Music accountant charged over alleged $2.2m fraud
An Australian music industry accountant has been charged over the alleged embezzlement of A$2.2 million (€1.35m) from prominent clients including festivals and artists.
Damien Luscombe, a former partner and business manager at accountancy firm White Sky Music, is accused of several counts of obtaining financial advantage by deception and using false documents, reports The Age.
White Sky, which looks after the finances of of more than 500 artists, promoters, music festivals and record labels, reportedly suspended Luscombe in October last year after discovering discrepancies in the accounts of multiple major clients. The firm called in external auditors and provided a statement to Victoria Police’s fraud squad.
Alleged victims include Grammy-winning artist Gotye, electronic music group Peking Duk and organisers of the Laneway Festival.
Victoria Police have given the following update on the case.
“A 38-year-old South Morang man was charged with a range of offences including obtain financial advantage by deception and make/use false documents”
“Detectives from the financial crime squad have charged a man following an investigation into allegations of fraud relating to the management of a Collingwood-based business between 2011-2022,” says a spokesperson.
“A 38-year-old South Morang man was charged with a range of offences including obtain financial advantage by deception and make/use false documents.”
According to The Music Network, White Sky has declined to comment on the latest developments, but in October last year the company said it was in “absolute shock”.
Luscombe was bailed to appear at Melbourne Magistrates’ Court on 1 June.
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UK ticket touts ordered to repay over £6m
Two UK-based ticket touts, who were jailed after fraudulently reselling event tickets, have been ordered to pay back more than £6 million (€6.96m) or face a further eight years in prison.
Peter Hunter and David Smith, who operated as the company BZZ Limited, were jailed in February 2020 for four years and 30 months, respectively, following an investigation by the National Trading Standards eCrime Team and trial at Leeds Crown Court.
The pair committed offences between May 2010 and December 2017, making a net profit of £3.5 million in the last two years of fraud alone, buying and reselling tickets to concerts by artists including Ed Sheeran, Madness, McBusted, Taylor Swift and Coldplay, as well as to shows including Harry Potter and the Cursed Child.
Yesterday’s (14 December) confiscation order follows a lengthy investigation by National Trading Standards and a complex and extensive financial investigation conducted by the Yorkshire and Humber Regional Economic Crime Unit (RECU). Smith and Hunter were found to have benefited from their crimes by a total of £8,750,732.00. They have been given three months to pay back £6,167,522.02 and face an additional eight years’ imprisonment should they fail to pay.
“We hope this sends a message to all those who choose to engage in fraud that there are severe consequences”
Ruth Andrews, regional investigations and eCrime manager for National Trading Standards, says the result “concludes a landmark case that demonstrates once and for all that dishonestly buying large quantities of tickets and reselling them at inflated prices is an unacceptable, illegal and fraudulent practice”.
“All too often fans looking to buy tickets to sport events, music concerts and other high-profile events find that official tickets sell out in minutes before reappearing on secondary ticketing sites at vastly inflated prices,” says Andrews. “This can have a significant financial impact on consumers and I hope this ground-breaking case helps drive long-term changes in the secondary ticketing market.
“The defendants have learnt again today that crime does not pay and their futures have been irrevocably damaged by their criminal behaviour as a result. We hope this sends a message to all those who choose to engage in fraud that there are severe consequences.”
Hunter and Smith, used dishonest and fraudulent tactics to purchase multiple tickets from primary ticket sellers such as Ticketmaster, Eventim and AXS, circumventing the platforms’ terms and conditions and their automated systems to block multiple purchases. They also engaged in “speculative selling” by listing tickets for sale on secondary ticketing websites that they had not purchased and did not own.
“Yesterday’s developments should be a trigger for wider investigations to tackle the excesses in this market”
The duo’s appeals against their convictions were rejected by the Court of Appeal in November 2021.
“Music fans should be delighted with the result of this landmark case,” says Adam Webb, campaign manager for anti-touting organisation the FanFair Alliance. “The sums involved are staggering, and give an indication on the massive harm being inflicted on consumers. However, Hunter and Smith are only the tip of the iceberg. They are not outliers by any stretch of the imagination, and many others still operate outside of the law.
“Yesterday’s developments should be a trigger for wider investigations to tackle the excesses in this market – whether that’s the activities of touts, their methods of acquiring tickets in bulk from primary agents, or the secondary platforms they sell through.”
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Scam alert: Fraudsters offer fake Radiohead dates
Scam artists have been posing as 13 Artists founder and agent Charlie Myatt, claiming to offer promoters 2023 North America tour dates for Radiohead.
