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Lockyer Sues Hollywood Charity Event Producer, Alleging Fraud

The state moves to shut down Aaron Tonken's firm. The defendant says he's the one victimized.

March 14, 2003|Michael Cieply and James Bates | Times Staff Writers

California Atty. Gen. Bill Lockyer moved Thursday to shut down a prominent charity event organizer, accusing the firm of misusing funds from affairs backed by a stable of entertainment and political luminaries -- from Michelle Pfeiffer to Michael J. Fox to Bill and Hillary Rodham Clinton.

In a 53-page complaint, state prosecutors accused fund-raiser Aaron Tonken, socialite Cynthia Gershman and two associates of orchestrating schemes that misdirected or failed to account for at least $1.5 million in charitable contributions.

Tonken has produced some of Los Angeles' glitziest charity events, including "A Family Celebration 2001," which was co-sponsored by the Clintons and people connected to the "Ally McBeal" TV series, including producer David E. Kelley and Pfeiffer, his wife. The suit, filed in Los Angeles County Superior Court, said funds were improperly diverted from that event to accounts controlled by Tonken.

Gershman, the widow of Beverly Hills real estate developer Hal Gershman, has been a frequent contributor to charitable and political causes and hosted several high-profile events for the Clintons and Al Gore during the 2000 campaign season.

According to the complaint, Gershman breached her fiduciary duty as a trustee of the Gershman Foundation by giving as much as $690,000 to a defunct foundation that diverted some or all of the money to Tonken. Gershman also funneled additional funds from the foundation through Tonken, who used them to pay her public relations expenses, the complaint said.

Philip Levy, an attorney hired by Tonken to evaluate the complaint, said, "Mr. Tonken's position is that he never benefited personally from any of the events he produced."

Levy said many charities "have benefited enormously" from Tonken's events and that the fund-raiser himself had been victimized. "Mr. Tonken feels ... on more than one occasion he was taken advantage of by people who did benefit personally."

Richard Sherman, an attorney for Gershman, said he hadn't seen the complaint and couldn't address its specifics. He said Gershman, on his advice, had declined to answer questions from the attorney general's office during an investigation that has been underway for months.

Also named in the complaint were Robert Freedman and attorney Kenneth Mattes Clarke.

The suit said Freedman improperly received $200,000 from a planned "Celebrating Diana" fund-raiser, built around singer Diana Ross and sponsored by the Joan English Fund for Women's Cancer Research. The event was scratched last year.

The attorney general has accused Clarke of misappropriating funds and failing in his duty to account for charitable dollars.

Sherman, who represented Freedman during the investigation, said his only involvement was to loan Gershman money.

Attempts to reach Clarke were unsuccessful.

At a Los Angeles news conference organized by Lockyer, charity representatives said they assumed Tonken was trustworthy because of the Clinton ties.

Tonken helped organize a $1-million fund-raiser for Hillary Rodham Clinton's 2000 New York Senate campaign. A spokesman for Clinton acknowledged that the senator knows him but had no information about the case.

Tonken also was linked in fund-raising activities to socialite Denise Rich, a Democratic donor whose ex-husband, fugitive financier Marc Rich, was pardoned by Bill Clinton.

Rich gave $75,000 to a 90th birthday charity event for Milton Berle in 1998 that Tonken organized at the Beverly Hills Hotel, with Gershman's backing. A suit filed by a former Tonken associate said Rich introduced Tonken to the Clintons.

The new complaint said Tonken failed to account for funds contributed for a subsequent Berle tribute that was supposed to benefit the Westside Waldorf School. The school hired Tonken only after he said he would provide a $650,000 donation from Gershman. But the socialite withdrew the donation after having "irrevocably pledged" it, the suit said.

Two executives involved in Hollywood's Democratic circles said that Tonken appeared on the scene overnight and that as a result many veteran fund-raisers were wary of him. They described him as a name-dropper who often cited the rich and famous without permission in organizing events.

According to one source, Tonken lobbied hard, but unsuccessfully, to be named one of the dinner chairs at a May 2002 fund-raiser for Gov. Gray Davis organized by the DreamWorks SKG trio of Steven Spielberg, David Geffen and Jeffrey Katzenberg.

The position required a $25,000 donation. According to sources, Tonken had not made the donation by the time the invitations were to be printed, then faxed credit card information for a man listed as a lawyer who worked for Tonken's company. Staff members organizing the event declined the donation.

Lockyer said the case "may eventually ripen" into a criminal matter. He said he had filed the civil case first to shut down Aaron Tonken & Associates and recover missing funds as quickly as possible.

"The attorney general should feel very successful in that," said Tonken's representative, Levy. He said Lockyer's operatives effectively closed the firm "when they began this investigation by contacting all the people involved."

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