Broadway Talent Agent Peter Strain Pleads Guilty to Stealing Over $500K from Clients

Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation ("FBI"), announced that PETER STRAIN, a talent agent for film, television, and Broadway actors, pled guilty today in Manhattan federal court to stealing more than half a million dollars from his clients, which he used to purchase personal luxury retail goods and artwork, among other things. STRAIN was originally charged in November 2013, and he pled guilty today before United States District Judge George B. Daniels.

Manhattan U.S. Attorney Preet Bharara said: "Peter Strain repeatedly lied to his clients about the payments for their acting work so that he could use the money for himself, as it suited his needs - including for personal luxury retail items. With today's plea, Strain has admitted to his fraud, and he will be punished for his conduct."

New York FBI Assistant Director-in-Charge George Venizelos said: "Peter Strain was making the old saying of robbing one person to pay someone else come to life. In this case he was robbing his clients and then paying himself, lying all along the way to try to cover his tracks. Embezzling more than a half a million dollars from clients is a serious offense. FBI will continue to investigate and bring those to justice who seek to do business in such a deceitful way."

According to the allegations contained in a Superseding Information filed in Manhattan federal court and statements made in public court proceedings:

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%. 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 his trust account on behalf of a particular client ("Client-1"), an actor who earned that money for work on a currently broadcast television series. However, STRAIN failed to remit approximately $500,000 of this money to Client-1, and diverted it for his own 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.

As STRAIN knew, his statements to Client-1 regarding the lawsuit were false. In truth, 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, and rather than use his own money, STRAIN withdrew $30,000 from an account held in trust for his clients ("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, 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 email 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, and as STRAIN well knew, 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 ("Client-3"), an actor who has appeared in several television shows, including a currently broadcast television series. 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.

STRAIN, 64, of Studio City, California, pled guilty to one count of interstate transportation of stolen property, which carries a maximum term of 10 years in prison. He is scheduled to be sentenced before U.S. District Judge George B. Daniels on April 30, 2014, at 10:00 a.m. The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Bharara praised the outstanding investigative work of the FBI.

The case is being prosecuted by the Office's Complex Frauds Unit. Assistant U.S. Attorneys James Pastore, Jr., and Jason Hernandez are in charge of the prosecution.