The scam email appears to be sent from Myatt’s correct email address but the sender asks recipients to reply to a bogus email address – [email protected] – that does not belong to him.
The email, titled RADIOHEAD – World Tour – North America 2023, reads: “RADIOHEAD are going to tour North America in 2023. Tour Period – July 15th, 2023 – November 30th, 2023. Due to a high volume of shows already on the books, a few time periods are available for bookings. Please contact us for more details and avails!”
A representative from 13 Artists told IQ they became aware of the issue on 2 November when Myatt began receiving bouncebacks from the phishing emails.
A number of promoters also got in touch with the Brighton-based booking agency after they received the phoney offer.
13 Artists was the subject of a similar scam in 2019, which saw a promoter send money for what they thought was a legit booking with the company.
If you become aware of a scam email or scheme, please get in touch and IQ will help raise awareness to the broader live music business.
Such scams had become relatively commonplace prior to the pandemic, with fraudsters posing as the representatives of major artists, including Adele, Ariana Grande, System of a Down, Beyoncé, Mark Knopfler and Eminem, emailing concert promoters and asking for deposits in exchange for non-existent live dates.
The sharp increase previously led the UK’s Entertainment Agents’ Association to issue a checklist, urging promoters to adopt the following steps if unsure of an agent’s identity:
1. Check the email address is correct – in particular the email domain – and if in any doubt call the agency to confirm it. Do not use the telephone number on the email
2. Check the artist’s website for any conflicting touring plans
3. Make sure you have full contact details of the agent with which you are working and speak to them on the phone at least once
4. Before sending a deposit, call the agency to confirm the booking and check their account details
5. Check with promoters in other markets to verify the artist is touring in that region at that time
6. If an offer is accepted and seems too good to be true, it probably is
Last year, a woman admitted scamming a charity out of $100,000 by posing as a booking agent for artists including Bruno Mars, Justin Timberlake, Drake and Ed Sheeran. Atlanta, Georgia-based Carissa Scott pleaded guilty to one count of fraud following a hearing in a New York federal court.
Under the name Canvas Media Group, Scott and a fellow defendant were charged with conspiring to defraud investors in events including a December 2019 benefit concert for the Sandy Hook Promise Foundation, set up by relatives of victims of the 2012 Sandy Hook Elementary School shooting.
Prosecutors said Canvas Media “falsely represented that they could book top-tier musical acts to perform at the concert”, and sent organisers a contract asking for $500,000 for his performance and a $275,000 deposit. One investor in the benefit show subsequently sent a $100,000 partial deposit to the scammers.
If you become aware of a scam email or scheme, please get in touch and IQ will help raise awareness to the broader live music business.
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Scam artists offer fake Ariana Grande tour dates
Scam artists have been posing as Ariana Grande’s agents, claiming to offer 2022 European tour dates for the singer.
In an email seen by IQ, fraudsters purporting to represent the singer state that she is “going to tour Europe in support of her forthcoming album which is scheduled to drop on July 15, 2022”.
Demands include 20 single rooms in a 5* hotel, and 10 single rooms and 15 double rooms in a 4* hotel for a travelling party of “60 Peoples” (sic).
Inviting promoters to “please send us your offer” for the star, who is a client of CAA, it adds: “We look forward to receiving your availabilities for this period so that we can put together the best possible tour schedule to deliver Ariana’s show to her fans.”
The email is headed: “ARIANA GRANDE – WICKED TOUR 2022”.
A sharp increase led the UK’s Entertainment Agents’ Association to issue a checklist for promoters
Such scams had become relatively commonplace prior to the pandemic, with fraudsters posing as the representatives of major artists, including Adele, System of a Down, Beyoncé, Mark Knopfler and Eminem, emailing concert promoters and asking for deposits in exchange for non-existent live dates.
The sharp increase led the UK’s Entertainment Agents’ Association to issue a checklist, urging promoters to adopt the following steps if unsure of an agent’s identity:
1. Check the email address is correct – in particular the email domain – and if in any doubt call the agency to confirm it. Do not use the telephone number on the email
2. Check the artist’s website for any conflicting touring plans
3. Make sure you have full contact details of the agent with which you are working and speak to them on the phone at least once
4. Before sending a deposit, call the agency to confirm the booking and check their account details
5. Check with promoters in other markets to verify the artist is touring in that region at that time
6. If an offer is accepted and seems too good to be true, it probably is
Last November, a woman admitted scamming a charity out of $100,000 by posing as a booking agent for artists including Bruno Mars, Justin Timberlake, Drake and Ed Sheeran. Atlanta, Georgia-based Carissa Scott pleaded guilty to one count of fraud following a hearing in a New York federal court.
