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edited August 2005 in Strut Central
GABRIELE T. SMITH seemed to carry an all-access pass to rap music's circles of power. Usually decked out in designer clothes, she vacationed with the music supercouple Jay-Z and Beyonc?? in the Caribbean. She dined at Mr. Chow in Manhattan. She traveled in style to the N.B.A.'s All-Star game.Skip to next paragraphIn fact, Ms. Smith had nestled so comfortably into the bling-encrusted embrace of the industry's heavyweights that she established herself as the money manager to the stars. At major investment houses and then through her own company, Premier Business Management L.L.C. in New York, Ms. Smith built a client list that included the president of the Def Jam Recordings label, rap stars like Fabolous and DJ Clue, and an assortment of wealthy young music executives.These days, however, many of those same executives and artists are accusing Ms. Smith, a 35-year-old stockbroker and former talent scout, of running an elaborate hustle. In lawsuits filed against her and the banks where she maintained accounts, former clients say Ms. Smith stole more than $3 million, using some of their money to pay other investors and pocketing the rest.In addition to the lawsuits, which have been filed in New York Supreme Court in Manhattan, public records indicate that at least one client has undertaken private claims against her former employers, Morgan Stanley and Prudential Securities, in arbitration proceedings. The firms declined to comment on the claims. J. P. Morgan Chase and HSBC, two banks named as defendants in some of the lawsuits, also declined to comment.Ms. Smith has also been indicted on federal charges that mirror many of the allegations in the lawsuits, according to people briefed on her case. The charges, in Federal District Court in Brooklyn, are under seal, which is sometimes a sign that prosecutors may offer a deal for a defendant's cooperation in another case.Whether Ms. Smith possesses any information that authorities may find useful is a mystery. There is speculation in rap circles that she may provide information in another federal inquiry, this one into suspicions of money laundering involving a convicted drug dealer, Kenneth McGriff, and the rap music label Murder Inc. Ms. Smith's company managed a bank account from which it paid business and personal expenses "on behalf of" Mr. McGriff, according to a document filed by prosecutors. Investigators have seized the account. Mr. McGriff and others involved in the case are scheduled to go on trial in October.While the various civil and criminal cases inch through the courts, Ms. Smith's former clients say they are angry, embarrassed and trying to figure out: How could she have bamboozled some of the savviest players in hip-hop?
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