From: Kelley Lynch <kelley.lynch.2010@gmail.com>
Date: Tue, Nov 4, 2014 at 5:11 PM
Subject: Re: Cases: BC338322 & BC341120
To: Jeffrey Korn <jeffkornlaw@live.com>, "irs.commissioner" <irs.commissioner@irs.gov>, Washington Field <washington.field@ic.fbi.gov>, ASKDOJ <ASKDOJ@usdoj.gov>, MollyHale <MollyHale@ucia.gov>, nsapao <nsapao@nsa.gov>, fsb <fsb@fsb.ru>, "Division, Criminal" <Criminal.Division@usdoj.gov>, "Doug.Davis" <Doug.Davis@ftb.ca.gov>, Dennis <Dennis@riordan-horgan.com>, rbyucaipa <rbyucaipa@yahoo.com>, khuvane <khuvane@caa.com>, blourd <blourd@caa.com>, Robert MacMillan <robert.macmillan@gmail.com>, a <anderson.cooper@cnn.com>, wennermedia <wennermedia@gmail.com>, Mick Brown <mick.brown@telegraph.co.uk>, woodwardb <woodwardb@washpost.com>, "glenn.greenwald" <glenn.greenwald@firstlook.org>, lrohter <lrohter@nytimes.com>, Harriet Ryan <harriet.ryan@latimes.com>, "hailey.branson" <hailey.branson@latimes.com>, "stan.garnett" <stan.garnett@gmail.com>, police <police@cityofberkeley.info>, sedelman <sedelman@gibsondunn.com>, JFeuer <JFeuer@gibsondunn.com>, "kevin.prins" <kevin.prins@ryan.com>, rwest0@gmx.com, "steve@blottermusic.com" <steve@blottermusic.com>, "steve@radicalmusic.com" <steve@radicalmusic.com>, Sherab Posel <poselaw@gmail.com>
Hello IRS, FBI, and DOJ,
This will form the basis of the Schedule related to the perjury and fraudulent misrepresentations in the "Related Case." This is a rough draft and I must review all information contained herein before attaching it to my declaration.
The information is attached hereto as a word document.
I am waiting to hear back from Jeffrey Korn re. the federal tax and corporate issues I've addressed and information related to the "informant" and "gigolo" I've requested.
All the best,
Kelley
Leonard Cohen Wrongful Seizure
Schedule of Perjury & Fraudulent Misrepresentations
ROUGH DRAFT
Leonard Cohen Related Case
Case No. BC341120
Documents fedexed to Kelley Lynch, by Jeffrey Korn, on 12/17/13.
Many documents were not served on Lynch. Korn refuses to provide her with proof of service re. summons & complaint; Steve Lindsey’s declaration; and other documents and attachments – including the “evidence” attached.
Complaint for Recovery of Possession of Personal Property
Case No. BC341120
Filed October 11, 2005
Assigned to Judge Susan Bryant Deason
No proof of service attached. No attachments.
This lawsuit was brought to my attention by Judge Ken Freeman’s court reporter in or around April 2010.
Summary: Cohen alleges that his property is being wrongfully detained by Kelley Lynch at her Brentwood home. Allegations include fabricated version of events involving Lynch being his personal manager who was terminated for cause for having “defrauded Cohen of millions of dollars.” Cohen had a strong sense of respect for Lynch’s professional capabilities. As such, Lynch maintained in her possession many files and other items that belonged to Cohen for that purpose.
“Although Lynch was terminated an entire year ago, she is wrongfully holding and detailing items of Cohen’s personal property to which he has an immediate right of possession.” Cohen the lies and states (a) Personal correspondence from 1960 to approximately 1995” and specifies correspondence with “Dominique Issermann, Burt Goldstein, and Herschel Weinberg, Esquire.” (b) Mr. Cohen’s business correspondence from 1980 to 2004. (c) a notebook of original watercolor drawings created by Mr. Cohen. (d) Mr. Cohen’s personal journals from 1960 to 1990 which contain his drawings, sketches, lyrics poems, and other writings. (e) Mr. Cohen’s personal financial records from 1980 to 2004, such as tax returns, bank statements, and other receipts and documents; and (f) the original manuscript of one of Mr. Cohen’s novels, “Beautiful Losers.” Cohen demanded that Lynch return the above-listed property before this action was filed, but Lynch has refused to do so. Given the personal nature of this property, no specific value may be attributed to it.
Plaintiff’s Memorandum of Points & Authorities
Re: Writ of Possession
Case No. BC341120
Filed: October 12, 2005
Cohen’s memorandum supporting the issuance of a writ of possession against Lynch re. personal property. Introduction states that Lynch never returned his property. Cohen understood Lynch worked from her home, on a daily basis, in the afternoons and was well aware of the fact that she stored boxes of old records in her garage as a courtesy to Cohen. This does not explain why Cohen failed to respond to Lynch’s lawyers October 27, 2004 letter advising him to make arrangements to pick up his property. He and his daughter picked up whatever they felt entitled to at Lynch’s offices.
Cohen Employs Lynch As His Personal Assistant & Business Manager
Cohen employed Lynch as his personal assistant and business manager for approximately 17 years. Lynch maintained many of Cohen’s business and personal files and other possessions in her office.
See Cohen declaration – CAK matter (personal manager); Steven Machat’s book excerpts (personal manager); other evidence; and Cohen’s statements to Streeter (via email) that Lynch worked as his personal and business manager since 1988. See testimony where Cohen advises jury that Lynch did NOT work as his personal manager. See latest documents Korn filed – Lynch was evidently Cohen’s personal manager. See Richard Feldstein (Cohen’s business manager). Etc.
Lynch Is Terminated For Wrongfully Taking Millions Of Dollars From Cohen
After Lynch’s former employee revealed that Lynch had wrongfully misappropriated millions of dollars from Cohen – nearly all of his retirement savings – Cohen reviewed his bank accounts and confirmed extensive irregularities.
Alter Ego; failure to address his $6.7 million in loans (to be repaid within 3 years with 6% interest; etc.) Cohen understood Lynch planned to go to IRS, etc.
Upon her termination, Lynch vacated her office and removed much of its contents – including a number of boxes containing Cohen’s personal property – to her home … Cohen had no access to these boxes since that time.
Lynch Refuses To Return Cohen’s Personal Property Which Is At Great Risk
Although Cohen terminated Lynch an entire year ago, she still maintains possession of numerous items of Cohen’s personal property. This property – to which Cohen is unable to attach a specific value, given is nature – includes: (1) Cohen’s personal correspondence in the form of handwritten letters and facsimiles dating from 1960 to approximately 1995, including but not limited to correspondence with Dominique Issermann, Burt Goldstein, and Herschel Weinberg; Esq; (2) Cohen’s business correspondence dating from 1980 to 2004; (3) a notebook of watercolor drawings created by Cohen; (4) Cohen’s personal journals from 1960 to 1990, which contain his drawings, sketches, lyrics, notes, poems and other writings; (5) Cohen’s financial records from 1980 to 2004, which he believes contain items such as tax returns and bank statements; and (6) Cohen’s original manuscript of one of his early novels, “Beautiful Losers.”
Cohen has expressly demanded, by himself and through his attorney, that Lynch return this property … Lynch however still has not returned Cohen’s property and the only feasible motivating factors for Lynch’s refusal to do so are to compromise the privacy of Mr. Cohen and his family, friends, and associates and out of spite – as evidenced by the relentless barrage of emails she has sent to third parties after her termination in which she attacks Cohen – and an intent to sell Mr. Cohen’s personal belongings for a substantial sum. See Declaration of Steve Lindsey. Indeed, Ms. Lynch has acknowledged that she took these items without Mr. Cohen’s knowledge or consent and implied that she may sell them as they might be worth a great deal of money.
Conclusion
Lynch, for no apparent reason other than to spite Cohen or to sell his belongs, refuses to return to him items of property that are purely personal and/or sentimental in nature, despite the fact that she has no basis to claim any right to them.
Supplemental Declaration of Leonard Cohen
Case No. BC341120
Filed: October 12, 2005
Not in possession of Exhibits B & C attached to Cohen’s original declaration (or the original declaration; Lindsey’s declaration)
Where is the evidence that from October 21, 2004 through October 12, 2005 Cohen requested anything from Lynch re. his alleged property? My lawyers wrote on October 27, 2004 and advised him to make arrangements to pick up his property. Cohen failed to do so and Lynch had no obligation to make arrangements to deliver it to him. The property was abandoned and Lynch advised the IRS, with Edelman copied in, that she planned to ship that evidence to IRS in Washington, DC. Evidently as of October 2005, Cohen felt Lynch would enter into a settlement agreement.
“Although I suspected nearly a year ago that Ms. Lynch was in possession of a notebook containing my original water color drawings which she did not return upon my request, we had worked closely together for nearly two decades, and I was hoping that she and I might be able to resolve our differences without resorting to litigation. Accordingly, I refrained from filing an application for writ of possession at that time. It was not until two weeks ago in a conversation with Steven Lindsey that I learned that Ms. Lynch maintained at her home an extensive collection of my personal belongings, and it was just over one week ago that Ms. Lynch reported in two emails that her home was going into foreclosure today, October 11, 2005. Those emails are attached to my initial declaration as Exhibits B and C.”
Supplemental Declaration of Scott Edelman
In support of Temporary Restraining Order and/or Ex Parte Application
For Writ of Possession
Case No. BC341120
Filed: October 12, 2005
Exhibit A [Edelman’s alleged email] not attached. Not Attached - Declarations of Leonard Cohen, Steve Lindsey, Scott Edelman, and Supplemental Declaration of Leonard Cohen – filed concurrently.
Advises the Court that Edelman attempted to reach Lynch, twice, on a cell phone number at which she previously requested to be contacted – to notify her that the ex parte proceeding had been continued until October 12, 2005. Could not get through. Number was disconnected. Had been informed that her home phone had already been disconnected. I had no information about this complaint and LASD did showed up out of the blue, raided my house, seized my property (and others), brought Cohen’s lawyers onto my personal property, failed to provide me with an adequate inventory, and provided free delivery service to Cohen for the property he abandoned and never made arrangements to pick up.
Does not include Exhibit A – the alleged email Edelman sent.
Ex Parte application had to be served. A phone call or email from Scott Edelman is not service.
California Rules of Court 3.1204.
contents of notice and declaration regarding notice
Rule Renumbered Effective 1/1/2007
(a) Contents of notice
When notice of an ex parte application is given, the person giving notice must:
(1) State with specificity the nature of the relief to be requested and the date, time, and place for the presentation of the application; and
(2) Attempt to determine whether the opposing party will appear to oppose the application.
(b) Declaration regarding notice
An ex parte application must be accompanied by a declaration regarding notice stating:
(1) The notice given, including the date, time, manner, and name of the party informed, the relief sought, any response, and whether opposition is expected and that, within the applicable time under rule 3.1203, the applicant informed the opposing party where and when the application would be made;
(2) That the applicant in good faith attempted to inform the opposing party but was unable to do so, specifying the efforts made to inform the opposing party; or
(3) That, for reasons specified, the applicant should not be required to inform the opposing party.
(c) Explanation for shorter notice
If notice was provided later than 10:00 a.m. the court day before the ex parte appearance, the declaration regarding notice must explain:
(1) The exceptional circumstances that justify the shorter notice; or
(2) In unlawful detainer proceedings, why the notice given is reasonable.
Tactical Allocation’s (Greenberg) Ex Parte Application in Intervention
For Order Protecting & Preserving Documentary Evidence, Etc.
Case No. BC3341120; Related to Case No. BC228211
Filed November 14, 2005
Proof of Service Not Attached.
Summary: Tactical Allocation applied for an ex parte under CCP Section 387 to (i) intervene in an ancillary proceeding in this case (writ of possession); and (2) obtain an order preserving, protecting and maintaining certain documentary evidence seized by the Los Angeles County Sheriff’s Department (Santa Monica Division) pursuant to that writ in the manner in which LASD delivered those documents to plaintiff.
Good cause exists for an order allowing intervention, because Agile has a direct and immediate interest in the disposition of the documents in issue, given the allegations in a lawsuit brought by Agile and others earlier this year in Colorado, and Cohen’s tortious concealment of these same documents; intervention will not enlarge the issues in this litigation, defendant thus far having failed to appear; and the reasons for intervention outweigh any opposition to intervention and to the request for relief made here.
This relief is being requested because such an order is necessary to prevent the potential loss or destruction of relevant evidence pending discovery in a matter between Agile and Cohen before the U.S. District Court in Colorado. [Greenberg fails to mention the 8/18/2005 mediation matter in the District Court in California; Lynch was not notified of that matter and just recently discovered it online]. An order of this kind is likely to protect the rights and interests of all interested parties.
Memorandum of Points & Authorities
Central to Cohen’s extortionate scheme (detailed in the Colorado District Court case) was the continued concealment of critical documents in the possession of Kelley Lynch – documents proving that Cohen and others effected their conspiracy and that the conspirators … Cohen recently commenced the present action without breathing a word of it to Agile or its attorneys – a calculated attempt at concealment that served his purposes. The lawsuit’s aim was to recover possession of certain business, financial and other documents and items from Lynch, his former personal manager whom he accuses of misappropriation. Lynch is also a defendant in the Colorado matter [re. interpleaded funds only] although she is not accused of being a co-conspirator with Cohen. When Lynch refused to cooperate in Cohen’s extortionate scheme against Agie by declining to cover up and lie for him, Cohen’s gambit became to seize documents in Lynch’s possession (some of which she had previously revealed to Agile).
Cohen failed to reveal to this Corut that the documents seized by LASD and now in his lawyers’ possession are at the center of that Colorado lawsuit. Cohen filed this second lawsuit against Lynch without the required Notice of Related Case. As Cohen is aware, Lynch has made no appearance in either of the other cases – and, as he no doubt anticipated, she made no appearance here.
Without Lynch’s or any other interested party’s appearance, or an opposition, Cohen immediately obtained an ex parte writ of possession and promptly executed and obtained the fruits of his deception.
Cohen was also keenly aware that Lynch lacks the wherewithal to satisfy the undertaking of $100,000 required to provisionally recover possession of the documents. Only AFTER LASD entered Lynch’s residence two times did Cohen file his Notice of Related Case. Agile discovered the existence of this case by accident. Upon inquiry last week of LASD re. the first LA action did Agile learn about these proceedings. LASD provided Agile’s lawyers with an inventory. The inventory reflects that Lynch failed to maintain any formal organization of these documents. [Lynch didn’t fail to maintain anything.]
It is impossible to tell whether some or all of the documents belong to him, to Lynch, or to an LLC named Traditional Holdings that is 99.5% owned by Lynch and 0.5% owned by Cohen. Several categories of documents relate to the Colorado action.
The crux of the Colorado lawsuit is that Cohen conspired with others to extort money from Agile … As pertinent here, the Colorado action alleges [mentions Traditional Holdings, Blue Mist Touring – the rights BMT was supposed to transfer, but failed to do so, TH assets, annuity agreement, Cohen’s allegation that Lynch took funds from TH without “his authorization,” and Cohen and others pressured, bribed, and eventually terrorized Lynch to enlist her participation in the extortion scheme, demanding that she testify (falsely) to wrongful acts by Agile [NOTE: by Neal Greenberg, Richard Westin, and other Cohen advisers.] Lynch’s participation and her concealment of critical documents in her possession were essential the success of the conspiracy. Lynch refused to cooperate. She also made the unilateral decision to provide Agile’s counsel with documents they might never have seen otherwise.
The aforementioned exculpatory documents are among a larger group of relevant documents that were seized on Cohen’s behalf in the instant matter.
The Colorado action also states a claim in Interpleader relating to the remaining, disputed funds held in an investment account in Denver for TH. Critical documents necessary to resolve Cohen and Lynch’s competing claims to the interpleaded funds in Colorado have now been seized by Cohen from Lynch.
Plaintiff’s Cases Summary pursuant to CRC 388 in
Support of Default Judgment against Kelley Lynch
Case No. BC341120
Filed February 27, 2006
Mailed January 19, 2006
Proof of Service attached. Mailed.
Not Attached – Proposed judgment filed concurrently.
Mailed January 19, 2006. Lynch was evicted on December 28, 2005 and Cohen was well aware of that; understood Lynch was in Santa Monica; and the basis for this “seizure” involved his narrative that Lynch was being evicted. Edelman, as stated above, had at least one of Lynch’s email addresses.
Summary: Cohen is a critically acclaimed singer/songwriter. Lynch was Cohen’s “business manager” and “personal assistant” for nearly 17 years until October 2004 when she was terminated for cause upon Cohen’s discovery that she had defrauded him out of millions of dollars.
Cohen had developed a strong sense of respect for Lynch’s professional capabilities and trusted her to handle many aspects of his life so that he could focus on his creative and personal endeavors. As such, Lynch maintained in her possession various files and other personal and work-related items and documents.
Upon termination in October 2004, Lynch vacated her office and removed many of the contents maintained therein to her home. Lynch wrongfully withheld from Cohen – and blatantly denied maintaining possession of – many items of Cohen’s personal property.
When Cohen recently discovered that Lynch did, in fact, have possession of his belongings, he filed this action on October 11, 2005 and simultaneously sought an ex parte writ of possession. Pursuant to that writ, the LA County Sheriff’s Department recovered numerous boxes of Cohen’s belongings from Lynch’s home on October 18 and 24, 2005.
Although she was personally served on October 11, 2005, Lynch never responded to the complaint. The clerk of this court entered default against Lynch on December 6, 2005. Cohen now seeks a default judgment in this action adjudging and decreeing that he is the rightful owner of the property obtained.
Declaration of Leonard Cohen
Case No. BC341120
Filed February 27, 2006
Mailed January 19, 2006
Proof of Service Attached. Mailed.
Summary: Lynch was “business manager” and “personal assistant” from about 1987 until October 2004, when I learned that she had stolen millions of dollars from my personal and investment bank accounts. After investigating the extensive irregularities , I terminated her employment and took steps to prevent her from being able to access any of my financial accounts.
