LOS ANGELES (CN) - James Franco's former talent manager embezzled one-third of the star's commissions and diverted them to his own company without telling partners at his management firm, a partner claims in court.
Randy James and Ken Jacobson sued Miles Levy, money manager Steve Blatt and his accounting firm Tanner Mainstain Blatt Glynn & Johnson, in Superior Court, on 16 causes of action, including fraud, breach of contract, conversion and unjust enrichment.
Franco is not a party to the lawsuit.
"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," the 27-page lawsuit states.
James says he founded James Levy Management in 1986 with his childhood friend, Levy.
But after nearly three decades in the business, James claims that Levy, "overcome by greed and other character flaws," told the firm's partners that Franco wanted to pay 10 percent commissions on his earnings, rather 15 percent.
"Yet Franco had never directed any such thing and continued to pay the 15 percent commissions to, he believed, James Levy Management. But Miles, unbeknownst to Franco, and with the help of Franco's financial manager, Blatt, diverted that 5 percent income stream to himself and, ultimately, to a California corporation named Down Goes Frazier, Inc., formed by Miles and Blatt for the sole purpose of facilitating this theft," the lawsuit states.
Down Goes Frazier is also named as a defendant.
According to the lawsuit, Blatt is a partner at the accounting firm Tanner Mainstain Blatt Glynn & Johnson, which also manages Jacobson's finances. Jacobson decided to leave James Levy Management in July 2006, and was meant to receive an equal share of Franco's commissions from his work in the three Spider-Man movies, according to the complaint.
In the intervening time, Levy took advantage of his role as Franco's personal manager to secure producer roles and stakes in the star's production companies but never told his partners at the management company, the complaint states.
"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. 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 lawsuit states.
Levy settled with Franco out of court in December 2013, according to the complaint.
James says that when he discovered Levy's fraud this year, Blatt "turned on co-conspirator Miles."
"He disclosed that Down Goes Frazier, between 2006 and the present, has received significant sums due to James Levy Management, and acknowledged that Miles's conduct was nothing short of criminal," the complaint states.
James Levy Management is a nominal defendant.
James and Jacobson seek compensatory, exemplary and punitive damages.
They are represented by Devin McRae, with Early Sullivan Wright Gizer & McRae.