James Franco's Ex-Managers Sued for Embezzling Actor's Money (Updated)

James Franco's Ex-Managers Sued for Embezzling Actor's Money (Updated)

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Randy James and Ken Jacobson have filed a lawsuit against Miles Levy and Steve Blatt over the busy actor's commissions

Update:
Shortly after the lawsuit was filed Friday, a counterclaim was filed against James, Jacobson, Levy. The court documents alleges that James and Jacobson are trying to make Blatt's accounting firm accountable for Jacobson, James and Levy's management company's own failures. Additionally, the counterclaims says JLM “was rife with internal mismanagement, surreptitious behavior, duplicitousness and questionable ethical acts,” and that James and Jacobson believed that Levy had a gambling addiction which was putting him into debt and he was stealing from JLM and engaging in “side deals with his clients for payment of management commissions directly to him rather than to JLM.”

Alleging that Jacobson quit JLM in 2006 due to his distrust of Levy, TMBGJ states that James continued to work with him, despite believing Levy was not trustworthy, but because he “generated significant business for the company.” However, TMBGJ states that with the termination of Levy's “lucrative client” James Franco, James and JLM “claim ignorance of Mr. Levy's character and actions.” TMBGJ maintains that the lawsuit is an attempt by James and Jacobson to blame others for their own “carelessness and reckless actions.” 
 
Attorney Devin McRae, who represents Randy James, told TheWrap, “This is no defense to the complaint's allegations that Tanner Mainstain 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.”

Previous:
Randy James of James/Levy Management and Ken Jacobson (JLM) have filed a lawsuit against James Franco‘s recently-fired talent and financial managers Miles Levy and Steve Blatt (TMBGJ), claiming that the duo embezzled significant commissions sums for nearly a decade.

James and Levy were childhood friends who started James/Levy Management in 1986.

Also read: James Franco Calls NYT Critic a ‘Little Bitch’ Over ‘Of Mice and Men’ Review

The suit, filed Friday in California Superior court, alleges that Levy told James that Franco would no longer pay the firm a 15 percent management commission, but rather 10 percent commission. However, the suit claims that Franco did no such thing, and continued to pay 15 percent commission to the firm.

Meanwhile, James claims that Levy diverted that 5 percent income stream to himself with Blatt's help, and ultimately set up a California corporation named Down Goes Frazier Inc., which James alleges Levy and Blatt used for the sole purpose of facilitating theft.

Furthermore, not only did Blatt serve as Franco's financial manager, but he also served as Jacobson's financial manager, so the alleged wrongdoing also “directly injured” his other client, the legal action contends.

Also read: James Franco Didn't Know He Has a Cameo in ‘Dawn of the Planet of the Apes’

When James discovered the alleged cover-up a month ago, the suit claims that Blatt turned on Levy and disclosed that Down Goes Frazier has received “significant sums” due to James/Levy Management between 2006 and 2014. He allegedly acknowledged that “what Levy did amounted to criminal embezzlement.”

Devin McRae and Michael Jones of Early Sullivan Wright Gizer & McRae are representing plaintiffs James and Jacobson, who seek redress for Levy and Blatt's alleged conduct and the resulting harm.