Upon her termination, Ms. Lynch vacated her office. I understood that she removed most of the contents of the offices to her home.
Ms. Lynch’s home was set for foreclosure and I believed that my personal property was at great risk of being imminently lost, concealed, transferred, damaged or destroyed due to Ms. Lynch’s erratic, bizarre, and spiteful behavior.
Ex parte application was granted on October 13, 2005.
LASD seized property on October 18 and 24, 2005.
Reviewed content of those boxes and they do indeed contain property belonging to me. Cohen notes “an original tape recording of my single “Heart On.” Fails to mention corporate or tax files.
Ms. Lynch had and has no ownership interest in any of these items.
Hearing Transcript – February 27, 2006
Case No. BC341120
Scott Edelman present. Representing Cohen in both cases. Also appearing on behalf of Richard Wesitn. Edelman advises Court that they have reached a settlement with Richard Westin. Court congratulates Edelman on the settlement and asks if it relates to both cases. Edelman explains that it does not. The case in this hearing is BC341120. The other case, BC338322, is the case where the settlement with Westin was made. Westin discusses defaults against Kelley Lynch in both matters and notes that those defaults will resolve the matters in their entirety. Edelman advises the Court that they have their settlement documentation signed and they’re waiting for an exchange of money and then the request for dismissal will be filed. The Court advises Edelman that it does not understand why a default against Lynch is appropriate and states that he would sign one judgment that deals with both defendants (Lynch and Westin). Edelman: We’ve removed that complication in the settlement so now we can just have one judgment against Lynch. Court grants that. Advises Edelman to prepare the documents. The date April 7, 2006 is discussed. Court advises Edelman to give notice. Edelman cannot be there on the 7th so the date the Court suggests is April 14, 2006.
Armelle Brusq is a young French artist living in Paris. She filmed this 52 min documentary in Spring 1996 on Mt. Baldy and in Los Angeles using a customized camera. The Norwegian television was the first to show it (on March 15, 1997), and later many other TV channels followed.
Leonard Cohen commented from the Mt Baldy Zen Center, his home at that time: The monks up here think it's pretty good. Roshi said to her: "You great artist"
Leonard Cohen commented from the Mt Baldy Zen Center, his home at that time: The monks up here think it's pretty good. Roshi said to her: "You great artist"
The film describes the daily routines of the Zen monks at the Zen Center of Mt. Baldy: waking up early (2:30 or 3:00 am), marching together to the ceremonies, meditating, making food and eating. We see Cohen working in the kitchen and helping his dear friend and teacher Joshu Sasaki Roshi (90 years at the time of shooting); later he drives with Roshi to another Zen Center (Rinzai Ji) in Los Angeles.
Cohen's cabin with his Technics KN 3000 synthesizer and computers are shown, and he sings his new song A thousand kisses deep. He also recites three unpublished poems, two telling about Roshi (one titled Roshi at 89) . The third was titled Too old.
The camera also visits the office of Stranger Management: Cohen demonstrates his archives (lots of boxes full of notebooks, he shows a poster of his first book Let Us Compare Mythologies and a painting made by Suzanne, the mother of his children). Later a studio session is going on, he is working with Raffi Hakopian (violin) and Leanne Ungar (his sound engineer). Afterwards Cohen and Brusq dine at Canter's.
VISIT TO MY OFFICES – HIS ARCHIVES.
FIRST TIME I READ COMPLAINT IN COHEN’S RETALIATION LAWSUIT. ATTACHED AN UNFINISHED, HIGHLY ROUGH DRAFT OF THE MOTION TO VACATE I WAS WORKING ON JUST PRIOR TO MOVING TO FT. LAUDERDALE, FLORIDA. I DID NOT RESIDE IN LOS ANGELES AGAIN UNTIL 6/4/2013. FILED THE MOTION TO VACATE TWO MONTHS LATER.
From: Kelley Lynch <kelley.lynch.2010@
Date: Thu, Apr 1, 2010 at 6:45 PM
Subject: Leonard Cohen's Fraudulent Complaint Against Me
To: "*irs. commissioner" <*IRS.Commissioner@irs.gov>, ASKDOJ <ASKDOJ@usdoj.gov>, Washington Field <washington.field@ic.fbi.gov>, Kelly.Sopko@tigta.treas.gov, Dennis <Dennis@riordan-horgan.com>
To the IRS, DOJ, FBI, Treasury, and Mr. Riordan,
How can Ken Freeman defraud me of my 15% share of intellectual property? Please review the judgment that I have just learned is online with Cohen's complaint suddenly. That is outright theft. My 15% ownership interest in Blue Mist Touring Company, Inc. and my 99.5% ownership interest in Traditional Holdings, LLC are were not held as a trustee for Cohen's equitable title. Cohen compensated me with 15% interest in all intellectual property for my past work. He dictated the minutes. He understood these assignments were non-revocable. Traditional Holdings, LLC apparently sold something it didn't own. Leonard Cohen, Neal Greenberg, and Richard Westin were the architects of that entity, it's structure, and the sale of assets to Sony. They were wrapped in attorney/client privilege leaving me in the dark. I was a personal manager and had nothing whatsoever to do with the corporate structures, tax structures, tax returns, and so forth. There was an entire team of lawyers, accountants, royalty consultants, tax lawyers, transactional lawyers, his financial adviser, and others. They all worked directly for Leonard Cohen. They did not work for me. Ken Cleveland was my accountant. He was Cohen's accountant. He did not work for me with respect to Cohen's matters. He was absolutely capable of writing directly to Leonard Cohen with respect to the $7 million and $1 million 1099s that I faxed him as Cohen instructed me to do. He shuddered to think about the penalties and interest related to those 1099s. What is problematic here? How fraud, fraudulent conveyance of my property via this "Attachment to Proposed Judgment Item 6, theft, conversion, etc. I want the IRS to review the constructive trust that Judge Ken Freeman imposed on my property. He has no jurisdiction. Agent Bill Betzer/IRS understood that I had an ownership interest in these two entities and understood that these ownership interests were rightfully mine. Why doesn't Ken Freeman understand that? Didn't he review the corporate books records, evidence, notarized documents, stock certificates, management agreement, my indemnity agreement with respect to Traditional Holdings, LLC that requires my attorney's fees to be paid, etc.
This will be my first time reviewing the Complaint. I am going to review this line by line for all parties copied in on this email. I have spent since October 2004 attempting to determine precisely what has gone on and am still in the dark about many many issues and matters. I have been prevented from requesting financial information that I need in order to prepare my tax returns. I have been prevented from addressing the illegal K1s LC Investments, LLC issued me that were brought to my attention by the IRS in approximately March of 2007 while staying with Edie Lamm. I have uncovered certain information that will now allow me to address Cohen's problematic default judgment and his entirely fraudulent and perjured Complaint.
I am attaching this email to my Motion to Vacate the Default Judgment. I think it would wise for the judge to read this and understand the totality of circumstances including the fact that I was served the suit, Scott Edelman refused to talk to me - repeatedly, and all parties - including Leonard Cohen, Scott Edelman, Robert Kory, and others, were advised that I refused to participate in what I viewed as a civil conspiracy and obstruction of justice and an outright attempt to cover up what I was told by my advisers, DiMascio & Berado and Dale Burgess, was criminal tax fraud. They understood that I did everything possible to determine the facts of the situation and did nothing to create Cohen's tax fraud. The judge should understand that the penalties and interest on Cohen's tax fraud (relating to three entities - Blue Mist Touring Company, Inc., Traditional Holdings, LLC, and LC Investments, LLC) was in the vicinity of $30 million as of the fall of 2004. I refused to meet with Cohen and Westin, hand over the corporate books to anyone but my lawyers, and unravel their work. Copies of Blue Mist and Traditional Holdings corporate books and records were transmitted to Greenberg, Glusker. The original of LC Investments, LLC was transmitted to Greenberg, Glusker. A transmittal letter exists. Robert Kory was given documents by my lawyers after being told not to. That includes documents with my shorthand notes that I wanted transcribed accurately before anyone received those documents. Boies Schiller was given three boxes of evidence to review, but not use, and they concluded that I have a $15 million suit against Cohen for fraud, conversion, intentional tort, slander, and the destruction of my life, my children's lives, and my parent's lives. And that does not address what Cohen owes me. Until a complete and proper forensic accounting is completed, I am unable to prepare and file my 2004, 2005, 2006, 2007, 2008, and 2009 tax returns. I have filed a final tax return for Traditional Holdings, LLC, after holding a Special Meeting, noticing Cohen, requesting evidence of his capital contribution, and contacting Phil Spector who served as Secretary for the meeting to inform him that the entity was dissolved. The Minutes were sent to Leonard Cohen and the University of Kentucky advised me that they put the Minutes and my faxes in Westin's in-box. I have, as you know, reported this fraud to the State of Kentucky. Mr. Robb Watts asked me to provide him with everything I've provided the IRS. The IRS will have to provide him with the evidence I have emailed and mailed you.
2. The civil action is another case of a Hollywood fraud going into court and lying, perjuring himself, and destroying another human being's life (after targeting her family - that would include his lawyer's Declaration in my young son's custody matter) because he himself has an utter and absolute disdain for ordinary income taxes and gift taxes. Through Cohen's own greed, self-dealing, concealment, knowing misrepresentation and reckless disregard for everything with respect to me - including fiduciary duties - I have been defrauded of millions and Cohen has attempted to destroy my reputation.
3. I was never Leonard Cohen's business manager. I was his personal manager. He had a business manager, accountants, bookkeepers, lawyers, royalty consultants, etc. I never handled his finances. I did not handle his accounting. I did not advise him on his investments, corporate structures, tax returns, or anything else. Cohen's Declaration filed as evidence in the U.S. District Court in New York in the failed C.A.K. bond deal proves that he knows I was his personal manager. He knew precisely what his royalty income was. I was also Cohen's publishing administrator, literary agent, publicist, and other things for which I should be compensated. Cohen discovered that I received a tax notice relating to my 2001 tax returns. The IRS should know that I received this on or around October 18, 2004 when all hell broke loose. I then switched accountants and Dale Burgess told me there was fraud on various entities and referred me to DiMascio & Berardo. The instant legal matter at that time involved my commissions, all assets involved with these entities, Cohen's loans that Kory wrote and asked if I would forgive (from Traditional Holdings), an offer of 50% community property in front of witnesses (my lawyers and accountant), and discussion of valuing the assets I owned in Blue Mist Touring Company, Inc. There was also discussion by Kory with respect to palimony, $10,000/month walking around money, $2,000/month walking around money for my parents and other offers. Cohen and Kory confirmed that my commission for my work as a personal manager was 15% of the gross. They confirmed that I owned 15% interest in Blue Mist and/or the intellectual property wherever it has gone. I never admitted to Cohen that I took "millions." I never said I "got in over my head." He told me he would give me whatever I wanted. He's a bald-faced liar and a con artist. What accounting would Cohen like? Kevin Prins, who filed a 102-page Declaration that I would like the IRS to review, advised Dale Burgess (who put this in a fax that you have) that he was missing a tremendous amount of back-up documentation relating to many entities - including LC Productions, Inc., Blue Mist Touring, Traditional Holdings, LC Investments, etc. Kevin Prins flew to San Francisco to have this conversation. Dale Burgess then advised me that neither Robert Kory nor Dianne DiMascio wanted a copy of that fraudulent ledger with all sorts of things in my column - including Cohen's girlfriend's house.
4. I didn't gain control over Cohen's financial affairs. He traveled, stayed in India, and other places, and gave me Powers of Attorney, etc. Marty Machat died in 1988. He was not Leonard Cohen's business manager. He was his lawyer and served, at times, as his personal manager. I was Marty Machat's legal assistant and paralegal. I gained valuable knowledge of Cohen's recording contracts, etc., after Marty Machat died and I became his personal manager. Unfortunately, Cohen didn't compensate me properly for years and that was one of the years for the assignments to Blue Mist and the issuance of stock representing my 15% ownership interest in Blue Mist and the intellectual property - which includes record contracts going back to 1967, publishing, performance income, and book publishing. Cohen told Billboard that I was a blessing to his family and helped put their house in order. I was most definitely capable. In fact, some people credited me with resurrecting his career.
5. Please see Robert Hillburn's interview with Leonard Cohen. Cohen acknowledges that he came into LA frequently. This may have been as frequent as 2-3 times a week unless there was rohatsu or a sasshin which last one week approximately. He would call me during those times. I saw him primarily as Joshu Sasaki Roshi's cook rather than someone leading a rigorous religious discipline. He had a double cabin. The Zen Center had to knock down a wall for him. He had a recording console, phone, fax, and room to work. He was working while he was there also. He was micro-managing every single thing. Peter Shukat, his transactional lawyer, should know how often Cohen called me about the deal he was working on with me. It was out of control.
6. Cohen was contractually obligated to deliver an album every 12-24 months. Years would pass in between. Who knows what he was doing. I don't think Cohen's lifestyle was all that modest. I think he's the last of the big time spenders and likes to pretend he lives a modest life. On The Future Tour it was the Four Seasons hotel for everyone, business class travel for everyone. He is the reason he didn't make money on that tour. The merchandising deal I made did however. The tour was run through Blue Mist Touring. Cohen had four royalty producing assets. Add the book publishing in. The book publishing was assigned.
7. Cohen just didn't appear to be working. I don't know if he voluntarily elected to reduce his income. I didn't begin paying myself a greater share of anything. That's a bald-faced lie. Cohen was concerned about me, my finances, my card company after I started it, and wanted to help me. He wanted these deals. He continually assured there would be a lot of money. He gave me $100,000. He personally signed the fax to Neal Greenberg. I asked if he wanted to issue me a 1099 and he said "No." He told me it was a gift. The man was obsessed with me. He wanted to buy me a solid gold Cartier watch that I believe was worth somewhere between $30,000 to $50,000. I didn't accept. He did buy me a less expensive Cartier watch for Christmas. That cost around $4,000 which I thought was appropriate.
8. I didn't initiate any strategy. Neal Greenberg flew to Los Angeles to meet His Holiness Kusum Lingpa and met Leonard Cohen. Cohen liked him very much. I did not know Neal Greenberg that well. I saw a handful of times over the years. I knew his wife who has since divorced him. Cohen confirmed with Peter Goldfarb, a client of Greenberg's, that he handled his investments relatively well. Goldfarb later pulled his investments away from Greenberg. Cohen personally hired Greenberg, signed all the documents, and Greenberg brought Westin on board. One of the first things they did, was accomodate Cohen's instruction to donate $500,000 to Mt. Baldy Abbot's fund. This was achieved by a charitable gift of stock after Cohen, Westin, and Greenberg decided to issue new stock from LC Stranger Music, Inc. I had nothing, whatsoever, to do with that. It was audited and Cohen's accountant told me he thought it was a miracle that Cohen's defense of the audit flew with the IRS. Cohen wanted to sell his assets. I would joke that he would throw in his Persian rugs if the price was right.
9. That seems correct. Cohen wanted to save taxes and there was discussion of estate. Cohen personally wrote Westin, via emails that the IRS should have, and told him he didn't want the children to be beneficiaries. He didn't want a trust. All of this made me uncomfortable, as did the Promissory Note, and that's why I asked for received an Indemnification Agreement with respect to Traditional Holdings. That sale occurred in 2001. I don't know why the "benefit of Cohen's two children" is brought up here. I did not orchestrate the sale of anything. Cohen had an entire professional team involved. I worked with them and did what Cohen and they instructed me to do. I didn't invent a "complex transaction." Cohen and his advisers did. I did not retain control of any of the royalty sale proceeds from the "1997 Sale." In 1996, Cohen sold LC Investments, LLC and his d/b/a Bad Monk Publishing to Sony. I had nothing to do with that sale. His lawyer, Ed Dean, structured the charitable remainder trusts. He was concerned about personal service contracts being assigned. Robert Kory told me personally, at our luncheon, that the holding periods were illegal. He told me there was fraud on every entity. He told me I had a cause of action against every one of Cohen's advisers. And, he told me he had extraordinary leverage to settle with me. As you know, Boies Schiller advised me to have the District Attorney's Investigator from the Phil Spector matter, who showed up after the DA received an anonymous tip about my friendship with Phil Spector, wire me. They felt Cohen and Kory were asking me to participate in illegal activity.
10. I have no idea what Westin and Greenberg did or if they burdened the sales with transaction actions. Cohen signed and faxed Neal Greenberg a list of his transaction fees that he wanted paid out of Traditional Holdings, LLC. They should not have been paid out of that entity. My commission should not have been paid out of that entity. He took approximately $2 million in loans on top of this. There are corporate books and records addressing distributions that had to be made to me. Traditional Holdings has now issued Cohen an $8 million 1099. He personally received $1 million that should have gone to Traditional Holdings. The IRS audited that and I can confirm that it was a deposit and not a loan. Cohen personally agreed with the manner in which Richard Westin felt it should be handled. I have nothing to do with that. The company didn't allow me to steal anything. I was to receive $240,000 a year for various things and I was to receive monies to pay taxes. All of this was done by Cohen's advisers for Cohen's benefit. As of the fall of 2004, as my lawyers confirmed, the corporation should have distributed $1.2 million in accordance with the corporate books and records. I have never received a Profit & Loss statement. Everything was done with Cohen's knowledge and consent.
11. I didn't belatedly inform Cohen of transaction costs. Those would be payments to his lawyers, royalty consultants, advisers, personal manager, tax lawyer, etc. What are they talking about? Does he think everyone does volunteer work? I know he refused to pay Peter Lopez $90,000 after he worked for nearly two years on the "failed CAK bond deal." Fortunately, Charles Koppelman sued him.
12. I've heard the "informant" was Betsy Superfon who told Cohen I switched accountants. Paragraph 12 sounds like a spy flick. Did Cohen note that he also accused me of having a gigalo?
13. After Cohen came into Los Angeles and couldn't convince me to unravel the corporate entities, he noticed things, I guess. When he met with my lawyers he thought he noticed "overpayments" without an accounting. My lawyers asked Westin, at that meeting, why he didn't structure Traditional Holdings legally. His response - this is how they do things in Kentucky. I didn't succeed in a last minute raid of his account. Perhaps he wrote that sentence himself. He is, after all, a fiction writer.
