddhist retreat Kelley was left managing his business interests. He said: “She started believing this money was hers and she started spending it. All of it. When I got back from my pilgrimage, I went to withdraw money left in the account to cover the draft. I was speechless. I didn’t know where to look, where to turn or what to think.” Cohen told me that with the help of his daughter, Lorca, he managed to piece together what had happened.

All Leonard had to do to avoid U.S. taxes was tear up his green card, and stop living in and using the U.S. as his base.

It’s no secret that Leonard has also made a killing on the art market by selling his paintings, plus his touring of the last two years … If that’s true, it doesn’t really tally with the clear implication from Cohen that he is a man who has been robbed of everything.

Leonard told me before I left that he had actually offered Kelley a settlement …

It’s clear that Cohen and his lawyers want to heap the blame on Kelley’s shoulders for more than just revenge. Because Cohen’s pension assets were cashed in … ahead of schedule they are liable to tax so they need to establish that this situation is her fault. The penalties could actually be greater than the tax itself.

Leonard has cast himself into a hell of his own making.

            Leonard Cohen does indeed enter into agreements and then attempt to breach them by accusing people of ripping him off.  That is precisely what has occurred in the present matter.  It is my understanding that Machat & Machat had an agreement with Leonard Cohen that they would receive 15% commission for their management fees and they owned 15% of Stranger Music, Inc.  The evidence supports precisely what Steven Machat has alleged for years.  Leonard Cohen is consumed by greed and he uses corporations to evade taxes.  Leonard Cohen is a hustler now using both Buddhism and Judaism as facades.  He has now stolen from me, Steven and Marty Machat, and possibly Phil Spector and record producer Bob Johnson.

            Leonard Cohen did not return from a religious pilgrimage, attempt to withdraw money from a bank account to cover a draft, and discover that he was left without anything.  This is merely a cover story that he has repeated for the news media, in court documents, and on the witness stand in Lynch’s related trial.  Cohen could not simply abandon his green card, stop living in the U.S., and return to Canada.  He faced tax and residence problems in Canada as well.  Leonard Cohen has made a fortune by touring and selling his paintings and other merchandise.  Cohen has taken the position that he terminated Lynch and due to the wrongful termination, he owes her a tremendous amount of money.  Cohen did indeed offer Lynch a settlement and as part of that settlement wanted her assistance in going after his advisers and/or representatives.  The instant legal matter is a scheme on Cohen’s part due, in part, to the fact that Cohen used and/or wasted assets (including pension assets) ahead of schedule and he is liable for tax and penalties.  Cohen also appears to have other tax problems with the IRS.  He needed to establish that this situation was Lynch’s fault which it was not.  Leonard Cohen had many professional advisers handling the corporate, tax, accounting, and financial matters on his behalf.  Leonard Cohen has simply attempted to blame his own conduct and wrongdoing on Lynch and possibly others.

THE IRS AND FEDERAL TAX MATTERS

            Leonard Cohen's motive for relentlessly targeting Lynch has to do with his tax fraud that Lynch reported to the IRS.  She was used horrendously by Cohen and others.  Mike Taitelman, who briefly represented Lynch in the spring of 2005, spoke to Robert Kory and advised Lynch that if she agreed to assist Cohen, they would say she was used as a pawn; otherwise, they would accuse her of orchestrating this situation.  This targeting continued in Lynch's 2012 trial.  The following excerpts from Lynch’s related 2012 trial before LA Superior Court relate to the default judgment in this matter and various tax issues that are at issue with respect to Leonard Cohen.  They also address tax, financial, accounting, and business documents that Cohen steadfastly refuses to provide Lynch.  Prosecutor Sandra Jo Streeter does not represent the Internal Revenue Service and is not in a position to falsely accuse Lynch of engaging in an alleged “ruse” that involves federal tax matters.  Furthermore, Leonard Cohen does indeed have the information required to prepare and provide Lynch with the IRS required form 1099.  Leonard Cohen steadfastly refuses to withdraw the K-1s issued to Lynch by his entity, LC Investments, LLC, although Lynch was never a partner on that entity.  These K-1s were transmitted to the State of Kentucky and Internal Revenue Service for the years 2003, 2004, and 2005.  Cohen also testified about the default judgment and alleged that the IRS accepted the default judgment.  No evidence exists to support that testimony but the reason for the instant matter is wholly apparent.  

Prosecutor Sandra Jo Streeter: And indeed one of the things, the evidence will show, that she talks a lot about is tax fraud and the need to have the tax return. But the people will submit to you or show to you that this so-called business relationship, or not honoring their business relationship, indeed the most important thing that she mentions every so often the tax statement is merely a ruse. For example ... the evidence you will see ... that Ms. Lynch specifically asked for her K-1 form ... Let’s talk a little bit about Ms. Lynch’s need for the tax form or tax returns -- the evidence will show that Ms. Lynch was Mr. Cohen’s business manager. The evidence will show that Mr. [sic] Lynch -- Mr. Cohen has no clue as to what a W-2 form is, a 1099 is, a K-1 form. The evidence will show that Ms. Lynch is the one that had all of that information, knew all that information. Mr. Cohen did not have it, does not have it and does not understand what it means. Okay. (RT 43)

Leonard Cohen Testimony: Q: Now, there is a mention of the K-1. The people ask you about some other documents. Do you know what a W-2 is? A: W-2? No, I don’t. Q: How about a 1099? A: A 1099, yes, is issued by an employer to an employee. Pages 83-84: Page 280: Q: Okay. Now, do you know what a K-1 is now? A: I have a perfect -- a sense of what it is, but I wouldn’t be able to teach it. Q: Okay. And is it fair to say that you’ve gotten emails through the years

referencing a K-1. A: That’s correct.

