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Johnny Depp’s already ugly legal battle with his former business managers is getting even more personal, as newly unsealed deposition testimony alleges The Management Group kept him in the dark about his finances and claims the star’s sister spent his money unchecked because his business manager was afraid of her.
Depp sued in January, claiming TMG and its principals, Joel and Robert Mandel, treated his money as their own and cost him millions. The Mandels countersued, claiming Depp knew he was short of funds but continued to spend at a breakneck pace.
Ex-TMG employee Janine Rayburn says she believes the actor didn’t know the state of his finances — and the court on Friday gave Depp the green light to amend his lawsuit to include claims arising from her testimony. The court also ruled that the transcript of Rayburn’s March 2 deposition should be public.
TMG fought to keep those claims under seal, citing a confidentiality agreement and claiming the woman lied under oath. L.A. Superior Court judge Teresa Beaudet found that contesting what is the truth is the very heart of litigation and keeping all such arguments confidential is not in the public interest.
Rayburn was an account manager at TMG from mid-2008 through the end of 2010, and handled the day-to-day business for eight clients including Depp. She says her job entailed processing bills, depositing checks, recording investments and meeting other client needs. “I do not believe that Johnny was aware of his financial situation,” Rayburn testified. “To my knowledge, financial statements were not sent to him.”
When cross-examined by TMG’s attorney Michael Kump, Rayburn testified that she did not work on the team that prepared any cash flow analysis documents or budgets and did not have personal knowledge as to whether they were sent to Depp
“The Court’s unsealing of whistle-blower testimony and the handwritten notes she took in 2010, both of which the Mandels sought to block from public view, reveal a stew of unethical and illegal acts,” Depp’s attorney Adam Waldman tells The Hollywood Reporter. “These acts include Joel Mandel’s instructions to the whistle-blower, who served as Mr. Depp’s account manager for two and a half years, to falsely notarize ‘fake’ documents and to alter numbers in his financial statements, all of which instructions she repeatedly refused.”
She claims one of those instructions was to notarize Depp’s signature on a document when he wasn’t present. “I have no idea what the transaction was for,” she said during her deposition. “It was only the signature pages, so I couldn’t tell.”
Rayburn claims her refusal to commit those acts and her questions about the handling of Depp’s account got her fired, although at the time she was told it was because she “wasn’t a good fit.” Her severance agreement shows she was paid $40,000; she agreed not to divulge confidential information and the parties agreed not to disparage each another.
TMG maintains that Rayburn is a “serial liar” who is disgruntled about her firing. “Under cross-examination, Janine Rayburn fully admitted that she was not part of the team at TMG that created Depp’s financial statements and that she has absolutely no personal knowledge regarding what TMG told Depp about his finances,” says attorney Kump. “Depp’s reliance on Rayburn’s highly speculative statements is ridiculous. Indeed, the one conversation Rayburn claims to have overheard while at TMG confirms that Depp and his closest advisers have been discussing Depp’s tremendous spending problems for at least a decade.”
Rayburn says she had a feeling she was going to be fired, so she made notes about things she thought were “odd” with plans to tell Robert Mandel and Howard Leiter about her concerns. In her notes, she calls the former an “idiot” and says he didn’t believe her.
Also in those handwritten notes, entered as an exhibit, Rayburn calls Depp’s sister Christi Dembrowski a “nasty bitch” and says Mandel did whatever she wanted because he was afraid of her. Dembrowski runs her brother’s production company and brought TMG to him in the late ‘90s, as part of a short list of other potential business managers for him to interview.
Rayburn claims the company was using Depp’s money to pay for Dembrowski’s personal expenses — including her daughter’s wedding, trips and a new pool — without express permission from the star. She says she asked Dembrowski about the spending on two occasions and “her response was, ‘he’s my brother. My money is his money. His money is mine.’” (Dembrowksi’s attorney Dylan Ruga did not immediately respond to a request for comment.)
Waldman says Rayburn’s claims are more than just one half of a he-said-she-said equation.
“Mr. Depp’s forensic accountants Edward White & Co., and Miriam Fisher, head of the tax department at Latham & Watkins, have independently verified many of the whistle-blower’s most damning allegations,” he says. “One is that Joel Mandel apparently altered financial statements before they were submitted to banks. The Mandels’ purpose in securing over $75 million in bank loans in Mr. Depp’s name was to use the loans to pay themselves and Mr. Depp’s entertainment lawyer over $70 million in improper contingent fees and to shovel out nearly $10 million to third parties as sham ‘loans’ without Mr. Depp’s knowledge.”
“The idea that Johnny Depp borrowed 1 cent to pay TMG or his entertainment lawyer, Jake Bloom, without his knowledge is libelous and beyond outrageously false,” says Kump. “At trial, Depp will be proven to be a liar and a fraud.”
Further, a TMG spokesman called claims that Mandel was afraid to defy Dembrowski “absurd” and questioned why Depp would want Rayburn’s testimony to be public while fighting that of his former reps. “It’s more than ironic that Johnny Depp and his attorneys are relying on the testimony of a low-level employee who lied numerous times but filed motions late Friday to quash testimony from two of Depp’s closest advisors and critical witnesses in the case, Jake Bloom and UTA’s Tracy Jacobs.”
Waldman says that argument is irrelevant. “We would not stop anyone from testifying in this fraud case,” he says. “The suggestion that a common motion to limit an overbroad subpoena request bears any resemblance to the Mandels‘ failed attempts to muzzle and then hide a whistle-blower’s testimony regarding their illegal conduct is absurd.”
Depp unceremoniously ended his relationship with TMG in 2016, shortly after the firm advised him to start liquidating real estate assets to pay his bills. He then hired White, who discovered the alleged misconduct while reviewing the actor’s finances.
Depp claims TMG cost him $8 million in unnecessary tax penalties and fees, loaned without permission $10 million of his money to parties close to him, secured a $12.5 million hard money loan with his residuals and failed to repay itself for a $5 million bridge loan it issued without his knowledge, which triggered nonjudicial foreclosure proceedings on his Hollywood Hills home. While TMG maintains it did everything it could to keep the star financially afloat and Depp was aware of the situation.
It’s too early to definitively say how Beaudet will handle this case, but her recent decision favoring transparency is a strong indication that much of what plays out leading up to the 2018 trial will be public.
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