The business manager who embezzled $4.8 million from singer Alanis Morissette and nearly $2 million more from other clients has been sentenced to six years in federal prison and ordered to pay $8.7 million in restitution.
Jonathan Todd Schwartz, a former partner at GSO Business Management, admitted in a plea agreement that he took clients’ money for himself and falsified account records to conceal the embezzlement of client funds. GSO cooperated with FBI and IRS investigators; clients who were victimized have been reimbursed by insurance carriers and by the company itself.
Schwartz was sentenced by U.S. District Court Judge Dolly Gee, who described his crimes as “insidious” and “audacious,” adding that they had resulted in “grave economic and psychological harm” to his victims, whose lives were “upended by the financial turmoil he caused.”
Besides the money he embezzled from Morissette, Schwartz also embezzled more than $1 million from another, unnamed, client and concealed the theft by falsely coding the unauthorized cash withdrawals as money used for the client’s home renovations. He also admitted that that he embezzled $737,500 from yet another unnamed client and forged that client’s signature on at least two cash receipts.
As a business manager, Schwartz had access to his clients’ bank accounts so he could pay their bills and obtain cash for them. As part of his embezzlement scheme, he submitted cash-withdrawal requests to banks that were not authorized by his clients, and he either had the cash delivered to him or he picked up the money himself. Schwartz was able to conceal the embezzlements because the bank statements were sent to GSO, and not to the clients. GSO prepared monthly statements for the clients based on a ledger of expenses that GSO bookkeepers maintained; those statements were false because Schwartz had provided false information to the bookkeepers and caused other pertinent information to be deleted from the monthly statements.