Leonard Cohen Cross: Two courts had given me a default --- or one court had given me a default judgment; the other court affirmed the default judgment. But, more significantly, the IRS accepted the results of that default judgment and awarded me a tax refund, so Ms. Lynch had no cause to ask me for any taxation information. (RT 282) That is the forensic report that Ms. Lynch has been asking for. The only problem is she doesn’t like the results. (RT 282) [Traditional Holdings] So you had no involvement with the creation of this company? Cohen: I wasn’t -- it was -- it was created in some -- some tax purposes. RT 286 The funds in that account … they were running low? Cohen: I - I discovered that they were being dissipated. Kelly: And in fact you had actually taken money from that account to buy homes, correct? Cohen: Yes, I had. Kelly: You took money from that account to buy a house for your son, correct? RT 287 Cohen: That’s correct. Kelly: To buy a house for your girlfriend? Cohen: Yes. Kelly: It’s fair to say that you did take money from that account? Cohen: That’s correct, sir. RT 288

            Leonard Cohen testified that the IRS accepted the results of the default judgment but no evidence, including with respect to the documents in the IRS binder, support this position. Leonard Cohen's fraudulent refund was obtained on or around December 2005, well before the default was entered against Lynch in May 2006. In March 2007, over a year after Cohen received confirmation of this tax refund, Lynch met with Agent Sopko and her partner from the U.S. Treasury. Following that meeting, Lynch received an email from Agent Sopko advising her to report the allegations of Cohen's criminal tax fraud to Agent Tejeda/IRS and to provide him with evidence. Lynch has provided the IRS, FBI, DOJ, Treasury, and FTB with ample evidence supporting these allegations. She also provided the IRS Commissioner's Staff with the passwords to her email accounts and authorized the IRS to review and use any pertinent emails in any potential proceeding. Leonard Cohen suffered no theft loss and has attempted to convert his tax fraud into a profitable enterprise. Under IRC §165, an individual may deduct losses arising from “fire, storm, shipwreck, or other casualty or from theft.” Lynch has now formally challenged the fraudulent refund Cohen received since discovering it in the IRS binder in April 2012.

            It is now abundantly clear that these transactions were fraudulent sham transactions and the corporate structures nothing other than shell companies set up for the sole purpose of Leonard Cohen’s tax evasion and avoidance. In summary, Leonard Cohen hired Neal Greenberg, Richard Westin, and others, to put together a tax strategy that would allow him to convert ordinary income to capital gains tax treatment on the sale of stock.

            On May 12, 2006, a default judgment (that she was neither served nor notified of) was entered against her. The attachment to the judgment, Item 6, reads, in pertinent part: “It is declared that (1) Lynch is not the rightful owner of any assets in Traditional Holdings, LLC, Blue Mist Touring Company, Inc., or any other entity related to Cohen; (2) that any interest she has in any legal entities set up for the benefit of Cohen she holds as trustee for Cohen’s equitable title; (3) that she must return that which she improperly took, including but not limited to “loans,” and (4) that Cohen has no obligations or responsibilities to her.”  

            The default judgment itself is evidence that Leonard Cohen is the “alter ego” of these corporate entities and has engaged in self-dealing.  Cohen has failed to adhere to corporate formalities, failed to treat these entities as separate legal entities, and personally regards the entities themselves as an extension of himself and the assets as his personal assets.

            Disregarding a corporate entity is known as “piercing the corporate veil.”  The following factors are relevant with respect to the Cohen related entities and his relationship to them.  Cohen testified that the corporate books and records related to these entities were handled by his lawyer.  There is an absence of and inaccuracies with respect to corporate records; Cohen has concealed and misrepresented members and/or shareholders; Cohen failed to maintain arm's length relationships with related entities; Cohen failed to observe corporate formalities in terms of behavior and documentation; Cohen intermingled the assets of the corporation and treated them as if they were his personal assets;  There is a significant undercapitalization of the business entities.  There is a lack of a business purpose with respect to these entities.  Cohen personally siphoned corporate funds.  

            Cohen clearly views himself as the dominant shareholder of a number of these corporate entities including, but not limited to, Blue Mist Touring Company, Inc. and Traditional Holdings, LLC.  In fact, he views himself as the only shareholder although the corporate books, records, agreements, and other documentation, prove otherwise.  These corporate entities were used as a façade for his personal dealings and the alter ego theory applies.  Cohen’s fiduciary duties fall under three broad categories: the duty of care, the duty of loyalty, and duties imposed by statute. However, Cohen’s actual loyalties were subordinated by his personal interests.  A fiduciary occupies a position of trust for another and owes the other a high degree of fidelity and loyalty.  A director owes the corporation the duty to manage the entity's business with due care.  Cohen engaged in self-dealing, acted in bad faith and negligently, and used these corporate entities to evade taxes.  Cohen also committed fraud, breached many agreements and contracts, and appears to have engaged in illegal and/or criminal acts.  These corporate entities are shams that have permitted Cohen to engage in fraud and other wrongful acts solely for his personal benefit.  Cohen dominated the corporation’s finances and business practices so that the corporate entities have no separate will or existence; the control has resulted in a fraud or wrong, and/or dishonest or unjust acts; and (3) the control and harm directly caused Kelley Lynch, and others, egregious injury and unjust loss.

            Lynch had no fiduciary duty to Cohen.  She merely owns 15% of Blue Mist Touring Company, Inc. and the intellectual property.  With respect to Traditional Holdings, LLC, no fiduciary obligation would have arisen until approximately January 2012.  By that time, Cohen’s tax lawyer (for Cohen’s sole benefit) extinguished the annuity from the federal tax returns and Cohen’s loans and/or advances totaled millions of dollars.  He has steadfastly refused to repay those loans and/or advances.  Furthermore, Cohen hired Neal Greenberg.  Lynch found Greenberg’s investment strategies reprehensible.  Greenberg has now lost all of his clients’ money.  

            Leonard Cohen disregarded the separate corporate entity and used these entities as a tool for personal reasons, merging their separate entities with that of the corporation and making the corporation merely their alter ego.  Furthermore, Leonard Cohen most definitely engaged in tax fraud.  Tax fraud against the federal government consists of the willful attempt to evade or defeat the payment of taxes due and owing (I.R.C. §7201).  Lynch believes the evidence and facts prove an overwhelming attempt on Cohen’s part to evade and defeat taxes due and owing.  His sense of greed and entitlement consumes him regardless of the image he presents to the public.  

