Funk musician Sly Stone has sued his former manager for allegedly bilking him out of as much as $30 million in royalties during the past two decades.
Stone filed suit in Los Angeles Co., Calif., Superior Court on Thursday alleging fraud by Jerry Goldstein and several of his associates and companies. Goldstein had been Stone’s personal and professional business manager since 1989. The relationship ended last year.
“Mr. Stone was totally unaware that Mr. Goldstein and his collaborators were misappropriating and converting and diverting royalties due him,” said Stone’s attorney, Robert James Allan, founder of Allan Law Group in Malibu, Calif. “He didn’t believe there were royalties due him.”
Stone performed during the 1960s and 1970s with Sly and The Family Stone, producing hits including “Dance to the Music,” “Everyday People” and “Hot Fun in the Summertime.”
According to the lawsuit, Goldstein forced Stone to sign a management contract at a time when the musician was “particularly vulnerable to duress and undue influence” due to drug addiction and other personal problems. Then, without Stone’s knowledge, Goldstein registered the trade name Sly and The Family Stone as his own, which allowed him to borrow millions of dollars secured by Stone’s royalties.
Goldstein used the proceeds to buy properties worth $80 million in California, New York, Hawaii, Connecticut and England through trusts and offshore corporations. Meanwhile, Stone was told that any royalties he was receiving were going toward tax liens, the suit asserts. He did not collect his royalties and did not receive an accounting of his royalties during the 20 years in question. Until 2007, Stone received “intermittent payments” from Goldstein or his music companies. After that, the payments dried up, according to the suit, even though Goldstein, his companies and his wife “received, borrowed and continue to receive millions of dollars of, or derived from, the Royalties.”
Stone was left to “live hand to mouth, at times homeless and dependent on social security payments,” the suit alleges.
Stone filed the suit along with Ken Roberts, who was Stone’s manager between 1975 and 1982. Roberts accuses Goldstein of fraud and identity theft. He claims that Goldstein stole the name and identity of Majorken Inc., a company Roberts incorporated in 1972, and used it to obtain Stone’s royalties from Broadcast Music Inc. and borrow millions of dollars in loans from Mercantile National Bank, now First California Bank, that were secured through royalties.
The suit names Goldstein and several of his associates and businesses, as well as the companies that collected and dispersed Stone’s royalties: Sony Music Entertainment Inc., a division of Sony Corp.; BMI; SoundExchange Inc.; and Warner/Chappell Music Inc., which is a part of Warner Music Group Corp.
Jerry Goldstein Music could not be reached for comment on Friday. A call to First California Bank, also a named defendant, was not returned. Representatives of Sony Music, BMI, SoundExchange and Warner/Chappell Music did not return calls for comment.
The performance right royalties for BMI affiliate Sly Stone are being distributed per his direction and based upon his documentation of entitlement we have received,” said BMI spokeswoman Hanna Pantle. “BMI abides by any court order that affects the payment of royalties to any of our affiliates.”