Talent Agent Sentenced in Manhattan Federal Court for Stealing More Than Half-a-Million Dollars from His Actor Clients and Ordered to Forfeit Artwork He Purchased with Proceeds
Preet Bharara, the United States Attorney for the Southern District of New York, announced that Peter Strain, a talent agent for film, television, and Broadway actors, was sentenced today in Manhattan federal court to three years’ probation, six months’ home confinement, and 500 hours of community service for engaging in a scheme to steal over $500,000 of his clients’ money, which he used to purchase, among other things, expensive artwork and luxury personal items. Strain pled guilty in March 2014 before U.S. District Judge George B. Daniels, who also imposed today’s sentence.
According to the superseding information and other documents filed in Manhattan federal court and statements made at related court proceedings, including today’s sentencing:
Through his talent agency, Peter Strain & Associates (PSA), Strain represented television, film, and stage actors. As a talent agent, Strain received funds in trust for his clients for their acting work and was required to remit those funds to his clients, less his commission, which was typically 10 percent. However, between approximately 2011 and 2013, Strain diverted money he received on behalf of three clients and used it to, among other things, pay for personal luxury retail goods and artwork. In order to conceal his theft and ensure that his clients allowed him to continue receiving money on their behalf, Strain repeatedly lied to his clients about why he had failed to timely remit their money.
Between July 2011 and December 2011, Strain received more than $1.4 million in an account held in trust for his clients (the trust account) on behalf of an actor who earned that money for work on a currently broadcast television series (Client-1). However, Strain failed to remit approximately $500,000 of this money to Client-1 and diverted it for his own personal use. In order to conceal his theft from Client-1, when Strain and Client-1 discussed the missing payments by telephone, Strain asked Client-1 if he could delay making the payments because, according to Strain, he was short on funds as a result of his partners at PSA embezzling money from the firm. Strain further claimed that he had recently won a lawsuit against his partners related to the supposed embezzlement and that he was waiting to receive settlement payments from his partners.
Strain’s statements to Client-1 regarding the lawsuit were false. In truth, as Strain well knew, Strain’s partners had filed a lawsuit accusing Strain of embezzling funds from PSA, and Strain agreed to settle the lawsuit by paying his partners more than $250,000 for their shares in PSA. Moreover, in order to make a payment required under the settlement, instead of using his own money, Strain withdrew $30,000 from the trust account.
Ultimately, during 2012, Strain repaid Client-1 by stealing money from a different client, Client-2, an actor who has appeared in several television shows, including a currently broadcast television series. Strain then lied to Client-2 in order to conceal his theft. Among other things, Strain falsely told Client-2 that Strain had recently hired a new business management team and that the new team must have misplaced Client-2’s money. In truth and in fact, as Strain well knew, Strain had used Client-2’s money to repay the money he had stolen from Client-1. Strain never fully repaid the money he took from Client-2 and still owes Client-2 in excess of $350,000.
In July 2012, Strain failed to timely remit over $200,000 in additional payments to Client-1 for Client-1’s television acting work. In an e-mail to Client-1 asking for additional time to remit the money, Strain repeated his false claim that he had “won” the lawsuit with his partners and was waiting for his partners to pay him. Strain further falsely claimed that he had Client-1’s money in his possession but that he was restricted from accessing the money due to court orders. Contrary to his representations to Client-1, Strain had not “won” the lawsuit, was not restricted from accessing the funds owed to Client-1, and did not have sufficient funds in the trust account to pay Client-1. In fact, in the same month that Strain claimed he was unable to access Client-1’s money, Strain withdrew more than $80,000 from the trust account, leaving the account overdrawn by more than $9,000.
Between November 2012 and February 2013, Strain also stole tens of thousands of dollars from another client who has appeared in several television shows, including a currently broadcast television series (Client-3). To cover up his theft, Strain offered several false excuses to Client-3 for why he had failed to remit Client-3’s money. For example, in November 2012, Strain falsely claimed that Client-3’s payments had been lost in the mail. Strain also later falsely told Client-3 that the delays in remitting Client-3’s money were caused by a lawsuit but that a confidentiality clause prevented Strain from discussing the details.
Strain used the money he stole from his clients to, among other things, pay operating expenses of PSA and to pay for personal luxury retail goods and artwork, some of which he purchased in New York using client money from California bank accounts. Between July 2011 and August 2012, using his clients’ money, Strain bought more than $161,000 in jewelry, more than $310,000 in artwork, and more than $57,000 at luxury goods retailers.
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Mr. Bharara praised the outstanding investigative work of the FBI.
In addition to probation, Strain, 64, of Los Angeles, California, was ordered to forfeit all artwork obtained as part of the fraud, and to pay $384,128.52 in restitution.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys James Pastore, Jr., and Jason Hernandez are in charge of the prosecution.