14. Cohen, Westin, and Greenberg were hysterical. Westin, however, wrote at that time that Traditional Holdings, LLC was a legitimate entity with a real obligation. Unfortunately, Cohen and Westin had extinguished the annuity obligation from the tax return in 2003. They extinguished my promissory note in 2002. They didn't report the income from the sale of assets to Sony on the 2001 return. They used two different tax ID numbers for various years. This was all done by Cohen and his advisers. It was brought to my attention by Dale Burgess, DiMascio & Berardo. Cohen's lawyer, Steve Blanq/Hochman Rettig, asked me if I was being blamed for Richard Westin's actions. Apparently, Richard Westin made an Ogden, Utah IRS Agent nervous with his evasiveness in an audit. Cohen, Westin, and Greenberg all moved to protect themselves. I believe their lawsuits were planned, the custody was coordinated, and this is nothing other than a civil conspiracy. I was an easy target.
15. I don't think Cohen, Greenberg, or Westin turned away or overlooked anything. They all breached duties to me.
16. I didn't conceal the amount of Cohen's royalties. See his Declaration in the failed C.A.K. bond deal. He knows precisely what his royalty income was and is. The man is one of the greediest men I've ever met in my life. All he talks about is money, income, royalties, advances, etc. He was always pissed off at the money he was giving his kids to support them. He was pissed at Suzanne Elrod because he had to pay her child support and he slandered her horrendously. Cohen read about the Bowie Bond and that's why he wanted to do the CAK bond deal. Nothing was urgent for me. It was urgent for him. He was mad at Peter Shukat and blamed him because he didn't think Sony paid the appropriate amount on the 1996 deal. He always feels gypped. Cohen's lifestyle's not that modest. This entire paragraph, as is true of the others, is an entire lie and fraud.
17. I have asked Cohen for a full and complete forensic accounting since the fall of 2004. What is he talking about? He has all his records. He has an accountant. Neal Greenberg gave him everything. He also accused my parents of taking money and putting it in an over shore account. That's a bald-faced lie. He accused me of the same. That's a bald-faced lie. I had no idea the lies were so extensive. I've never seen or read the Complaint. This is a new discovery for me - today, April 1, 2010. I'll view it as an April Fool's Joke because that's precisely what is is - albeit malicious and vicious.
18. I think they actually used the process to mediate with Westin. What monies did Westin pay Cohen? Was it a bribe? He's the one that wrote, in the fall of 2004 (to me and Cohen), advising that if my management agreement wasn't adhered to the IRS could overturn Traditional Holdings for a lack of substance and/or form and it could promote further unwanted inquiries by the IRS. Kory himself wrote me on May 24, 2004, and said the IRS would demand answers to things going back years. The IRS has those emails, etc. The IRS also has all emails between me and Richard Westin. Westin's "simultaneous representation of Cohen and Lynch" is a blatant lie. The IRS has Westin's email to me. He confirmed that he never represented me. That's correct. He did not represent Traditional Holdings, LLC. He represented Leonard Cohen and he stated that in his email. I would like to know if Westin's relationship with Cohen was rife with undisclosed conflicting professional loyalties. Are they talking about Greenberg? As you know Kory told me that they blamed Greenberg and Westin. Kory met with my lawyers and talked about me for 7 minutes and Greenberg and Westin for three hours. I hope I didn't pay for that. I was not his business manager. Cohen gave an interview to Brian Johnson in Canada after I went to the IRS and confirmed his motive - his massive tax hit. He also confirmed that he wasn't accusing me of theft. Brian Johnson understood that I was his personal manager. The New York Times wrote a piece and understood I was his personal manager. Please refer to Cohen and my emails to Westin where Cohen questions whether his children have to be beneficiaries and makes comments about Traditional Holdings, LLC. There are notarized documents. He signed both 341(f) elections on the same day for LC Investments, LLC and Traditional Holdings, LLC. His accountant later told me that this is not legal. He told me this sounds like Enron. He told me that I could never understand these structures. He can't. Cohen knew I owned 99.5% of Traditional Holdings, LLC. That's what he wanted. I wanted an Indemnity Agreement. He agreed and had Richard Westin prepare that. Cohen signed it. The only thing inexplicable is the unbelievable lies in this document. Cohen, Kory, and Edelman should be charged with perjury, fraud, theft, conversion, civil conspiracy, obstruction of justice, etc. I don't know why Ken Freeman would participate in this or enter the problematic default judgment illegally shifting whatever it shifted to me and defrauding me. Westin was always given all financial information, including bank statements, copies of checks, everything from Greenberg, etc., to prepare the tax returns. The man's delusional. I did not engage in any misconduct and/or misappropriation so it would be hard for Westin to have knowledge of that. Westin was supposed to prepare Promissory Notes for all monies distributed or loaned by Traditional Holdings, LLC. I asked him repeatedly. I was told by him and Greenberg Cohen's loans had to be documented by Promissory Notes. I wanted all loans documented because Westin said he would recharacterize the nature of all distributions at a later date. He prepared the Promissory Notes for Traditional Holdings using LC Investments, LLC as the maker. It's preposterous. Why is LC Investments, LLC suing me anyway? That was owned 100% by Cohen and was created when SOCAN refused to sign a corporation that I owned 15% of. They wanted Cohen, as a writer, to own 100% of that entity. Furthermore, CAK wanted a bankruptcy proof entity.
Jurisdiction
I don't think Ken Freeman has jurisdiction. I think this is a federal tax matter.
Factual Background
26. I did not meet Cohen in 1975. That would have been 1 year after I graduated from high school. I lived in Pennsylvania. I attended Philadelphia College of Textiles, Wharton Business School, was married to Richard Dallett, and never heard of Cohen. I worked for Marty Machat beginning sometime around 1984 1985. I think it might have been 1985. I worked for Marty from around that time until after his death. His children and his companion wanted me to stay and help sort things out.
27. Upon his death I began working as his personal manager. He's lying. I wasn't his personal assistant. Ask Phil Spector. I worked for Phil Spector at the same time. Ask Sony. Cohen had accountants. He had Herschel Weinberg. They were sorting out his various social security cards, abandoning his green card, closing off-shore accounts, etc. I had nothing to do with any of that.
28. We never had an oral agreement that Cohen would pay me 10%. We ultimately agreed that I would be paid 15% of gross earnings for all the years I worked for him. I did not incorporate my d/b/a Stranger Management. What are they talking about? When I created this, it was immediately following the agreement that he would pay me for all the years he had not paid me properly although as I worked as his personal manager, publishing adminstrator, publicist (except when Susan Blond did briefly), literary agent, etc.
29. My father was hired to oversee construction of the recording studio over Cohen's garage. This paragraph starts off immediately with lies. My Mother worked for Cohen and was paid by him. He fired her after I wouldn't have sex with him in Toronto. She knows this. She saw the letter he faxed me. He also wrote that he wanted to fire Sara Vienot. He wasn't the personal assistant he wanted. She was lousy. We both agreed with that. She had been my babysitter. My Mother ultimately had to contact CNB to obtain Canadian cashier's checks for all Cohen's bills. It was a nightmare. Why? Because my brother-in-law, an attorney in Canada (Van Penick), advised me after Cohen had me contact him, that there was no good news in Canada for Cohen either. He said residence wise and tax wise. He advised Cohen, in a letter he wrote to me as his sister-in-law, that he should sell his houses, relinquish his temple membership, close his bank account, and get rid of all the badges of residency. Cohen told me he re-obtained a green card in 1991 because the IRS does not ask where you paid taxes the prior year. Canada's National Treasure lives in Los Angeles. After Marty Machat's death, he bought out two people who owned a house with him in Los Angeles. He was establishing residency. The 1977 tax memo I provided the IRS was written to Leonard Cohen. I didn't work for Marty then. In fact, you've seen my emails with Jules Zalon. I worked for Jules, as a legal assistant and office manager, in 1982 and 1983. He knows I didn't work for Marty Machat in 1977. I didn't live in New York at that time. I didn't move to Northern New Jersey, where I first worked for Jules Zalon before he moved his offices into Manhattan, until sometime around 1982. My mother didn't assist in the day to day tasks of Stranger Management which didn't exist. She worked for Cohen - directly. Kelly Owens also worked for us around that time. The IRS, FBI, and others, should speak to her. Betsy Perks was Cohen's assistant and household manager. He fired her. She thought it had to do with Anjani Thomas.
30. My parents did not handle Cohen's bookkeeping. My dad filled out checks that Cohen signed and prepared deposit slips. He's not a bookkeeper and said he woudn't do that. He did many things for Cohen besides bookkeeping. Cohen wanted him in the office as frequently as he was there and wanted to pay him $25/hour. I didn't conceal his royalty income. His personal bank statements went to his home and he keys to my office. He lived across the street and came and went as he pleased. Everything that I wasn't presently working on was in the office. I never took his bank statements, financial statements home. I did store tons of stuff in my home garage and office garage for him and Lindsey, I might add. I didn't conceal or convert anything. The man is a deranged liar. Perhaps he's still on prescription meth.
31. I had no goal of taking control of Cohen's finances. That's why I have an Indemnity Agreement and asked Westin to prepare the 2002 letter to Cohen explaining these entities and how they work with his estate planning. Westin addressed his gift taxes. I don't even know if Cohen's Dean Witter account was moved to Greenberg. I didn't think Greenberg's investment strategy was safe. I attended Wharton. I thought high risk. I went to CNB on my own and met with people to see if they could do a better job. I also Greenberg was churning. In the letter you have from my lawyers, they confirm that Cohen and Kory thought Greenberg committed securities fraud. I reported that to the SEC. Did they?
32. First of all, Cohen had me approach Eric Kronfeld in 1994 about the sale of his assets. He hadn't hired Greenberg and Westin at that time. He personally retained Greg Bowman. There was a signed retainer agreement. He personally hired the Grubman Indursky firm. He and I met with Arthur Indursky. He explained to Arthur Indursky that he wanted to sell these assets. I have no idea why the charitable remainder trusts were created. I had nothing to do with them.
34. I guess I received a large commission for work I had done since around 1993 that was completed in 1997. I called Sony for 1099s. I specifically remember talking to their lawyer about the 1099 for my commission from the TH deal. That lawyer told me that he coudn't talk to me. I then called Stuart Fried and explained what happened. I thought he was a new Sony lawyer. Sony understood that due diligence began with Blue Mist Touring. They and the Grubman firm understood that I owned 15% of the intellectual property in Blue Mist. My huge commission in 1997 would have been for $125,000 a year and that includes ALL the work I did - including slavery. I was also managing Adam Cohen and expending monies on his behalf that his father was supposed to repay me. We were going to settle things like phone and fax that he owed me; rent for storage of all his stuff throughout my entire office; etc.
36. His personal checking statement went to his house. How could I do anything without his knowledge or consent? He also had me break the statements down into who got what - meaning how much did the kids get, how much Anjani Thomas get, how much were the utilities, etc. I did that as a favor. Just putting it in categories. He's lazy. The only thing I did with respect to his accounting was send things to his accountant and break down his Amex bill. All dinners and lunches that were declared were business. I never included anything personal. I kept track of all his meals, whereabouts, etc. I think he stole those diaries but I don't know for a fact. My receipts were missing. He went in and threatened my mother. I have no idea what he took from my office. He's a liar. He gave me that wooden table. He's just a con artist thug bully. Cohen was always low on funds. He gave Adam Cohen $5,000/month; Lorca Cohen's store and he supported her; he supports Anjani Thomas; her garden was so expensive it was deranged; he bought her a house; he bought Adam Cohen a house; his recordings were incredibly expensive.
37. Cohen knew the card company was hard for me. He said he wanted to help me and that's why he advanced me monies. I told him if I couldn't repay him with the next deal we were doing (that he stopped when Sony made the first offer - I should be paid on that because I worked on it for years as did others) that he could have a share commensurate with any possible advance monies I might owe him. Advances are standard in this industry. He's more than happy to take them morning, noon, and night. I didn't have an extravagant lifestyle. I invested well in a house. Bought my parents condo after the 1996 Sony deal. Refinanced and got a proper mortgage on the condo. My parents paid rent on the condo. There may be a gift somewhere to my parents but I don't think so because they can each give me $11,000 or so Ken Cleveland or Richard Westin told me. I don't know. They paid the condo fees and utilities directly. They also did spend a great deal of money renovating and should have been reimbursed. I had to sell it pay taxes on Traditional Holdings somewhere around $165,000. It's unconscionable.
38. I didn't orchestrate the transfer of Cohen's intellectual properties anywhere. First of all, 15% of the intellectual property is mine. So that didn't go anywhere. I have no idea what they're talking about. Please keep in mind that Kory told my lawyer, Mike Taitelman, that if I did what they wanted (say he was defrauded by his advisers) they would say I was used a pawn. Otherwise, they would say I orchestrated this deranged nightmare. I believe Kory told Bert Deixler that all monies loaned or advanced me were forgiven. Bert Deixler wrote Dianne DiMascio that he represented me on limited basis and had a conversation with her also. He absolutely told me he was the former Asst. Attorney General and could walk me into the AG's office and have the "poet" arrested. Too bad he didn't. Speak to Peter Shukat. Cohen was furious with him after the first deal. Then he hired Peter Lopez. Peter Lopez negotiated the CAK bond deal. He's close with Charles Koppelman. He was also close with Bob Bowlin. He's very professional. Cohen hated him after the failed CAK bond deal and wouldn't pay him. Why? Cohen decided not to do the deal with CAK and did it with Sony. He had me ask Stuart Bondell for a good faith $1 million deposit.
39. I didn't enlist Westin and Greenberg. They worked for him and were wrapped in attorney/client privilege with him.
40. I never asked Richard Westin to prepare anything. He prepared what he prepared and told me what to do with it. I always advised Cohen, showed him whatever was received, and he approved everything. I have no idea why Neal Greenberg wanted any transfer done expeditiously. I didn't. He must have been talking about Cohen. He forget to tell me, until after the fact, that Cohen's level of borrowing was dangerous to the structure of Traditional Holdings, LLC.
41. What request on June 1, 1998? Any request coming from my end came directly from Cohen.
42. I didn't ask to pay capital gains tax on my commission. Westin wanted that. It sounded insane to me and I refused to do it. That's not how the discussion about my being compensated with shares of Blue Mist arose. I've already addressed this. Nice lie though. I guess Ken Freeman really fell for this. You have to wonder now about everyone involved here.
44. Cohen was aware of everything with SOCAN. He had to create LC Investments, LLC for CAK and it worked when SOCAN said I owned 15% of the writer's share. That's not their policy. They want the writer to own 100% of the company. That's not my problem. I shouldn't be defrauded because of that. Greg McBowman was also involved in the SOCAN matter.
45. How could I do an inventory of Blue Mist. They know what was assigned. Everyone's always attempting to transfer blame for what they've just done or about to do. The minutes were discussed with Cohen. He signed and dictated part of the language for my stock compensation for past work.
46. Sony didn't want to do a stock deal. Cohen was insistent. He wanted a stock deal and he had a net bottom line. Ken Cleveland raised issues relating to collapsible corporations. That's when Westin called, told me Don Friedman advise me if I needed a tax lawyer, and told me to rip of the assignments to Blue Mist. I did not. The IRS has the assignments. I didn't concede that the Blue Mist transfers weren't valid. I thought they asked me to do something criminal. I told Cohen I wasn't ripping up the assignments and he asked Westin if I could be compensated with 15% of LC Investments, LLC where they weren't actually transferred as my lawyers noted. They attempted to transfer them. Westin wrote saying he felt I should have been compensated with 15% of LC Investments, LLC but I wasn't. And now, I have illegal K1s from 2004 and 2005. And, I have one from 2003 in Kentucky showing I own 99.5% of that entity. Cohen has one in Kentucky and there's a cover letter.
47. I didn't inadvertently deposit monies into Blue Mist. Cohen and his tax lawyer told me to do that. Then they told me to stop. I did what I was told. I didn't convert the royalties. I was told to deposit certain checks to the account. How could I convert a royalty? There's documentation of this.
48. As a result of being compensated for past work, I own 15% of Blue Mist Touring. What's wrong with Ken Freeman? I want to know. It's clear I'm being defrauded and a whole bunch of lying men are involved. I guess this is how they handled the fact that Cohen knew the assignments were non-revocable. Nice of Edelman to help defraud me. What a story. My children could have come up with something better. I think Betsy Superfon nailed it: does Cohen pay for his legal advice?
49. Westin devised nothing at my urging. You've seen my emails to him. I thought he was nuts, couldn't figure out what he was talking about, and told him to just do whatever he was doing and tell me what to do. He was Cohen's lawyer. I never worked with anyone like this. Cohen was informed of everything. I saw to that. I did not trust them particularly when I tried to pay off my promissory note and everyone freaked out. Everyone being Cohen, Westin, and Greenberg. Somehow that ended up with a discussion about whether I should receive 100% profit in accordance with the corporate books or 50%. I stayed out of it and no one ever mentioned the promissory note again. I decided to gather evidence. Ultimately, Westin ended up emailing me in the summer of 2004 that Greenberg was going to screw me over and he would stand up for me. He apparently changed his mind. They were all concerned about jail. Cohen was absolutely hysterical. I figured they all have things to hide personally also.
50. I was told the private annuity was a way Cohen could receive monies at a later date and this would be beneficial taxwise. He wasn't supposed to take loans, if possible. If he took them they had to be documented with Promissory Notes that Westin would prepare. Cohen was clear about this. What's the unsigned Promissory Note for $355,000? Does it relate to the live album? In any event, there's no fiduciary duty on my part. His lawyer extinguished the annuity obligation and Kory wrote that this meant a gift to me of $4.7 million. I have no idea why he did it and I intend to guess. They intended to roll this back into LC Investments, LLC - probably after three years and the tax returns would support that theory. That's he didn't have beneficiaries. It wasn't real. It was nothing other than a way to avoid paying taxes. Boies Schiller told me when he proved these assets were his, he proved that he committed tax fraud.
