Johnny Depp has stepped out of one legal entanglement and into another.
“Pirates of the Caribbean” star Depp, who finalized his divorce from Amber Heard on Friday, finished up the week by filing a fraud lawsuit against The Mandel Company, dba The Management Group, on Friday, claiming more than $25 million in damages.
“Mr. Depp is one of the most sought after and highly paid actors in the world. He is also the victim of the gross misconduct of his business managers — The Management Group and attorney Joel and Robert Mandel — who collected tens of millions of dollars in contingency fees, purportedly based on an oral contract, all at Mr. Depp’s expense,” the complaint, filed in Los Angeles Superior Court, reads. “Like many successful artists who depend upon financial professionals to advise them, Mr. Depp trusted and reasonably relied on TMG to handle his financial and certain legal affairs and to ensure that he and his family would have a financially secure future, built on the foundation of substantial monies Mr. Depp earned through years of hard work.”
“But instead, Mr. Depp lost tens of millions of dollars and has been forced to dispose of significant assets to pay for TMG’s self-dealing and gross misconduct.”
The suit goes on to state, “As a direct and proximate result of TMG’s fraud and concealment, Plaintiffs have been damaged in an amount that has not yet been fully ascertained, but which is believed to be in excess of $25 million.”
According to the suit, Depp agreed to have J. Mandel and R. Mandel handle his new business, legal tax and accounting matters in 1999, “well after Mr. Depp had become a critically acclaimed and enormously successful actor.”
Among the alleged misdeeds: Taking a 5 percent commission of the actor’s income, “in some cases regardless of whether Mr. Depp actually received any income himself or not” — a commission that was “exorbitant, excessive, and far outstripped the actual value of services TMG would be performing for Mr. Depp.”
The suit accuses the firm of imposing the deal on the actor “without negotiation or review of any terms by either Mr. Depp or any independent counsel.”
The suit claims that, while helping itself to more than $28 million in contingency fees, the company “ignored its most basic duties to Mr. Depp by consistently failing to pay his taxes on time causing him to lose over $5,600,000 in penalties and interest in his federal returns alone, failing to properly keep books and records, ‘loaning’ nearly $10 million to third parties without Mr. Depp’s required prior authorization and without proper documentation or requiring repayment, using inflated and obviously incorrect figures as ‘loan’ offsets, falsely ascribing third parties’ taxable income to Mr. Depp so that he, rather tan they, paid the tax, and failing to reduce Mr. Depp’s expenditure or avoid profound financial waste.”
According to the complaint, Depp only learned of the alleged misconduct until only recently, after he terminated his relationship with TMG and hired new management.
In a statement, The Management Group’s attorney Michael J. Kump called the lawsuit a “complete fabrication.”
“The lawsuit filed by Johnny Depp against his long-time business managers is a complete
fabrication. For 30 years, Joel and Rob Mandel, and their company The Management Group,
have been trusted business managers to some of the most successful individuals and companies
in the entertainment business. For 17 of those years, they did
from his irresponsible and profligate spending.”
Kump’s statement continued, “In December 2012, Depp faced financial ruin with the impending default on a $5 million bank loan. The Mandels bailed him out by loaning him $5 million, which he promised to repay by January 2014. Although Depp later changed managers, he n
Pamela Chelin contributed to this report.