Actor Johnny Depp Files $25 Million Fraud Lawsuit Against Former Business Managers

According to several news outlets, including SFGate.com, popular actor Johnny Depp has filed a $25 million fraud lawsuit against his former business managers, alleging misconduct in various forms.

Johnny Depp Slaps His Managers With  25 Million Fraud Lawsuit   SFGate

The complaint, filed in Los Angeles Superior Court, reads in part:

“Mr. Depp is one of the most sought after and highly paid actors in the world. He is also the victim of the gross misconduct of his business managers — The Management Group and attorney Joel and Robert Mandel — who collected tens of millions of dollars in contingency fees, purportedly based on an oral contract, all at Mr. Depp’s expense. Like many successful artists who depend upon financial professionals to advise them, Mr. Depp trusted and reasonably relied on TMG to handle his financial and certain legal affairs and to ensure that he and his family would have a financially secure future, built on the foundation of substantial monies Mr. Depp earned through years of hard work.”

“But instead, Mr. Depp lost tens of millions of dollars and has been forced to dispose of significant assets to pay for TMG’s self-dealing and gross misconduct.”

Among other allegations, Depp’s lawsuit says that while the management company collected more than $28 million in contingency fees, it “ignored its most basic duties to Mr. Depp by consistently failing to pay his taxes on time causing him to lose over $5,600,000 in penalties and interest in his federal returns alone, failing to properly keep books and records, ‘loaning’ nearly $10 million to third parties without Mr. Depp’s required prior authorization and without proper documentation or requiring repayment, using inflated and obviously incorrect figures as ‘loan’ offsets, falsely ascribing third parties’ taxable income to Mr. Depp so that he, rather than they, paid the tax, and failing to reduce Mr. Depp’s expenditure or avoid profound financial waste.”

Responding to the suit, Michael J. Kump, attorney for The Management Group, called Depp’s claims a “complete fabrication,” and provided some details of his own as to why, he says, it his clients, not Depp, who are the real victims here:

“In December 2012, Depp faced financial ruin with the impending default on a $5 million bank loan. The Mandels bailed him out by loaning him $5 million, which he promised to repay by January 2014. Although Depp later changed managers, he never alleged any wrong doing. In October 2016, with Depp still owing $4.2 million, the Mandels started non judicial foreclosure proceedings against certain of Depp’s properties. Depp’s lawsuit, filed on the eve of the sale of those properties, is a transparent attempt to derail the foreclosure by concocting and spreading malicious lies about the Mandels. His tactics and lawsuit will fail, and he will be forced to pay back the loan as promised.”

The information contained here is for general information purposes only. The Financial Writer blog and Bob Yetman disclaim responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this article, or any other article featured at this blog, should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

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