Soft rock crooner John Mayer has been targeted in a Ponzi-scheme bankruptcy case, The Wall Street Journal reports.
Mayer fans can rest easy. The singer wasn't involved in the scheme. He was just allegedly paid with Ponzi scheme money for a performance at a corporate event.
Mayer played at a corporate event put on by Meridian Mortgage Investors. Frederick Darren Berg, who ran Meridian, evntually converted the business into a Ponzi scheme. He was sentenced last February to 18 years for defrauding five hundred investors out of more than $100 million.
Berg reportedly bought a huge mansion and a 70-foot yacht with the proceeds from his fraud. He denied running a Ponzi scheme up until his sentencing.
Whatever the case, Mayer's services were apparently paid for with questionable funds. Bankruptcy trustees looking to track down the millions of dollars lost in the scheme have named Mayer, among others, in the suit.
According to the lawsuit, Berg paid at least $465,000 to Mayer's booking agent, Grabow & Associates, between October 2007 and January 2008. Mayer reportedly played for Berg at a corporate event in 2008. According to Grabow & Associates' Bob Grabow it was private concert that "was very successful event for meeting planners in Seattle."
In bankruptcy cases, trustees are appointed to oversee the process and make sure that everything goes smoothly. In a Chapter 7, for instance, the trustee is in charger of rounding up the debtor's property, liquidating the property, challenging the creditors' claims where appropriate, and distributing the proceeds to the creditors.
In certain circumstances, the trustee tries recover money that the debtor inappropriately paid out, so that there's something left for the creditors. The lawsuit here is contending that Mayer should never have been paid with money illegally bilked from unsuspecting investors. According to Grabow, Mayer "never knew anything" about the fraud, and there's "no merit" to the lawsuit.
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