            Leonard Cohen’s vindictive, fraudulent, and retaliatory activity with respect to Lynch arises from the fact that she reported his tax fraud to the IRS.  On March 6, 2007, Agent Kelly Sopko, U.S. Treasury Department, sent the following email to Lynch.  On April 15, 2005, Lynch reported Cohen’s tax fraud to the IRS.  Agent Sopko and her partner met with Lynch in March 2007 and the following email advises Lynch to contact Agent Tejeda, Internal Revenue Service, and provide him with evidence supporting the allegations that Cohen committed criminal tax fraud.

Good afternoon Ms. Lynch,

Per our meeting last week, I have found a solid IRS contact that will be better able to assist you. His name is Luis Tejeda, and he is the head of a fraud group at IRS. I spoke with him today and advised him that I would be passing on his contact information to you.

Office phone and address redacted.

He emphasized that you will need to put something in writing - a summary of all important details, with as much specificity as you have. (For example if you have copies of any paperwork involved, or social security numbers of people involved …) Once you pass the information on to him, he will review it and proceed accordingly. As standard practice, you will not get confirmation that your information was received. However, you may contact Tejeda to follow-up.

I hope that this information is helpful to you. If there is anything else I can assist you with, please be sure to let me know.

Kelly A. Sopko

Special Agent

Treasury IG for Tax Administration (TIGTA)

Special Inquiries & Intelligence Division

            Lynch was not served the summons and complaint, or default judgment, in this matter.  She was not served or notified of the fraudulent restraining order Cohen filed in Los Angeles on May 25, 2011.  Lynch is convinced that Cohen, and others, set out to entrap her using fraudulent restraining orderes.  Lack of jurisdiction in its most fundamental or strict sense means an entire absence of power to hear or determine the case, an absence of authority over the subject matter or the parties.  When a court lacks jurisdiction in a fundamental sense, an ensuing judgment is void.  The court lacked personal jurisdiction

over Lynch, Blue Mist Touring Company, Inc., and Traditional Holdings, LLC.  The default judgment itself is evidence of nothing other than theft and self-dealing on the part of Leonard Cohen.

            Lynch has a legal interest in Traditional Holdings, LLC, Blue Mist Touring Company, Inc., and other entities.  She did not hold her legal shares of these entities as trustee for Cohen’s equitable title.  That assertion is entirely fraudulent.  Lynch has asked the Internal Revenue Service for a formal opinion with respect to this, and other, matters. That would include, but is not limited to, the fact that Lynch’s federal tax returns were altered by default judgment.  Finally, Lynch did not make charitable

contributions, in the form of tax payments, on behalf of Leonard Cohen or any Cohen related entity.  

            Executed this 2nd day of August, 2013, at Los Angeles, California.   I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct to the best of my knowledge.

                                                            ____________________________________

                                                            Kelley Lynch

On Thu, Feb 26, 2015 at 3:35 AM, Kelley Lynch <kelley.lynch.2010@gmail.com> wrote:

Hello Criminal Division DOJ,

I do hope "Gianelli" is clear.  He appears to wear many hates:  stalker, intimidator, slanderer, etc.  You are now in receipt of the motion you wrote me about a while back.   That is the final version.  You have the declarations and I am reviewing mine.  The IRS Commissioner's Staff has all of this (and other) evidence addressed on the "Perjury Schedules."  Cohen testified ON MARCH 23, 2012 that I never stole from him and no one believes he meant a potted plant from his front porch.  This man's insane narrative is right up there with his MKULTRA stories, Bay of Pigs insanity, Yom Kippur War stories, the three versions of the Spector gun story (one told under oath during my trial - which contradicts that used by the DA in motions used against Phillip and, according to Mick Brown/UK Telegraph, were presented to the Grand Jury), and me.  Cohen seems to think lying about our being "lovers," pretending that I he is not obligated to provide me with IRS required tax and corporate information, using restraining orders as litigation tactics, calling me a drunken slut, and fantasizing that I might actually want to attend his concert might be a defense but I do not see it.  Please do keep in mind that he has a long publicly documented history of psychiatric problems, drug and alcohol abuse, chronic lying, and theft.  

In any event, I will attach my motion to State Bar Complaints, send you the filed copy, drop one off to Agent Tejeda with this email), mail one to the DA's Justice Integrity Unit, and - together with the motion to vacate the fraud domestic violence order - mail it to the Criminal Grand Jury of Los Angeles' Legal Adviser.

If Jeffrey Korn wants to discuss these matters with me, he can hit REPLY ALL and do so.  Gianelli is completely out of control and has resumed his pattern of cc'ing the "City Attorney."  

All the best,

Kelley

On Thu, Feb 26, 2015 at 3:19 AM, Kelley Lynch <kelley.lynch.2010@gmail.com> wrote:

Hi IRS, FBI, and DOJ,

I've copied Jeffrey Korn on this email.  He can respond if he wants.  I have advised Gianelli to cease and desist criminally harassing me over Cohen, these legal matters, and IRS federal tax and corporate matters.  I have advised the City Attorney that I do NOT want to be copied in on emails to Swanigan by Gianelli.  Rutger was clear about that.  Others have been as well.  Gianelli wrote me that he worked with this office on two occasions to have me arrested.  I assume he is moonlighting for Leonard Cohen.

I will print this email out and deliver it to Agent Tejeda with my motion in a few days.  He can ponder the issues (and evidence) they raise.

All the best,

Kelley

On Thu, Feb 26, 2015 at 3:16 AM, Kelley Lynch <kelley.lynch.2010@gmail.com> wrote:

Stephen Gianelli,

Cease and desist.  You have not entered a formal entry of appearance in any Leonard Cohen matter related to me and I have been exceedingly clear with Jeffrey Korn that he, or another Cohen attorney of record, are the parties who should address these questions, comments, legal opinions, etc..  I intend to file my motion in Case No. BC 338322 in the next few days, will hand deliver a copy to Agent Tejeda/IRS with a copy of your email regarding him, and ask him to please explain the facts contained in the motion and evidence vis a vis this criminally harassing email that I view as yet another attempt on your part to threaten, intimidate, and harass me over my pursuit of legal remedies.  I am aware that your "colleagues" at the City Attorney's Office, such as Sandra Jo Streeter, would like to silence me and see my pursuit of legal remedies "abate."  I will address that with the federal court.