51. Cohen's actions resulted in the $1 million advance deposit on the sale. He took the money personally and spent it. Westin told him he could take the deposit as a loan. Sony then had to change the 1099 and they had written a letter that it was a deposit. Cohen's actions caused the audit. I see they think the IRS might review that deposit again. I liked the IRS Agent's document request when this was audited. I was literally hoping an IRS Agent would show up at my office so someone could finally tell me what was wrong with everything. No one thought this was a very funny joke.
52. I think the letter of November 19, 2000 was fraud. Cohen disagreed with all of what was proposed. You have the emails.The structure certainly was novel. When these theories play out in reality you could have your life destroyed.
53. The email inquiries were not supposedly from me. I was sitting with Cohen when he dictated his questions.
54. Cohen was advised of everything. I wasn't Cohen's business manager. Cohen knew I owned 99.5%. I was concerned that this bypassed his will and his children weren't addressed. I even discussed my concern with Lindsey. It all felt too ambiguous.
55. What does he mean - even though the sales price is blank? This was all done for Cohen.
56. He breached my Power of Attorney. I've notified him that he didn't represent me and he wasn't TH's registered agent. I've notified the State of Kentucky of this as well.
57. Westin wrote that he never represented me. I agree. I wasn't the business manager.
58. Everything was discussed, by me, with Cohen in great detail.
59. They've acknowledged it. When the annuity obligation was extinguished I received a gift of $4.7 million. A lawyer told me Cohen owes the gift taxes also. Apparently this lawyer understands more than Ken Freeman.
60. Nothing was assigned to Traditional Holdings so Sony didn't purchase anything. Cohen made the personal warranties & representations. I did not. They did not buy my 15% share. It's amazing that Cohen netted $4.7 million and that's precisely the amount that I was gifted when it was extinguished. I guess Agent Betzer was right about how people abuse LLCs and handle debt. I don't think $200,000 was paid to CAK. I believe it was $40,000. What were the five unidentified wires in Greenberg's TH account?
61. Everyone forgot to tell me about my risk and placed my life in harm's way. See Indemnity Agreement. They forgot to mention that. DiMascio & Berardo continually advised Kory to take a look at it again. He has a copy. I did not take loans for Cohen. He took them. Kory wrote my advisers and asked if I would forgive them. The answer is no. They were to be repaid within three years at 6% interest. He was well aware of that.
63. Everything was explained to Cohen before the transaction consummated. He was completely involved in this and, I believe, speaking with Greenberg and Westin also.
64. Cohen didn't question the transaction in 2002. I asked about repaying the promissory note and everyone freaked out. There are emails documenting that. The IRS was given the password to ekajati@aol.com and tsimar@
65. Westin and Greenberg haven't supported me. That's outrageous. Grubman and Indursky blamed the corporate structure and tax work on Westin and Greenberg. They addressed this in writing. I'll bet Westin explained the structure to Cohen when I changed accountants and hired lawyers. He probably had to explain it from the point of view of how they could move to protect themselves.
67. I didn't see anything in the management agreement about cleaning, painting, plumbing, carpentry, etc. The IRS has the management agreement. That is not in there. I'm not about to start painting, cleaning, plumbing, and doing carpentry. There are no inconsistencies. It's $20,000 a month and $20,000 a year. It's in two different paragraphs. They tried this my lawyers. Everything's intentional. Westin uses $20,000 and $24,000 to deceive and confuse. It's called obfuscation. Cohen's the alter ego. He's the Ego Maniac in this instnace.
69. I didn't promote a POA to Cohen. He and advisers wanted me to sign one. I shouldn't have. Is this asshole trying to go at my parents? I want that investigated. My parents have done nothing to this fraud.
I'm not reading any more now. It's an incredible lie. Shameless. This is Super Lawyer Edelman. I think not. I'll finish this tonight since I just discovered it for the first time. Obviously, Gianelli is posting these documents online so journalists can find them. Clearly they understand I have a lawyer and intend to move legally now.
All the best,
Kelley
Blogonaut said...
We just searched the entire Los Angeles County superior Court data base to see if Kelley Lynch's "attorneys" filed her threatned "doccument" against Leonard Cohen.
Not as of today.
What we did find, in additikon to two civil harassment restraining order cases, is this:
Leonard Cohen Complaint against Kelley Lynch
http://www.scribd.com/doc/
Leonard Cohen Judgment against Kelley Lynch
http://www.scribd.com/doc/
As of today, April 1, 2010, no more recent filings have been made relating to Kelley Lynch in the Los Angeles County Superior Court.
AS of today, Kelley Lynch has not filed a request to set aside the May, 2005 judgment.
Not as of today.
What we did find, in additikon to two civil harassment restraining order cases, is this:
Leonard Cohen Complaint against Kelley Lynch
http://www.scribd.com/doc/
Leonard Cohen Judgment against Kelley Lynch
http://www.scribd.com/doc/
As of today, April 1, 2010, no more recent filings have been made relating to Kelley Lynch in the Los Angeles County Superior Court.
AS of today, Kelley Lynch has not filed a request to set aside the May, 2005 judgment.
April 1, 2010 3:11 PM
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12/16/2013 - Monday
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LOS ANGELES, CA
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LOS ANGELES, CA
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In FedEx possession
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LOS ANGELES, CA
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797422158094
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CASE SUMMARY
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Lynch has no details of this case and recently discovered it online. She has been unable to obtain the documents using Paulette Brandt’s Pacer account.
Leonard Norman Cohen v. Neal R Greenberg et al
California Central District Court, Case No. 2:05-cv-06047 District Judge Ronald S.W. Lew, presiding docket://gov.uscourts.cacd.2- | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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DRAFT SCHEDULE – FINAL DOCUMENT WILL BE SIGNED.
SCHEDULE OF
FACTUAL ALLEGATIONS & STATEMENTS
NEAL GREENBERG AMENDED COMPLAINT
I, Kelley Lynch, agree with the following factual statements and was a witness to much of what was addressed in Neal Greenberg’s Amended Complaint (Denver District Court, Case No. Case 1:05-cv-01233-LTB). Therefore, Neal Greenberg and I are in agreement with respect to the following facts. See Neal Greenberg Amended Complaint & Exhibits attached hereto and made a part hereof. Kelley Lynch opposes all statements raised in Greenberg’s Complaint and not contained in the following excepts taken directly from the Amended Complaint. See Amended Complaint attached hereto and made part hereof.
Dated: 23 October 2014
Will be signed when KL reviews and submits with other documents.
______________________________
Kelley Lynch
Neal Greenberg. Vs. [HEADING]
Denver District Court, Case No. Case 1:05-cv-01233-LTB
Judge Lewis Babcock
Defendant Leonard Cohen (“Cohen”), a noted recording artist, acting directly on his own behalf, and through his agent and attorney, Robert Kory (“Kory”), has threatened to take or has taken, improper and unlawful actions, including bribery and intimidation of a witness, subornation of perjury, defamation …
Cohen’s extortion scheme was eventually exposed by Lynch and ultimately frustrated …
Cohen has made clear that he asserts rights over certain investment funds that belong to Traditional Holdings, LLC (“Traditional Holdings”), a dissolved Kentucky entity that was managed and 99.5% owned by Lynch and 0.5% owned by Cohen.
From the early 1990s, impressed with a new strategy used by other Hollywood celebrities to cash in on their future revenue streams from IP rights and increase short-term income (called a “Pullman
or “Bowie” bond, after the artist David Bowie who first used it), Cohen … worked aggressively with advisors, including Greg McBowman, to auction off portions of his IP to the highest bidder.
or “Bowie” bond, after the artist David Bowie who first used it), Cohen … worked aggressively with advisors, including Greg McBowman, to auction off portions of his IP to the highest bidder.
Lynch arranged for Cohen to have a first meeting with Greenberg in 1996 to discuss Cohen’s investment options for the proceeds from the anticipated First Sony Sale.
During this meeting, and at Cohen’s request, Greenberg suggested ways in which Cohen could structure the investment of his proceeds from the First Sony Sale so as to reduce tax consequences and generate substantial income.
Cohen worked with, and began to be represented by, a creative tax attorney and law professor from the University of Kentucky, Richard Westin (“Westin”). Cohen also had other advisors and consultants working with Lynch on his business, music and tax matters, including Greg McBowman … Ken Cleveland, as well as Stuart Fried and other attorneys at the law firm of Grubman Indursky & Schindler, P.C.
Ultimately, Cohen decided to transfer some of the income from the First Sony Sale into charitable remainder trusts. On October 30, 1996, Cohen established three trusts: the Sabbath Day Charitable Trust (the "Sabbath Day Trust"), the Cohen Family Charitable Trust (the "Cohen Family Trust"), and the Cohen Remainder Trust (the "Remainder Trust") (collectively, the “Trusts”).
Cohen … repeatedly withdrew large amounts of the Trusts’ assets. On repeated occasions, TAS notified Cohen (both directly, when possible, and per instruction through Lynch) that Cohen was spending more than recommended from the Trusts, and thus, was draining down the Trusts’ principal.
On one such occasion, on April 13, 2001, Greenberg, on behalf of TAS, wrote to Cohen: “I am writing to you to discuss the income withdrawals you’ve received from your portfolio and to provide you with some helpful guidelines for the future. When we originally constructed your portfolio in 1997, you may remember that we had extensive conversations about how much you required for your annual living expenses.”
In or about 1999, Cohen put more of his IP up for auction. In 1999, Sony and Cohen … negotiated for a second sale of IP to Sony for about $8 million (the "Second Sony Sale"). The artist royalties to be sold were represented by Cohen as being held by another … entity, Blue Mist Touring Co., Inc. ("Blue Mist"). Cohen was the Chairman, President, and majority shareholder of Blue Mist, owning 425 shares, while Lynch was the Assistant Secretary and minority shareholder of Blue Mist, owning 75 shares, or 15% of the company.
Cohen asked Westin, and in the spring of 2000, Greenberg, to provide advice about how to invest the anticipated proceeds from the Second Sony Sale and minimize the sale’s tax burden.
Cohen leapt at this opportunity to minimize his tax burden [via Traditional Holdings, LLC], just as he had explored all possible means of reducing his taxes in years past, such as by seeking a tax credit for donating his papers to a Canadian museum [University of Toronto], and using artifices in dealing with Sony to avoid paying any Canadian taxes (as a Canadian citizen) on his royalty income earned in Canada.
Westin’s proposed plan had the following basic components: a limited liability company – which eventually became Traditional Holdings – would be created. Blue Mist would transfer certain IP assets to Traditional Holdings in exchange for a deferred annuity, to be paid to Cohen beginning in about 10 years. Traditional Holdings would then sell the assets it received from Blue Mist to Sony. The tax plan prevented Cohen, the annuitant, from owning more than a de minimis interest in Traditional Holdings. Therefore, Cohen would own less than 1%, and another person – who ultimately was Lynch – would own the remaining LLC interest (more than 99 percent).
Westin outlined this proposal to Cohen and Lynch both orally and in a series of letters and other written communications between October 2000 and December 2000. See, e.g., Exh. 1 attached.
In these written communications, Westin explicitly warned Cohen that since the annuity plan gave significant transactional control to Lynch, and also potentially placed tax and other burdens upon her as majority shareholder, the plan would work only if Cohen and Lynch maintained (as they had in the past) a long-term relationship of personal and professional trust which would secure their mutual obligations as manager of the obligor (Lynch) and annuitant (Cohen). See, e.g., Exh. 2 attached.
Cohen carefully reviewed, understood, and signed off on the ownership structure of Traditional Holdings – including the fact that Lynch would own 99 percent of Traditional Holdings’ membership interests, so as (among other reasons explained by Westin) to avoid any suggestion of self-dealing.
First, Cohen reviewed the Traditional Holdings Articles of Organization, and reviewed and executed the Traditional Holdings Operating Agreement, which set forth in detail the entity’s ownership structure and managerial procedures. See Traditional Holdings Articles of Organization and Operating Agreement (Exh. 3 attached).
Second, Cohen participated, at his request, in conference calls with Westin and Lynch and/or Greenberg during which the structure was carefully reviewed.
Third, Cohen talked about the structure of Traditional Holdings privately with Lynch, including when he forced her to discuss it with him while he took a bubble bath.
Fourth, in addition to several explanatory faxes he received from Westin describing Traditional Holdings, Cohen communicated specific questions, through Lynch, relating to Traditional Holdings’ ownership and transactional structure, which questions Westin answered in a letter written directly to Cohen on December 4, 2000, and faxed (as with his prior memos) directly to Lynch and Cohen. See, Exh. 2.
Moreover, regardless of whether Lynch owned 1 percent or 100 percent of the shares of Traditional Holdings, Cohen knew or should have known that she had or came to have authority – through a durable power of attorney and pursuant to her role as Traditional Holdings’ manager – to act, and give directions, on Traditional Holdings’ and on his own behalf. See, e.g., Exh. 3.
Likewise, no matter who owned the majority of shares of Traditional Holdings, the obligation to fulfill a deferred annuity obligation to Cohen remained the same. Thus, Cohen's interests in the firm (the long term annuity payments) were identical, no matter how his purported ownership interest in the assets were held and invested in the interim.
In December 2000, Westin created Traditional Holdings as a Kentucky limited liability company. Lynch was named as the initial manager in the Articles of Organization, and both Cohen and Lynch were appointed as managers in the Operating Agreement. Id. Also in December 2000, Cohen signed a Private Annuity Agreement with Traditional Holdings which document sets forth Traditional Holdings’ annuity obligations to Cohen. See, Private Annuity Agreement (Dec. 7, 2000) (Exh. 4 attached). Lynch signed the Private Annuity Agreement on Traditional Holdings’ behalf. Westin maintained, and continues to maintain, that the company and its annuity contract with Cohen are legitimate under prevailing interpretations of the federal tax code.
To purchase her ownership interest in Traditional Holdings, Lynch was required to submit to Traditional Holdings a promissory note for $240,000. It was agreed that Lynch would receive a salary and/or distributions from Traditional Holdings sufficient to pay down the $240,000 promissory note and to cover tax liabilities. See, Exhs. 2 and 3.
As set forth in the Operating Agreement, Traditional Holdings was authorized to issue loans to its members, Cohen and Lynch, as long as the loans were paid back before the annuity obligations commenced. See, Exh. 3.
In April 2001, the Second Sony Sale was completed. The gross proceeds of the Second Sony Sale were approximately $8 million, less certain identified costs, expenses, and holdbacks for undelivered work.
Of these proceeds, Cohen had already requested and received $1 million as an advance in November 1999. Cohen was well aware of this $1 million advance because it became the subject of a tax dispute with the Internal Revenue Service in 2002.
Of the remaining proceeds of the Second Sony Sale, [certain] amounts were paid to cover the costs involved in closing and negotiating the Second Sony Sale:
$350,000 Grubman Indursky & Schindler, P.C. (attorneys for Cohen)
$333,750 McBowman Consulting Group (consultants for Cohen)
$30,450 Epstein Backer & Green, P.C.
$1,101,250 Stranger Management (commissions to Lynch's company)
Kelley Lynch comments in bold: The following amounts, as confirmed in Cohen’s Complaint, should have been fully addressed in Neal Greenberg’s Amended Complaint. Cohen’s Complaint, Clause 61, confirms that transaction fees related to the 1st and 2nd Sony deals totaled approximately $4.7 million and listed the following amounts:
$1.2 million – Stranger Management
$350,000 – legal fees (Grubman, Indursky firm)
$350,000 – consultant fees (Greg McBowman)
$500,000 – for federal income taxes and penalties due on Sony’s $1 million advance paid on the sale in 1999.
$100,000 – Richard Westin legal fees
$200,000 – Leonard Cohen’s settlement fees re. failed CAK bond deal
Additionally, Cohen withdrew approximately $592,000 as a “shareholder loan” from the Traditional Holding account to purchase homes for his son and girlfriend. The Greenberg Complaint confirms that $2,084,518 belonging to Traditional Holdings, LLC was deposited into Leonard Cohen’s account. Leonard Cohen also personally received $1 million advance on the Traditional Holdings, LLC 2001 sale and failed to transfer this amount to the corporate entity. The above expenses, loans, income and deposits total: $6,376,518.00. In addition to this, a Promissory Note was prepared and signed by Leonard Cohen. That Promissory Note addressed an additional approximate amount of $355,000 Leonard Cohen owed Traditional Holdings bringing the total to: $6,626,518.00 with interest in the amount of 6% per annum.
None of these listed expenses had anything to do with either the formation of the annuity plan or
with Traditional Holdings’ dealings … Westin did receive a modest fee for his work on the Traditional Holdings documents, and for consulting with Sony on Cohen and Traditional Holdings’ behalf.
Agile Group [sent] official monthly statements to Cohen at the Larchmont Address (the record address for Traditional Holdings) setting forth the performance of the Traditional Holdings’ funds invested in the Agile Safety Fund. See, e.g., Exhibit 6 (example of monthly statements sent by independent outside administrator). In addition, Agile Group, LLC sent monthly letters to Cohen which, as a courtesy, summarized the deposits into and withdrawals from the Agile Safety Fund by Traditional Holdings. Id. (example of monthly summaries sent by Agile Group, LLC).
No sooner had Traditional Holdings been funded, however, than Cohen – just as he had done with the Trusts’ assets from the First Sony Sale, and notwithstanding Greenberg’s prior warnings about draining down investment money – began to dissipate the Traditional Holdings funds, jeopardizing his own long-term annuity interests, as well as the company’s legitimacy. Greenberg and others were immediately alarmed by Cohen's desire and tendency to treat this company like his own personal piggybank, out of which he could borrow or take distributions against his annuity benefits.
For example, almost immediately after the funding of Traditional Holdings, Cohen took out a loan for $50,000. This was followed, during 2001 and 2002 alone, by several loans to Cohen … to cover tax liabilities, houses for Cohen's son and his current girlfriend, and living expenses. These 2001-2002 loans to Cohen –amounting to over $1 million – were deposited directly into Cohen’s personal bank account at City National Bank in Beverly Hills, California.
