Joe maintained his daily schedule during Sammy’s sickness and made himself available for household duties, anything, just to help out. One afternoon Joe was sent on an hour’s drive to buy chicken even though the nearest restaurant was only ten minutes away.
“It’s a special kind of chicken,” said Shirley.
When Joe returned sooner than expected, he saw Shirley and her niece Eygie filling a station wagon with Sammy’s possessions.
As Sammy’s condition worsened, the situation inside the home became more chaotic and unmanageable. Brian couldn’t watch and remained with Sammy overnight. Other security employees sided with either Shirley or Altovise. Akrum Mankarios chose Altovise and helped deliver her goods to Al Carter.
Brian shared with Sonny his firsthand account of the looting of Sammy’s home. He also had something else to share.
“They changed Sammy’s will,” he said.
The night before Sammy was finally discharged from Cedars-Sinai Hospital on March 13, 1990, to go home to die, Shirley visited Sammy with her boyfriend Ben Garfunkel, Murphy Bennett, and Dino Meminger, one of Sammy’s road crew. They ordered Brian to leave the room so Shirley could speak privately. Brian walked out into the hallway and ten minutes later the door opened and the foursome exited the room. When Brian walked back in, Sammy was lying on his bed, staring aimlessly out the window.
“What was that about, boss?”
“Nothing, man,” said Sammy. “Just some stuff.”
Sonny didn’t understand.
Brian said that among Murphy Bennett’s many duties during his three decades working for Sammy, he also signed Sammy’s signature in such a way that, at first glance, it looked exactly like Sammy’s. Unbeknownst to but a few people, Murphy had signed all of Sammy’s fan mail, pictures, and posters—and, if Sammy wasn’t around, his official documents. Sonny recalled reading the will in Herb Sturman’s office; on the surface, it appeared ordinary and unspectacular. There were instructions for several financial gifts, and the rest of the property and possessions were bequeathed to Altovise.
The will was never challenged, and probated in August 1990.
But Brian said that Murphy, for one, had been promised $1 million from a life insurance policy and was also beneficiary of a trust fund opened by Sammy through Transamerican Entertainment. Sy Marsh, Sammy’s former manager and partner, was also promised a $1 million payout, which never materialized, Brian said.
“Are you sure about this?” said Sonny.
Brian said he knew that Murphy was promised he’d be taken care of.
“And I know he was supposed to get $1 million from Sammy’s insurance,” said Brian.
But Murphy Bennett didn’t get a dime after thirty years with Sammy, Brian said, and Murphy died a couple of years after Sammy, leaving behind a wife and five children.
CHAPTER 9
On March 27, 1995, nearly a year after accepting Altovise Davis as a client, Sonny Murray made an Offer in Compromise to the IRS.
The federal tax debt, with penalties and interest continuing to accrue, exceeded $7 million, but Sonny’s offer was for $105,000, which would be split into separate payments of $25,000 upon acceptance of the OIC, another $25,000 to be paid within six months, and the final $55,000 paid upon the acquisition of numerous personal items, many of which were held by Al Carter. Among the listed items were a Rolls-Royce, a 1989 Chrysler LeBaron, eight ladies watches, four bangle bracelets, several sets of earrings, and two wedding wrist bracelets. In addition there was artwork, clothing, furnishings, and other miscellaneous items. Three lots on Grand Bahama Island valued at $20,000 were also included. Sonny wanted to disclose all possible assets, knowing that if for some reason something wasn’t divulged, it could nullify the agreement.
In return for the payment, Sonny sought ownership for Altovise of Sammy’s estate, which included his name and likeness and all residuals and royalties due. The initial cash offer was very low, almost insignificant, but it was based on what Sonny knew Altovise could possibly pay, and what the estate had earned since Sammy’s death. Shirley Rhodes, as coexecutor, had been charged by the IRS with handling business affairs for the estate and residual income from endorsements, record contracts, film and television shows brought in roughly $50,000 annually. It wasn’t much, and Sonny believed there was more, much more. But the low number proved fortunate in that it allowed Sonny to argue that, with little expected income from the estate, he could only offer a low settlement number. The offer also included additional payments that, after Altovise regained the right to develop Sammy’s image and likeness, would amount to 50 percent of annual income above $110,000 for fifteen years.
