Isn’t it moronic: Morissette manager sad over ‘stupid’ theft

“He did this in a long, systematic, drawn-out and sinister manner,” Morissette said, adding it would have bankrupted her within three years had the thefts continued.

Schwartz, 47, who blamed his gambling addiction for the thefts, wept and apologized at the hearing, saying he took full responsibility for his “stupid” behaviour and would live in shame because of it.

“I will spend the rest of my life asking for forgiveness,” he said in seeking less than a year in prison.

Prosecutors sought just over five years in prison, but U.S. District Judge Dolly Gee said she thought Schwartz deserved more time for the “sheer audaciousness of this conduct.”

Gee noted that she has criticized federal sentencing guidelines as draconian, but said they weren’t harsh enough in this case. Schwartz’s gambling addiction may explain the wire fraud and tax crimes, but didn’t excuse them, she said. She ordered him to pay $8.6 million in restitution.

Schwartz admitted stealing nearly $5 million from Morissette between May 2010 and January 2014 and more than $2 million from five unnamed clients when he worked at GSO Business Management, a firm that touted relationships with entertainers such as Katy Perry, 50 Cent and Tom Petty.

Schwartz was a high-flying partner making $1.2 million a year, according to court papers. The thefts struck a blow to the firm’s reputation that led to nearly a dozen layoffs and is expected to cost it $20 million, according to founder Bernard Gudvi.

The embezzlement was discovered by a new money manager Morissette hired after she couldn’t get a straight answer from Schwartz about her investments.

“It was at this time, I realized he also stole my dreams,” said Morissette, dressed in a black blazer, black pants and with her hair dyed blond.

When GSO was contacted about the apparent theft, Schwartz made “wild accusations” Morissette was a drug addict and mentally unstable, Gudvi said. Schwartz also falsely claimed Morissette had invested the money in an illegal marijuana growing business.

“As the walls were closing in on the scheme to steal client funds … he was unable to turn away from the lies,” Gudvi wrote to the court.

The thefts financed “a lavish and luxurious lifestyle even beyond the means of the people he was stealing from,” Morissette said. “He had us all fooled.”

Schwartz, who was fired, had offered financial guidance to some of the biggest stars and was said to represent Beyonce and Mariah Carey, who both appeared at a fundraiser last year in support of a heart disease charity he founded.

Schwartz penned a mea culpa in The Hollywood Reporter recently, saying his crimes ruined his family and career. He said his father was a gambling addict who abandoned his family and he sought refuge in sports betting and drugs to deal with the stress from his business.

“If I lost, then I had to make it back and when I lost again, the hole I had dug got deeper and deeper,” he wrote. “I felt weak and powerless, terrified by my internal demons that I was turning into my father.”

Assistant U.S. Attorney Ranee Katzenstein disputed that Schwartz was a gambling addict or that he had come clean when he was caught.

Schwartz “did not ‘reveal, reform, and rehabilitate’ as soon as his crimes were discovered; he lied, blamed others,” Katzenstein wrote. “He did not acknowledge that he’d committed a crime until after the government had put together its case and he had no other choice.”

Brian Melley, The Associated Press

by Canadian Press

Isn’t it moronic: Morissette manager sad over ‘stupid’ theft

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