In March 2002, Greenberg [spoke to] Cohen directly by telephone, Cohen “admitted he was spending too much and seemed a little shaken when [Greenberg] reminded him how much he had just spent on gifts to friends."
Lynch repeatedly assured Agile Group, LLC and TAS that the loans from Traditional Holdings were being properly documented with Westin’s assistance. Cohen’s tax attorney, Westin, also was aware of and in regular communication with Lynch [Cohen, Greenberg, and Cohen’s other representatives] concerning the shareholder loans and other aspects of the affairs and management of Traditional Holdings.
The March 5, 2002 Traditional Holdings Board Meeting Minutes, prepared at Westin’s direction, state “that the level of borrowing was undesirable and [the members] expressed their assent that further borrowing was discouraged, even though the borrower’s [Cohen’s] credit and collateral were good.”
Cohen, however, gave no sign that he had any intention of abating his spending habits. In an e-mail to Lynch dated March 4, 2002, Cohen thanked Lynch for “keeping [him] informed,” and instructed her to “give lots of money to everyone.”
Because these shareholder loans were to be repaid, and because it was necessary to protect the entity’s integrity for tax purposes, these shareholder loans were properly characterized, on Cohen’s tax attorney Westin’s advice, as Traditional Holdings assets when calculating the entity’s value.
Lynch, on Cohen’s behalf, sent e-mails to Colorado in response to Greenberg’s warnings, defending the loans, giving assurances that all of the loans were proper and documented, and assuring that they would be paid off when Cohen received the money from another, upcoming Sony transaction.
In October 2004, Cohen and Lynch had a major falling out, the details of which remain unknown to Plaintiffs. As a result of this falling out, the Third Sony Sale – which appeared to be on the verge of consummation – never happened.
On October 21, 2004, Cohen personally contacted Greenberg by e-mail and informed him that Lynch was “busy with other aspects of [his] career,” and therefore, Cohen had “relieved her of all financial responsibilities.” Cohen further stated that Lynch “need not be copied on your statements or reports,” and that Cohen's new accountant would “be in touch.”
On October 22, 2004, Cohen sent another e-mail to Greenberg stating that Lynch “no longer represents me,” and directing Greenberg not to “respond to any of her instructions.”
On or about October 24, 2004, Cohen again communicated directly with Greenberg by e-mail, stating that his business address was no longer the Larchmont Address or Keniston Address. With allegations flying fast and furious from Cohen – and later Kory – that Lynch was acting without due authority from Cohen, remarkably, a request to change Cohen's record address was left on Plaintiffs’ general voice mailbox by Anjani Thomas. Only later did Plaintiffs learn the identity of Ms. Thomas – Cohen’s current girlfriend, and Kory’s ex-wife. Thus, Plaintiffs demanded an original signature from Cohen on a document verifying the new address
Given Lynch’s position as manager and 99.5% owner of Traditional Holdings, and learning of the apparent schism between Lynch and Cohen, Agile Group, LLC became concerned about whose directions as to the Traditional Holdings account it was legally obligated to follow. On October 24, 2004, Agile Group, LLC communicated with Westin – Cohen's attorney who had created Traditional Holdings – and inquired: “Does Leonard in your view have equal authority over the accounts that we manage? What if there are contradicting directive on those accounts that we manage? For example if KL says 'take money out' and LC says don’t take money, what is your view . . . .” Westin confirmed that because Cohen held a membership interest in Traditional Holdings, Agile Group, LLC could share information with him about Traditional Holdings’ investments. Westin could not, however, answer the issue of conflicting directives, and instead referred Agile Group, LLC to Traditional Holdings' governing documents (drafted by Westin), which documents provided little, if any, guidance on the issue.
At or about this same time (October 22-24, 2004), Cohen phoned Greenberg. Cohen said that he thought Lynch had been taking money from Traditional Holdings without Cohen's authorization. He claimed that Lynch was using the money to support a gigolo and to fund shopping sprees at Neiman Marcus, and suggested that Lynch and Westin may have colluded to defraud him. When Greenberg reminded Cohen that Westin had warned Cohen in 2000 that "the biggest risk" from Westin's tax avoidance plan “was that Lynch would own his [the] assets and he would have lost control,” Cohen stated that he recalled that initial warning.
According to Lynch, however, Cohen regularly visited his management offices, often in Lynch’s presence, and reviewed and discussed his mail with her, all of which was kept on his desk to facilitate such review, including all correspondence, reports, and statements from the Agile Safety Fund’s independent, outside administrators, and from Plaintiffs.
Cohen then turned to his agent and attorney Kory to deal with Lynch, Westin, and Plaintiffs.
Based on these checks, Agile Group, LLC calculated that, of the loan money withdrawn from Traditional Holdings:
a. $2,084,518 had been deposited into Cohen’s own personal bank account;
b. Lynch personally had outstanding loans of approximately $293,000, which loans she represented had been disclosed to and sanctioned by Cohen;
Her abrupt termination frustrated Lynch's ability to make good on any loans through her share of receipts from the Third Sony Sale, the "Dear Heather" album, a pending sale of original lithographs, or other sources, and left her in a precarious financial position …
In November 2004, Lynch was asked by [Cohen] to appear without the benefit of counsel at a meeting with Cohen, Kory, and … Greenberg, Glusker law firm acting as legal counsel for Cohen, and to sign certain legal documents related, inter alia, to unwinding Traditional Holdings on the spot [settle with Cohen]. Lynch refused to do so without benefit of counsel, and subsequently received advice from a variety of legal, accounting and tax professionals, including but not limited to Mike Taitelman, Dale Burgess, Dianne DiMascio, and an IRS officer named Betzer, that she was wise not to sign, because such action could have been fraudulent.
[NOTE: Lynch did not receive this specific advice from IRS Agent Betzer. Lynch spoke to Agent Betzer on April 15, 2005 and thereafter about the allegations re. Leonard Cohen’s tax fraud and numerous corporate entities. Agent Betzer first advised Lynch to bring this matter into the IRS with an attorney and then later instructed her to contact the IRS fraud unit.]
Lynch claimed that she had substantial, unsatisfied interests in Cohen's business entities and/or intellectual property. If Cohen were to attempt to recover money from Lynch, she would likely assert counterclaims alleging that Cohen owes her, and has never paid, substantial amounts of money; and, according to Lynch, and upon information and belief, such possible improprieties included, but were not limited to, the retention by Blue Mist and other persons or entities of IP that should have passed through Traditional Holdings to Sony, the failure to reference or disclose the annuity obligation, loan obligations, and other important matters on Traditional Holdings’ corporate tax returns, and Cohen’s failure to properly document Traditional Holdings’ transactions.
Because any attempt to recover money from Lynch was likely to be both futile and treacherous, Cohen, Kory, and other unnamed co-conspirators (including Steve Lindsay, Betsy Superfon, and John Doe Nos. 1-25) … conspired ...
Thus, for example, although the attorneys and accountants involved in the Second Sony Sale structured and received hefty fees for that transaction, which Kory charged were excessive, Cohen and Kory decided not to pursue any of those persons because they would not be easy targets, and because many of them – principally Sony and its law firm and advisors –continued to do business with Cohen profitably. Instead, Cohen and Kory decided to go after Plaintiffs, none of whom had any role whatsoever in that Sony transaction and/or received any benefit therefrom.
[NOTE: In a Memorandum Kory provided to Lynch’s lawyers, Ira Reiner and Kevin Prins, he raised issues related to fraud in the inducement against members of the Grubman firm and Greg McBowman. Kory advised Lynch’s lawyers that they were considering going after Ken Cleveland. Kory also advised Lynch that she had a cause of action against every one of Cohen’s representatives and they would assist her with those claims if she provided testimony against Cohen’s representatives and advisers.]
He [Leonard Cohen] told Greenberg to "be a man" and contact his insurance company. “Please do talk to the insurer. A great deal of suffering can be avoided.”
Cohen with affirmative support from Kory, Steve Lindsay and Betsy Superfon, and John Doe Nos. 1-25, all acting toward a common end and each for his or her own purposes, began to direct an extortion scheme …
Cohen and Kory indicated that, unless Plaintiffs obtained insurance funds … Cohen would go out on tour to promote his new album, and would give interviews to reporters in which he would state or insinuate that he was touring because he had been bankrupted by the improprieties of his financial advisors.
Cohen and Kory knew full well that, from Plaintiffs’ perspective, once a celebrity were to raise such allegations of fraud and breach of duty against them, the damage would already be done, no matter the ultimate outcome.
Cohen and Kory began to pressure Lynch to assist in the extortion scheme against Plaintiffs. Specifically, they requested that she falsely testify … Cohen sought to obtain … testimony from Lynch knowing that the testimony would be false.
Lynch's cooperation in Cohen’s extortion scheme was critical. Cohen believed that he could not only use Lynch as a witness against Plaintiffs, but could also buy or coerce her silence as against himself at the same time.
Thus, Cohen pressed for private "mediation" as an alternative to a public lawsuit, knowing full well that with Lynch's cooperation and silence, many of the critical documents concerning Cohen's financial affairs – documents that indubitably show … his aggressive tactics to avoid taxes at all costs, and his desire to capitalize on and benefit from all of his intellectual property during his lifetime to fuel an extravagant lifestyle – would not be the subject of discovery
Thus, by deliberate misrepresentations and omissions of critical facts … Cohen could knowingly and deliberately misrepresent his objectives and sophistication as an investor, his long history of aggressive tax management, his long history of exploitation of his IP for immediate gain and profit, his profligacy …
For example, Cohen affirmatively misrepresented to Plaintiffs that Lynch had simply forged his signature on various documents, knowing full well that she had not done so, or had signed with his full authority (as borne out by his subsequent actions – such as purporting to state claims based on agreements with TAS bearing his signature, and revoking a power of attorney bearing his signature that he acknowledged executing).
Cohen likewise falsely asserted that at no time had he authorized any of the shareholder loans from Traditional Holdings, and made various accusations against Lynch for which he had no basis in fact …
As one example, he claimed never to have known, prior to November 2004, that Lynch was the majority shareholder of Traditional Holdings, thereby implying that he had been deceived by Plaintiffs and Westin. He also denied receiving information about Lynch's role as managing the obligation to pay his annuity, and denied ever receiving any information from Plaintiffs other than some monthly email summaries, even though he was easily able to retrieve Plaintiffs’ other written warnings, reports and correspondence from [Lynch’s] own Keniston office address in 2004, and was reported by Lynch to have regularly visited the office, reviewed his mail, and discussed Traditional Holdings' loans and his other accounts with her on a regular basis.
In particular, starting in March 2005, Cohen began to assert that Plaintiffs were responsible for the loss of $8 million, which figure included many millions of dollars which they knew Cohen had, in fact, received and previously spent in support of his own extravagant lifestyle.
… according to Lynch and others, he was prepared to admit or agree with Lynch that she owed Cohen nothing.
Having garnered the support of Lynch's then-attorney, Dianne DiMascio (“DiMascio”), Cohen felt
confident enough in January 2005 to misrepresent to Plaintiffs’ counsel, through Kory, that Lynch was then of the view that she, along with Cohen, was a victim of the misconduct of Plaintiffs and Westin.
Cohen and Kory continually sought to purchase or coerce Lynch’s cooperation
In a demand letter from Kory to DiMascio, Kory wrote: I want to reemphasize my position that I am willing to work with you as part of a settlement between Mr. Cohen and Ms. Lynch in going after Westin’s and Greenberg’s insurers as a source of restitution.
Thereafter, on January 11, 2005, Kory wrote to DiMascio, telling her that [Ira Reiner believed] “properly framed letters to Greenberg and to Westin would cause their insurance companies to show up.”
Lynch declined to attend the meeting in person. Instead, DiMascio went to the meeting on Lynch’s behalf in early February 2005, after which she reported to Lynch: “[Cohen and Kory] want your cooperation in pursuing [the Plaintiffs] and Richard Westin. In this regard, they seem to want you to acknowledge that you knew that Neal [Greenberg] and Richard [Westin] wanted to defraud Leonard and that you approved their conduct.”
Repeatedly, from at least November 2004 through April 2005, Kory made known
to Lynch, directly, through counsel, through Steve Lindsay (the father of Lynch’s youngest child
and one of Cohen’s record producers), through Lynch’s accountant Dale Burgess, through
accountant Mike Taitelman, and through others among her friends and relatives, that he had
extraordinary negotiating authority from Cohen to "forgive" any obligations of Lynch, to treat
them as a gift, to make additional payments to her or her family members (including disguised as
"palimony" on the pretext that Cohen is the father of one of her children), to make good on
Lynch's shares of IP rights or legal entities, or even to dedicate a hefty percentage to her of
whatever funds could be extorted from Plaintiffs and other advisors with her cooperation.
Kory tried to do this directly in late spring 2005 when he met Lynch for lunch and tried to persuade her to work with Cohen to “go after” Plaintiffs [and all of Cohen’s representatives].
Cohen and Kory also worked indirectly. For example, they recruited Lynch’s erstwhile friend and longtime “friend” of Steve Lindsay, Betsy Superfon, a person of some notoriety due, among other reasons, to her entrepreneurship in the telephone sex trade. On numerous occasions, Kory [and Cohen] used Lindsay and Superfon to try to “broker” deals with Lynch …
In one such conversation, in May 2005, Superfon, according to Lynch, called Greenberg “the kingpin” and a “criminal” and pleaded with Lynch to cooperate with Cohen for “[her] heart, [her] health, and [her] kids” and recommended that Lynch “get out of this.” Superfon promised that she could “settle this for [Lynch] immediately,” and stated that “Leonard and Kory [are] trying to get you out of this situation.”
When Lynch requested a settlement agreement in writing during a later conversation, Superfon, according to Lynch, stated that when she asked Kory to fax Lynch a settlement, Kory said “you can’t fax this kind of a deal. It has to be discussed.” [Superfon advised Lynch that she personally believed the deal they were offering was illegal.]
Through Lindsay, Superfon and other friends, relatives and acquaintances, Cohen and Kory delivered the message that giving in to Cohen’s wishes would be in Lynch’s best interest.
When these tactics to draw Lynch into his extortion scheme proved futile, Cohen and Kory – according to Lynch – turned to far more aggressive means to obtain her cooperation. Indeed, as heard by other witnesses, Cohen and Kory vowed to “crush her,” and planned to use restraining orders and other means to prevent her from serving as a credible witness regarding both Cohen's affairs and in regard to the scheme into which they had tried without success to draw her.
Consistent with that vow and plan, and according to Lynch and other witnesses, and on information and belief, Cohen and Kory's tactics to terrorize, silence, or disparage Lynch have included, inter alia, the following:
a. contacting City National Bank, where Lynch, Lynch’s son .., all had personal banking accounts, and convincing City National Bank to put a freeze on … their accounts;
b. alleging that Lynch's father and mother were depositing funds for Lynch in secret offshore bank accounts … ;
c. threatening Lynch that she would go to jail if she did not cooperate, and having her younger son's father, Steve Lindsay, who was also Cohen’s record producer, repeat these threats in the child's presence;
d. threatening to “go to child services,” encouraging Steve Lindsay to file legal action to remove Lynch’s younger (and his) son from her custody, and submitting affidavits (from Kory and Superfon) supporting that effort;
e. in a coordinated fashion with Lindsay’s child custody petition, encouraging or directing Steve Lindsay to call in a warning to the LAPD (not related to Traditional Holdings, but on some other, unknown pretext) that caused a police team to descend, guns drawn, on Lynch's home, resulting in her being handcuffed and taken involuntarily, in her bathing suit, to a hospital psychiatric ward and medicated without her consent, before being released the next day, during which time Kory attempted to persuade Lynch’s older son, Rutger, to sell Lynch’s house and provide $3 million; and
f. paying two paroled convicts to make [false] statements [about Lynch’s older son].
These and other tactics brought Lynch to the point of … financial ruin.
Cohen’s scheme to force Plaintiffs into a contrived mediation without discovery or publicity might have succeeded, had not Lynch refused to cooperate. Instead, she made the unilateral decision to provide to Plaintiffs' legal counsel a variety of documents and other information that they might not have otherwise seen … See, e.g., Facsimile Message from K. Lynch to S. Posel (March 17, 2005) (Exh. 11 attached).
Fortunately, Lynch [permitted Boies Schiller to review] not only historical files, but also the details of Cohen and Kory's illicit offers made to her through attorney DiMascio, through accountant Dale Burgess, and through other intermediaries, and shared every detail of Cohen and Kory's attempts to negotiate with or threaten her in order to obtain … testimony ...
Cohen and Kory continued to heighten their efforts to bribe or coerce Lynch into giving … testimony … without knowing that Lynch had already exposed their scheme …
Cohen and Kory alleged that Plaintiffs “proposed the sale of Cohen's ‘illiquid assets,’ including Cohen's various royalty interests,” and contended that “Cohen was convinced by [Greenberg] of the financial necessity to sell off his royalty interests during his lifetime . . . .”
Cohen and Kory alleged that Plaintiffs were liable for “actual damages of at least $8 million,” which was an amount even greater than the total proceeds of the Second Sony Sale. In fact, Cohen and Kory made this allegation with full knowledge that Cohen had already received at least $1 million in advance of the Sale closing, that the gross proceeds had been reduced by specific costs and charges, that were well over $1 million had been paid out to third parties to cover closing costs from the Sale, and that Cohen had received at least $2 million of the remainder into his own personal bank account.
Cohen reviewed the Traditional Holdings governing documents (detailing that arrangement), that he repeatedly received and understood both oral and written explanations of this very fact, and that [Lynch was not] behind the formation or structure of Traditional Holdings.
Thereafter, on June 3, 2005, Plaintiffs provided Kory, as promised, a draft complaint … with extensive documentary support … The draft complaint also revealed to Cohen and Kory, for the first time, that Lynch and others had already exposed the extortion scheme. In particular, the draft complaint demonstrated that Plaintiffs were aware of Cohen’s scheme to use economic compensation, emotional intimidation, and other forms of undue pressure to coerce Lynch to provide … testimony …
At all relevant time periods stated herein, Kory acted, at a minimum, as an agent, attorney, joint venturer, and/or co-conspirator of Cohen …
Cohen and Kory knew that the false, disparaging, and defamatory press release was not made in furtherance of any lawful objective or within the scope of the litigation commenced by Plaintiffs, and that the intended recipients were not involved in or closely connected with the litigation.
