Milan Mandaric, the Serbian-born tycoon who owns the Premier League football club Portsmouth, is suing a top accounting firm and investment company after being caught up in a massive tax-avoidance probe.
The Portsmouth chairman is one of several wealthy, high-profile people being investigated by the US Internal Revenue Service (IRS) over a tax avoidance scheme being run by a Chicago accounting firm, BDO Seidman. The scheme, which generated tax losses in specially created vehicles to avoid capital gains tax, has been subject to an IRS probe for more than two years.
The IRS sued BDO Seidman and another accounting firm, KPMG, last year to force them to disclose the clients who had used the tax scheme.
As well as Mr Mandaric, the well-known names revealed included Gary Winnick, then the chairman of US telecoms group Global Crossing, and Bill Simon, a Republican nominee for governor of California who stood aside to let Arnold Schwarzenegger run.
The team behind the tax scheme at BDO Seidman were known internally as the "wolf pack" and are believed to have generated almost $200m (£115m) in fees from sales of the tax structures.
Mr Mandaric would not disclose how much tax he was able to shield using these schemes, but reports in the US have put it as high as $100m.
He is now suing BDO Seid-man and an investment unit of American International Group, which advised him on the tax scheme, over the IRS probe. Mr Mandaric would not disclose details of the litigation except to say that it was to protect him against losses and extra costs caused by the investigation.
The Serbian-born tycoon moved to the US in his 20s and made his money in the semi-conductor industry. He bought Portsmouth in 1999 after looking at a number of other clubs.Reuse content