You have sent me countless harassing emails lately.  You continue to criminally harass Los Angeles resident Paulette Brandt who advised you years ago to cease and desist.  You copied my sister on a recent email to Vivienne Swanigan of the City Attorney's office knowing that you spoke to my sister's attorney, Jim Walker, who advised you years ago to cease and desist.  You have relentlessly targeted and harassed my sons, including my younger son as a minor.  I am well aware that the prosecutor in my alleged 2012 trial doesn't believe, unlike FBI, that parents should view all adult strangers targeting their minors as potential predators.  She thinks that might "annoy" Leonard Cohen.  My sons have been clear with you.  They do not want to hear from you.  My younger son advised you that these emails (which you were, at that time, coordinating with Cohen fan, Susanne Walsh, and others) made him ill and Rutger advised you to SHUT UP.  He wrote not that long ago, in response to another email with Swanigan copied in, that he thinks you and Walsh are "thunder buddies" who stay up nights making these slanderous fabrications up.

I do not actually know Alan Hootnick, whose emails you have forwarded me, and have no idea why you are slandering me to a stranger in Chile.  I have noted online that Alan Hootnick is very pro Phil Spector, in terms of his innocence, and apart from that I do not have an interest in your emails with this man.  

Agent Tejeda was meeting with attorneys from the DOJ re .the subpoena I issued during my alleged 2012 IRS Sabotage trial.  I was clear with Judge Hess - I asked him to wait two hours for Agent Tejeda to call us back.  There were concerns evidently about third party privacy violations.  The "IRS Binder" prosecutor Sandra Jo Streeter handed my prosecutors on April 9, 2012 (containing newly discovered evidence re. Cohen's IRS refunds that have now been challenged as fraud; the same is true with FTB), is most certainly not private and the index will be attached to my motion as evidence that federal tax matters continue to be argued before LA Superior Court.  Robert Kory's absurd declaration in response to my motion to  vacate is evidence of that.  You have written me that IRS required form 1099 (that Cohen has not provided me for 2004) is not his obligation based on a 2006 judgment that does not state that it is retroactive.  You have written that Cohen is not obligated to provide me with corporate federal tax information for 2004 and 2005.  The judgment appears to be ambiguous based on that inane interpretation and a State Court Order cannot subvert IRS reporting and filing requires.

Do not contact me again.  The lengths you have gone to target me, my family, friends, witnesses, etc. is completely out of control and evidence that you are "moonlighting" and clearly on someone's payroll.  Your harassing emails are evidence that you are indeed representing Cohen legally and providing me with legal matters related to his alleged defenses.  Cohen has no defense re. the fact that i was not served the summons and complaint and he continues to lie about those matters.  It is also abundantly clear that this lawsuit and judgment have been used to obstruct justice and the fraud restraining orders to prevent me from requesting IRS required information; Cohen using them as an excuse to not provide me with IRS required information; to discredit and defame me; and, bizarrely enough, to argue that I am not permitted to effect service upon Cohen's legal representations or the Registered Agent of LC Investments, LLC.  Cohen understands that he owns 100% of that entity but refuses to rescind the illegal K-1s that undermine the fraudulent financial ledger and prove perjury.  The 2003, 2004 and 2005 LCI K-1s transmitted to IRS and State of Kentucky show $0 income for those periods.  The ledger shows income.  Cohen has argued that I was not entitled to commissions for services rendered if he deposited royalties (related to assets owned by Blue Mist Touring Company, Inc.) to his personal account.  I have his email proving otherwise.  Perhaps Agent Tejeda would like to explain these, and other extremely material issues, vis a vis the evidence.  He might also like to see the evidence that Cohen offered me settlements; including 50% community property; and Cohen/Kory understood in May 2005 that I had reported the allegations of Cohen's criminal tax fraud to Agent Bill Betzer on April 15, 2005.  Agent Tejeda must be aware of the fact that I did not report those allegations to him in March 2007 since Agent Sopko, Treasury, advised me that she discussed this matter with him.  

I suppose Agent Tejeda could explain the 1977 tax memo advising Cohen that he doesn't have to pay taxes in Canada, U.S., or Greece and cautioning him not to have a green card while advising him to funnel royalties into off-shore accounts.  Perhaps Agent Tejeda would like to explain Cohen's Amro Bank account in Netherlands or numerous social security numbers.  Agent Tejeda could also take a look at the Case History (and evidence; most of which was presented to IRS Commissioner's Staff) attached to my Motion to Vacate and explain what he believes has gone on and why Cohen refuses to provide me with a formal accounting that includes corporate ownership interests (equity), assets, and liability.  Agent Tejeda can also explain why Cohen's personal transaction fees (totaling $3 million according to his complaint and not contained on the TH 2001 federal tax returns) are Traditional Holdings, LLC expenses.  Or why, with those fees figured in, Cohen's loans from TH total approximately $6.7 million and he understood (when he signed the December 2000 Annuity Agreement) that his loans had to be repaid with interest.  In fact, Agent Tejeda can explain why I am included as a partner on TH federal tax returns for the years 2001, 2002, and 2003.  He can explain why Cohen's lawyer prepared them in that manner and failed to file State of Kentucky tax returns (per Cohen's complaint).  Another thing Agent Tejeda could address is why the 2001 TH federal tax returns failed to report $8 million in income (recoupments also; less delivery requirements re. personal service contracts); why the 2002 TH federal tax returns (using a separate ID number) extinguish my promissory note; and why the 2003 TH federal tax returns extinguished the private annuity obligation.  My accountant and lawyers brought that information to my attention and I have been exceedingly clear about that fact. 

Another thing Agent Tejeda could ponder:  whether my lawyers were correct that Cohen had to argue recission/fraud in order to unwind these sham entities and defend himself against allegations of criminal tax fraud.  Agent Tejeda could also confirm if my lawyers were correct:  the penalties and interest re. the tax fraud on TH came to approximately $10 million as of the fall of 2004.  The State of Kentucky thought the IRS should go back to the date Cohen originally obtained his green card (1970) and audit.  