As a result of Cohen and Kory’s improper and unlawful conduct, the false, disparaging and defamatory press release was immediately published on, inter alia, the following interactive and other websites:
(a) www.leonardcohen.com (the official Leonard Cohen website, which has a link to the chat room for the Leonard Cohen files, where the statement was published);
(b) http://www.cmumusicnetwork.co.
(c) http://xrrf.blogspot.com/2005/
(d) http://blogs.theage.com.au/
an industry rep to MalContent”); and
Leonard Cohen sued by investment company, alleging civil conspiracy, extortion
June 2005
Musician and legend Leonard Cohen is being sued by a Colorado investment company Agile Group, which alleges Cohen and another person threatened to irreparably damage Agile's reputation in order to extort millions of dollars from Agile and its insurer. The case is related to claim by Cohen that Agile bears responsibility for the alleged misappropriation of Cohen's invested funds by Cohen's former manager. Read it here.
Don's ask me why, but Cohen's classic, Everbody Knows comes to mind.
A statement released by Leonard Cohen's lawyer points to the truth of this sad state of affairs:
ATTORNEY ROBERT KORY STATEMENT
IN RESPONSE TO AGILE GROUP SUIT
INVOLVING LEONARD COHEN
IN RESPONSE TO AGILE GROUP SUIT
INVOLVING LEONARD COHEN
"The suit filed by the Agile Group Monday, June 6, 2005 is completely
consistent with Agile's reckless disregard for its client and his
investments.
consistent with Agile's reckless disregard for its client and his
investments.
We had hoped to reach an out-of-court settlement with Agile that
returned to Mr. Cohen some portion of the retirement money the firm was
authorized to administer on his behalf. Instead, in the middle of
negotiations to determine Agile's responsibilities to Mr. Cohen to
compensate him for money lost under their management, Agile launched a
surprise attack in an effort to besmirch the reputation of one of its
notable clients.
returned to Mr. Cohen some portion of the retirement money the firm was
authorized to administer on his behalf. Instead, in the middle of
negotiations to determine Agile's responsibilities to Mr. Cohen to
compensate him for money lost under their management, Agile launched a
surprise attack in an effort to besmirch the reputation of one of its
notable clients.
Agile repeatedly failed to alert Mr. Cohen to true account balances
while allowing improper and unauthorized withdrawals by Cohen's former
business manager. In doing so Agile failed to protect Mr. Cohen's
interests and retirement savings and knowingly misled him by providing
inaccurate financial reports.
while allowing improper and unauthorized withdrawals by Cohen's former
business manager. In doing so Agile failed to protect Mr. Cohen's
interests and retirement savings and knowingly misled him by providing
inaccurate financial reports.
We will of course file a counter suit that lays out in detail how Agile
acted in a reckless way that violated the firm's fiduciary
responsibilities towards Cohen and consequently resulted in the loss of
Mr. Cohen's retirement savings."
acted in a reckless way that violated the firm's fiduciary
responsibilities towards Cohen and consequently resulted in the loss of
Mr. Cohen's retirement savings."
· Posted by: Adrian du Plessis at June 14, 2005 08:07 PM
(e) http://bcbr.datajoe.com/app/
181. In addition, Cohen made false, disparaging, and defamatory statements and republished
false, disparaging and defamatory e-mails to a reporter for an industry publication known as MacLeans, knowing that the statements would be immediately published by MacLeans to the general public via the internet and other print publications. The MacLeans article, published via the internet on August 17, 2005. SEE ATTACHED. [Excerpt: Cohen wrote (Greenberg) in November 2004 … “Face up to it, Neal,” the email continues, “and square your shoulders: You were the trusted guardian of my assets, and you let them slip away . . . Restore what you lost, and sleep well.” In his sign-off, Cohen delivered as much a piece of advice as his own philosophy: “Put this behind you and it will dissolve.”]
The wrongful conduct described herein was attended by circumstances of fraud, malice, willful and wanton behavior, and bad faith.
Consistent with their prior threats, Cohen and Kory have knowingly published or caused to be published false information concerning [Lynch and possibly others] in the public domain …
The false, disparaging, and defamatory press release and other statements are not protected by any statutory or common law privilege because the statements were not made in furtherance of any objective of litigation, either lawful or otherwise, and because the intended and actual recipients of the statements were not involved in or closely connected with the litigation.
The … statements, and other defamatory statements, were communicated to and understood by third parties to be defamatory, and have harmed [Lynch and possibly others] reputation in the community.
Cohen and other co-conspirators not currently named as Defendants herein (including Robert Kory, Steve Lindsay and Betsy Superfon) committed one or more unlawful acts in furtherance of these common goals and objectives.
The unlawful goals and objectives of the conspiracy included inter alia the following: (a) The extortion and/or attempted extortion of money or property from Plaintiffs and their insurers [and others, including Lynch] in Colorado [and elsewhere] to recover alleged losses sustained by Cohen as the result of his own exorbitant spending habits, his own neglect and mismanagement of his financial, legal and personal affairs … The making of substantial threats, that were reasonably likely to induce [Lynch and possibly others] that the threats would be carried out, and would cause
significant economic hardship or damage to the reputation [of Lynch and possibly others] with the intent to induce [certain parties] to perform acts against their will; The offering of benefits [to properly compensate Lynch with respect to her ownership interest in numerous corporate entities; for services rendered; and so forth] to a witness and/or members of the witness’ family with the intent to influence the witness to testify falsely or unlawfully withhold truthful testimony; The use of threats, acts of harassment, or acts of harm or injury to persons [including Kelley Lynch] or property, directed to or committed upon a witness and/or members of the witness’ family to intentionally attempt and/or actually influence the witness to testify falsely or unlawfully withhold truthful testimony; The intentional attempt to induce a witness to testify falsely or unlawfully
withhold truthful testimony; The generation and dissemination of a false, disparaging and defamatory press release and other similar statements to third persons with the knowledge, intent, and directive that such statements be disseminated by media publication and the internet throughout [the world].
Cohen’s conduct described herein was attended by circumstances of fraud, malice, and willful and wanton behavior.
Cohen and the other co-conspirators not currently named as Defendants herein (including Robert Kory, Steve Lindsay and Betsy Superfon) knowingly conducted or participated, directly or indirectly, in such enterprise through a “pattern of racketeering activity” … The acts of racketeering activity which Cohen and the unnamed co-conspirators, and the enterprise committed, attempted to commit, conspired to commit, solicited, coerced or intimidated others to commit included, inter alia: (a) Mail fraud; (b) Wire fraud; (c) Interference with commerce by threats; (d) Criminal extortion; (e) Bribing a witness; (f) Intimidating a witness; (g) Tampering with a witness. [The witness is Kelley Lynch]
The predicate acts described herein formed a pattern of racketeering activity, were related to the conduct of the enterprise, and were related to each other as part of the common plan …
Cohen and his agents and attorneys have engaged, and are continuing to engage, in a continuous and relentless pattern of malicious and unwarranted conduct, as described more fully herein [and in Lynch’s legal documents in various related matters and elsewhere].
Judge Babcock’s December 5, 2005 order dismissing Robert Kory from this case [due to lack of personal jurisdiction] contains the following statements. The tactics and purported thuggery Judge Babcock refers to are ongoing and ineffective: They tried to compel Ms. Lynch to participate in their project by, among other tactics, having her arrested on false pretenses and initiating proceedings to deprive her of her children. The Amended Complaint does not indicate that this purported thuggery was effective.”
RE: JUDGE LEWIS BABCOCK’S ORDER
Only the above allegations or statements in Neal Greenberg’s Amended Complaint are factual.
UNITED STATES DISTRICT COURT, D. COLORADO.
GREENBERG ASSOCIATES. INC. v. COHEN
(D. Colo. Dec 05, 2005)
Decided December 5, 2005
GREENBERG ASSOCIATES. INC., d/b/a Agile Advisors, Inc. a Delaware corporation, TACTICAL ALLOCATION SERVICES, LLC, d/b/a Agile Allocation Services, LLC, a Delaware limited liability company, AGILE GROUP, LLC, a Delaware limited liability company, GREENBERG ASSOCIATES SECURITIES, INC., d/b/a Agile Group, a Delaware corporation, and NEAL R. GREENBERG, a Colorado resident, Plaintiffs, v. LEONARD COHEN, a Canadian citizen residing in California, ROBERT KORY, a United States citizen residing in California, KELLEY LYNCH, a United States citizen residing in California, and JOHN DOE, Numbers 1-25, Defendants.
Civil Case No. 05-cv-01233-LTB-MJW.
United States District Court, D. Colorado.
December 5, 2005
ORDER
LEWIS BABCOCK, Chief Judge
The defendant Robert Kory moves for dismissal of all claims against him on the alternate grounds that I have no personal jurisdiction over him, Fed.R.Civ.P. 12(b)(2), and that the plaintiffs have failed to state a claim against him, Fed.R.Civ.P. 12(b)(6). The motion is adequately briefed and oral arguments would not materially aid its resolution. For the reasons stated below, I find and conclude that I have no personal jurisdiction over Mr. Kory and I GRANT the motion pursuant to Rule 12(b)(2).
Because Mr. Kory has contested the Court's jurisdiction, the plaintiffs have "the burden of proving jurisdiction exists." Wenz v. Memery Crystal, 55 F.3d 1503, 1505 (10th Cir. 1995). *22 "Where, as in the present case, there has been no evidentiary hearing, and the motion to dismiss for lack of jurisdiction is decided on the basis of affidavits and other written material, the plaintiff need only make a prima facie showing that jurisdiction exists." Id.
In resolving factual questions:
The allegations in the complaint must be taken as true to the extent they are uncontroverted by the defendant's affidavits. If the parties present conflicting affidavits, all factual disputes must be resolved in the plaintiff's favor, and the plaintiff's prima facie showing is sufficient notwithstanding the contrary presentation by the moving party. However, only the well-pled facts of plaintiff's complaint, as distinguished from mere conclusory allegations, must be accepted as true.
Id. (citations omitted).
I. Allegations The allegations of the Amended Complaint are substantially the following. In 1997, the defendant Leonard Cohen, a resident of California, retained the plaintiffs, directed by the plaintiff Neal Greenberg and headquartered in Boulder, Colorado, to create for him charitable trusts and to manage the assets placed into those trusts. (Throughout the Amended Complaint and their briefs, the plaintiffs refer to themselves individually and in the aggregate as "Greenberg." They do not reveal the nature of their relationships to each other. I have attempted to be as precise as the pleadings and the record will allow.) Mr. Cohen allegedly drew extravagant sums from the trusts, depleting the principal amounts and impeding the plaintiffs' efforts successfully to invest the funds in profitable ventures. The defendant Kelley Lynch, Mr. Cohen's manager, oversaw and had power of attorney over, all of Mr. Cohen's financial dealings. Mr. Greenberg allegedly repeatedly warned Ms. Lynch and Mr. Cohen that Mr. Cohen was spending too much and that, absent a change of habit, he would become destitute. *33 In October, 2004, Mr. Cohen and Ms. Lynch allegedly parted ways and began to issue competing directives to the plaintiffs. They each blamed the other for Mr. Cohen's financial distress. Mr. Cohen claimed that Ms. Lynch had deprived him of substantial sums of money. Thereafter, Mr. Cohen and Mr. Kory, Mr. Cohen's personal attorney and a California resident, allegedly conspired to extort the lost sums from the plaintiffs by tarnishing the plaintiffs' reputation, asserting spurious claims, and coercing a settlement from the plaintiffs' insurance carrier. This they intended to accomplish by using Mr. Cohen's fame as a prominent recording artist to publish defamatory statements about the plaintiffs to the press. They tried to compel Ms. Lynch to participate in their project by, among other tactics, having her arrested on false pretenses and initiating proceedings to deprive her of her children. The Amended Complaint does not indicate that this purported thuggery was effective.
Mr. Kory sent an allegedly defamatory demand letter to Mr. Greenberg's attorney, wrongly accusing the plaintiffs of fraud and various breaches of fiduciary duty. After the plaintiffs filed this lawsuit, Messrs. Cohen and Kory allegedly published defamatory statements on Mr. Cohen's web site, blaming the plaintiffs for the lost monies, asserting that the plaintiffs had wrongfully permitted Ms. Lynch to withdraw unauthorized sums, and asserting that the plaintiffs had provided Mr. Cohen with fraudulent accounting records. Mr. Cohen and Ms. Lynch now dispute entitlement to the funds remaining in the trusts. Each seeks immediate acquisition of the funds.
Mr. Kory allegedly submitted to the jurisdiction of this Court by his purposeful and repeated written and telephonic communications with the plaintiffs and his direction of Mr. Greenberg's activities, performed in Colorado. Additionally, Mr. Kory allegedly reserved a *44 conference room at the Denver International Airport and scheduled a meeting, which he, Mr. Greenberg, Mr. Cohen, and Mr. Greenberg's counsel were to attend. Messrs. Kory and Cohen allegedly failed to appear for the meeting, which Mr. Greenberg attended.
II. The record
A. Kory affidavit
Mr. Kory has provided two affidavits replete with refutations of the plaintiffs' jurisdictional allegations. He is licensed to practice law in California, where he resides and has his law practice. He last traveled to Colorado in 1985 or 1986 for a ski vacation. He has no business or property interests in Colorado.
In the fall of 2004, Mr. Cohen retained Mr. Kory to investigate suspected losses from an entity denominated Traditional Holdings, LLC ("Traditional"), which the plaintiff, Tactical Allocation Services, LLC ("Tactical") managed for Mr. Cohen under Mr. Greenberg's direction. In the ensuing weeks, Mr. Kory contacted Tactical's Boulder, Colorado office on two or three occasions. Tactical responded by sending information about Mr. Cohen's accounts to Mr. Kory in California. Thereafter, Mr. Kory communicated predominantly with Tactical's legal counsel, Sherab Posel, whom Mr. Kory believed to be resident in New York. Though he engaged in at least one email exchange with representatives of Tactical located in Boulder, Mr. Kory communicated Mr. Cohen's asserted legal claims against Tactical and related requests for information to Mr. Posel, who responded on letterhead imprinted with New York addresses.
In April, 2005, Mr. Kory and Mr. Posel scheduled a mediation for June 5, 2005, which was to occur in Colorado. Mr. Kory reserved a conference room at a hotel near the Denver airport in anticipation of that meeting. After Mr. Posel disputed the veracity of Mr. Cohen's *55 claims and threatened litigation, Mr. Kory cancelled the room reservation in Colorado and remained in California.
B. Barnett affidavit
Timothy Barnett, Tactical's Vice President who works in Boulder, has produced correspondence — emails and letters — between Mr. Kory and representatives of the plaintiffs in Colorado and New York. Numerous emails and letters between Mr. Kory and Mr. Barnett throughout the period beginning in November, 2004 and ending in June, 2005 addressed Mr. Kory's requests for information about the accounts that Tactical managed for Mr. Cohen and Tactical's efforts to comply with those requests. Contrary to Mr. Kory's assertion, these communications number in the dozens. Many of the communications indicate that copies were sent to Mr. Greenberg and Mr. Posel, among others. Emails exchanged on December 15 and 16, 2004 detailed plans for a conference call involving Messrs. Kory, Barnett, and Posel. The three set up another conference call in March, 2005. Other emails reference telephone calls between Mr. Kory and Mr. Barnett and calls and conversations between Mr. Kory and Mr. Posel.
In an April 10, 2005, twenty-seven page demand letter to Mr. Posel, Mr. Kory asserted claims against "the Agile Group, Neal Greenberg and his partners" on Mr. Cohen's behalf. Mr. Kory made repeated references to the "several telephone conversations and e-mails regarding" the claims that he and Mr. Posel had previously exchanged. He invited a further response from Mr. Posel. Thereafter, Mr. Kory and Mr. Barnett exchanged emails only discussing the scheduling of a mediation meeting for June 5, 2005. Mr. Posel and Mr. Kory continued to communicate in writing about Mr. Cohen's allegations. On June 4, 2005, Mr. Kory wrote to Mr. Posel by email cancelling the mediation, but making no reference to the lawsuit that the plaintiffs had purportedly *66threatened. In a June 9, 2005 email, Mr. Kory expressed surprise at the contents of a draft complaint that Mr. Posel had sent him the day before.
By letter on June 2, 2005, Mr. Kory sent to Mr. Barnett two checks for deposit in Mr. Cohen's accounts. On June 7, Mr. Barnett responded in writing, noting that Mr. Cohen had terminated his relationship with the plaintiffs.
III. Discussion
"To obtain personal jurisdiction over a nonresident defendant in a diversity action, a plaintiff must show that jurisdiction is legitimate under the laws of the forum state and that the exercise of jurisdiction does not offend the due process clause of the Fourteenth Amendment." Far West Capital, Inc. v. Towne,46 F.3d 1071, 1074 (10th Cir. 1995). Because, as set forth below, I conclude that the Colorado long-arm statute does not reach Mr. Kory, I need not consider the constitutional question. The plaintiffs argue that Mr. Kory has submitted to jurisdiction in Colorado by the "commission of a tortious act within this state." Colo. Rev. Stat. § 13-1-124(1)(b). Colorado courts have held that the tort provision of the long-arm statute may be satisfied either 1) when tortious conduct occurs in Colorado, or 2) when tortious conduct initiated in another state causes injury in Colorado. Wenz, 55 F.3d at 1507; Classic Auto Sales, Inc. v. Schocket, 832 P.2d 233, 235-236 (Colo. 1992).
The plaintiffs first argue that Mr. Kory committed tortious conduct in Colorado. Directing into Colorado communications by which a tort is committed constitutes conduct sufficient to satisfy the statute if the tort is completed by the plaintiff's receipt in Colorado of the communications. Id. at 236; Broadview Financial, Inc. v. Entech Management Services Corp., *77859 F. Supp. 444, 448 (D. Colo. 1994). However, merely communicating with a person resident in Colorado is, in itself, insufficient to bring a defendant within the reach of the Colorado statute. Archangel Diamond Corp. v. Lukoil, ___ P.3d ___, 2005 WL 3097588 (Colo. 2005).