The OIC was based on a thorough, months-long review of what the IRS claimed it was owed. Sonny expressed concern that their accounting was accurate, and his accountants pored over the IRS bill, looking for possible mistakes and ensuring Altovise received proper credit for the few payments that were made.
The OIC also included a Schedule “B” Supporting Statement from Altovise, in which she explained, over four typewritten pages, what transpired prior to Sammy’s death. The statement, which, along with the OIC, was copied to Calvin and Altovise, served as a sort of roadmap to her marriage to Sammy, the people involved, and how, she claimed, she had been sliced out of any decision-making.
“I am not personally responsible or liable for the taxes due the IRS for the years in question. (I don’t believe I owe this tax.) I am also aware of the tax case decided by the Federal Tax Court. (I was not given the opportunity to appeal the decision.)
“Today, I have a sense of being. From the day I married my husband, Sammy Davis Jr., in 1970, we lived at 1050 Summit Drive, Los Angeles, California. Soon after, we stayed at the Ambassador Hotel while looking for a new house—preferably close to the children. I found the perfect house and we moved to 1151 Summit Drive, in Los Angeles. I lived there for twenty years, until my husband’s death on May 16, 1990. My house was sold in 1992 by the IRS for taxes owed to the government.
“From 1970, I became involved in the community and did various charitable services. One being SHARE, which is a big event held every year. I was Ambassador for the City of Los Angeles and for the Los Angeles Visitors and Convention Bureau. I was a professional dancer, and worked occasionally on television. I did not participate in the business affairs or day-to-day operations of my husband’s entertainment company. I had no control of, or access to, the books and records, accounts, or other financial documents of my husband’s company. All personal and corporate business and financial matters, from the beginning of our marriage until my husband’s death, were handled by his various accountants, attorneys, and financial advisors. Financial decisions, with respect to investments, tax planning, purchase of real estate, and other items, were made by my husband’s advisors. They were all on large financial salaries, and we relied exclusively upon their professional judgment.
“Specifically, I was to be a ‘celebrity’s wife’ without the responsibilities of managing our finances. I loved my husband, my children, and my home.
“In the late 1970s, Sy Marsh was the financial advisor and partner with my husband. The company’s name was Sy and I. Mr. Marsh and my husband made all financial decisions, paid all bills, and signed all checks. My husband bought Sy Marsh out approximately six years later. George Louis was our accountant and handled all personal and corporate taxes. I never had a financial advisor, accountant, or attorney of my own. Because of my past health challenges, I was discouraged and prevented from participating in business matters. I acted solely as a housewife, being responsible for the care of our children and family, maintenance of our residence, and loving support of my spouse. Also, I have never had education or training in finances, business, or law.
“When our personal taxes were due each year, I would gather the household receipts and give them to George Louis who had done them for my husband previously to my being married. I was to read them over and sign the tax papers. Our taxes were jointly done
and that was that. I knew that my husband was the sole breadwinner. When I asked our financial advisors about filing separately, I was told that doing it jointly was the best way: ‘You’ll always stick with your husband.’
“When Marsh was bought out, Shirley Rhodes and John Climaco, Esq., took over. A company was formed called Transamerican Entertainment Corporation to replace Sy and I. Things changed and the office moved to South Beverly Drive. All business transactions were done without me. I was not on the Board and made no major decisions nor had any control over the books. In fact, when I wanted to see them, I was refused many times over. My husband began to sign his own checks for the road, office, and salaries for household personnel. He also wrote checks for various family members. I was not allowed to participate, and was ignored when I questioned Mrs. Rhodes about expenditures. All the household bills were sent directly to the office. I paid for none of that. Later, I began to ask to see monthly bills, but was told by the office that it was not necessary.
