Gambling addiction made me embezzle: Morissette’s manager
LOS ANGELES — Alanis Morissette’s meteoric rise to fame put her in need of someone who could wisely invest her fortune for her future.
She thought she found that person in Jonathan Todd Schwartz, a money manager to the stars, who earned her trust and assured her that her nest egg was secure and growing.
But even as she was repaying the favour by singing her hits at a benefit for a charity Schwartz founded, he was pocketing royalties from her hit 1995 record Jagged Little Pill and other albums.
Schwartz was sentenced Wednesday to six years in federal prison for embezzling more than $7 million from Morissette and others after the singer made a pitch for a lengthy and severe sentence, saying he stole more than her money — he stole her dreams.
“He did this in a long, systematic, drawn-out and sinister manner,” Morissette said, adding it would have bankrupted her within three years had the thefts continued.
Schwartz, 47, who blamed his gambling addiction for the thefts, wept and apologized at the hearing, saying he took full responsibility for his “stupid” behaviour and would live in shame because of it.
“I will spend the rest of my life asking for forgiveness,” he said in seeking less than a year in prison.
Prosecutors sought just over five years in prison, but U.S. District Judge Dolly Gee said she thought Schwartz deserved more time for the “sheer audaciousness of this conduct.”
Gee noted that she has criticized federal sentencing guidelines as draconian, but said they weren’t harsh enough in this case. Schwartz’s gambling addiction may explain the wire fraud and tax crimes, but didn’t excuse them, she said. She ordered him to pay $8.6 million in restitution.
Schwartz admitted stealing nearly $5 million from Morissette between May 2010 and January 2014 and more than $2 million from five unnamed clients when he worked at GSO Business Management, a firm that touted relationships with entertainers such as Katy Perry, 50 Cent and Tom Petty.
Schwartz was a high-flying partner making $1.2 million a year, according to court papers. The thefts struck a blow to the firm’s reputation that led to nearly a dozen layoffs and is expected to cost it $20 million, according to founder Bernard Gudvi.
The embezzlement was discovered by a new money manager Morissette hired after she couldn’t get a straight answer from Schwartz about her investments.
When GSO was contacted about the apparent theft, Schwartz made “wild accusations” Morissette was a drug addict and mentally unstable, Gudvi said.
Schwartz penned a mea culpa in The Hollywood Reporter recently, saying his crimes ruined his family and career. He said his father was a gambling addict who abandoned his family and he sought refuge in sports betting and drugs to deal with the stress from his business.
“If I lost, then I had to make it back and when I lost again, the hole I had dug got deeper and deeper,” he wrote. “I felt weak and powerless, terrified by my internal demons that I was turning into my father.”
Assistant U.S. Attorney Ranee Katzenstein disputed that Schwartz was a gambling addict or that he had come clean when he was caught.
Schwartz “did not ‘reveal, reform and rehabilitate’ as soon as his crimes were discovered; he lied, blamed others,” Katzenstein wrote. “He did not acknowledge that he’d committed a crime until after the government had put together its case and he had no other choice.”