GGW's Joe Francis Sues Accounting Firm

LOS ANGELES — Girls Gone Wild founder Joe Francis is embroiled in yet another legal battle.  This time, he's suing accounting firm BDO Seidman claiming that it duped him into investing millions of dollars in tax shelters that cost him millions in penalties.

The suit filed in Superior Court, alleges breach of fiduciary duty, fraud, fraudulent nondisclosure, negligent misrepresentation, negligent nondisclosure, and professional negligence.

Francis was indicted in Reno, Nevada in April 2007 and charged with tax evasion having deducted more than $20 million in apparent false business expenses on his 2002 and 2003 tax returns.

The case was moved to Los Angeles, and in September 2009 Francis pleaded guilty to filing false tax returns. In November 2009, Francis was sentenced to time served and a year of probation and pay $250,000 in restitution.

In the latest action Francis claims that accounting giant BDO, the firm he used to help with his 2001 audit of Mantra Films, bilked its clients out of millions by having them invest in the firm's tax shelters.

The 36-page complaint reads, "In the late 1990s and continuing through at least 2003, BDO created investment schemes which were purportedly lawful tax deferral/avoidance products that BDO mass marketed to its clients in order to generate millions of dollars in fees.

"BDO, and others, induced plaintiff to invest millions of dollars in the investment schemes, and BDO falsely represented to plaintiff; orally and in writing, that it was 'more likely than not' that a deduction taken for losses generated by such investments would be upheld if challenged by the IRS."

Francis reportedly said he invested in the firm's tax shelters and based on its recommendations claimed "substantial" deductions on his 2001 federal and state returns. He further maintained that he didn’t know and the firm didn’t tell him that its strategies did not "comport with then existing tax law, and that the IRS would likely succeed in challenging any deductions taken for losses generated by the investments."

Once the IRS investigated Francis’ 2001 return it found he owed more than $9 million and another $3 million in penalties and interest, according to the complaint.

"As of the filing of this complaint, the exact amount of any back taxes, penalties, and interest that plaintiff may be assessed in connection with the tax shelter product is currently being litigated and has not been determined with finality," the complaint states.

The Girls Gone Wild chief maintains that if it wasn’t for BDO’s shady practices he would not have been hit with penalties nor would he have invested in the tax shelters.

Francis is seeking at least $20 million in damages.

Coincidentally, Francis last month lost a slander case to casino mogul Steve Wynn and was ordered to pay up $20 million and another $20 million in punitive damages.

Related:  

Copyright © 2024 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

Justices Alito, Thomas Invoke Victorian-Era Morality Law, Raising Censorship Concerns

Several national publications reported this week on widespread concern among Free Speech advocates after U.S. Supreme Court Justices Samuel Alito and Clarence Thomas repeatedly invoked during a hearing the infamous segregation-era law the Comstock Act, which was the cornerstone of U.S. censorship of sexual material from the 1870s until the 1970s.

Nebraska AV Bill Moves Forward Despite Privacy, Free Speech Concerns

Nebraska’s unicameral Legislature has given first-round approval to LB 1092, the state’s version of the age verification bills being sponsored around the country by anti-porn religious conservative activists.

Performers in Meta Blacklisting Lawsuit Seek to Preserve Antitrust Claims

Adult Performance Artists Guild board officers Alana Evans, Kelly Pierce and Ruby have informed a California court that, although they want to drop their lawsuit claiming that Meta conspired with OnlyFans to blacklist rival premium fan platforms’ talent, they may still pursue antitrust claims in the future.

FSC, Co-Plaintiffs to Ask US Supreme Court to Review Constitutionality of Texas Age Verification Law

Free Speech Coalition (FSC) and its co-plaintiffs in the challenge to Texas’ controversial age verification law have petitioned the United States Court of Appeals for the 5th Circuit to stay its recent decision upholding the law, because they intend to appeal to the U.S. Supreme Court to review the law’s constitutionality.

FSC Vows to Fight Florida Age Verification Law

Free Speech Coalition (FSC) has issued a statement vowing to continue fighting Florida’s new age verification law, which was signed by Gov. Ron DeSantis on Monday as part of a comprehensive bill targeting minors’ use of social media.

Kansas Republican Aims to Create New Bureaucracy to 'Investigate' Porn Websites

Republican state legislators succeeded Monday in moving forward Kansas’ version of the age verification bills being sponsored around the country by anti-porn religious conservative activists, despite serious concerns raised by House Democrats about the cost of establishing a new bureaucracy tasked with investigating websites for pornographic content.

Industry Attorney, Free Speech Champion Clyde DeWitt Passes Away at 75

Noted industry attorney Clyde DeWitt passed away on Friday in Las Vegas at 75, according to friends and colleagues.

Texas AG Ken Paxton Sues Chaturbate, xHamster Over Controversial Age Verification Law

Texas Attorney General Ken Paxton filed lawsuits on Tuesday against the parent companies of Chaturbate and xHamster, claiming that the sites are not complying with the state’s controversial age verification law, HB 1181.

GirlsDoPorn's Michael Pratt Extradited From Spain, Pleads 'Not Guilty'

Former GirlsDoPorn owner Michael Pratt made his first appearance in federal court Tuesday following his extradition from Spain Monday night, according to a statement released by the Department of Justice.

Missouri Republican Behind FOSTA-SESTA Renews Attack on OnlyFans

Rep. Ann Wagner, the Missouri Republican legislator who was the original architect of FOSTA-SESTA, has renewed her call for federal action against OnlyFans.

Show More