EXCLUSIVE (contains update): If you’ve followed Nic Cage’s financial back-and-forth with his business manager, then this will interest you. Plus, if the allegations are true, I think it should rank in the Hall of Fame of entertainment business manager screw-ups. Is it possible that the prominent business manager for a well-known hip hop band has failed to file ANY federal and state tax returns for the group, leaving it vulnerable to financial and legal penalties? According to a legal document filed today in Los Angeles Superior Court, Sean Michael Larkin is accused of that and more, including allegations he hid more than $1.4 million in tax refunds due members of that touring group. (Though the legal papers don’t identify the band, sources tell me it’s the Black Eyed Peas.) The filing also claims he has been obstructing efforts to conduct an audit of his records. It goes on to charge that only recently has Larkin begun creating “necessary accounting ledgers” for the music group. This is all according to the legal filing by Helen Yu, an attorney for several members of the group. Yu was responding to a lawsuit filed last week by Larkin, who accused her of attempting to destroy his reputation.
*UPDATE: As his lawsuit states, “The defendant used lies, falsehoods and baseless accusations seeking to ruin a competitor’s business and reputation. Plaintiff Larkin is a successful business manager with over two decades of experience. He is the president and founder of a well-respected business management company, Larkin Business management. One of his major clients is a very successful, world-famous music group. Due to an inadvertent oversight, LBM did not timely file certain tax returns for the corporate and individual entites related to the group. Upon realizing the mistake, Larkin accepted responsibility, set forth a course of action to correct the mistake and agreed to pay any interest and penalties associated with the late tax filings.”*
Yu claims that she has at all times simply been protecting the rights and financial affairs of her clients, who relied on their business manager to oversee tens of millions of dollars in worldwide earnings. Her filing also states that “corporate entities” owned by the music group and its members have been “suspended” by the Franchise Tax Board for failing to file tax returns.