If Agent Tejeda is indeed the head of fraud for the Western Division of the United States, I believe he should understand what parrots realize now:  that Leonard Cohen's tax fraud is egregious; he has stolen from me and others; and why Canada's national treasure cannot live in Canada.  I'm not certain if he'll be able to explain why prosecutor Streeter lied about IRS matters, attended sidebars where he was discussed, called the iRS matters a ruse; what her jurisdiction is over those issues; whether or not my lawyer was correct - that she was attempting to sabotage IRS and discredit me; why she advised the judge that there was an IRS holding re. the default judgment when there is not; and why she advised jurors that I have IRS required information when I do not.  He might find her closing statements about IRS and FTB of interest.  Evidently no one knows the difference and I know the difference between a K-1 and 1099 which means I violated a non-existent "domestic violence" order willfully even though the Boulder Combined Court advised me for years that the 2008 order expired on February 15, 2009.  They advised Paulette of that as well.  Once Agent Tejeda reviews Kory's letters defending his client (and understands they are not IRS opinions), he will probably realize that Cohen and his lawyers have used these fraud orders to discredit me; prevent me from requesting IRS required tax and corporate information; are being used to argue that Cohen cannot transmit IRS required tax and corporate information; and were actually used to argue that I cannot effect service on Cohen's legal representatives or a Registered Agent of LCI.  Maybe he'll know why Blue Mist Touring Company, Inc. continues to list my former POB as its place of business.  I would hope he understands the evidence of corporate ownership interest:  stock units, stock ledgers, corporate records including minutes, non-revocable intellectual property assignments; agreements and documents Cohen signed - including my TH Indemnity Agreement that I demanded; and, the federal tax returns and tax documents.

He could also phone Steven Machat to ask him why he believes Cohen uses corporations to evade taxes; falsely accuses people of ripping him off to breach contracts; should have ripped up his green card and returned to Canada; and is a hustler who uses religion to con people.  I attach the below comments for Agent Tejeda's review.  Also, a transcript of Steven Machat and my conversation re. Cohen's "theft" from me, Machat, and Phil Spector, and other issues.  I don't know if Agent Tejeda could explain why Cohen aligned himself with Spector's DA (Steve Cooley) or why the City Attorney's prosecutor elicited testimony from Cohen (prior to my lawyers cross-examining him over one of the three Spector gun stories now before LA Superior Court - including the one incident he testified about during my trial under oath. during my trial.  My lawyers couldn't figure it out but one suggested that the City Attorney wanted to sabotage IRS, discredit me, and the DA didn't want the Spector verdict overturned.  Perhaps Agent Tejeda could speak to that lawyer.  I would be more than happy to specifically authorize that.  

In any event, Agent Tejeda can simply review my motion.  I'll also send copies to DA's Justice Integrity Unit, Criminal Grand Jury of Los Angeles, Department of Justice, and attach it to copies of State Bar Complaints.  Finally, Agent Tejeda can download my blog and listen to Paulette Brandt and my little internet radio interviews.  Agent Tejeda could conclude that there is egregious criminal witness tampering, witness intimidation, etc. taking place and will be able to review a schedule where I confirm what statements of Neal Greenberg's Complaint (as memorialized for Boies Schiller who reviewed three huge boxes of evidence and realized Cohen owes me millions and noted that he's another "Hollywood fraud" who they thought should be "taken down," legally I suspect) re. legal conspiracy, bribery, witness tampering, witness intimidation, etc. 

I've copied Cohen's lawyer, Jeffrey Korn, on this email.  If he has any questions, he can hit Reply All and ask them.  He will be served the Motion asking Judge Hess to refer Leonard Cohen to the appropriate authorities in this matter.  For the record, Cohen testified on March 23, 2012 that I never stole from him - just his peace of mind.  I don't now if Agent Tejeda will actually believe that Cohen was really talking about my potentially stealing a potted plant from his porch.  I'm within the 3 year statute period.  No one else believes that's why Cohen testified in that manner but I don't know how Agent Tejeda perceives things.  I've spoken with him and know you're name dropping him, threatening me with him, and have misspelled his name repeatedly. 

CEASE AND DESIST, Gianelli.

Kelley Lynch

Ann Diamond Draft Article for Rolling Stone:

Kelley Lynch & Steven Machat discussion (confirmed by Machat himself) re. Leonard Cohen and Phil Spector, evidence, theft, etc.

https://www.scribd.com/doc/57415308/Kelley-Lynch-s-Conversation-With-Steven-Machat-Leonard-Cohen-and-Phil-Spector

Kelley & Paulette Radio Interviews:

Re:  Leonard Cohen (Ann Diamond weighs in on Cohen's allegations re. CIA MK ULTRA mind control.and Cohen's personality, threats to her personally, how he operates, etc.)

https://www.youtube.com/watch?v=jVXTY0ATTR8

Re:  Phil Spector and why we know he's innocent

https://www.youtube.com/watch?v=PB1WMxTwnHg

Kelley Lynch

Ann Diamond - Draft Article for Rolling Stone (NOTE:  Cohen threatened her over this one day, in the midst of his European tour, before his dramatic flight into Boulder, Colorado to obtain yet another fraudulent TRO).

Whatever Happened To Kelley Lynch by Ann Diamond

Thursday, July 3, 2008

Whatever Happened to Kelley Lynch?

Kelley Lynch is the woman accused in 2005 of skimming millions from singer Leonard Cohen’s retirement fund. I knew of her through friends of Leonard Cohen, and had heard her described in glowing terms as the agent who, singlehandedly, saved Cohen’s career in the 1990s.

In early May of this year, Lynch suddenly contacted me. She said she was mainly interested in my perceptions of Cohen as a former friend and next door neighbour in Montreal. At one time I also studied with his Zen Master in California, and had spent time with him on Hydra, Greece.

Not having heard her side of the story (I doubt that anyone has, apart from a circle of her closest friends), I was curious. Over the next few weeks, she shared several documents pertaining to the case including an affidavit written and signed by her older son, Rutger.

Together, they paint a picture very much at variance from the sketchy media image of Lynch as a reckless, delusional woman on the brink of a career meltdown. Lynch's own timeline also includes disturbing behind-the-scene dealings that suggest she may have been set up to take the blame for Cohen's tax situation.

The following account is based on what Lynch has sent me --

Since 2005 when she became the object of media gossip, little if anything has been heard from Kelley Lynch.

