6-Year Prison Sentence for Alanis Morissette Ex-Manager

A California federal judge sentenced former business manager of Canadian singer-songwriter Alanis Morissette, Jonathan Schwartz, to 6 years in prison after he pleaded guilty to embezzling millions of dollars.

Schwartz held the position of a certified public accountant at GSO Business Management LLC in Los Angeles when it was discovered that he had been withdrawing funds from Morissette’s accounts. Schwartz plead guilty to charges of wire fraud and filing a false tax return. With the illegally withdrawn funds, Schwartz would subsequently often report the funds as “sundry/personal expenses” to his employer. Schwartz was found to have either personally picked up funds owed to clients, or would have the funds delivered to the office, with bank statements also going to GSO rather than to the respective clients. Schwartz would then send financial statements to clients based on falsified information.

These actions of embezzlement were discovered by Morissette after she took her business to another company and a new financial manager had begun balancing and reviewing her finances and portfolio from her time at GSO.

Schwartz had admitted to stealing nearly $5 million from Morissette over the course of a number of years. However, it then came to light that Morissette wasn’t the only one affected; Schwartz further admitted to stealing $2.3 million from five other clients in the entertainment industry, names of which have remained anonymous and undisclosed in court documents.

Morissette and Schwartz’s former business partner at GSO, Bernard Gudvi, testified, giving individual statements as to the impact and gravity of Schwartz’s actions; both stressed that it was important for the industry to know that money cannot be made out of client’s accounts. In her testimony, Morissette stated she had trusted Schwartz to handle her finances so that she could focus on being an artist and songwriting. She noted that she often felt in the dark when it came to details surrounding her finances; she stated that Schwartz was always evasive and dismissive of the subject, and that she was often coined by him as disrespectful whenever she would inquire for details surrounding her accounts. Morissette further stated in her testimony that as a result of Schwartz’s actions, her ability to trust had been “shaken”.

Back in April 2017, Schwartz appeared as a guest columnist in The Hollywood Reporter, where he published an open letter addressing his actions and the controversy, while vowing to make amends to the industry. In his words:

"I lived a double life since no one other than my bookie knew I had this “dark” side. At first, I “borrowed” a little from clients, with the hopes that I would pay them back if I won that night’s bet. That snowballed, and as I kept losing, I kept stealing. I kept telling myself that I just needed one lucky break, and I’ll pay them back. That lucky break never came — thankfully. I say thankfully because when I was finally caught, a bright spotlight shined on my deplorable conduct. I could not hide any longer and hit rock bottom. By seeing how pathetic I had become, I finally got the courage to ask for help." Read the full column here.

The column explained a gambling and drug addiction as the driving force behind his actions. Schwartz’s lawyer asked the court to keep these ailments in mind when making their judgment, along with the fact that Schwartz had been receiving treatment and was now sober for almost a year.

As a result, Schwartz and his legal team put forward to the court a request for a sentence of one year and one day behind bars, followed by another year of house arrest with 2,000 hours of community service. However, the U.S. Attorney’s Office rejected this suggestion and instead recommended a sentence of 63 months. U.S. District Judge Dolly Gee declared that although she viewed sentencing guidelines as “draconian”, this situation was “one of those rare occasions where I think the guidelines are not harsh enough”. As a result, Gee sentenced Schwartz to 72 months in prison, followed by 3 years of supervised release which will involve outpatient addiction treatment, regular drug testing, and mental health counselling. Schwartz was also ordered to pay $8.6 in restitution, and is due to surrender into custody on July 11, 2017.

Morissette’s hope was for the court to issue “a sentence that sends a crystal-clear message”. This case is unfortunately not unprecedented in the entertainment industry, however, its publicity brings to light some of the behind-the-scenes realities of the industry, highlighting how abuse of power by those in fiduciary positions can play on the vulnerability of trusting clients. The gravity of the Schwartz sentence may lead to more artists re-evaluating their surroundings and taking a hands-on approach when it comes to their accounts and transactions, thus leading to increased transparency.