Trust and Deception: A Story of Addiction and Financial Crimes

It’s never a good idea to blindly trust and deception can hide between even the most accomplished facades. Remarkable achievements and professional demeanors can conceal addition and criminal behavior. While events in our lives are unlikely to look exactly like Jonathan Schwartz’s celebrity-studded story, the lessons remain.

See Gambling, Lies, and Millions Stolen from Celebrities with Jonathan Schwartz for a complete transcript of the Easy Prey podcast episode.

Jonathan Schwartz was once Hollywood’s most trusted financial advisor. Known as the “diva whisperer,” he managed the finances of celebrities including Mariah Carey, Gwyneth Paltrow, and Beyonce. But behind his outstanding success, secret drug and gambling addictions led him to violate his fiduciary duty and embezzle over $4.7 million from his clients. He pled guilty to the crime in 2016, served his time, got sober, and is now focused on rebuilding his life and helping others. Currently he works as the program director at Altus Rehab, helping other people recover from their own addictions. He shares his story to help people understand how easy it is to fall into addiction – and that recovery is possible.

The Start of a Career

Jonathan grew up in upstate New York. When he was four years hold, his father abandoned the family, leaving his mother to raise him and his younger brother by herself. She was young, not prepared for single motherhood, and worked three jobs to put food on the table. It was a lot of stress, and she took a lot of it out on Jonathan. Though Jonathan takes full responsibility for his actions, childhood trauma has been shown to contribute to addictions and maladaptive behaviors, and he believes that was a factor in his later deception and violations of trust.

Jonathan attended three different colleges before graduating. He had seven CPAs in his family, and one was a cousin in the entertainment and music space. After graduation, he called that cousin and said he was ready to come work for him. The cousin said no – he should work in the public accounting world first. So Jonathan took a job at a small CPA firm in San Francisco, married his high school sweetheart, and got experience in a variety of accounting areas. After four years, his cousin called. So Jonathan packed his wife and young son up and moved to Los Angeles.

Jonathan worked hard. He was first in the office and last to leave. He spent a lot of time learning how to be a business manager for wealthy clients. In 1999, his cousin’s firm was acquired by Chase Manhattan Bank. His cousin invited him to get into investment management, but Jonathan decided to join another business management firm instead. With his cousin’s blessing, he took a few clients with him, and started at GSO Business Management.

The Big Break

Just after joining GSO Business Management, Jonathan got his big break. The band Linkin Park was searching for a business management. Jonathan and a partner at the firm, Michael, took the meeting. Jonathan was the young and energetic one, while Michael was older and more experienced. Linkin Park loved the combination. The band hired them in 2000, just before their first album released in November of that year.

This opened the floodgates of success for Jonathan. Linkin Park was the leading artist for selling albums in the 2000s. Jonathan landed more and more A-list clients, not because of who he was but because of who he already had as a client. In the entertainment industry, you’re only as good as your clients. And he had some great ones. He quickly made partner at his firm and started making a seven-figure salary. From the outside, he looked incredibly successful – but on the inside, he suffered from a lot of insecurity and low self-esteem so he didn’t feel that way.

Then, in 2010, he became addicted to gambling. That’s where the deception and violating clients’ trust began.

A Gambling Addiction

It wasn’t actually the first time Jonathan had gambled. The first was in college. He had the genius idea to be the bookie for his fraternity, and was probably the only bookie in history to lose money because he didn’t know what he was doing. Instead of paying the $10,000 he owed, he left that college and went to another one. The second time he gambled was at his cousin’s firm. One of the partners allowed him to place a bet. He lost $3,000, and the partner generously paid for it because Jonathan wasn’t making much money at the time.

But in 2010, he was helping coach one of his sons’ sports teams when the assistant coach asked if he wanted to gamble. He placed a $50 bet. At this point, he was making seven figures. He had plenty of money, and he was fine with winning or losing. But after that first bet, he just wanted more. He immediately began to bet with bigger numbers. By the end of the first week, he had lost $25,000.

He should have just taken the money from his own accounts. He had the money. But he didn’t want his wife or the bookkeeper paying his bills to find out. So he came up with a “brilliant” idea – he could “borrow” money from a client. For weeks, then months, then years, almost every day he placed a bet. And he was the type of sports better that didn’t just bet on the outcome of a single game. He bet on every game, not just who would win or lose but totals, parlays, and teasers too. At the height of it, he was probably betting $250,000 a day on weekends.

The Consequences of Deception

Jonathan gambled with his clients’ money almost every day for six years. He couldn’t sleep at night knowing he was violating his clients’ trust, but he couldn’t stop the deception. It was never his intent to steal the money – he always intended to pay it back the next week when he finally won. But the amounts just kept getting bigger. In the end, the government investigation determined he gambled $21 million in total, with a net loss of $7 million that he stole from clients.

I wish I had the courage to ask for help a lot sooner.