A single mother with two sons, Lynch was Leonard Cohen's personal manager from approximately 1988 to 2004, and was known for her skill, hard work, and dedication. Until 2004, Kelley lived and worked in Los Angeles where she still has many friends and acquaintances in the entertainment world including Phil Spector and Oliver Stone.

Her own account of the events that wrecked her career, varies widely from the media portrait of a reckless, delusional woman in the throes of a personal meltdown. The meltdown was real, however. By late December, 2005, Lynch had lost custody of one son and was homeless and living on the streets with her older son, Rutger, who witnessed the chain of bizarre events that had begun a year earlier. 

In 2004, Lynch owned a house in Brentwood, and still worked for Cohen, who owed her money for royalties and other services, but was increasingly involved with his new girlfriend, Anjani Thomas, ex-wife of Cohen’s attorney, Robert Kory.

In retrospect, Lynch believes she was set up by Cohen and his representatives to help cover up a tax situation which made the IRS “nervous.” In September 2004, Cohen’s attorney Weston told Lynch that a financial entity known as Traditional Holdings, LLC could be overturned by the IRS. Lynch, who had been selected as a partner on the entity, became uneasy and consulted a new accountant, who referred her to tax lawyers, who found irregularities in Cohen's tax history, both in the US and Canada where he has residences.

Rattled by what she was hearing – that she was being dragged into criminal tax fraud -- Lynch called the IRS in Washington and also contacted their website. An IRS collection agent advised her to call the Fraud Hotline, which she did.

Told that any further action on her part might implicate her in fraud, Lynch refused to meet with Cohen or turn over the corporate books. At that stage, Cohen’s advisers began claiming that certain payments, distributions, or advances made to her were actually "over-payments." Lynch says their accounting was incomplete and ignored her share of intellectual property, unpaid commissions and royalties, and share in Traditional Holdings, LLC. Apparently Lynch had also been issued K1 partnership tax documents and made a partner on another Cohen investment entity, LC Investments, LLC, without her permission or awareness.

Lynch says an increasingly nervous and desperate Cohen was pressuring her to agree to mediation and told a friend of hers that Lynch was "the love of his life." She and Cohen had had a brief affair in 1990, but Cohen now was offering her 50% of his "community property" as well as "palimony" through lawyer Robert Kory at a meeting attended by Lynch's legal representatives and her accountant, Dale Burgess. To Lynch, none of this made sense at the time.

Meanwhile, the Los Angeles District Attorney's office received an anonymous tip informing them that Lynch was a friend of producer Phil Spector, whom Lynch maintains is innocent. Cohen, on the other hand, had given an interview in which he described a gun-waving Spector who threatened him during recording sessions in 1977.

At around the same time he was offering her “millions”, Lynch says, Cohen was also circulating slanderous stories about her. She believes Cohen encouraged Los Angeles record producer Steve Lindsey, the father of her son Ray, to initiate a custody suit – on May 25, 2005, the same day a 25-man SWAT team from the LAPD, acting on a bogus 911 call, suddenly cordoned off her street and surrounded her home in response to a "hostage taking."

Earlier that morning, Lynch says, her 12 year old son Ray woke up not feeling well. She sent an email to his school informing them she was keeping him at home. When the boy's father found out Ray was home he became agitated and abusive over the phone to Lynch.

Lynch says she had young people who worked for her coming and going that day, and did not want Ray’s father coming to the house and attacking her, as he had in the past. She called her older son Rutger, who was visiting a friend nearby, and asked him to pick Ray up and take him down the hill where actress Cloris Leachman waited in her car. Leachman, a friend of Lindsey, took charge of Ray – just as seven LAPD squad cars came speeding up Mandeville Canyon Road in the direction of Lynch’s house. With them was Ray’s father, Steve Lindsey.

Lynch says she looked out the window and saw armed men on her lawn. Her son Rutger and his friends were telling police there was no hostage-taking, that they had spent the morning with Lynch, and that there must be some mistake. For reasons no one understands, LAPD/Inglewood PD decided to believe Steve Lindsey, who had left the scene.

Police later gave varying explanations about what led up to the incident. West LAPD said they responded to a report that someone heard "shots fired." But a company that oversees SWAT said Lynch would have to have a superior caliber weapon to warrant such a high risk entry. A member of the SWAT team claimed to have seen a note that Lynch’s sister had placed the call stating Lynch posed “a danger to herself and everyone around her.” Her sister denies this.

Lynch stayed inside her house and called her former custody lawyer, Lee Kanon Alpert. She also called Leonard Cohen, assuming he had played a role in the events unfolding on her lawn. Lynch says she knew Steve Lindsey had also been meeting with Cohen and his attorney, and had recently told their son Ray that Lynch was “going to jail,” upsetting the boy. She says Cohen taped the phone call later used in his successful court case against her – for which, Lynch says, she never received a summons.

Lynch says, “Police were on my hillside and crouching under my kitchen window.” She says the standoff on her lawn continued for several more hours, disrupting the neighbourhood. Members of Inglewood Police Department also participated in the operation.

Eventually, she decided to go into the back yard. Seeing her son Rutger acting as a “human shield and hostage negotiator,” Lynch ventured out front with her Akita on leash and joked to the cops: "Who am I supposed to be holding hostage? My dog?"

The police responded by telling her son they would only shoot Lynch and her dog if necessary.

“That was when I dove into the pool.”

SWAT team members searched her house. As they entered, Lynch's African Grey parrot, Lou, called out: "I see dead people!" – further alarming the nervous cops.

Offering her a hand out of the pool, one officer said they were only there to help her and not to hurt her.

“No one asked me if I was all right; no one questioned me about my well-being.” The Medical Examiners Office later wondered how the police had evaluated her. After stating they were not arresting her, they handcuffed Lynch, still in her bikini. On her way out the door, her son managed to hand her a brocade jacket.

Although she lived near UCLA Medical Center, she was taken in a squad car to King-Drew Medical Centre in Watts, 40 miles away and a three-hour drive in traffic. Known as one of America’s worst hospitals, King-Drew was recently closed down as a place where patients routinely die from neglect and medical errors. During the long ride through South Central Los Angeles, Lynch says she was questioned closely about her relationship with Phil Spector, who had been charged with first degree murder of Lana Clarkson. In the car, Lynch voiced concern over what awaited her at the hospital but was told by a woman cop: "This will be good for you."

