JEROME RECORDS SAGA CONTINUES

UPDATE: JOHN LOAN/JEROME PLEADS GUILTY - Sentenced to three years in return for admitting $3.59-million theft

According to an article in today's (04/17/02) N.Y. POST, John Loan (aka John Jerome) pleaded guilty to embezzling $3.59-million from his employer, ALLIANCE CAPITAL MANAGEMENT on Tuesday, April 16th. In return for his guilty plea, Mr. Loan was sentenced to three years in prison, and ordered to pay back the funds. His lawyer stated that with good behavior and credit for time served (Mr. Loan has been incarcerated since mid-January), he should be eligible for work release in about nine months. If he had gone to trial and convicted, he faced as much as 8 to 25 years in prison.

The prosecutors disclosed that only about $200,000 of the stolen funds were actually given to recognized charities. About $1-million was used to set up his record company, JEROME RECORDS. Much of the rest, his lawyer reported, was lavished on his friends. A complete report on the court appearance can be found in the April 1th issue of the N.Y. POST at http://www.nypost.com/.

Many in the cabaret community were stunned Tuesday morning, January 15th, to read in the NY POST that John Loan (aka John Jerome) was arrested and charged the day before with grand larceny and criminal possession of stolen property in connection with reportedly over $3-million in funds misdirected from his employer, Alliance Capital Management. It is alleged that Mr. Loan used his position as Special Events officer at the firm to pay for phony invoices for services never performed from a company that he set up called "Beautiful Parties." According to police, this practice went on for a period of four years, and was uncovered by a recent internal audit. It is reported that the funds were used in large part for charitable causes, including setting up a foundation for Downs Syndrome, donations to the Gay & Lesbian Community Center and the Gay Men's Health Crisis. Loan/Jerome also contributed heavily through donations and advertising placement to cabaret causes, benefits, projects and publications, including CABARET HOTLINE ONLINE.

JEROME RECORDS burst on the cabaret scene about two years ago with the introduction of a CD by Kristopher McDowell called ""Faces of Love." Soon the label's roster of performers included such cabaret personalities as Phillip Officer, Karen Mason, Jeff Harnar, Carolyn Montgomery, Laurie Krauz, Stephanie Pope and others. The firm was about to release a new CD by cabaret legend Julie Wilson. Each CD release was accompanied with an advertising blitz and most often a series of release events featuring a performance by the artist. Cabaret artists around the country were excited to discover that someone was there to invest in their efforts.

A large number of folks were counting on JEROME RECORDS to make their dream of recording a CD possible. While several CDs had already been released under the JEROME label, a large number more were in the process of being recorded, or contracts had been completed. One performer received his contract in the mail on the day of the arrest. Syndicated columnist Liz Smith reported in her column on Friday, January 18th, that Christine Andreas was in London making a new CD for Jerome, and had already booked a studio, commissioned orchestrations, hired a studio team and over a hundred musicians. "Suddenly, invoices were not being paid, and his excuses were many and varied," Ms. Andreas reported, sadly. Just a few days before the arrest, she was told by Jerome/Loan that he had decided to terminate the project - leaving Ms. Andreas to pay all the bills.

Also in a state of limbo at this time is the status of the CDs, tapes and masters in JEROME RECORDS possession - it is quite possible that they will become the property of Alliance Capital or its insurers, and might even be offered for sale without any of the proceeds going to the original artists. These are items that will have to be addressed in the future.

But cabaret and cabaret artists were not the only recipients of Mr. Loan/Jerome's largesse. Since the arrest there have been several new items that have come to light, including a number of friends who have come forward in support of Mr. Loan/Jerome, recounting stories of his generosity in times of extreme need. While the Gay Mens Health Crisis claimed that it could find no record of donations by Mr. Loan or JEROME RECORDS, the GENESIUS GUILD stated that his support of that organization was "minor." Other organizations that reportedly received donations, The Gay & Lesbian Community Center, Broadway Cares/Equity Fights AIDS and MAC (Manhattan Association of Cabarets & Clubs) had no comment on the situation.

It appears that all who were recipients of Mr. Loan's largesse were totally unaware of the source of the funds. In addition to the more than $3-million reportedly misappropriated, Mr. Loan's salary was first reported to be in the area of $225,000.00 per year (Mr. Loan/Jerome's lawyer later indicated that the salary was more in the $70,000.00 per year area). When confronted about questionable records after an internal audit, Loan admitted that he had been stealing company money. The police also say that Mr. Loan admitted that "Beautiful Parties" was his company and it had not in fact performed any services for Alliance.

John Loan/Jerome was indicted by the Grand Jury on Friday, January 16th, and from the comments made by his lawyer at the time of the indictment, he appears to admit to the theft of over $3-million from his employer, ALLIANCE CAPITAL. It looks like that there will be some type of plea arrangement with the hope that Mr. Loan's apparent use of the funds for good deeds and establishing the CD label will result in a merciful sentence. The "Plea Bargaining" process is going on now. The lawyer for Mr. Loan claims that there are no funds left of the $3-million taken over the past 4 years.

The January 25-31 Issue of BACK STAGE had an article on the situation by Leonard Jacobs. David Finkle, who writes for both BACK STAGE and the VILLAGE VOICE also wrote an article about Mr. Loan/Jerome's escapades in the VILLAGE VOICE issue dated February 5th. These articles are available on-line at http://www.backstage.com and http://www.villagevoice.com/. The February 11 issue of THE NEW YORKER also carries an article in their "Talk of the Town" column entitled "The King of Cabaret," written by Adam Green (who happens to be the brother of Amanda Green, one of the JEROME RECORDS artists. It is available on-line at http://www.newyorker.com/.

Mr. Loan/Jerome is being held at the Rikers' Island Correctional Facility in Queens, NY in lieu of his continued $1-million bail. Meantime, the JEROME RECORDS website, and the websites of many of the label's artists, have become inoperative.

There has been some lively discussion on this whole matter on the CABARET HOTLINE ONLINE Message Board on the website as well. You are invited to add your comments, as long as you remember that when expressing an opinion, we ask that you use your real name - we currently verify postings and will remove items that are anonymous. After all, if you are unwilling to sign your name to it, you have no business posting it.

UPDATE - FEBRUARY 7, 2002: Appearing in court on Wednesday, February 6th, John Loan/Jerome entered a plea of "Not Guilty" to grand larceny. Loan reportedly turned down a plea-deal offer carrying a four-to-12-year sentence. If he continues to reject the plea bargain offered by the prosecution, he faces a maximum sentence of 25 years if convicted as charged of stealing a total of $3.4-million from his employers, Alliance Capital Management. In their court statement, prosecutors reported that Loan lived glamorously, using some of the money to pay for hotels and trips to Cairo, Rome, London and Paris. It was reported that he had credit-card bills totalling over $1.8-million alone. Prosecutors said that they have some six boxes of cancelled checks to prove the alleged embezzlement and the evidence is still mounting. A complete report on the court appearance can be found in the February 7th issue of the N.Y. POST at http://www.nypost.com/.

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