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Former Alanis Morissette Manager Pleads Guilty to Embezzlement

The former business manager for singer Alanis Morissette and other entertainment and sports figures pleaded guilty Thursday to embezzling more than $6.5 million from his clients.

Jonathan Todd Schwartz, 48, who lives in Playa Vista but was living in Agoura Hills at the time of the offenses, entered his plea to federal wire and tax fraud charges for failing to disclose the embezzled funds to the Internal Revenue Service.

Schwartz, who is set to be sentenced on May 3, faces a prison term between four and six years, according to his plea agreement. However, the actual amount of time he will serve, if any, will be determined by the judge hearing the case, according to the U.S. Attorney’s Office.

Schwartz was a member of GSO Business Management LLC, a Sherman Oaks- based business management firm that provides financial guidance to clients, including managing bank accounts, providing accounts payable services, and preparing short- and long-term budgets.

Schwartz admitted that he took clients’ money for himself and falsified account records to conceal the embezzlement of client funds.

Schwartz acknowledged that between May 2010 and January 2014, he withdrew about $4.8 million belonging to Morissette without her knowledge or authorization.

Schwartz further admitted that he falsely labeled the unauthorized cash withdrawals as “sundry/personal expenses” on the accounting records maintained for the singer-songwriter.

When confronted about the missing funds, Schwartz stated that the money was an investment in illegal marijuana “grow” businesses, a statement he has now admitted was false.

“Money managers have fiduciary and moral responsibilities to their clients that begin with preserving client assets and not using that money to line their own pockets,” U.S. Attorney Eileen M. Decker said last month when Schwartz agreed to plead guilty.

“This defendant violated this basic principle, and then engaged in further criminal conduct by attempting to hide his ill-gotten gains from the Internal Revenue Service. Despite those efforts, however, the defendant will now face serious consequences for victimizing his clients and American taxpayers,” she said.

In the plea agreement, Schwartz also admitted that he embezzled more than $1 million from another client — who is not identified in the document — and concealed the embezzlement by falsely coding the unauthorized cash withdrawals as money used for the client’s home renovations.

Schwartz further admitted that he embezzled $737,500 from yet another as- yet-unidentified client and forged that client’s signature on at least two cash receipts.

“Mr. Schwartz was hired to protect his clients’ money by managing it professionally, but instead misappropriated millions to enrich himself,” said Deirdre Fike, the assistant director in charge of the FBI’s Los Angeles field office.

“This case should serve as a warning that there are serious consequences for those who abuse their positions of trust to embezzle funds,” she said.

While he pleaded guilty to filing a false tax return for the year 2012, Schwartz admitted that he did not report any of the roughly $6.5 million he obtained through his embezzlement scheme to the IRS.

As a result of the entire scheme, Schwartz acknowledges that he owes the IRS more than $1.7 million in federal income taxes.

Money

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