A federal criminal investigation is under way after $1.25 million in songwriter royalties were allegedly embezzled from the Songwriters Guild of America by its longtime royalty manager Marsha Aiken an
NEW YORK -- A federal criminal investigation is under way after $1.25 million in songwriter royalties were allegedly embezzled from the Songwriters Guild of America by its longtime royalty manager Marsha Aiken and family members.
The SGA's special counsel, Charles Sanders, tells ELW that the FBI, the Internal Revenue Service and the U.S. Postal Service are working with the guild to determine the full extent of any criminal activities.
The SGA represents about 5,000 songwriter members and their estates. Members may elect to have the guild collect royalties for them from publishers, collecting societies and others. Nearly $16 million in royalties are collected annually, and the SGA holds about 2% of that amount when current addresses for writers cannot be located.
According to a federal civil lawsuit the SGA filed in July, Aiken became the guild's royalty manager in 2002 and created a fraudulent membership account under the name Anthony Ray, who the IRS later identified as her cousin. She began writing unauthorized royalty checks to Ray from the SGA's general account -- where the unknown writers' funds are held -- and mailing them to him in Rhode Island.
A Rhode Island bank complied with federal banking regulations by notifying the IRS when someone attempted to cash an SGA check for more than $10,000, Sanders says. The IRS then contacted the SGA, with Aiken taking charge of the inquiry as royalty and office manager; she stalled the IRS with various excuses, Sanders says. In June the IRS contacted an SGA executive and pointed out that Aiken and the recipient of the check were cousins.
The guild immediately launched an investigation and discharged Aiken. Several specialists are working to implement security improvements and to file insurance claims, Sanders says.
The District Court in Brooklyn, N.Y., issued an injunction Aug. 17 prohibiting Aiken, Ray, Michael Levy, Monique Aiken Adams and anyone "in active concert" with any of them from selling property in St. Albans, N.Y., that the SGA claims was acquired with the funds.
Sanders says that the investigation reveals that unauthorized checks were sent to one or more recipients in a number of states. Songwriters who are active members with addresses on file have not been affected, he adds. The SGA expects criminal charges to be filed in the near future.
"The SGA has acted expeditiously to strengthen its systems and infrastructure, and as a result will move forward from this unfortunate incident as a stronger and even more vital organization in the America music community," says SGA president Rick Carnes.
Aiken declined to comment. Ray, Levy and Adams could not be reached.