Mr. Kory's several communications with Mr. Barnett concerned Mr. Kory's attempts to elicit information from Mr. Barnett that would prove useful to Mr. Cohen. Though the plaintiffs feel that Mr. Kory solicited their cooperation in bad faith — Mr. Kory used much of the information the plaintiffs provided to construct claims against them, even as he repeatedly commended them for their diligence — the gravamen of their claims against Mr. Kory is that he conspired to defame them and to extort money from them by asserting frivolous claims. Mr. Kory directed to Mr. Posel in New York, and not to Mr. Barnett in Colorado, the communications by which he allegedly accomplished those torts. The plaintiffs have not argued — nor does it appear from the record — that the exchange of information and documents between Mr. Kory and Mr. Barnett was tortious. Nor could the plaintiffs premise liability on Mr. Kory's later-reneged reservation of a conference room in Colorado. I am left to determine whether the plaintiffs have suffered an injury in Colorado as a result of Mr. Kory's allegedly tortious acts. Wenz,55 F.3d at 1507. Tortious-activity jurisdiction obtains under the statute when "the injury itself" occurs in Colorado. McAvoy v. District Court, 757 P.2d 633, 635 (Colo. 1988).
Further, the injury in the forum state must be direct, not consequential or remote, and loss of profits in the state of plaintiff's domicile is insufficient to sustain long-arm jurisdiction over a nonresident defendant. Hence, when both the tortious conduct and the injury occur in another state, the fact that plaintiff resides in Colorado and experiences some economic consequences here is insufficient to confer jurisdiction on a Colorado court. Amax Potash Corp. v. Trans-Resources, Inc., 817 P.2d 598, 600 (Colo.Ct.App. 1991) (citations *88 omitted).
The plaintiffs argue that Mr. Kory directed the injurious consequences of his wrongful activity toward Colorado because they, who have an office here, were the intended recipients of the harm. They cite D D Fuller CATV Const., Inc. v. Pace,780 P.2d 520(Colo. 1989) for the proposition that Mr. Kory could, therefore, have reasonably anticipated being haled into court in Colorado. However, they have not addressed the prior question where the injury occurred. Nothing in the record, Mr. Barnett's correspondence from Colorado included, appears to demonstrate that the plaintiffs suffered an injury in Colorado. Indeed, the only business the plaintiffs are alleged to have lost was transacted with Mr. Cohen, who resides in California. Accordingly, it is ORDERED that
1) Robert Kory's motion to dismiss pursuant to Fed.R.Civ.P.12(b)(2) [13] is GRANTED; and
2) the plaintiffs' claims against Mr. Kory are dismissed.
EXHIBIT
MACLEAN’S ARTICLE
KL will mock up the lies in this article before filing her Motion
August 17, 2005
A 'devastated' Leonard Cohen
The Canadian music icon is broke and the lawsuits are flying. It's a sordid tale involving allegations of extortion, SWAT teams, forcible confinement, tax troubles and betrayal.
KATHERINE MACKLEM
I said there's been a flood
I said there's nothing left
-- Leonard Cohen, from The Letters, on his album Dear Heather
Take an iconic artist, mix in missing millions, hints of tantric sex, a lawsuit replete with other salacious details, and a ruptured relationship with a long-time, trusted associate, and you've got the makings of a Hollywood blockbuster. Except in the case of Leonard Cohen, it's a true tale, with the bizarre twist of a Tibetan Buddhist suing a Zen Buddhist, Cohen. For the 70-year-old poet, singer and songwriter, it's a nasty, rapidly escalating legal battle that on the one hand accuses him of conspiracy and extortion, and on the other has him accusing both his highly trusted personal manager and long-time financial adviser -- the Tibetan Buddhist -- of gross mismanagement of his financial affairs. The case exposes not only private details of Cohen's finances, but also a dramatic tale of betrayal.
The conflict, which Cohen and others have tried to keep out of public view, has left him virtually broke -- he's had to take out a mortgage on his house to pay legal costs -- and facing a multi-million-dollar tax bill. But the artist, who is soon to release a new album with his collaborator -- and current girlfriend -- Anjani Thomas, is today remarkably calm about the potentially embarrassing conflict. Still, when he discovered last fall that his retirement funds, which he had thought amounted to more than $5 million (all figures U.S.), had been reduced to $150,000, he wasn't so sanguine. "I was devastated," Cohen says. "You know, God gave me a strong inner core, so I wasn't shattered. But I was deeply concerned."
So far, only one formal court filing involving Cohen has been made. In June, Boulder, Colo.-based Neal Greenberg, Cohen's investment adviser of almost a decade, launched a hyperbole-laden claim in Colorado against Cohen, who lives in both Los Angeles and Montreal. The suit accuses Kelley Lynch, who was Cohen's manager and is also named in the suit, of siphoning money from the songwriter. It also accuses Cohen and his lawyer Robert Kory of conspiracy, extortion and defamation. It alleges the two, in an attempt to recover at least some of Cohen's lost money, threatened to besmirch Greenberg's reputation and concocted a plan to force Greenberg to give Cohen millions of dollars.
The suit paints an almost preposterous picture of Cohen as an artist who led a lavish celebrity lifestyle and then turned bitter and vindictive when he discovered the money had run out. For example, the suit quotes Lynch describing how Cohen demanded she discuss business matters while he soaked in a bubble bath, and how later he was somehow involved in calling a SWAT team to her home, where she was handcuffed and forcibly taken to a psychiatric ward while in her bathing suit.
None of the allegations have been proven in court. Cohen is expected to file a countersuit this week. More lawsuits are likely to join the fray. And Lynch, who has sent turgid, raw and wrathful emails hither and yon, is threatening to sue just about everyone.
The conflict was triggered last fall when Cohen was tipped off by an insider that a lot of money was missing from his accounts. All that remained of his retirement savings was the $150,000, funds that today he can't get at as a result of the tangled legal web he finds himself in. Greenberg's suit portrays the soulful songwriter as an artist who paid little attention to his financial affairs and so was easily duped by a conniving personal manager. Cohen says he tried quietly, and confidentially, to find out from his various managers where the money had gone. Cohen calls the case "a tragedy," suggesting he was exploited by trusted advisers. He uses words like "greed, concealment, and reckless disregard," and says firmly he did nothing wrong. "I can assure you, within reason, I took every precaution except to question the fidelity of my closest associates."
Untoil Cohen fired her last fall, Kelley Lynch had been his personal manager for almost 17 years. Back in 1988, she'd been working as an assistant to his then-manager, who died that year. Because she was knowledgeable about Cohen's business affairs and recording contracts, he had her take over. Over the years, the two developed a personal and professional relationship. Fifteen years ago, they had a brief affair. "It was a casual sexual arrangement. It was mutually enjoyed and terminated," he says. "I never spent the night." The end of the affair didn't affect their bond. "We were very, very close friends," Cohen says today. "I liked her immensely. Our families were close -- she was helpful when I was raising my daughter; I employed her father." He even named her in his living will, giving her the power to decide, in certain circumstances, if he would live or die. He handed her vast powers of attorney. He trusted her implicitly. And he believed the relationship was mutual. "She wrote dozens of emails to me, thanking me for my help. We used to correspond regularly, relentlessly." He says that in 2004, while he was recording his most recent album, Dear Heather, with a small team at his home-recording studio, Lynch would come by almost daily. "People were very tight. Kelley was taking care of business, I was producing the album. It was all taking place in this little duplex and the garage that was converted into a studio. Kelley would come over, and I would generally prepare lunch for everyone."
The cosy arrangement was shattered one day last October when a young man, the boyfriend of a casual employee of Lynch, spoke to Cohen's daughter, Lorca, who owns an art deco furniture store and who lives downstairs from her father in the L.A. duplex he owns. "Your father really ought to look into his accounts, because he might be surprised at what he finds," he said. Lorca told him that her father trusted everyone involved and that besides, "he's about to retire, anyway." As Cohen senior tells the story, the young man replied, "He won't be able to retire."
Alarmed, Lorca called her father, who was in Montreal. Within a couple of days, he returned to Los Angeles and immediately went to his bank. There he discovered, as he puts it, "improprieties." Lynch had linked her American Express bill directly to his personal chequing account, he says, and just days before his visit to the bank, he'd paid a $75,000 Amex bill on her behalf. He never learned what purchases the card had been used for, but says the credit card company reimbursed him. Cohen immediately removed Lynch's signing powers on the accounts. The next day, Cohen told Lynch she no longer had access to the bank accounts and he fired her. That afternoon, Cohen says the bank notified him that Lynch went to a different branch and attempted to withdraw $40,000 from one of his accounts. He then called a lawyer and brought in a forensic accounting firm, Moss-Adams, which, in an investigation of all of Cohen's holdings, discovered "massive improprieties." In all, the accountants discovered about $8.4 million had over time disappeared from his holdings, Cohen says. His retirement funds had been virtually depleted.
Neal Greenberg, a banker with a thriving investment firm, had been brought in by Lynch to manage Cohen's money in 1996, two years after Cohen went up Mount Baldy to study to be a Rinzai Zen Buddhist monk. But now, he was worried. Over two decades, Greenberg had built a successful company, the Agile Group, and managed more than half-a-billion dollars of other people's money. He enjoyed, as he says in his suit, a "spotless professional reputation." And suddenly, here was Leonard Cohen, not just a prized client but one with a high profile, suggesting that Greenberg was party to the disappearance of Cohen's retirement savings.
Over the years, he says, he warned Cohen that his funds were being rapidly depleted, but it seemed the artist paid no heed. And now, Cohen and his lawyer, Kory, claims the Greenberg suit, were threatening "that Cohen would go out on tour to promote his new album and give interviews to reporters in which he would insinuate that he was touring because he had been bankrupted by improprieties by Greenberg and other financial advisers." Greenberg must have envisioned his business and his career in absolute tatters. He sued.
Greenberg's lawsuit lays out the business background to the dispute. Cohen's success as a singer and songwriter generated millions in royalties, the suit says, and in the 1990s, Lynch, as Cohen's trusted personal manager, began to investigate auctioning his intellectual properties, including copyrights to his song catalogue and continuing royalties for his songs. Lynch, along with a tax consultant named Richard Westin, arranged two deals for Cohen's properties. The transactions were eventually completed, one in 1997, the other in 2001, with Sony Music. From the first sale, about $5 million was transferred to trusts that Greenberg had been enlisted to manage and that would protect Cohen from an upfront tax hit. Greenberg says he invested the proceeds wisely, making lots of money for the trusts. But Greenberg also claims that Cohen's "consistent and prolific spending" to support "his extravagant 'celebrity' lifestyle" eroded the gains he had made on his client's behalf.
The second sale of Cohen's intellectual property, in 2001, was for $8 million. With Westin, Lynch put that money into a newly formed company named Traditional Holdings LLC that also was intended to shield Cohen's earnings from a major tax hit. Lynch was named as owner of 99.5 per cent of the company, leaving Cohen holding just 0.5 per cent. Greenberg alleges that Cohen, well aware of the structure and its dangers, signed off on it. Westin had explained to Cohen, the suit says, that "the plan would only work if Cohen and Lynch maintained (as they had in the past) a long-term relationship of personal and professional trust." Traditional Holdings could also issue loans to its owners, Lynch and Cohen.
As soon as the new company was in place, "Greenberg was immediately alarmed by Cohen's desire and tendency to treat this company [Traditional Holdings] like his personal piggy bank," the lawsuit alleges. It goes on to claim Cohen took a $1-million advance on the second sale of assets to Sony, Lynch took a commission of $1.1 million, and fees for lawyers and accountants ate up another $714,000. And then, over the next few years, Lynch regularly borrowed money from the Traditional Holdings account in amounts of tens of thousands of dollars, sometimes for herself, sometimes acting for Cohen. The lawsuit claims that while Greenberg sent a monthly email statement to Cohen, it was always Lynch who told Greenberg to release the loans.
The Greenberg suit claims Lynch, always acting as Cohen's agent, told Greenberg what to do regarding the funds. For instance, Lynch instructed Greenberg to send Cohen the monthly email status reports, but Greenberg says she directed him to leave out day-to-day activities and the status of Traditional Holdings loans. Because the loans were to be repaid, Greenberg included them in the statements as assets, which meant that it appeared as though nothing had been taken out.
Greenberg, who declined to comment for this article, claims in his suit he repeatedly stressed to Cohen that his spending was seriously draining his investments. In one warning letter, Greenberg told Cohen that Traditional Holdings had only $2.1 million left. Considering how quickly the money was leaving the account, Greenberg wrote, "I think you should consider your situation quite desperate." It's not clear if Cohen ever received this letter. On this, Cohen and Greenberg agree: they say many of Greenberg's attempted communications with Cohen were intercepted by Lynch.
On other points, Cohen disagrees. He was vitally interested in his financial affairs, he says. "It wasn't that I wasn't involved -- on the contrary, I took great pains to pay these professionals well and to solicit their advice and to follow it," he insists. "And, I was receiving a report every month from Neal Greenberg indicating that my retirement savings were safe." Cohen insists he was not made aware that Lynch had been named the majority owner of Traditional Holdings; instead, he says that in an early description of the company's structure, he had been told that his two children, Lorca and Adam, would be its principal owners. He says he was shocked to learn that Lynch had almost complete ownership. The mistake Cohen admits to is that "I paid close attention to everything except the possibility that my closest associate would embrace any irregularities in the discharge of her duties."
Cohen also says he learned only recently that the two sales of his intellectual property to Sony were unnecessary. He understands now that those properties earned roughly $400,000 a year, before taxes. That was plenty for him to support what he calls his modest lifestyle. Cohen accuses Lynch of creating the deals in order to boost her own income. He paid her 15 per cent of his income, which generally earned her $90,000 a year, he says. With the sales of his intellectual property bringing in revenue in the millions, it boosted her income to seven figures.
Greenberg's lawsuit becomes more disturbing as it describes what happened after Cohen realized he'd lost millions of dollars. Greenberg says Cohen pressured him to go after his firm's insurance company for the money to repay him. "Be a man," Cohen told Greenberg, the suit says. By threatening his reputation, it appeared to Greenberg that Cohen, on Kory's advice, had decided to target Greenberg's and his insurance company's deep pockets. Then, alleges the lawsuit, Cohen and Kory began to pressure Lynch to join them in "their extortion scheme." From November 2004 to April 2005, the lawsuit says, Kory repeatedly let Lynch know, sometimes directly, sometimes through friends or other intermediaries, that Cohen was ready to "forgive" Lynch's obligations to him, and that she in fact could receive a hefty cut of "whatever funds could be extorted from Greenberg and other advisers with her co-operation."
Greenberg's suit alleges that when Lynch refused to participate, Kory and Cohen vowed to "crush her." It goes on to say their "tactics to terrorize, silence, or disparage Lynch" included threatening her that she would go to jail, and "paying two paroled convicts to make statements that they had observed Lynch's older son brandishing a gun and threatening to kill someone."
Lynch's response, to all of this has been bitter, scattered and in some cases difficult to comprehend. In a rambling exchange of emails with Maclean's last week, she denied any wrongdoing. She also declined to discuss the Agile Group's lawsuit, describing it as "bogus" and "slanderous," while promising to file her own complaints against Cohen and other principal players in the case. She added her phone had been disconnected because she lacked money to pay the bills.
In the meantime, she's been showering Cohen and others with invective-laden emails that alternately voice misery and hurl accusations at friends and former colleagues. Many of these lament losing custody of her 12-year-old son, Ray, to his father, music producer Steve Lindsay. A few devolve into the outrightly bizarre. One missive, sent July 17 and obtained by Maclean's, invites Greenberg in highly explicit terms to Lynch's home for an evening of tantric sex. "First I want to study the inner channels with you," it says. "Why not -- let's see who is better at tantric sex -- you or me."
So troubling have the messages become that several people who know Lynch fear she's become unhinged. "I'm afraid she's suicidal," says Lindsay, her ex-husband, adding that in his judgment she's been acting erratically for the better part of a year. Cohen too sent Lynch a message last fall spelling out his concern in verse: You can't tell the difference between a threat / and a helping hand, he wrote. You can't tell the difference between a threat / and a solemn warning / from one of the few people / who still cares about you and your family.
Lynch's apparent troubles have had punishing legal consequences. Lindsay has obtained a temporary restraining order that prevents her from visiting her son. Tara Cooper, a former employee of a greeting card company Lynch started while still in Cohen's employ, has taken out a similar order after alleging that Lynch sent threatening emails and harassed her by phone. And two of her creditors -- upscale department stores Neiman Marcus and Bergdorf Goodman -- have filed collections claims against her in Los Angeles Superior Court.
This is the mess that Leonard Cohen -- a man many believe floats a few inches above the ground -- finds himself in. These days, he's Zen-like. In the course of a long interview by phone from his home in Los Angeles, the man sometimes called the poet laureate of pessimism sounded almost bemused. "What can I do?" he asks. "I had to go to work. I have no money left. I'm not saying it's bad; I have enough of an understanding of the way the world works to understand that these things happen."
His first choice of action when he learned his money was gone, he says, was to not do anything. Aware of how painful litigation could be, he says he wanted no part of it. "I said, 'I can walk away with nothing.' I said, 'Let me start again. Let me start fresh at 70. I can cobble together a little nest egg again.' " But he ran into a glaring, immediate problem: had he done nothing, he would have legally been responsible for the funds that had gone missing. And on that money, he'd owe millions in taxes, a sum he no longer had.
His next step, "his second-best choice," was to negotiate with his advisers about the missing money. He approached Lynch, asking her to open her books. "She resolutely and unconditionally refused to open her books to any scrutiny whatsoever and instead began a bizarre email campaign to discredit me in some kind of way, which has gone all over the place," Cohen says, adding that he's launching a lawsuit this week with great reluctance. "I don't want anybody hurt. It's not my nature to pursue and to contend with people that way." Cohen says all he wants is to find out where the money went. "I'm not accusing her of theft," he says of Lynch. Still, his countersuit will likely describe how money was removed from his accounts.
