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Musicians' money manager faces scrutiny

Sean Larkin got his start with the Black Eyed Peas and soon had a full roster. But he has acknowledged in court filings that he failed to file income taxes. 'I was overwhelmed by work flow,' he said.

April 14, 2012|By Harriet Ryan, Los Angeles Times
  • Sean Larkin, right, the former business manager for the Black Eyed Peas, poses with, from left, Michael Jurkovac, will.i.am and Fred Goldring after winning an Emmy for the "Yes We Can" video in support of Barack Obama. Larkin is under investigation after many of his clients said he failed to file their income tax returns.
Sean Larkin, right, the former business manager for the Black Eyed Peas,… (Marc Bryan-Brown )

Sean Larkin was a Cal State Northridge accounting grad trying to break into the entertainment industry when he met a hip-hop act that performed in local clubs.

The Black Eyed Peas didn't need high-level financial advising in the mid-1990s, when they were often broke and handed out fliers to fill their shows. Larkin signed on as their business manager anyway and remained at their side as they became international superstars who routinely pulled in $1 million a night.

What seemed a rare story of loyalty rewarded in the music industry has revealed itself as a cautionary tale in recent years. The Peas jettisoned Larkin after discovering that he had gone years without filing their federal and state income tax returns. Other clients stepped forward with similar allegations and federal authorities began looking into his handling of client money.

Larkin's own finances also are troubled. His 5% cut of the Peas' revenue should have made him a multimillionaire, but public records indicate he owes more than $1.1 million in taxes, and American Express recently sued him over failure to pay a $58,000 credit card bill.

"I've tried my hardest to make sense of it," said Peas' guitarist George Pajon, who is suing Larkin for breach of contract. "It's ugly. It's really nasty."

He and other former clients said finding out they owed hundreds of thousands of dollars in delinquent taxes hurt all the more because they regarded Larkin as reliable and candid in a shark-infested industry.

"It was a very slow heartbreak," recalled singer Laura Dawn Murphy, who used Larkin as a business manager for years. "We were begging him to be the person who he said he was."

Larkin did not return messages, and his lawyer declined to comment, citing ongoing litigation with Pajon and another client. He has acknowledged in court filings that he failed to file tax returns and, in a deposition last month, blamed his sudden success.

"I was overwhelmed by work flow," he testified.

Those who know Larkin describe an understated, conservative presence in a business of flash and noise. He drove a Prius, dressed in unremarkable suits and lived for years in a modest Sherman Oaks condominium by the Ventura Freeway.

In a club, he could stretch one cocktail out over an entire evening, said Murphy, who occasionally socialized with him. Asked in a deposition last year if Larkin gambled a lot in Las Vegas, one longtime employee laughed in disbelief.

He shared a Sherman Oaks office with his father, John, a veteran business manager, an arrangement some clients found heartwarming and reassuring. (John Larkin came under police investigation this week following a Times report about his handling of an elderly heiress' affairs.)

Sean Larkin's long-standing relationship with the Peas, whose gold records and photos once decorated his office, was his calling card. Although singer Stacy "Fergie" Ferguson had her own business manager, Larkin handled the affairs of the group, its other members, and associated musicians. At industry events, he was frequently with the Peas and he spoke of traveling around the world to see them.

In an unusual move, frontman will.i.am gave Larkin an associate producer credit on the "Yes We Can" video he made in support of Barack Obama's 2008 campaign. Larkin, a registered Republican, voted in the GOP primary the same week the video launched, records show. When it won an Emmy, he was at will.i.am's side to pick up the award.

Larkin's professional relationships often grew into friendships. When Larkin got married, the late celebrity deejay Adam "DJ AM" Goldstein performed. When Pajon married, Larkin delivered a toast.

"It's just obscene to me," Pajon said. "He knew what he was doing and had no problem speaking at my wedding."

The erosion of Larkin's position as a trusted advisor to the Peas and others is detailed in court filings, breach-of-contract suits by Pajon and another client, a Fox executive, and a defamation claim that Larkin filed against an attorney.

In spring 2009, the Peas learned that the California secretary of state had suspended the band's corporate entities because of delinquent taxes. It quickly emerged that Larkin had not filed tax returns for at least five years — a period in which the Peas had toured constantly; sold millions of records; signed endorsement deals with Apple, Best Buy, Verizon and other major companies; and brought in tens of millions of dollars.

Lawyers for Larkin would later call the failure to file returns "an inadvertent oversight." Larkin told Pajon that the Peas had gotten too big too fast for him to handle, the guitarist said. Larkin apologized, agreed to pay the money owed and asked the group to "keep it in the family," according to Pajon's complaint.

A former Larkin employee, Jean-Luc Tahou, said Larkin didn't appear worried. "He said that he had it under control," Tahou said in an interview.

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