Under the name Canvas Media Group, Scott and a fellow defendant were charged with conspiring to defraud investors in events including a December 2019 benefit concert for the Sandy Hook Promise Foundation, set up by relatives of victims of the 2012 Sandy Hook Elementary School shooting.
Prosecutors said Canvas Media “falsely represented that they could book top-tier musical acts to perform at the concert”, and sent organisers a contract asking for $500,000 for his performance and a $275,000 deposit. One investor in the benefit show subsequently sent a $100,000 partial deposit to the scammers.
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Bogus Justin Timberlake booking agent admits fraud
A woman has admitted scamming a charity out of $100,000 by posing as a booking agent for artists including Bruno Mars, Justin Timberlake, Drake and Ed Sheeran.
Atlanta, Georgia-based Carissa Scott pleaded guilty to one count of fraud following a hearing in a New York federal court earlier this week.
Under the name Canvas Media Group, Scott and fellow defendant Nancy Jean were charged with conspiring to defraud investors in events including a December 2019 benefit concert for the Sandy Hook Promise Foundation, set up by relatives of victims of the 2012 Sandy Hook Elementary School shooting.
Prosecutors said Canvas Media “falsely represented that they could book top-tier musical acts to perform at the concert”, and sent organisers a contract asking for $500,000 for his performance and a $275,000 deposit. One investor in the benefit show subsequently sent a $100,000 partial deposit to Jean and Scott.
Law360 reports that bank records allegedly show Scott and Jean immediately started using the money on leasing a Mercedes-Benz, making large cash withdrawals and going shopping.
Scott also reported she could book other artists for the concert, including Drake, Flo Rida and Ed Sheeran
According to legal papers, the investor requested proof of the booking when Timberlake’s social media account failed to mention or promote the event.
The investor then received a telephone call from an “unidentified male”, who falsely claimed to be Timberlake’s manager. He stated that Timberlake would perform at the benefit for an increased fee of “between $800,000 and $1 million”. When the investor baulked at the demands, Canvas Media said Bruno Mars could perform instead for $600,000.
Scott also reportedly claimed she could book other artists for the concert, including Drake, Flo Rida and Ed Sheeran.
The real managers for Mars and Timberlake later told investigators they had never heard of Canvas Media and had never spoken to Scott and Jean, who were arrested in January 2020.
Scott, who has been ordered to pay $100,000 (€86,500) in restitution, is due to be sentenced on 24 February next year. The status of the case against Jean is currently unclear.
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Woman indicted for Taiwanese promoter scam
The Taipei District Prosecutors’ Office has reportedly charged a woman with fraud and forgery, for posing as a promoter for concerts by K-Pop groups, Mandopop star Andy Lau and Singaporean musician JJ Lin.
According to the Taipei Times, Chao Chung-ling is accused of defrauding six people who invested TWD 4.84 million (US$159,000) in her business after she claimed she was promoting a concert by Lau in Taiwan last year.
The individual in question, reportedly the proprietor of Taipei-based agency FD Model Co, had previously received TWD 4m ($132,000) from separate investors for a concert tour by K-pop band VIXX.
The report also states that Chao sought an investment of TWD 800,000 ($26,000) in January last year, again claiming she was putting on an Andy Lau show in Taiwan.
The Asian live industry has seen its fair share of scams in recent years
Chao was also allegedly sued last year by claimants who said they lost TWD 40m ($1.3m) on a concert she claimed she was promoting for K-pop superstars BTS. In another claim, an investor said he gave Chao TWD 6m ($198,000) for a series of dates by Taiwanese hip-hop band 911.
The Asian live industry has seen its fair share of scams in recent years. Last year, promoters, festivals and venues across Asia were contacted by bogus ‘agents’ claiming to represent artists such as Lady Gaga, Eminem, Rihanna and System of a Down.
More recently, several South Korean industry insiders were accused of defrauding promoters and investors of more than $4m by posing as representatives of BTS’ management company, Big Hit Entertainment.
Similar scams targeted European promoters in 2018, which saw fraudsters pose as representatives of Adele, Justin Timberlake, Beyoncé and more.
