On April 18, 2014, the management firm of Hollywood actor James Franco sued his recently fired talent manager Miles Levy and financial manager Steve Blatt in California state court, alleging that both conspired to fraudulently bilk the actor out of millions of dollars. The suit, filed by Randy James of James Levy Management, accused the defendants of “embezzl[ing] significant sums in commissions [ ] for nearly a decade . . . . The thieves have been caught and the day of reckoning has arrived.” Among other things the complaint included causes of action for breach of contract, fraud, and unjust enrichment.
In particular, the suit states that Levy was skimming one third of the 15% commission Franco had been paying to James Levy Management. Allegedly, Levy did so by falsely informing James, (his business partner) that Franco’s commission payments had dropped to 10% when they had not. Levy then diverted the extra 5% of Franco’s commissions to himself using Blatt’s help, purportedly by setting up a dummy corporation named Down Goes Frazier, Inc. – an entity James asserts was created for the sole purpose of facilitating the theft.
This isn’t to say the defendants aren’t fighting back. Only a couple of hours after the Franco suit was filed, Steve Blatt’s financial firm, Tanner Mainstain Blatt Glynn & Johnson LLP (“TMBGJ”), responded with a counterclaim, accusing James Levy Management of being “rife with internal mismanagement, surreptitious behavior, duplicitousness and questionable ethical acts.” The counterclaim went on the blame James/Levy for mishandling Franco’s money and then seeking “to make TMBGJ responsible for the own myriad internal shortcomings.”
James’ attorneys’ aren’t buying these allegations, however. In a recent statement to the press they noted, “[the counterclaim] is no defense to the complaint’s allegations that [TMBGJ] name partner Steve Blatt knowingly facilitated, concealed and profited from Mr. Levy’s theft from the corporation . . . . The law doesn’t allow fraudsters to point to the victim and say, ‘It’s your fault I duped you.’ This pleading will be shut down quickly.”
James Franco’s ex-managers sued for embezzling actor’s money