This week, using her real name “Robyn Fenty”, Rihanna filed a lawsuit against her former accountants for mismanaging her finances over the span of five years.
The New York Daily News reports:
Rihanna sued her former accountants Thursday, accusing them of being blundering beancounters who squandered millions of her dollars and got her audited by Uncle Sam.
The singer’s lawsuit in Manhattan Federal Court accuses Berdon LLP of New York and two of the company’s accountants of breach of contract and negligence, among other claims.
The suit says Rihanna hired Berdon as her financial manager in 2005 when she was 16 and her music career was just getting off the ground in her native Barbados.
It alleges Rihanna lost millions of dollars on her 2009 “Last Girl on Earth Tour” because Berdon failed to properly manage her cash flow, expenses and touring income.
It also accuses Berdon of mismanaging Rihanna’s taxes, including failing to file tax returns in certain instances.
As a result of the firm’s negligence, the suit says, Rihanna is now being audited by the IRS for the tax years 2008 to 2010.
The suit also blames Berdon with failing to uncover millions of dollars in unpaid royalities owed to the singer.
And it says Berdon was negligent in failing to discourage Rihanna from buying a home in Beverly Hills during her money-losing “Last Girl on Earth” tour.
The suit says Rihanna fired Berdon in September when she learned for the first time the extent of the alleged mismanagement.
“Despite having earned millions of dollars in revenues during Berdon’s tenure Fenty learned that her net income after payment of expenses and exorbitant commissiones to defendant was a fraction of that amount,” the suit says.
The lawsuit seeks unspecified damages. Reuters reports a spokesman for Berdon, Michael Tasch, did not immediately return a call seeking comment. Mitnick and Gounis have since left the firm and could not be immediately reached for comment either.
If what Rihanna alleges is correct, then she has lost millions of dollars because of shady accountants.
Her lawsuit said several of the Barbados-born singer’s national and international tours between 2005 and 2010 suffered losses compared to her last tour “Loud” that was a financial success after she had parted ways with Berdon. Her lawsuit also said the firm did not do monthly planning reports, and performed little record-keeping of Rihanna’s personal and business expenses, including those for Tourihanna, according to the suit. For example, during 2008 and 2009, the accountants kept only 2 percent to 4 percent of all receipts for expenses charged on the singer’s personal credit card, the suit said.
Rihanna isn’t the only celebrity to have weathered problems with accountants. In 2010, Khloe Kardashian claimed she paid an $18,000 dollar tax lien to the IRS through her accountant and her accountant kept the money. Mr Biggs, Wesley Snipes, and Damon Dash have all had problems with their accountants too, an just last year celebrity accountant Kenneth Starr was sentenced to 90 months in prison for defrauding his clients out of millions of dollars.
The IRS is always after one celebrity or another and it looks like Rihanna was on the short list. Let’s hope she gets things all squared away with these people and the IRS because we definitely don’t want to see her get arrested because of tax problems!