Actor James Franco’s accounting firm is embroiled in a lawsuit over accusations that his former talent manager illegally diverted money from the actor’s commissions to fuel a gambling habit.
The lawsuit claims that Franco’s former talent manager, Miles Levy, told his business partners, Randall James and Kenneth Jacobson, that Franco no longer wanted to pay them a 15 percent commission, but would only pay 10 percent, according to Variety. However, the lawsuit claims that Franco had never made such a demand and that Levy instead had diverted the extra 5 percent from Franco’s roles in movies such as the Spider-Man trilogy to himself and a company he had set up called Down Goes Frazier.
James and Jacobson filed suit last Friday against Levy, as well as Franco’s financial manager Steven Blatt and his accounting firm, Tanner, Mainstain, Blatt, Glynn & Johnson. The suit claims that Blatt had helped Levy set up the company to facilitate the “theft.” Blatt did not return a call seeking comment.
"Box office star James Franco's recently fired talent and financial managers, defendants Miles Levy and Steve Blatt, conspired to, and did by fraudulent means, embezzle significant sums in commissions due James Levy Management for nearly a decade. The thieves have been caught, and the day of reckoning has arrived," said the lawsuit, according to Courthouse News Service.
Franco is not part of the lawsuit and reportedly settled out of court last December with Levy.
The lawsuit also accuses Levy of taking advantage of his role as Franco’s personal manager to be made a producer in Franco’s production company and make unauthorized credit card charges.
“Further, Levy made credit card charges, without Franco’s knowledge, of substantial sums for personal, as opposed to business, matters on a card provided for him by Franco,” said the lawsuit. “Blatt paid those personal charges from Franco's money for years until Franco's other representatives discovered that scheme, which resulted in a demand by Franco for repayment from Levy and ultimately the termination by Franco of Blatt and his firm Tanner Mainstain.”
The accounting firm later filed a counterclaim last Friday, according to Variety, contending that the management firm was “rife with internal mismanagement, surreptitious behavior, duplicitousness and questionable ethical acts.”
The accounting firm contended that James and Jacobson believed Levy had a gambling addiction that was putting him in debt and was stealing from his partners by making side deals with clients to pay him the commissions directly, according to The Wrap. They said that Jacobson quit in 2006 because he distrusted Levy and that the lawsuit was an attempt to blame others for their own “carelessness and reckless actions.”
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