“I felt I was being kidnapped”.

At Emergency, the admitting psychiatrist administered anti-psychotic drugs without authorization and left Lynch in the waiting area for hours, still in her bikini and brocade jacket, and handcuffed to a chair. A nurse advised her she would be transferred – but did not tell her where. Examining her file, the nurse noticed it listed her as 19 years old with wrong social security number, wrong date of birth, wrong religion, and her name misspelled as "Kelly Lynch" Lynch thinks it was the same file she had seen, several months earlier, in the hands of the Special Investigator who came to question her about Spector.

A second doctor told her to wait her turn to ensure no further harm would come to her, and assured her that nothing in the King Drew report could cause her to lose custody of her child. The following day, she was released after nearly 24 hours in the psych ward.

Back home, Lynch learned that while she was being held at the hospital her younger son's father, Steven Clark Lindsey, had filed for custody of her son Ray Charles Lindsey and obtained a restraining order denying her access to the boy. She says Lindsey attempted to convince doctors at King Drew that she was dangerous, in order to have her committed, She says Lindsey also threatened the psychiatrist who had her released.

On that same day, Cohen’s attorney Robert Kory filed a Declaration in the custody matter, as did Betsy Superfon (a friend of Cohen, Kory and Lindsey who had befriended Lynch a few months earlier ). Superfon later told Lynch she didn't realize what she was signing, and that Cohen had offered Lindsey money “or something else” to take Ray away from Lynch.

Her older son alleges Lindsey offered him money to go to Leonard Cohen's lawyer's office and transfer or sign over Lynch’s house to Cohen or his attorney Robert Kory. Rutger refused and phoned his own father, who advised him to contact a lawyer.

Two weeks later, in early June, as she drove down her street to buy dog food, a Mercedes sped out of a neighbouring driveway and rear-ended her car, Lynch was thrown forward, fracturing her nose against the steering well, and was knocked unconscious. Later, she says, as she drove back up the hill to her home, the same driver was standing in his driveway and called out: “We are watching you” as she passed.

Seeing his injured, bleeding mother enter the house, her older son again phoned his father, who may have called 911. Accounts vary as whether the call referred to an incident of "domestic violence" or a "drug overdose." Either way, police arrived at Lynch’s door for the second time in two weeks. Over the protests of her son, they entered while she was on the phone to a friend, Dr. Wendi Knaak who stayed on the phone talking with Rutger while police again handcuffed Lynch. This time they took her to UCLA hospital where her obvious head injuries were ignored. Instead, she was once again drugged and placed in the psychiatric unit where she remained for several days.

Lynch and her advisors maintain these events were coordinated by Cohen, Kory and Lindsey, with the help of former LA District Attorney Ira Reiner in a well- orchestrated plan to traumatize and discredit her – paving the way for media stories which accused her of skimming millions from Cohen’s retirement fund.

In the summer of 2005, as Lynch was struggling to save her home and protect her child from a father her friends describe as "viciously anti-social" and “violent”, reports of Leonard Cohen's financial troubles hit the press. They alleged the 70-something singer had been scammed by his personal manager, Kelley Lynch, who colluded with an advisor at the AGILE Group in Colorado to send him false financial statements while emptying his accounts of millions of dollars.

Although listed as the owner of Traditional Holdings, the entity in question, Lynch says she never received any statements from the AGILE Group -- who instead had been sending them to Cohen -- having changed her mailing address to Cohen's home in Los Angeles. She has since filed a complaint with the US Post Office for mail tampering.

She insists Cohen sued her because she went to the IRS about his tax situation. She says he is not, and never was, "broke" and that missing funds went to buy homes for his son Adam Cohen and girlfriend, singer Anjani Thomas, ex-wife of Robert Kory. Noting Cohen is famous for his financial largesse and once gave Zen Master Sasaki Roshi $500,000 as a gift, Lynch also cites hefty payments to advisers, various transaction fees, personal taxes, and other monies which may have been sent offshore.

While Cohen and Lindsey attempted to persuade others, including LA Superior Court, that she intended to flee to Tibet or another non-extradition country, Lynch was isolated and penniless and still in Los Angeles. Lynch was former personal secretary to the late Chogyam Trungpa Rinpoche, a flamboyant Tibetan spiritual teacher who founded Naropa Institute in Boulder, Colorado in the 1970s, and died in 1987. She says various Tibetan lamas are praying for her safety.

Journalists covering the story were either unable, or didn't bother, to track Lynch down, and most reported Cohen's statements as fact. The NY Times contacted Kelley for a quote which they never printed

By July 2005, Lynch had lost her custody battle and Ray went to live with his father. On December 28, she and Rutger were evicted from the house in Brentwood, and ended up homeless in Santa Monica, which has no resources for the homeless. The Police Department gave her no help and, she claims, laughed when she brought in evidence that she was being stalked by a known serial killer while she camped on the beach.

In 2006, Cohen was awarded a symbolic $9 million settlement in a civil suit against Lynch, who still does not have a lawyer representing her. Corporate books and other evidence of fraud appear to have been overlooked by Judge Ken Freeman in his judgment, Lynch says, although she admits she has not read the court documents and was never served a summons. At the time of the decision, she told reporters she lacked the money to make a phone call. That same year, her older son lost his fingers in an accident with a meat grinder while he was working at Whole Foods in Los Angeles and Lynch could not afford a bus ticket to visit him in hospital.

Lynch heard through a journalist that Cohen later testified for the District Attorney’s office in a secret grand jury relating to the Phil Spector case with former District Attorney Ira Reiner acting as his lawyer. Reiner is a personal friend of Cohen, and as D.A. presided over some high-profile cases including the “Night Stalker” serial killer and the McMartin Day Care scandal.

Recently, on June 17, 2008, Cohen's lawsuit against the Agile Group was thrown out of court for lack of evidence. In response the AGILE Group dropped its counter-suit accusing Cohen of defamation and fraud. AGILE still claims to be shocked that a singer of Leonard Cohen's talent and stature would engage in false accusations against his own representatives.

