GGW's Joe Francis Sues Accounting Firm

LOS ANGELES — Girls Gone Wild founder Joe Francis is embroiled in yet another legal battle.  This time, he's suing accounting firm BDO Seidman claiming that it duped him into investing millions of dollars in tax shelters that cost him millions in penalties.

The suit filed in Superior Court, alleges breach of fiduciary duty, fraud, fraudulent nondisclosure, negligent misrepresentation, negligent nondisclosure, and professional negligence.

Francis was indicted in Reno, Nevada in April 2007 and charged with tax evasion having deducted more than $20 million in apparent false business expenses on his 2002 and 2003 tax returns.

The case was moved to Los Angeles, and in September 2009 Francis pleaded guilty to filing false tax returns. In November 2009, Francis was sentenced to time served and a year of probation and pay $250,000 in restitution.

In the latest action Francis claims that accounting giant BDO, the firm he used to help with his 2001 audit of Mantra Films, bilked its clients out of millions by having them invest in the firm's tax shelters.

The 36-page complaint reads, "In the late 1990s and continuing through at least 2003, BDO created investment schemes which were purportedly lawful tax deferral/avoidance products that BDO mass marketed to its clients in order to generate millions of dollars in fees.

"BDO, and others, induced plaintiff to invest millions of dollars in the investment schemes, and BDO falsely represented to plaintiff; orally and in writing, that it was 'more likely than not' that a deduction taken for losses generated by such investments would be upheld if challenged by the IRS."

Francis reportedly said he invested in the firm's tax shelters and based on its recommendations claimed "substantial" deductions on his 2001 federal and state returns. He further maintained that he didn’t know and the firm didn’t tell him that its strategies did not "comport with then existing tax law, and that the IRS would likely succeed in challenging any deductions taken for losses generated by the investments."

Once the IRS investigated Francis’ 2001 return it found he owed more than $9 million and another $3 million in penalties and interest, according to the complaint.

"As of the filing of this complaint, the exact amount of any back taxes, penalties, and interest that plaintiff may be assessed in connection with the tax shelter product is currently being litigated and has not been determined with finality," the complaint states.

The Girls Gone Wild chief maintains that if it wasn’t for BDO’s shady practices he would not have been hit with penalties nor would he have invested in the tax shelters.

Francis is seeking at least $20 million in damages.

Coincidentally, Francis last month lost a slander case to casino mogul Steve Wynn and was ordered to pay up $20 million and another $20 million in punitive damages.

Related:  

Copyright © 2025 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

Age Verification Watch: Patching the Holes

This roundup provides an update on the latest news and developments on the age verification front as it impacts the adult industry.

Ofcom Fines OnlyFans Parent Company Over Inaccurate Age Verification Reporting

U.K. communications regulator Ofcom has fined OnlyFans parent company Fenix International Ltd. $1.36 million for inaccurate reporting of its age verification measures.

Irish Government Releases Report on Sex Work Decriminalization Legislation

The Irish government has released a report reviewing a 2017 law that decriminalized sex work across the country.

Texas Bill Would Require Age Verification for Online Sex Toy Sales

A new bill in the Texas state legislature would require online retailers to implement age verification of purchasers before selling “obscene devices” to anyone in that state.

Age Verification Watch: Michigan Joins the AV Club, Some Laws Just Make No Sense

This roundup provides an update on the latest news and developments on the age verification front as it impacts the adult industry.

Free Speech Groups Back SCOTUS Appeal of Georgia Strip Club Tax

Two civil liberties organizations filed an amicus brief Tuesday supporting a petition asking the U.S. Supreme Court to hear an appeal in a case involving whether a tax specifically aimed at adult entertainment establishments violates the First Amendment.

Swedish Court Rules LELO Products Do Not Infringe 'Invalid' Satisfyer Patent

A Swedish district court has ruled that a patent filed by Satisfyer parent company EIS GmbH is not valid, and therefore three products from pleasure brand LELO are not in violation.

North Dakota House Committee Questions Anti-Porn 'Public Health Hazard' Claim

The North Dakota House of Representatives Education Committee on Monday amended a resolution that would have recognized pornography as a “public health hazard,” instead replacing that language with a call for further study into whether such a designation is appropriate.

Wyoming Governor Signs Age Verification Law

Wyoming Governor Mark Gordon signed the state's new age verification bill into law yesterday.

Florida Bill Would Auto-Filter Porn for All Users, Not Just Minors

Florida lawmakers have introduced legislation to require manufacturers to equip tablets and smartphones with a filter that would prevent all users from accessing material deemed harmful to minors, to be automatically enabled on devices activated in that state.

Show More