Johnny Depp Vs. The Management Group

Johnny Depp has been embattled with The Management Group, or TMG, since January. Mr. Depp is suing the Las Vegas management partnership, alleging they mismanaged his money and cost him tens of millions of dollars. Depp, in addition to filing a lawsuit, took the case to federal authorities because Johnny felt that their practices were improper. In August, the IRS, the Justice Department, and SEC began investigating TMG, according to CNBC.

The Management Group has countersued Johnny Depp for $2 million and expect him to continue to pay on a $5 million dollar loan that Mr. Depp was allegedly not a willing party to. It has been alleged by a former employee of The Management Group, TMG asked her to notarize Johnny Depp’s signature in his absence for the purpose of obtaining the loan.

TMG put up not just one but five of Johnny Depp’s homes as collateral, including his primary residence. It has not been explained why only one of Johnny Depp’s homes would not be enough collateral for a loan, or if not, why another property other than his primary residence was not offered as collateral instead.

Johnny Depp owned 14 houses at the time, with several worth more than $5 million. Why were five homes used for collateral, including the house he lives in most?

Now, TMG is saying if Johnny Depp does not pay off the loan they took out, the five homes will be foreclosed on. Johnny Depp’s attorney Adam Waldman explained to People Magazine their action was improper.

“Today’s improper foreclosure action is the latest of the Mandels’ efforts to intimidate Mr. Depp into dropping his lawsuit.”

Will Johnny Depp lose his homes as TMG warns? Adam Waldman told People Magazine there was no chance of that.

“Of course not, and they know it. We will move for sanctions for this latest publicity stunt.”

Going after Johnny Depp with negative publicity is hardly new. The Mandel brothers, Joel and Robert who are partners in TMG, have released information about Johnny Depp’s personal business before.

In contrast to TMG’s treatment of Johnny Depp, The CFA Asset Manager Code of Professional Conduct clearly states in the section titled “Loyalty to Clients,” on page 5, the requirement for client confidentiality.

“Preserve the confidentiality of information communicated by clients within the scope of the Manager–client relationship. – As part of their ethical duties, Managers must hold information communicated to them by clients or other sources within the context of the Manager–client relationship strictly confidential and must take all reasonable measures to preserve that confidentiality.”

TMG revealed Johnny Depp’s alleged personal spending records to the press last summer. There was an explosion of tabloid articles about how much Johnny Depp spent on wine, how much he paid for each of his houses, and even how much he spent on Hunter S. Thompson’s funeral, all based on The Management Group’s released reports.

Johnny Depp said their figures were off and that he had spent nearly double what TMG reported for Mr. Thompson’s final send-off. The Management Group alleged Johnny paid $3 million to shoot Hunter S. Thompson’s ashes into the stratosphere, as Hunter had requested, but Johnny said it cost $5 million.

Johnny Depp’s financial information, released by TMG, was seeded with juicy tidbits designed to make headlines. Johnny Depp argued none of this was relevant to the case. The judge told The Mandel brothers the same thing. Since these filings were ruled irrelevant, the accuracy of The Management Group’s documents was never verified and should not be considered facts.

Johnny Depp’s spending of his own money was not the issue. The business of the court, as well as the IRS, SEC, and Justice Department, was to discover if TMG had mismanaged Johnny Depp’s money, not to examine the budget of a Hollywood icon.

What did TMG initially agree to do on Johnny Depp’s behalf? Here is a description of The Management Group’s services from an interview on Aish. Robert Mandel explained TMG’s services.

“A business manager is a hybrid of personal assistant, bookkeeper, accountant, and attorney. It provides services for someone who doesn’t want to be bothered with the business side of their life. So a business manager does everything — bills come to our office and we pay them, paychecks come here and we bank them.”

The services the Mandel brothers offer through TMG do not stop there. The Management Group offered Johnny Depp and their other clients an extensive list of services.

“On a higher level, we make sure they have the right insurance coverage for everything — home, car and life, the appropriate estate planning products; we make sure their investment portfolio is adequately diversified for their age, degree of risk and so on. We buy their houses, we buy their cars, we do their tax returns, we help negotiate their contracts. It really runs the gamut from basic everyday services to very complicated life issues.”

Johnny Depp has alleged the Mandel brothers did not pay his property taxes. Instead, they incurred millions of dollars in penalties. Part of Johnny Depp’s official complaint was quoted in People Magazine.

“As a result of years of gross mismanagement and sometimes outright fraud, Mr. Depp lost tens of millions of dollars and has been forced to dispose of significant assets to pay for TMG’s self-dealing and gross misconduct. In essence, TMG treated Mr. Depp’s income as their own, available to either TMG or third parties to draw upon as desired.”

Robert Mandel, in sharp contrast to Johnny Depp’s allegations, states in the interview with Aish that TMG values the company’s reputation and goes the extra mile to be ethical.

“Because the most important thing we have — our dad taught us this — is our reputation. We would never do anything to jeopardize our reputation.”

Johnny Depp, however, feels differently about TMG’s services. Not only does Johnny allege fraud and misconduct. The Management Group has defied conventional ethics by revealing Johnny Depp’s personal information, which was ruled irrelevant. The Mandel brothers are both attorneys and might likely know this information is irrelevant to the case.

The Management Group has gone after Johnny in the media, letting the press know details, whether true or false, that seem to cast Johnny Depp in a bad light by design. TMG’s statements have seemed judgemental of his values, even his generosity toward family and friends. Yet, Joel Mandel told Aish he didn’t feel it was his place to judge others on their values.

“Although when people express desires that represent misplaced values — greed, self-absorption, etc. — in my experience, I don’t think it’s helpful to engage in a discussion about those values. It’s not a place you can productively go.”

Yet, TMG has presumed to tell the court and the public about Johnny Depp’s personal business and poke fun at Johnny’s spending habits in a way that suggests judgmental attitudes. They seemingly do not consider the needs of a busy movie producer, rock star, and actor, who must travel internationally, and owns has his own film studio.

Johnny Depp and The Management Group are embroiled in a multi-million dollar lawsuit in which the ethics of TMG are being challenged.

[Featured Image by Jesse Grant/Getty Images]