We seem to be in the midst of numerous hip hop related scandals at the moment, including ongoing drama at The Source and the less closely related but still relevant news of possible insider trading of Reebok related to Adidas' acquisition.
However, I'm just learning about the unfolding tale of the wayward money manager Gabriele T. Smith who, initially at "major investment houses and then through her own company, Premier Business Management L.L.C. in New York . . . built a client list that included the president of the Def Jam Recordings label, rap stars like Fabolous and DJ Clue, and an assortment of wealthy young music executives," some of whom she allegedly ripped off.
Apparently Ms. Smith began her career in the music industry in various entry level jobs before becoing a so so A&R for Tommy Boy. However, after a year of that, she went on to become a stockbroker at Morgan Stanley before reconnecting with folks in music in 1997, just in time to ride the tech boom to financial wizardry. One of her clients at Morgan Stanley was Kevin Lyles.
Smith moved on to Prudential Securities in 2001 for a few months, secretly forming her own independent company while employed by Prudential. At the time, she was dating the vice president for promotion at Def Jam, Michael Kyser, which gave her substantial credibility in music circles. Though Kyser says he was not involved with her business and they later broke up, Smith's access allowed her to accumulate a number of clients, including DJ Clue, and provide services ranging from paying bills to investing.
The initial decay of her empire came in late 2002 when clients began discovering that important bills had not been paid and that money was missing. Full scale collapse came in early 2003 "when federal authorities raided her offices as part of their investigation of Mr. [Kenneth] McGriff - whose drug-dealing organization dominated the Baisley Park housing project in Jamaica, Queens, in the 1980's - and Murder Inc., the music label headed by Irving Lorenzo."
Unfortunately for Ms. Smith, Premier had been handling an account for McGriff that had allegedly been used to help launder drug money and may also have been handling "money for Ronald Robinson, an artist manager also known as Gutta, whom the authorities have indicted on money-laundering charges."
Currently there are multiple lawsuits involving Smith and the companies with which she was associated, as well as federal charges that have been sealed, leading to speculation that she may be providing information on another case, possibly that of Kenneth McGriff and Murder Inc.
Former clients are claiming that Gabriele T. Smith "stole more than $3 million, using some of their money to pay other investors and pocketing the rest." Kevin Lyles, "now an executive vice president at the Warner Music Group, has sued Ms. Smith, saying he lost about $450,000 that he had invested with Ms. Smith when she was at Morgan Stanley and Prudential."
Although it might be tempting to say that this situation is simply another example of the twisted nature of the rap game, such stories involving financial fraud by trusted advisors of wealthy individuals, including entertainers, periodically recur. If the allegations are correct, this tale is more about the fact that once a con artist has become a trusted figure in a social network, members of that network accept that status until the truth is painfully revealed.
ProHipHop Update:
Morgan Stanley Settles w/New York Over Gabriele T. Smith
Recent Comments