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Gogol Bordello Frontman Eugene Hutz Sued Over Alleged Hole in Band Accounts

His shirt may not be too far off...

His shirt may not be too far off…

Gogol Bordello’s former guitarist is suing frontman Eugene Hutz, accusing the singer of “brazenly absconding” with half a million dollars of the group’s money.

The lawsuit was filed by Oren Kaplan, Gogol Bordello’s guitarist, on behalf of both himself and the band’s business entity, Gypsy Punks LLC. Kaplan submitted his claim to New York county supreme court,Courthouse News reports, charging Hutz with breach of contract, breach of fiduciary duty and unjust enrichment. He wants personal damages of at least $950,000 (£623,000), plus another $950,000 to be paid back to Gypsy Punks.

According to the suit, Kaplan had been playing with Gogol Bordello since 2000, co-writing many songs, and used to help oversee the group’s financial affairs. In 2009, Hutz allegedly took over all of Gogol Bordello’s accounting; thereafter, he began paying himself a salary of more than $130,000 (£85,000), twice as much as any other band-member. Kaplan also claims the singer created new corporations, separate from the band, and transferred over about $500,000 (£330,000) of their cash. Although Hutz referred to these transfers as “loans”, he never paid any interest.

“Hutz [took] approximately half a million dollars from the bank accounts of the Gogol Bordello entities and deposited those funds into the accounts of new companies which are wholly owned by Hutz,” the suit alleges. “Plaintiff had no prior notice of, and has never approved any of these illicit self dealing acts.”

The situation came to a head last year, when Kaplan left the New York group. He says his accountant discovered Hutz’s money movements, as well as details of Gogol Bordello’s “secret” contract with Coca-Cola, which used one of the band’s songs to promote the Euro 2012 football championships held in Ukraine and Poland.

“Hutz secretly entered into a promotional deal for the group with Coca-Cola without telling plaintiff about it,” Kaplan wrote. “Hutz accomplished this ruse by feigning concern for plaintiff (whose mother had just passed away) and encouraging plaintiff to take an extended leave of absence from the group … Hutz’s true reason for encouraging plaintiff to extend his leave of absence was to ensure that plaintiff would not participate in the Coca-Cola promotion, thereby allowing Hutz to keep more of the proceeds from that promotion for himself.”

When approached by the Guardian, a spokesperson for Hutz declined to comment on the matter.

It’s not yet clear whether Kaplan has support from any of Gogol Bordello’s other band members; the group, which is currently an octet, have yet to issue a statement. But Kaplan does not appear on their new record, Pura Vida Conspiracy, and he is not accompanying them on theircurrent world tour. Gogol Bordello are due to play the UK this December, performing at venues including O2 Academies in Bristol, Leeds, London and Glasgow.

By Sean Michaels, The Guardian, 8/1/13

For the full article, please click here: http://www.theguardian.com/music/2013/aug/01/gogol-bordello-eugene-hutz-sued-band-accounts

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