Music by VICE

How to Steal Millions from a Singer and Almost Get Away With It

Alanis Morissette's ex-manager may be going to prison for mishandling her money—but he wouldn't be the first.

by Tshepo Mokoena
Feb 2 2017, 2:58pm

You've got to watch your back. Useful advice, usually given with the benefit of hindsight when you're looking after something valuable. Say, millions of pounds. Take the case of security officer Greg Counsell, in 1983. He was on duty at an east London cash depot, starting his early shift, when a group of armed robbers who'd been studying the depot's complex and vulnerable control room system swooped in. It was Easter Monday, so there was no one else around—yet. But the morning would end with the robbers making off with about £6 million (worth more than £28 million today) after ambushing and holding hostage four other guards who came to work, ready for a quiet holiday shift.

It all cascaded in a domino effect triggered by one thing: Counsell letting down his guard, and stepping from one control room to the other, to pick up the morning's milk delivery for his daily cuppa. While he did the necessary unlock-lock-move-to-the-next-room routine to get from one control room post to the next, the robbers—weirdly, including the brother of Barbara Windsor's husband and one of the men who'd be part of the Hatton Garden heist more than 30 years later—slipped inside the complex's main gate. After a standoff, the money was gone.

All of this leads us to Alanis Morissette, who—not unlike our good friend Greg—was robbed of millions when her back was turned. In her case, news broke in mid-January of Morissette's manager admitting to siphoning about £3.7 million out of her account between January 2010 and January 2014. According to the Associated Press, the 48-year-old was "charged with wire fraud and filing a false tax return for failing to report the embezzled funds," as per the prosecutor's statements on Wednesday, January 1. And this week, Schwartz is due to appear in court on those criminal charges, to which he's pleaded guilty as part of a plea bargain—but we'll get to that in a bit.

First: money seems to disappear all the time. You've probably squinted at your bank balance, thinking, hmm that number looks lower than I expected, but I did get carried away at the pub and do that thing where I offer to pay for the gin we take back to Katie's afterward, and so on. You may have been the type to print out hopeful budget spreadsheets, with cells waiting to be filled with the minutiae of all of your spending, only to leave it crumpled in that draw with all the old keys and lighters. And perhaps you, dear reader, have made a point of avoiding the "cash and balance" option at a cash machine rather than face a number that hovers at a fraction of what you rightfully deserve.

But this did not happen with Alanis Morissette. She wasn't carelessly spending a bit more than she should have. The person Alanis was meant to trust most, the one in charge of her cash, taxes and investment choices, has admitted he was behind a stitch-up so bold it's almost commendable. Guardian commenters have already made their "Ironic" lyric jokes about this, so let's leave those punchlines behind. Just know that Schwartz labelled his withdrawals of Morissette's money as "sundry/personal expenses," according to the now-settled civil suit Morissette first filed in May 2016, to paper over the fact that he was stealing.

Court documents from Morissette's civil suit against her former manager

The complaint from Morissette's civil suit against her former manager and his former employer (LA County Superior Court)

The singer's complaint—addressed to both Schwartz and management company GSO, where he was employed at the time—doesn't mince words. Schwartz and GSO's misconduct, the complaint read, "is not, however, limited to this theft. They engaged in a pattern of wrongful conduct in an apparent to conceal the theft. For example, when Morissette originally hired Schwartz, she explained to him and others what was referred to as "the Plan." Morissette's "Plan" was not to spend any of the money that she had invested, but rather to live off of her current income and interest. But instead, according to Morissette's complaint, Schwartz did the equivalent of shouting OMG RELAX! rather than stop her from spending her savings. "When she asked him if she was over budget, he would insist that things were "fine," that she had "nothing to worry about," and that she and her future grandkids were "set for life." Except LOL, absolutely not.

What actually happened—as per records uncovered when Morissette took on new business manager Howard Grossman in May 2016 after firing Schwartz a month prior—was that about $8 million went missing from Morissette's savings, without a paper trail leading any of it back to transactions that Morrissette had authorised. New manager Grossman hit up Schwartz in April 2016, no doubt casually asking about the 26 boxes of files he'd found, filled with records showing a total of 116 cash transfers from Morissette's investments accounts to ya boy Schwartz. Without receipts, or any explanation for the payments, Grossman expected a standard response.

Instead, as per Morissette's complaint, Schwartz stalled. He first said that he'd been spending a lot of cash and he'd elected to take it out in batches and keep the money in his safe, "so that when she needs cash, we don't need to go to the bank each time." Schwartz also said that Morissette had signed receipts for the transfers, which were in storage somewhere, then that, actually, he'd been using the money to invest in "one or more marijuana 'grow' businesses." Eventually this civil case was settled out of court, with management company GSO distancing themselves from Schwartz and suing him separately, too.

"The investigation revealed that Mr Schwartz was burning through money to sustain a lavish lifestyle," GSO's complaint against Schwartz read, "including a $50,000 [£34,700] vacation to Bora Bora and an outstanding gambling debt of $75,000 [£52,000] at a casino in the Bahamas." Schwartz has agreed to a plea bargain in this current criminal case: enough episodes of The Good Wife have taught me that, in translation, he'll say he's guilty in order to get a shorter sentence. In this case, more like four to six years rather than the maximum of 23.

What's particularly weird about this case is that it seems to hark back to an era in the industry that is mostly defunct. Yes, managers take a standard 15 to 20 percent cut of what an artist makes. And that number can swell to dangerous levels—ie: with Colonel Tom Parker's infamous 50 percent cut of Elvis' earnings—if you're not careful about the contract you sign. But back when labels ran the business, before DIY culture made artists feel they could go it alone and self-release, you'd have been more likely to get shafted in the terms of your contract. From sunset clauses to contracts giving managers a slice of gross income that didn't always have that much to do with their work, there were plenty of opportunities for young and naive musicians to sign away chunks of their advances and profits.

This is something different, though. For a 21st-century scam, it has the vintage touch of Billy Joel suing his ex-manager for $90 million in 1989; of the Stones flinging lawsuits at Allen Klein and his notorious grip on their publishing rights; of boyband Svengali Lou Pearlman lifting money from the Backstreet Boys and plunging it into the Ponzi scheme for which he served eight years in prison; of Leonard Cohen's former manager serving time after allegedly stealing millions from him, then harassing him. But now that musicians are learning that recorded music, and the industry it propped up, doesn't have to be the cornerstone of their careers, Morissette's sort of story may not crop up that often. Managers are increasingly doing the work that labels used to, and often working closely with artists who can peer over their shoulders to check that things are going the musician's way too. If the trend continues to develop that way, this may be one of the last high-profile cases we hear about in which money goes walkabout. Until then, watch those backs.

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(Lead image by Stephanie Schuster via Alanis Morissette's Website)