Jonathan Schwartz

The “gambling week” ends with the last NFL game on Sunday. That’s when Jonathan would find out how much he owned his bookie. Sunday night was terrible because he had to decide what lie he was going to tell the bank about why his client needed money. As the years went on, he hated gambling. He wasn’t getting the dopamine rush and lived in fear whether he won or lost. The deception and violation of trust left him always thinking the world was going to collapse on him. He lied to the bank literally every Monday. He lied to his employees and the partners at the firm. Dishonesty and manipulation are common in addiction, and it was eating him alive.

In 2015, Jonathan started thinking about killing himself. He was constantly living in fear, he couldn’t go a single day without placing a bet, and he couldn’t sleep. He realized that he was hurting his kids that he loved, his wife, his mother who was battling cancer, and countless other people with his poor choices. Killing himself started to feel like a reasonable alternative. Thankfully, he was able to identify reasons to live.

The Deception Unravels

In 2015, Alanis Morisette fired Jonathan because he wasn’t giving her the attention he used to give her. And that was true. Jonathan gave most of his attention to his A-list clients, and by then she wasn’t relevant. Her new business manager called Jonathan and asked about $4.7 million in cash withdrawals that Alanis didn’t know about. Jonathan tried to bluff, but it didn’t work. He was asked to come back and have a meeting. Jonathan had to leave rehearsals with Beyonce to take this meeting with the new business manager and some lawyers. He still believed he could get away with it. So he proposed a lie detector test, thinking he could pass it.

Jonathan planned to take his wife on a weekend trip for their anniversary. They were set to leave on May 8, 2016. But he got a call earlier that week that his lie detector test was scheduled for that same day. He hadn’t told anyone about the addiction or the crimes. He had spent the past six years violating trust and spinning webs of deception. But now he had to explain to his wife why he had to go somewhere else instead of leaving for their weekend trip. So he came clean and told her everything.

The next morning, he told his wife to go ahead on the trip and he’d meet her later. Then he drove down to the office of one of the leading FBI polygraphers. He walked out of the office still thinking he’d beat the test and met his wife for a nice dinner. But when they got back to the hotel, he tried to access his work computer and couldn’t. When his assistant confirmed that she still could, he realized his years of deception were finally collapsing.

Rock Bottom and Recovery

Jonathan called his attorney, who told him he’d failed the polygraph harder than anybody else in the polygrapher’s career. He was facing twenty-three years in federal prison. His lawyer was able to negotiate a plea agreement for only four to six years in prison, but Jonathan was still in denial. Despite the deception and the violations of trust, he didn’t think he should be in prison. Now, he realizes that he deserved everything he received.

After a few years in prison, he took RDAP, the Residential Drug and Alcohol Program. It took a year off his sentence, but it also helped him deal with his addiction and trauma. Prison gave him an opportunity to reflect on his bad decisions, read books, soul-search, understand how he’d hurt people, and make amends. After his release, he decided to go to school and become a marriage and family therapist with a focus on addiction and trauma to help other people struggling with issues like his. He’s also very involved in Gamblers Anonymous.

A huge part of his transformation was learning not to blame other people for the choices he made. He had to accept it and own it. Now he’s proud to call himself sober and to recognize the progress he’s making. Even when he makes mistakes, he’s human, and they’re miniscule compared to his past. And now that he’s worked on his own trauma, he wants to help people in treatment today not make his same mistakes, do things differently, and learn how to ask for help.

That’s part of my message today to people: Personal accountability, owning your side of the street.

Jonathan Schwartz

Warning Signs of Deception

Jonathan doesn’t blame his clients – he was the one committing the crimes. But if you’re concerned someone you trust might be involved in deception, there are steps you can take to bring it to light sooner. Every time Jonathan met with clients, he showed them spreadsheets and graphs of their finances. If they’d asked for a source document like a bank statement, he would have been caught. But they trusted him, so his deception went on much longer.

Celebrities – and anyone working with a financial professional – need to avoid trusting that professional too quickly. They should be proactive in their financial affairs and ask for source documents. Audits on a regular basis are a good idea. And no one should have total power of attorney to sign checks or make large withdrawals. Anything over a certain amount should require dual signatures. Safeguards like that can prevent a lot of fraud and embezzlement.

Financial literacy is hugely important, too. A lot of young people have grown up without it. Jonathan saw a lot of problems with this, especially young sports stars. They’d often spend without thinking about taxes or paying their agent. And they were never guaranteed another contract. Jonathan was guilty of that, too – he spent money because he wanted people to like him. But it adds up. Approach your money conservatively, find a budget, and live within your means. This will help protect your finances.

I don’t care if you make $40,000 a year, $40 million a year, or $400 million a year. Everyone should have a budget and everyone should live within their means.

Jonathan Schwartz

Find Jonathan Schwartz on Instagram @therealjonathanschwartz, where he will be posting information about his book in progress, along with other things. If you’re struggling, he also encourages you to message him.