Like many musicians from the ’90s and before that, Alanis Morissette was subject to fraud via the very person who should’ve been looking out for her — her manager. Deadline reports that in a new plea deal, Morissette’s former manager Jonathan Schwartz has admitted to embezzling up to $4.8 million dollars from the Canadian singer during his stint running her career. Morrissette filed suit agains Schwartz last spring, and this deal comes with other confessions from the former partner at GSO Business Management, who is on the hook for a total of $6.5 million from clients.
Schwartz is charged with wire fraud, false tax returns, and failing to disclose to the IRS. Along with what he stole from Alanis, Schwartz also took $1 million from another unnamed client, and $737,500 from another, using false codings and forged signatures to cover his tracks. He will make an initial court appearance on February 1, where he will face a maximum sentence of twenty-three years in prison, though the deal will probably get that down to four to six years.
Attorney Eileen M. Decker told Deadline that Schwartz had violated basic principle as a money manager, and was further to blame for hiding his conduct:
“Money managers have fiduciary and moral responsibilities to their clients that begin with preserving client assets and not using that money to line their own pockets. This defendant violated this basic principle, and then engaged in further criminal conduct by attempting to hide his ill-gotten gains from the Internal Revenue Service. Despite those efforts, however, the defendant will now face serious consequences for victimizing his clients and American taxpayers.”
Since none of this “income” was reported to the IRS, Schwartz is also on the hook to pay about $1.7 million in back taxes to the government. Anthony J. Orlando, the IRS special agent of IRS Criminal Investigation involved in the case, emphasizes that all income is taxable:
“Schwartz was caught with his hand in the proverbial cookie jar. No matter what the source of income, all income is taxable. The IRS works regularly with our law enforcement partners in cases like these to prevent other financial professionals from duping their clients.”