“While at times we made extravagant expenditures, it was in accordance with a budget given to us by the financial advisors. Many times when moneys were low, the financial advisors continued to get excessive salaries, while my husband struggled to earn income from his performances.
“I received a salary that was for gifts, my dogs, pocket money, clothing, and small items that I might purchase.
“The managers and business people would plan an entire yearly schedule and present it to me. I never attended business meetings on this schedule. Moreover, I never knew what businesses or investments we were involved in, other than the Bahamas property.
“Concerning the tax shelters, sometime in the early 1980s attorney Climaco introduced us to his business partner, a gentleman named Bill Hall. Climaco recommended Hall to get my husband into various investments, such as barbecue sauce and other food items.
“During the year, my husband, Climaco, and Rhodes would meet at the office, but usually at the house or on the road (I was not present). They would bring along various financial papers and documents for tax shelters. I do not know what a tax shelter is, or what it is to accomplish with respect to the tax laws. I was told about some of them and shown a few, i.e., Black Stallion, Halco, and a few others. Mostly, I brought refreshments into their meetings and left.
“I casually looked at materials and information on these various enterprises. No one took the time to explain them to me. Mr. Climaco did not advise me of the consequences of signing any financial documents. I did not understand and appreciate their purpose, nor sign or knowingly agree to participate in any of the shelters. I had no idea what I was looking at.
“However, my husband did explain that he would not invest in something that was not going to make money, and I went along with his wishes.
“Climaco did not advise me to have another attorney, who would represent me, review the documents.
“I have never seen the financial decision of the Tax Court nor how much was owed. I was not advised as to whether attorney Climaco or estate representatives appealed the decision. All I know is that after my husband died, the financial obligation to pay the IRS was on me.
“I was not properly advised as to what to do, as the coexecutors have kept me alienated from all business affairs. I have not seen the books and records of my husband’s business. Both Climaco and Rhodes took over as executors of my husband’s estate and have continued to control his and, indirectly, my financial affairs.
“During the administering of the estate, I relied upon the representations and advice of an attorney and a person who held themselves out as an attorney. They advised me that they were settling matters with the IRS and that they would need money to file an Offer in Compromise; this was only partially true, because no moneys have been paid to the IRS on my behalf, nor has there been a settlement.
“I was misled and kept in the dark about my responsibilities and rights regarding my personal property. At the time of my husband’s death (and for several years thereafter), I was seriously incapacitated and my health deteriorated. I could not mentally or emotionally fully appreciate or understand many of the events that were occurring.
“During his lifetime, I was assured by my husband that all financial matters and, specifically, the tax situation were being handled in a proper manner. I did not question his judgment. However, I do believe that my husband realized, at the end, that there was a lack of moral ethics and nothing to protect me at all.
“I felt discouraged and totally fragmented by the fact that even though I had legal and financial representatives, no one advised me to file separately nor was I given any explanations as to what would be in my best interest with respect to my financial obligations, or lack thereof. To say the least, I was totally sheltered from financial matters, and did not knowingly, intentionally, or willfully create the tax problems that I find myself in.”
The IRS assigned the Davis case to Daryl Frerking, a career investigator based in Los Angeles. Frerking’s job was to examine the offer, determine actual income and assets, and then come up with a counteroffer. His investigation was expected to take months.
Of immediate concern to Frerking was Altovise. While the IRS felt very comfortable dealing with Sonny, their previous experiences with Altovise left them with doubts. Sonny explained that she was very ill and secretly undergoing treatment at a rehabilitation facility, where she still remained after six months. Sonny also said he planned to seek the removal of John Climaco and Shirley Rhodes as executors. But after so many years, Frerking said the IRS was simply sick and tired of Sammy Davis Jr. and Altovise and the whole affair and just wanted to finally close the books on the case. So the IRS declined to address the issues of Climaco and Rhodes and the accounting for the insurance money paid to Transamerican Entertainment.
