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Talent Manager Claims Partner Stole James Franco Money

Miles Levy allegedly diverted the actor's management commissions and made unauthorized credit card charges.

Homefront James Franco - H 2013
James Franco

James Franco's talent manager embezzled part of the actor's management commissions, says a lawsuit filed on Friday in Los Angeles Superior Court.

The actor isn't a direct party to the lawsuit, which involves two business partners, Miles Levy and Randy James, who, according to the complaint, have known each other for 50 years. The friendship since childhood now appears to be torn apart over alleged deceit.

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Levy and James founded James Levy Management in 1986. Among the firm's clients was Franco, until late last year.

The actor was a client for about two decades and was paying 15 percent commission from his work, but the lawsuit alleges that in May 2006, Levy informed his partners including Kenneth Jacobson that Franco no longer wished to pay 15 percent, and going forward, would pay only 10 percent.

Jacobson left the firm that year, and a separation agreement (attached to the complaint) directed co-defendant Steven Blatt at Tanner Mainstain to split Franco's commissions on the Spider-Man movies to Levy, James and Jacobson directly.

Tanner Mainstain is a financial management firm with a healthy celebrity clientele. According to the complaint, "Blatt and Tanner Mainstain ... knew full well at this point that James and Jacobson thought that Franco only paid 10 percent commission when in fact he continued to pay 15 percent commission, with the Company only receiving 10 percent and the other 5 percent being improperly diverted to Levy."

But the lawsuit goes beyond mere commissions. Levy has been credited as a producer on many films that Franco has worked on, including Spring Breakers and Palo Alto.

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The complaint continues: "Levy sought to leverage his position as Franco's personal manager into roles for himself as producer, and to procure ownership interest in Franco's production companies, all without informing James or the Company. Further, Levy made credit card charges without Franco's knowledge for substantial sums for personal, as opposed to business, matters on a card provided for him by Franco."

The alleged "overreaching" is said to have "alienated" Franco, causing him to terminate the relationship. The plaintiffs say they didn't know about it until after it happened, but in December, Franco and his former manager Levy executed a confidential settlement with each other, according to the lawsuit. The alleged 5 percent skim to Levy's side company Down Goes Frazier was discovered in March along with a stipulation to deduct the past credit charge amounts from future commissions going to the firm.

When confronted, Blatt is said to have stood by the 10 percent number initially until confessing the true amount and "acknowledging that what Levy did amounted to criminal embezzlement." (Neither Blatt nor Levy have responded yet to a request for comment.)

"Plaintiffs, as yet, do not know the full extent of Defendants' malfeasance, and the degree to which he has robbed the Company of monies and opportunities rightfully belonging to the Company," says the lawsuit filed by Devin McRae at Early Sullivan. "They fear that this recently exposed fraud may be just the tip of the iceberg."

Sixteen causes of action are asserted including breach of contract, breach of fiduciary duty, fraud, conversion and abuse of control. The plaintiffs demand compensatory and punitive damages as well as a constructive trust and an order removing Levy from the office that still maintains his name.

Email: Eriq.Gardner@THR.com
Twitter: @eriqgardner