'Duck Dynasty' Producers Put on Leave at ITV Amid Fraud Investigation (Exclusive)

scott Gurney and Deirdre Gurney  - Getty - H 2016
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There's a shake-up at Gurney Productions, the company behind A&E's Duck Dynasty.

Scott and Deirdre Gurney — the founders of the reality TV production company that in 2012 was purchased by ITV for $40 million — have been temporarily suspended amid an internal fraud investigation, The Hollywood Reporter has learned.

Staff at Gurney Productions were told Monday afternoon that the Gurneys have been placed on a short-term leave of absence amid the internal probe. No charges have been filed. Sources tell THR the investigation concerns potential billing irregularities associated with Gurney programs.

For now, ITV has tapped 5x5 Media co-founder Craig Armstrong to serve as interim CEO of Gurney Productions. ITV America COO Chris Valentini also will help oversee Gurney Productions alongside Armstrong. Armstrong will continue to oversee unscripted producers 5x5, where it remains business as usual.

The Robertson family, which has a financial stake in Duck Dynasty, has been notified of the investigation. The news comes as the veteran and controversial unscripted series is heading into its final season at A&E. 

"The board of Gurney Productions is currently in discussion with Scott and Deirdre Gurney about future arrangements with them," Gurney Productions said in a statement. "Craig Armstrong has been appointed interim CEO of Gurney Productions. Craig is an Emmy award-winning producer whose credits include King of the Nerds for TBS, CBS’ Survivor and ABC’s Extreme Makeover: Home Edition and Jamie Oliver’s Food Revolution. Craig, along with his producing partner Rick Ringbakk, is co-founder and co-CEO of 5x5 Media, which will continue to operate as before."

U.K. broadcaster ITV bought a controlling 61.5 percent stake in U.S.-based unscripted production company Gurney in 2012. U.K. TV giant ITV reported a 4 percent third-quarter ad revenue decline, likely the result of June's Brexit vote. ITV forecast ad revenue to be down 7 percent in the fourth quarter and 3 percent for the year. Content production arm ITV Studios grew 18 percent in the quarter, driven largely by acquisitions. China's Huace Film & TV recently announced it would produce a Chinese version of an unnamed ITV Studios format as the latter continues to grow globally.

Armstrong's internal memo to staff follows:

As most of you have heard, the board that oversees Gurney Productions has placed Scott and Deirdre on a short, temporary leave of absence. Due to the nature of this leave of absence, we can not share all the specific details. What I can tell you is that Gurney Productions is a very important part of the ITV family and we are committed to help keep things running smoothly until the situation with Scott and Deirdre is resolved. There are several items we need to look into over the next couple of days so we may be asking some of you to sit down with me and legal counsel to answer some questions. Thank you in advance for your cooperation. Obviously, this is a little out of the ordinary and you may be tempted to start inquiring and drawing conclusions for yourselves, but I strongly recommend that you do not do so and direct any questions to ITV management.
So what does this mean for all of you? You should continue to operate “business as usual” but will be functioning under a new management team. Starting immediately, Scott and Deirdre are no longer responsible for the day-to-day operations of the Company. For the short-term, the Company will be overseen by Craig Armstrong who will be your interim CEO & Chris Valentini, ITV America COO. All questions, decisions and actions now come under the jurisdiction of Craig and Chris. I do want to remind you that [the] new management is in place immediately and all discussions around Gurney business must be directed to new management. As of today Scott and Deirdre no longer have legal oversight of Gurney Productions.
I do want to remind everyone that it is unlawful to circumvent the new management team or discuss internal operations with Scott and Deirdre. We will have a transition team stationed in LA and in the Louisiana office to assist with the changeover and to support all of you during the next few weeks. Attached please find the contact list noting phone numbers and email addresses as well as the org chart.
All this week we will be meeting with company personnel to ensure the continuation of the existing series currently in production and to get to know each one of you and a little bit about what you do here. If you have any questions please feel free to meet with me and anyone from the HR team and we should be able to answer any questions you may have.
We understand this is a lot to take in and certainly not an easy message for us to deliver but we ask that you keep an open mind. We would appreciate your help and cooperation to facilitate a smooth and seamless transition and please know that it is important for us to hear your thoughts and ideas to make this a great place to work.