According to papers filed today in Los Angeles County Superior Court, the business manager of a “world famous super group” has been cooking up a mess of trouble for the band, including non-payment of federal taxes for at least eight years, non-payment of state income taxes in California and other states, and suspension of band members’ California corporations for non-payment of corporate income taxes.

At least one of the suspended corporation is owned by Black Eyed Peas singer will i am while others are owned by various members of the band and the band as whole. Another of the corporate entities is the band’s touring corporation.

The situation came to light when business manager Sean Larkin sued attorney Helen Yu, who represents several of the band members, for $5 million dollars  for defamation of character over Yu’s concern about the state of the band’s finances.  According to Courthouse News, Larkin’s suit alleged Yu defamed him after he forgot to file taxes for the band and used the

inadvertent error

to

hatch an underhanded, deliberate and malicious scheme to ruin Larkin’s reputation and poach his clients through lies, misrepresentations and falsehoods.

Larkin says realized his mistake, he says he took responsibility, filed the forms and agreed to pay interest and late penalties. Um, “inadvertent error”? “Mistake”? Ooops, yeah kind of a big one, especially if that’s your job. But Yu in her response alleges a knowing and/or reckless breach of fiduciary duty, claiming that Larkin is now playing catch-up, finally creating the books and records, which should have been kept the whole time.

Yu’s answer claims:

….Larkin has failed to file numerous tax returns for years. Despite the music group earning tens of millions of dollars over several years, Larkin is only now creating necessary accounting ledgers of the music group, which books and records should have been created and maintained on an on-going basis.

Hmmm, seems like the IRS and the California Franchise Tax Board would know if taxes had been not been filed for eight years as Yu claims. In fact Yu’s response says a

third-party audit started months earlier after the music group discovered some of Larkin’s misconduct and after IRS inquiries regarding Larkin’s failure to file tax returns.

A search of the California Secretary of State’s business registry shows that several corporation linked to the Black Eyed Peas, including their touring corporation, have been suspended.  According to the California Secretary of State’s website

A business entity’s powers, rights and privileges can be suspended or forfeited in California by (1) the Secretary of State for failure to file the required Statement of Information; and/or (2) the Franchise Tax Board for failure to file a tax return and/or failure to pay taxes, penalties or interest.

The answer Yu filed claims that

As a direct result of Larkin’s misconduct, corporate entities owned by the music group and its members have been “suspended” by the Franchise Tax Board for nonpayment of taxes.

A famous person or group without a corporate shell is suddenly open to a world of problems, which Yu’s response claims

the full extent of which is still unknown because Larkin has delayed and obstructed efforts to audit the performance of his duties as a business manager for the music group.

The only defense of defamation is the truth. And with allegedly suspended corporations, an alleged IRS inquiry, and allegedly just getting around to getting the books in order, that truth may be a very interesting one.