DETROIT (CN) – A RICO class action accuses Lady Gaga and others of skimming “a portion of the first five dollars of each donation” for Japanese earthquake relief they collected through sales of Lady Gaga Japan wristbands. The class claims Gaga and her co-defendants, including Live Nation Entertainment, “only sent a portion of the subject funds, if any, to the Japan Relief Effort.”
Lady Gaga (Steffani Germanotta) designed a wristband to raise money for Japan soon after the 9.0 earthquake and tsunami hit on March 11.
The class claims: “Lady Gaga personally and repeatedly stated: ‘I Designed a Japan Prayer Bracelet. Buy It/Donate here and ALL proceeds will go to Tsunami Relief Efforts. Go Monsters,’ and ‘Little Monsters, show your support for Japan with this ‘We Pray for Japan’ wristband! Choose your price to add an additional donation with your wristband,’ … ‘All proceeds go directly to Japan Relief Efforts.'”
But the class claims that not all of the money went to helping Japan. Lead plaintiff Caitlin Demetsenare claims: “A portion of the first five dollars of each donation were retained by defendants. These funds are included in the ‘Subject Funds.’
“Not only did defendants retain a portion of the first five dollars of the donation as set forth above, they also added additional ‘shipping charges’ in excess of the amount required to ship the wristbands based on their weight, and retained a portion of the shipping charges. …
“Additionally, consumers were taxed for their donations wrongfully, and the wrongfully levied taxes were not forwarded to the appropriate taxing authorities in the appropriate time frame. …
“Later, defendants claimed that they had raised a sum certain for the relief effort when all the funds touted as having been raised for the relief effort were not donated to the relief effort.”
The final allegation apparently refers to a CNN report of March 29, in which Germanotta claimed her relief effort had raised $1.5 million for Japan.
The scathing complaint states: “Defendants made materially false and misleading representations as set forth above when they (1) retained at least a portion of the first five dollars from each transaction instead of donating all proceeds to the Japan Relief Efforts; (2) artificially inflated reports of the total donations by including the portion of funds retained by defendants in their calculations; (3) represented that the cost to ship the bracelets was a certain amount and collected same from consumers, when it was not and (4) levied taxes against consumers for their donations that are inherently not taxable, and retained those funds.
“Defendants then used the inflated financials to solicit additional ‘donations.’ The additional donations were then treated in kind as set forth above.
“Defendants failed to perform as advertised. Defendants only sent a portion of the Subject Funds, if any, to the Japan Relief Effort.”
Also sued are Ate My Heart, Mermaid Music, House of Gaga Publishing, Bravado International Group Merchandising Services, Live Nation Entertainment, Live Nation Merchandising and Universal Music Group.
The class alleges RICO violations, unjust enrichment and violations of state consumer protection laws. They are represented by Alyson Oliver and Ari Kresch of Southfield, Mich.