But the IRS did go after Altovise, Frerking said, after learning of her amateurish and ill-fated attempt to hide nearly a million dollars by purchasing a home.
“What?” said Sonny, who was stunned yet again to learn that Altovise attempted to buy another house with her hidden insurance proceeds after losing the home on Summit Drive. She bought the home using her mother’s name, with money she should have reported and turned over to the IRS. When the IRS learned of the purchase, they quickly saw it for the fraud it was and seized the home.
Sonny was embarrassed and angry. His dealings with the IRS to date had been honest and cordial. The last thing he needed as he worked to resolve the debt was to hear of some last-minute surprise that could kill the deal. Sonny was deeply concerned that she had hidden other important information from him, so he decided to call Richard Ferko.
Richard Ferko’s pinkie finger was shaped like a Z, and he showed it off proudly as a testament to his college football career. Ferko played for the Ohio State Buckeyes, and the 1971 Rose Bowl game pitted the Big Ten powerhouse against the Pac Ten champ Stanford Cardinal. For Ohio State, the game was a mere formality on the road to being crowned national champion following an undefeated season. But two late touchdown passes by Cardinal quarterback Jim Plunkett led Stanford to a 27-17 upset win, and Ohio State shared the national championship with Nebraska.
The visit to Southern California wasn’t a total loss for Ferko. The young man from Pittsburgh, who did the unthinkable and crossed the state line to play linebacker and special teams for Ohio State, fell in love with the beaches, palm trees, and golden sunshine and vowed to return, which he did in 1973 after graduating law school with a head full of dreams and a couple of dollars in his pocket.
By 1990, Ferko had built a successful and affluent law practice focusing on entertainment law and celebrity clients, and his reputation extended beyond Hollywood, which is why he received a call from a Las Vegas friend Jack Medlevine, asking if he’d be interested in representing someone described only as “a very big client.” When the sandy-haired and still-muscular Ferko, now in his early forties, walked into the conference room the day of the meeting in July 1990, he was introduced to Altovise Davis, Al
Carter, and Manny Illumanardi. Ferko had no idea who they were, and when Medlevine began the meeting, Ferko played dumb and just listened. After a few minutes, several details emerged, and he finally pieced together that Altovise was actually the widow of Sammy Davis Jr. She said she owed millions to the IRS and her husband’s advisors were taking everything she and her husband had owned.
“I’m not getting anything,” she complained.
Altovise claimed she shouldn’t be responsible for her husband’s onerous tax bill. She wanted to keep her Beverly Hills home and was using another attorney, Bill Choulos, whom she and her husband had known for years. But Choulos was based in San Francisco and Altovise needed someone on the ground here, in Los Angeles.
Ferko agreed to represent her, but Carter said they had little money.
“Well I can’t work for free,” said Ferko.
Carter said that Sammy had given him money to take care of his widow, from which he would pay a retainer with the promise of more to come. But it didn’t take Ferko long to realize he had a problem client. He could smell the alcohol on Altovise’s breath during initial visits to her Beverly Hills home to watch as its contents were inventoried. But by his later visits, many of the items that had been counted simply “disappeared.” Two large individual portrait paintings of Sammy and Altovise, which hung opposite each other in the foyer, were gone, as were the diamond-encrusted tennis bracelet Altovise wore on her wrist, and the absurdly large leather Gucci sofa that sat in the sunken living room off the foyer. It was custom-made to fit what served as Sammy’s movie room.
When he asked about the bracelet, which Sammy wore during his illness, Altovise said it was a woman’s bracelet and belonged to her.
“What happened to the sofa?” said Ferko.
Deconstructing Sammy Page 10