Financial Adviser Gone Bad

Hip-hop money manager Gabriele Smith is being sued in New York Supreme Court in Manhattan for allegedly running an elaborate scam that bilked high-profile clients out of millions of dollars.

In lawsuits filed against her and the banks where she maintained accounts, former clients claim Smith stole more than $3 million, using some of the money to pay other investors and pocketing the rest, according to The New York Times.

Through her New York-based company, Premier Business Management LLC, Smith built a client list that included Warner Music Group‘s Kevin Liles, rapper Fabolous, DJ Clue, and several wealthy young music execs.

“At one point, she was one of the most trusted financial advisers in the business, and it’s painstakingly obvious that she’s ruined that,” Jasmine Young Trinidad, a former Def Jam executive who was one of Smith’s clients, told the Times. “People in the business are feeling outraged and betrayed.”

In court papers and interviews, several former clients of Smith reportedly said she forged their signatures to make unauthorized withdrawals and fabricated account statements to cover up transactions.

Smith’s attorney, Kenneth Paul, declined to discuss his client’s case with the Times or confirm the filing of charges but commented, “I understand people who say they were victimized and say they lost money are upset. … I don’t think it’s fair to attribute their losses to Gabriele Smith.”

Smith, a former hip-hop talent scout, has also been indicted on federal charges that mirror many of the allegations in the lawsuits, sources told the Times. The charges are under seal, which is sometimes an indicator that prosecutors may offer a deal for a defendant’s cooperation in another case.

There is speculation within rap circles that Smith may provide information in a federal inquiry into money laundering involving convicted drug dealer Kenneth “Supreme” McGriff and rap label Murder Inc. (now The Inc.). Smith’s company managed a bank account from which business and personal expenses were paid on behalf of McGriff, according to a document filed by prosecutors.

On January 3, 2003, federal authorities raided Smith’s offices as part of their investigation of McGriff and Murder Inc.