NEW YORK: MWWPR has filed a $10 million damages lawsuit against former EVP Andrew Garson, who was arrested and indicted last year on wire fraud charges.
The agency filed the lawsuit on November 16, according to documents from the Supreme Court in Manhattan.
MWW has accused Garson of engaging in a “Ponzi-like scheme of diverting funds from one client to pay down the account balance of another.”
The firm said Garson made misrepresentations including entering agreements without MWW’s knowledge or consent, making false reassurances of payment sometimes coupled with gifts paid for by the firm and fabricating invoices and wire transfer records, according to court documents.
MWW’s lawsuit specified four categories where Garson’s alleged conduct resulted in significant loss or liability for the agency: the creation of fictitious campaigns, over-budgeting existing campaigns, theft from campaigns and criminal diversion of agency assets, according to court filings.
Garson developed campaigns without MWW or client approval or funding and convinced vendors and talent to work on the fake efforts, according to the lawsuit. On some existing campaigns, he also entered into agreements that exceeded approved budgets that were “never paid,” according to court documents.
For other over-budgeted campaigns, Garson directed MWW’s accounts payable department to overpay talent and vendors and diverted payments, according to the lawsuit. The firm has also accused him of making the agency’s accounts receivable department divert payments from clients to pay debts he owed to his former agency, Endeavor, or its clients.
MWW hired Garson as an EVP to co-lead the firm’s sports and entertainment practice in 2018. He previously worked at Catalyst, a firm acquired by Endeavor, then known as IMG Worldwide, in 2013.
MWW fired Garson in November 2018, and he was arrested and indicted by the Southern District of New York nearly 11 months later. Garson faces two counts of wire fraud, each carrying a maximum sentence of up to 20 years in prison. A status conference is scheduled for January 19, 2021, in federal court in the Southern District of New York after hearings were postponed due to COVID-19.
The agency said that because of Garson’s alleged actions, MWW was sued by, and later settled with, digital media content producer Group Nine Media and vendor HB Content. It also received demand letters or settlement demands from talent Megan Fox, Tenderloins and Mindy Kaling; sports talent consulting company Sandoval Ventures and media companies Warner Bros. and Turner Broadcasting.
MWW founder and CEO Michael Kempner said his firm settled any disruptions with clients or talent years ago.
“This has nothing to do with clients and celebrities,” he said. “All that was resolved two years ago … No clients, employees or talent are a part of this lawsuit. The fact is the company is entitled to significant damages, but they’re not involved in this at all.”
Garson or his attorney could not be reached for comment on the lawsuit.