Photo: Huandy618/Wikimedia Commons (CC BY-SA 3.0) (cropped)
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WiZink Center reports 1.2k fake tickets in 2019
More than 1,200 fans were denied entry to Madrid’s 16,000-capacity WiZink Center last year, having purchased false or duplicated tickets from unofficial platforms.
According to a report by the venue, there has been an “alarming increase in ticket fraud” in recent months, as fraudsters “capitalise on high demand and sophisticated technology to deceive fans who want to buy tickets at any price.”
In all cases, tickets had been purchased from secondary ticketing sites or through resale between individuals, either online or via street touts.
As reported in the International Ticketing Yearbook 2019, secondary ticketing has long been a controversial issue in Spain and has been raised at government level. However, according to promoters’ association APM, concrete action is yet to be taken.
In May last year, Anatic, the association for secondary ticketing in Spain, warned against the fraudulent behaviour of many resellers and called for regulation and professionalisation of the sector.
To avoid more fans falling foul of fraudsters, the arena – the biggest in Spain – has launched an awareness campaign, disseminating advice to fans through banners on its website and other digital platforms.
“This is a problem that affects us directly, given that we are the ones who end up denying entry”
“This is a problem that affects us directly,” says Almudena Requena, director of ticketing at the WiZink Center, “given that we are the ones who end up denying entry to people with these kinds of tickets. This places a responsibility on us that we are not accountable for.”
Eugeni Calsamiglia, general director of Ticketmaster Spain, says that although it has always been advisable to buy ticket through official channels, it is now “essential”.
“Current access control systems detect 100% of false or duplicated tickets,” explains Calsamiglia, “so the risk of not being able to enter a concert with a ticket bought on an unofficial channel is high.”
The arena reminds fans that, unlike tickets bought through unauthorised channels, tickets purchased from its online box office or through other official sellers also protect against cancellations and date changes.
Upcoming concerts at the WiZink Center include Halsey, Jonas Brothers, Maluma, Bon Iver and Dua Lipa.
Photo: Luis García/Wikimedia Commons (CC BY-SA 4.0) (cropped)
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Bogus booking agents arrested in New York
Two women who allegedly scammed a charity out of hundreds of thousands of dollars by posing as booking agents for artists including Bruno Mars, Justin Timberlake, Drake and Ed Sheeran have been arrested by police in New York.
Under the name Canvas Media Group, Nancy Jean and Carissa Scott conspired to defraud investors in events including a benefit concert for the Sandy Hook Promise Foundation, set up by relatives of victims of the 2012 Sandy Hook Elementary School shooting, according to prosecutors.
As alleged in the US district attorney for eastern New York’s complaint against the pair, Jean and Scott were contacted last September by the organiser of a concert at the 64,000-seat Alamodome in San Antonio, Texas, in aid of the Sandy Hook Promise Foundation.
Prosecutors say Canvas Media “falsely represented that they could book top-tier musical acts to perform at the concert, and provided the investor with a contract for a total fee of [US]$500,000 that purported to commit Timberlake to perform”.
One investor in the benefit show then sent a $100,000 deposit to Jean and Scott, which they allegedly later used for personal expenses or withdrew as cash.
“Subsequently, when Timberlake’s social media account failed to mention or promote the event, the investor requested confirmation that Timberlake was booked,” the complaint continues. “In response, the investor received a telephone call from an unidentified individual who falsely claimed to be Timberlake’s manager. The unidentified individual stated that Timberlake would perform at the concert, but that the fee would have to be raised to between $800,000 and $1 million.”
“Simple stealing is bad enough, this is worse”
When the investor baulked at the increased ‘fee’, Canvas Media said Bruno Mars could perform instead of Timberlake for $600,000.
Scott also reportedly claimed she could book other top-tier artists for the concert, including Drake, Flo Rida and Ed Sheeran.
“As alleged, the defendants viewed a fundraiser for a charity formed to protect children from gun violence as an opportunity to commit fraud and line their own pockets,” comments Richard Donoghue, United States attorney for the eastern district of New York. “Simple stealing is bad enough, this is worse.”
According to the New York Post, Jean and Scott have been banned from working as agents or promoters while awaiting trial.
William Sweeney Jnr, assistant director in charge of the FBI’s New York field office, says: “Nancy Jean and Carissa Scott may have been able to realise a quick profit as a result of their alleged fraudulent booking scheme, but not long after their illegal activity took off they landed in New York to face federal criminal charges.
“It’s discouraging to think these defendants were willing to defraud an investor supporting a charity foundation. Fortunately, the FBI doesn’t entertain such activity.”