Cohen appears to have been blindsided by Greenberg's lawsuit. He insists that he and Kory were in the midst of mediation with Greenberg when the financial adviser's lawsuit was suddenly and unexpectedly filed. He says the mediation had been confidential, at Greenberg's urging, as he feared for his reputation. In an email to Greenberg, Cohen urges him to make good. "Dear Neal, I believed in you. I depended on you," Cohen wrote in November 2004. "When things went wrong, does it make any sense that you would make your warnings available to the only person in the cosmos who had an interest in deceiving me? A single, simple email informing me that my accounts were being emptied would have been enough. I answered EVERY SINGLE EMAIL you ever sent me. Fortunately, I have them all.
"Face up to it, Neal," the email continues, "and square your shoulders: You were the trusted guardian of my assets, and you let them slip away . . . Restore what you lost, and sleep well." In his sign-off, Cohen delivered as much a piece of advice as his own philosophy: "Put this behind you and it will dissolve." There's an irony here, that a man who has struggled much of his life to distance himself from the material world now, at 70, finds himself in an intense battle with it. Still, he's not defeated. "This has propelled us into incessant work," he says of himself and Thomas. He exudes optimism about their new CD. "It's one of the best albums I've heard." It's not closing time quite yet.
With CHARLIE GILLIS and BRIAN D. JOHNSON
A 'devastated' Leonard Cohen
The Canadian music icon is broke and the lawsuits are flying. It's a sordid tale involving allegations of extortion, SWAT teams, forcible confinement, tax troubles and betrayal.
KATHERINE MACKLEM
I said there's been a flood
I said there's nothing left
-- Leonard Cohen, from The Letters, on his album Dear Heather
Take an iconic artist, mix in missing millions, hints of tantric sex, a lawsuit replete with other salacious details, and a ruptured relationship with a long-time, trusted associate, and you've got the makings of a Hollywood blockbuster. Except in the case of Leonard Cohen, it's a true tale, with the bizarre twist of a Tibetan Buddhist suing a Zen Buddhist, Cohen. For the 70-year-old poet, singer and songwriter, it's a nasty, rapidly escalating legal battle that on the one hand accuses him of conspiracy and extortion, and on the other has him accusing both his highly trusted personal manager and long-time financial adviser -- the Tibetan Buddhist -- of gross mismanagement of his financial affairs. The case exposes not only private details of Cohen's finances, but also a dramatic tale of betrayal.
The conflict, which Cohen and others have tried to keep out of public view, has left him virtually broke -- he's had to take out a mortgage on his house to pay legal costs -- and facing a multi-million-dollar tax bill. But the artist, who is soon to release a new album with his collaborator -- and current girlfriend -- Anjani Thomas, is today remarkably calm about the potentially embarrassing conflict. Still, when he discovered last fall that his retirement funds, which he had thought amounted to more than $5 million (all figures U.S.), had been reduced to $150,000, he wasn't so sanguine. "I was devastated," Cohen says. "You know, God gave me a strong inner core, so I wasn't shattered. But I was deeply concerned."
So far, only one formal court filing involving Cohen has been made. In June, Boulder, Colo.-based Neal Greenberg, Cohen's investment adviser of almost a decade, launched a hyperbole-laden claim in Colorado against Cohen, who lives in both Los Angeles and Montreal. The suit accuses Kelley Lynch, who was Cohen's manager and is also named in the suit, of siphoning money from the songwriter. It also accuses Cohen and his lawyer Robert Kory of conspiracy, extortion and defamation. It alleges the two, in an attempt to recover at least some of Cohen's lost money, threatened to besmirch Greenberg's reputation and concocted a plan to force Greenberg to give Cohen millions of dollars.
The suit paints an almost preposterous picture of Cohen as an artist who led a lavish celebrity lifestyle and then turned bitter and vindictive when he discovered the money had run out. For example, the suit quotes Lynch describing how Cohen demanded she discuss business matters while he soaked in a bubble bath, and how later he was somehow involved in calling a SWAT team to her home, where she was handcuffed and forcibly taken to a psychiatric ward while in her bathing suit.
None of the allegations have been proven in court. Cohen is expected to file a countersuit this week. More lawsuits are likely to join the fray. And Lynch, who has sent turgid, raw and wrathful emails hither and yon, is threatening to sue just about everyone.
The conflict was triggered last fall when Cohen was tipped off by an insider that a lot of money was missing from his accounts. All that remained of his retirement savings was the $150,000, funds that today he can't get at as a result of the tangled legal web he finds himself in. Greenberg's suit portrays the soulful songwriter as an artist who paid little attention to his financial affairs and so was easily duped by a conniving personal manager. Cohen says he tried quietly, and confidentially, to find out from his various managers where the money had gone. Cohen calls the case "a tragedy," suggesting he was exploited by trusted advisers. He uses words like "greed, concealment, and reckless disregard," and says firmly he did nothing wrong. "I can assure you, within reason, I took every precaution except to question the fidelity of my closest associates."
Untoil Cohen fired her last fall, Kelley Lynch had been his personal manager for almost 17 years. Back in 1988, she'd been working as an assistant to his then-manager, who died that year. Because she was knowledgeable about Cohen's business affairs and recording contracts, he had her take over. Over the years, the two developed a personal and professional relationship. Fifteen years ago, they had a brief affair. "It was a casual sexual arrangement. It was mutually enjoyed and terminated," he says. "I never spent the night." The end of the affair didn't affect their bond. "We were very, very close friends," Cohen says today. "I liked her immensely. Our families were close -- she was helpful when I was raising my daughter; I employed her father." He even named her in his living will, giving her the power to decide, in certain circumstances, if he would live or die. He handed her vast powers of attorney. He trusted her implicitly. And he believed the relationship was mutual. "She wrote dozens of emails to me, thanking me for my help. We used to correspond regularly, relentlessly." He says that in 2004, while he was recording his most recent album, Dear Heather, with a small team at his home-recording studio, Lynch would come by almost daily. "People were very tight. Kelley was taking care of business, I was producing the album. It was all taking place in this little duplex and the garage that was converted into a studio. Kelley would come over, and I would generally prepare lunch for everyone."
The cosy arrangement was shattered one day last October when a young man, the boyfriend of a casual employee of Lynch, spoke to Cohen's daughter, Lorca, who owns an art deco furniture store and who lives downstairs from her father in the L.A. duplex he owns. "Your father really ought to look into his accounts, because he might be surprised at what he finds," he said. Lorca told him that her father trusted everyone involved and that besides, "he's about to retire, anyway." As Cohen senior tells the story, the young man replied, "He won't be able to retire."
Alarmed, Lorca called her father, who was in Montreal. Within a couple of days, he returned to Los Angeles and immediately went to his bank. There he discovered, as he puts it, "improprieties." Lynch had linked her American Express bill directly to his personal chequing account, he says, and just days before his visit to the bank, he'd paid a $75,000 Amex bill on her behalf. He never learned what purchases the card had been used for, but says the credit card company reimbursed him. Cohen immediately removed Lynch's signing powers on the accounts. The next day, Cohen told Lynch she no longer had access to the bank accounts and he fired her. That afternoon, Cohen says the bank notified him that Lynch went to a different branch and attempted to withdraw $40,000 from one of his accounts. He then called a lawyer and brought in a forensic accounting firm, Moss-Adams, which, in an investigation of all of Cohen's holdings, discovered "massive improprieties." In all, the accountants discovered about $8.4 million had over time disappeared from his holdings, Cohen says. His retirement funds had been virtually depleted.
Neal Greenberg, a banker with a thriving investment firm, had been brought in by Lynch to manage Cohen's money in 1996, two years after Cohen went up Mount Baldy to study to be a Rinzai Zen Buddhist monk. But now, he was worried. Over two decades, Greenberg had built a successful company, the Agile Group, and managed more than half-a-billion dollars of other people's money. He enjoyed, as he says in his suit, a "spotless professional reputation." And suddenly, here was Leonard Cohen, not just a prized client but one with a high profile, suggesting that Greenberg was party to the disappearance of Cohen's retirement savings.
Over the years, he says, he warned Cohen that his funds were being rapidly depleted, but it seemed the artist paid no heed. And now, Cohen and his lawyer, Kory, claims the Greenberg suit, were threatening "that Cohen would go out on tour to promote his new album and give interviews to reporters in which he would insinuate that he was touring because he had been bankrupted by improprieties by Greenberg and other financial advisers." Greenberg must have envisioned his business and his career in absolute tatters. He sued.
Greenberg's lawsuit lays out the business background to the dispute. Cohen's success as a singer and songwriter generated millions in royalties, the suit says, and in the 1990s, Lynch, as Cohen's trusted personal manager, began to investigate auctioning his intellectual properties, including copyrights to his song catalogue and continuing royalties for his songs. Lynch, along with a tax consultant named Richard Westin, arranged two deals for Cohen's properties. The transactions were eventually completed, one in 1997, the other in 2001, with Sony Music. From the first sale, about $5 million was transferred to trusts that Greenberg had been enlisted to manage and that would protect Cohen from an upfront tax hit. Greenberg says he invested the proceeds wisely, making lots of money for the trusts. But Greenberg also claims that Cohen's "consistent and prolific spending" to support "his extravagant 'celebrity' lifestyle" eroded the gains he had made on his client's behalf.
The second sale of Cohen's intellectual property, in 2001, was for $8 million. With Westin, Lynch put that money into a newly formed company named Traditional Holdings LLC that also was intended to shield Cohen's earnings from a major tax hit. Lynch was named as owner of 99.5 per cent of the company, leaving Cohen holding just 0.5 per cent. Greenberg alleges that Cohen, well aware of the structure and its dangers, signed off on it. Westin had explained to Cohen, the suit says, that "the plan would only work if Cohen and Lynch maintained (as they had in the past) a long-term relationship of personal and professional trust." Traditional Holdings could also issue loans to its owners, Lynch and Cohen.
As soon as the new company was in place, "Greenberg was immediately alarmed by Cohen's desire and tendency to treat this company [Traditional Holdings] like his personal piggy bank," the lawsuit alleges. It goes on to claim Cohen took a $1-million advance on the second sale of assets to Sony, Lynch took a commission of $1.1 million, and fees for lawyers and accountants ate up another $714,000. And then, over the next few years, Lynch regularly borrowed money from the Traditional Holdings account in amounts of tens of thousands of dollars, sometimes for herself, sometimes acting for Cohen. The lawsuit claims that while Greenberg sent a monthly email statement to Cohen, it was always Lynch who told Greenberg to release the loans.
The Greenberg suit claims Lynch, always acting as Cohen's agent, told Greenberg what to do regarding the funds. For instance, Lynch instructed Greenberg to send Cohen the monthly email status reports, but Greenberg says she directed him to leave out day-to-day activities and the status of Traditional Holdings loans. Because the loans were to be repaid, Greenberg included them in the statements as assets, which meant that it appeared as though nothing had been taken out.
Greenberg, who declined to comment for this article, claims in his suit he repeatedly stressed to Cohen that his spending was seriously draining his investments. In one warning letter, Greenberg told Cohen that Traditional Holdings had only $2.1 million left. Considering how quickly the money was leaving the account, Greenberg wrote, "I think you should consider your situation quite desperate." It's not clear if Cohen ever received this letter. On this, Cohen and Greenberg agree: they say many of Greenberg's attempted communications with Cohen were intercepted by Lynch.
On other points, Cohen disagrees. He was vitally interested in his financial affairs, he says. "It wasn't that I wasn't involved -- on the contrary, I took great pains to pay these professionals well and to solicit their advice and to follow it," he insists. "And, I was receiving a report every month from Neal Greenberg indicating that my retirement savings were safe." Cohen insists he was not made aware that Lynch had been named the majority owner of Traditional Holdings; instead, he says that in an early description of the company's structure, he had been told that his two children, Lorca and Adam, would be its principal owners. He says he was shocked to learn that Lynch had almost complete ownership. The mistake Cohen admits to is that "I paid close attention to everything except the possibility that my closest associate would embrace any irregularities in the discharge of her duties."
Cohen also says he learned only recently that the two sales of his intellectual property to Sony were unnecessary. He understands now that those properties earned roughly $400,000 a year, before taxes. That was plenty for him to support what he calls his modest lifestyle. Cohen accuses Lynch of creating the deals in order to boost her own income. He paid her 15 per cent of his income, which generally earned her $90,000 a year, he says. With the sales of his intellectual property bringing in revenue in the millions, it boosted her income to seven figures.
Greenberg's lawsuit becomes more disturbing as it describes what happened after Cohen realized he'd lost millions of dollars. Greenberg says Cohen pressured him to go after his firm's insurance company for the money to repay him. "Be a man," Cohen told Greenberg, the suit says. By threatening his reputation, it appeared to Greenberg that Cohen, on Kory's advice, had decided to target Greenberg's and his insurance company's deep pockets. Then, alleges the lawsuit, Cohen and Kory began to pressure Lynch to join them in "their extortion scheme." From November 2004 to April 2005, the lawsuit says, Kory repeatedly let Lynch know, sometimes directly, sometimes through friends or other intermediaries, that Cohen was ready to "forgive" Lynch's obligations to him, and that she in fact could receive a hefty cut of "whatever funds could be extorted from Greenberg and other advisers with her co-operation."
Greenberg's suit alleges that when Lynch refused to participate, Kory and Cohen vowed to "crush her." It goes on to say their "tactics to terrorize, silence, or disparage Lynch" included threatening her that she would go to jail, and "paying two paroled convicts to make statements that they had observed Lynch's older son brandishing a gun and threatening to kill someone."
Lynch's response, to all of this has been bitter, scattered and in some cases difficult to comprehend. In a rambling exchange of emails with Maclean's last week, she denied any wrongdoing. She also declined to discuss the Agile Group's lawsuit, describing it as "bogus" and "slanderous," while promising to file her own complaints against Cohen and other principal players in the case. She added her phone had been disconnected because she lacked money to pay the bills.
In the meantime, she's been showering Cohen and others with invective-laden emails that alternately voice misery and hurl accusations at friends and former colleagues. Many of these lament losing custody of her 12-year-old son, Ray, to his father, music producer Steve Lindsay. A few devolve into the outrightly bizarre. One missive, sent July 17 and obtained by Maclean's, invites Greenberg in highly explicit terms to Lynch's home for an evening of tantric sex. "First I want to study the inner channels with you," it says. "Why not -- let's see who is better at tantric sex -- you or me."
So troubling have the messages become that several people who know Lynch fear she's become unhinged. "I'm afraid she's suicidal," says Lindsay, her ex-husband, adding that in his judgment she's been acting erratically for the better part of a year. Cohen too sent Lynch a message last fall spelling out his concern in verse: You can't tell the difference between a threat / and a helping hand, he wrote. You can't tell the difference between a threat / and a solemn warning / from one of the few people / who still cares about you and your family.
Lynch's apparent troubles have had punishing legal consequences. Lindsay has obtained a temporary restraining order that prevents her from visiting her son. Tara Cooper, a former employee of a greeting card company Lynch started while still in Cohen's employ, has taken out a similar order after alleging that Lynch sent threatening emails and harassed her by phone. And two of her creditors -- upscale department stores Neiman Marcus and Bergdorf Goodman -- have filed collections claims against her in Los Angeles Superior Court.
This is the mess that Leonard Cohen -- a man many believe floats a few inches above the ground -- finds himself in. These days, he's Zen-like. In the course of a long interview by phone from his home in Los Angeles, the man sometimes called the poet laureate of pessimism sounded almost bemused. "What can I do?" he asks. "I had to go to work. I have no money left. I'm not saying it's bad; I have enough of an understanding of the way the world works to understand that these things happen."
His first choice of action when he learned his money was gone, he says, was to not do anything. Aware of how painful litigation could be, he says he wanted no part of it. "I said, 'I can walk away with nothing.' I said, 'Let me start again. Let me start fresh at 70. I can cobble together a little nest egg again.' " But he ran into a glaring, immediate problem: had he done nothing, he would have legally been responsible for the funds that had gone missing. And on that money, he'd owe millions in taxes, a sum he no longer had.
His next step, "his second-best choice," was to negotiate with his advisers about the missing money. He approached Lynch, asking her to open her books. "She resolutely and unconditionally refused to open her books to any scrutiny whatsoever and instead began a bizarre email campaign to discredit me in some kind of way, which has gone all over the place," Cohen says, adding that he's launching a lawsuit this week with great reluctance. "I don't want anybody hurt. It's not my nature to pursue and to contend with people that way." Cohen says all he wants is to find out where the money went. "I'm not accusing her of theft," he says of Lynch. Still, his countersuit will likely describe how money was removed from his accounts.
Cohen appears to have been blindsided by Greenberg's lawsuit. He insists that he and Kory were in the midst of mediation with Greenberg when the financial adviser's lawsuit was suddenly and unexpectedly filed. He says the mediation had been confidential, at Greenberg's urging, as he feared for his reputation. In an email to Greenberg, Cohen urges him to make good. "Dear Neal, I believed in you. I depended on you," Cohen wrote in November 2004. "When things went wrong, does it make any sense that you would make your warnings available to the only person in the cosmos who had an interest in deceiving me? A single, simple email informing me that my accounts were being emptied would have been enough. I answered EVERY SINGLE EMAIL you ever sent me. Fortunately, I have them all.
"Face up to it, Neal," the email continues, "and square your shoulders: You were the trusted guardian of my assets, and you let them slip away . . . Restore what you lost, and sleep well." In his sign-off, Cohen delivered as much a piece of advice as his own philosophy: "Put this behind you and it will dissolve." There's an irony here, that a man who has struggled much of his life to distance himself from the material world now, at 70, finds himself in an intense battle with it. Still, he's not defeated. "This has propelled us into incessant work," he says of himself and Thomas. He exudes optimism about their new CD. "It's one of the best albums I've heard." It's not closing time quite yet.
With CHARLIE GILLIS and BRIAN D. JOHNSON
