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Sly Stone Claims Manager Swiped $80 Million

LOS ANGELES (CN) - Sly Stone says his manager stole $80 million in licensing fees, royalties and other income from Sly and the Family Stone records over 20 years, leaving Stone to "live hand to mouth, at times homeless and dependent on Social Security payments."

Stone, whose real name is Sylvester Stewart, claims longtime manager Gerald Goldstein slipped a waiver granting himself rights to collect Stewart's royalties into what Goldstein claimed was a standard management agreement.

Then, Stewart says, Goldstein spent 20 years telling the bandleader that he had earned little or no royalties from Sly and the Family Stone albums, and that "problems with the IRS" prohibited Stewart from holding assets in his own name.

Stewart claims Goldstein never gave him an accounting of royalties from the 12 records put out by Sly and the Family Stone and Sly Stone solo albums, from 1989 through 2009.

Stewart claims that in 1999, Goldstein and the companies he set up to help him defraud Stewart worked out a scheme to borrow money from Mercantile National Bank against Stewart's future royalties. In 2007, Goldstein claimed that he and Stewart's label were done advancing Stewart money, though Goldstein kept borrowing against future royalties, according to the complaint.

Stewart says the last time he signed an agreement with his label, BMI, was in 1979. Since then, Stewart claims, BMI automatically extended that agreement every two years. BMI was supposed to send Stewart royalties and statements twice a year, but it has not done so since Stewart signed with Goldstein, according to the Superior Court complaint.

From 1980 through 1984, Stewart says, BMI paid his royalties to the IRS.

From 1985 until 1996, Stewart claims the record label sent his royalties to "an address unknown to him in Woodland Hills, Calif."

And from 1996 to 2009, Stewart says, BMI sent his royalties to one of the companies Goldstein set up to defraud him.

Co-plaintiff Ken Roberts, Stewart's former manager, claims Goldstein set up a copycat company called Majoken, the same name as the company Roberts used to collect Stewart's royalties in the 1970s, before "loaning" the money to Stewart.

Roberts says he dissolved Majoken in 1991, but Goldstein started a new company under the same name without permission in 1996, to defraud Mercantile National Bank of Stewart's future royalties.

Sly and the Family Stone reportedly have announced a rare performance at the 2010 Coachella Music Festival in Indio, Calif.

Stewart seeks punitive damages for fraud, conversion and breach of fiduciary duty.

Named as defendants are Gerald Goldstein, Amadeus Trust, the Gerald Goldstein Revocable Trust, Amadeus Capital Investors, Amadeus B, Avitta Properties, Claire Levine aka Claire Goldstein, Jaclyn Levine, Stephen Topley, Glenn Stone, Elva Hackney, Columbia Street Inc., Even Street Productions, Stone Fire Productions, Majoken Inc., Jerry Goldstein Music Inc., Audio Visual Entertainment Inc. dba Avenue Records adba Avenue Music Group, First California Bank, Mercantile National Bank, Broadcast Music Inc., Sony Music Entertainment, Warner/Chappell Music, Warner-Tamerlane Publishing Corp., and SoundExchange Inc.

Stewart and Roberts are represented by Robert Allen and Rod Rummelsburg with the Allen Law Group.

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