Justin Timberlake is no stranger to agency scams, having been one of a number of high-profile artists targeted by scammers pretending to be his representative, alongside artists such as Adele, Eminem and Mark Knopfler.
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Korean ‘industry pros’ implicated in $4m K-pop scam
Several South Korean industry insiders have been accused of defrauding promoters and investors out of more than ₩5 billion (US$4 million) by posing as representatives of BTS’s management company, Big Hit Entertainment.
According to The Fact (via Allkpop), a total of 11 music companies, primarily small and medium-sized promoters, were targeted by concert professionals ‘K’ and ‘D’, who forged Big Hit contracts and took ‘deposits’ – ranging from ₩150m ($130,000) to ₩1.4bn ($1.2m) – for non-existent BTS shows.
In one typical example, The Fact reports, an Indonesian promoter put down a deposit for a BTS concert due to take place some time between November 2019 and February 2020. The ‘fee’ for the show is listed as US$2.8m, with the number of concertgoers estimated at 50,000.
Other individuals involved in the alleged scam include a famous actor, ‘A’, and their manager, ‘Seok’, who posed to Chinese investors as a Big Hit Entertainment board member.
One of the victims, ‘L’, says: “The manager, ‘Seok’, deceived them by saying that he holds the rights to distribute BTS transportation cards at ‘C Entertainment’, an agency created by him and ‘A’. The Chinese investors believed the stories of the famous Korean actor and his manager and invested about ₩800m [$685,000] in distributing the fake cards.”
“The Chinese investors believed the stories … and invested about ₩800m”
Other victims include companies based in Malaysia, Vietnam, Thailand and Hong Kong.
The Hong Kong company, reports Soompi, realised they had been scammed after a concert due to take place in the city-state did not go ahead.
‘K’ was reportedly arrested on 9 November and is being held in a detention centre in Seoul. Police believe he has a history of posing as other Korean artists and their representatives, including Exo, Super Junior, Lee Min Ho and Sistar.
In a statement, a spokesperson for Big Hit says the company was unaware the scammers were posing as its employees. “We did not learn about this ‘fake document’ until we received photos of the reports,” it reads. “The contracts depicted in the photos [obtained by The Fact] are fake documents, and have nothing to do with Big Hit Entertainment. When we confirm specific details of such crimes and damages caused by these crimes, we will take legal action.”
The scam appears to be a more sophisticated version of those employed against promoters in Europe, who have been targeted by bogus emails purporting to come from leading booking agents.
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Hologram USA hits back amid fraud allegations
Hologram USA and its CEO Alki David have announced that they intend to “vigorously fight” allegations of fraud and registration violations made by the US Security and Exchange Commission (SEC).
The SEC complaint alleges that Hologram USA presented “false and misleading” information to investors on its website, in relation to its “exclusive” rights to present holographic performances of artists including Tupac Shakur, Whitney Houston and Roy Orbison.
The complaint also claims the company misled investors regarding the existence of a Hologram USA theatre network, which was said to include the Landmark Theater in Indianapolis, the Civic Theater in New Orleans, the Saratoga Casino in New York and the Twin River Casino in Rhode Island.
Additionally, the SEC states that Hologram USA drew investors to its website through a TV commercial advertising the sale of unregistered stock.
“Through a nationwide television commercial and internet campaign that hyped Hologram’s purportedly imminent public offering, defendants knowingly or recklessly disseminated materially false and misleading statements to promote these unregistered offerings to prospective investors,” writes the SEC.
“I’m glad they sued and I’m going to countersue”
According to the SEC, David sold US$100,000 worth of unregistered shares between December 2017 and March 2018 ahead of an aborted initial public offering (IPO). The company had sought approval from the SEC to sell the stock but started soliciting buyers and selling unregistered securities to investors – “many of whom were not accredited” – before receiving the go ahead.
In March 2018, the SEC began enquiring about the unregistered offerings and Hologram USA started to refund investors. By April, all but $26,000 had been returned, according to the complaint.
“I’m glad they sued and I’m going to countersue,” says David in response to the complaint, which he terms as “bullshit”.
“I spent $80 million of my own money to build my company and take it public,” continues David. “I hired the best people and did everything by the book, working closely with NASDAQ. Twice, the SEC has targeted me and blocked my efforts to create hundreds of jobs as I advance the hologram industry. And now this. They’ve picked the wrong guy to fish for some settlement with. I’m not going to take it.”
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