Lynch believes Cohen and AGILE colluded to defraud her. She continues to deny all allegations against her, and remains hopeful that Phil Spector's lawyer, Bruce Cutler, will represent her in recouping damages to her livelihood and reputation. She now lives in another state and recently learned her younger son, 15, whom she has not seen since July 2005, stopped attending school last January.

These days Cohen’s fans seem to have expended their rage at Kelley Lynch for driving their idol into bankruptcy. Some now say she unwittingly did them a service -- by forcing him to go on tour for the first time in nearly two decades.

At 74, singer-songwriter Leonard Cohen continues to ride a wave of sympathy, gathering wide support from the music world and even some British royalty. Unquestionably, his career and finances have benefited from news reports that he is too impoverished to retire.

From his tower of song, Cohen has written:

I smile when I'm angry
I cheat and I lie
I do what I have to do
To get by

And I’m always alone
And my heart is like ice
And it’s crowded and cold
In my secret life

My Secret Life. Leonard Cohen
His many admirers need to listen closely.

Gods, Gangsters & Honour by Steven Machat

Excerpts:

Leonard was desperate to get rid of this two managers, Judy Berger and Mary Martin, who he believed had stolen the rights to his songs and records early on in his career.  Even back then, Cohen was convinced that women were ripping him off.  He signed an agreement, and when he wanted to get rid of the contract, he accused everyone of ripping him off.  You could say it became repeat behaviour.  My father duly got rid of Berger and Martin, set up a new company called Stranger Music for Cohen and agreed to manage Leonard for 15% as well as 15% of Stranger.  The idea of the company was twofold:  one, to maintain ownership of the copyrights duly created; and two, to minimise Leonard’s exposure to American tax, just like any other rich individual trying to minimise their tax liabilities.  

I’ve no problem with people trying to avoid tax, but as the years have passed, I couldn’t help but smile at the apparent contradiction between Leonard’s public persona and his private business arrangements.  This was a supposedly devout Buddhist with no interest in material possessions, who was all the same happy to put his trust in business managers and companies he created with his knowledge and consent whose sole aim was to minimise tax liability.  

Leonard then sold Stranger Music for a small fortune and I’ve seen nothing from Cohen.

Cohen controlled his copyright, not my father.  The irony was that Cohen had total control over my father …  Do you know what happened to the $400,000 worth of bearer bonds in my father’s office?  Bearer bonds are just unregistered bonds or paper money that are used to conceal ownership and, with it, tax liabilities.  Cristini told me (who knows if this is true?) that he had found the bonds in my father’s office hours after he had died but the next day they disappeared.

Cohen denied any knowledge of these bonds.  I was unsure if they existed or were part of my father’s schemes cooked up to conceal Leonard’s money.  

Cohen said:  “Steven, you remember the 1988 tour?  Flemming extorted $100,000 from me.  He wanted 20% managerial commission, in addition to his promoter’s fees.  He thought he was doing extra work for me and wanted me to pay him.”

Far from being the poet of the spirits, Leonard was a hustler using Buddhism as a facade.  

The next time I would see Leonard … We’d just seen The Hand That Rocks The Cradle where Rebecca De Mornay plays the psychopathic nanny who stalks this family.  Who should walk along but Cohen, who was holding hands with DeMornay, his girlfriend at the time.  Cohen was extremely uncomfortable because he knew he had stolen from me and it was clear he couldn’t get away quick enough.  Neither could my son, because he took one look at DeMornay and ran.  He was terrified because he thought she was the nanny in the film!

It was clear that Leonard was also wary of me because, I guess, he thought I might be planning to sue him.

Leonard told me that when he had gone off on his Buddhist retreat Kelley was left managing his business interests.  He said:  “She started believing this money was hers and she started spending it.  All of it. 

Then Leonard told me that Kelley had bought a multi-million dollar house in Mandeville Canyon with his money … Leonard said:  We didn’t even get the house back.  Kelley stopped paying the mortgage so the house got repossessed and the mortgage company took everything in the house as well.

Lynch had been sending out long and bizarre emails to his friends, journalists, and the authorities denouncing Leonard for a million and one sins, which would have worried me if I was their target.

The whole scheme was so ridiculous [Leonard Cohen’s attempts to limit his liabilities on the deals] from the start.  All Leonard had to do to avoid U.S. taxes was tear up his green card, and stop living in and using the U.S. as his base.  

It’s no secret that Leonard has also made a killing on the art market by selling his paintings, plus his touring of the last two years … If that’s true, it doesn’t really tally with the clear implication from Cohen that he is a man who has been robbed of everything.

Leonard told me before I left that he had actually offered Kelley a settlement …

It’s clear that Cohen and his lawyers want to heap the blame on Kelley’s shoulders for more than just revenge.  Because Cohen’s pension assets were cashed in … ahead of schedule they are liable to tax so they need to establish that this situation is her fault.  The penalties could actually be greater than the tax itself.  

Leonard has cast himself into a hell of his own making.  

---------- Forwarded message ----------
From: STEPHEN R. GIANELLI <stephengianelli@gmail.com>
Date: Wed, Feb 25, 2015 at 10:19 PM
Subject: Your email dated 2/25/2015 12:51 AM
To: kelley.lynch.2010@gmail.com

Ms. Lynch,

If the head of the fraud division for the Western US, Agent Luis Tajeda really agreed with your professed claim of “victimhood” (as you have b assumed all of these years) he would have showed up at your trial to support your defense, but he didn’t did he? Can you imagine if he did show and told your criminal jury that he indeed looked at the facts and that Tajeda recommended that YOU be prosecuted for tax evasion? Ha!

Moreover, since Agent Tajeda is undoubtedly a busy man, and his job concerns managing ACTIVE criminal TAX investigations for the entire Western Region of the US, and he concluded his investigation into the whole Kelley Lynch – Leonard Cohen investigation upon his referral to the United States Attorney for the Central District of California in 2008, why in the world would you think he would be interested in reading your “motion”, which (if filed) would be yet another compilation of false allegations against Cohen, this time concerning an alleged violation of a state statute during state court legal proceedings that are miles from his jurisdiction?

I mean, are you kidding or do you really believe the stuff you write in emails?