The founder and CEO of beleaguered Tate Publishing and Enterprises have been arrested, accused of bilking their clients out of tens of thousands of dollars. Founder Richard Tate, 70, and his son, CEO Ryan Tate, 38, are each charged with eight criminal counts, including seven felonies and one misdemeanor. The publishers are charged with four felony counts of embezzlement, three felony counts of attempted extortion by threat, and one misdemeanor count of embezzlement.
Reports say Tate Publishing began falling on hard times in 2013. By 2015, the Attorney General's Consumer Protection Unit began investigating consumer complaints against Tate Publishing and affiliated Tate Music Group. Soon, printing services providers Xerox and Lightning Source sued Tate Publishing for millions of dollars, and ultimately won their cases this year after the publishers failed to respond to discovery requests.
In January 2017, Tate Publishing shuttered its doors after 20 years in business. This left clients who claimed they were owed thousands of dollars frustrated, understanding that they would likely never see their royalties or the books and albums they paid the companies to produce.
However, recently, the firm emailed some of its clients to say that it would be reopening soon. That prompted the Attorney General's Office to take quick action against the founder and CEO. Attorney General Mike Hunter said of the arrests, "[The email] had something to do with us approaching this in the expeditious manner that we did. We don't need any more victims. We are very focused on this. There now have been more than 800 complaints, and we are going to look into each one of them.”
Prosecutors say the Tates took money intended to publish books and produce albums, and instead deposited that money into personal accounts. One of the felony embezzlement charges is related to a contract in which a client paid $25,800 in 2016 to Tate Publishing in exchange for 10,000 copies of his books. The client never received any books, and investigators say they tracked the client's payments into the personal bank accounts of Richard and Ryan Tate and their wives.
The three extortion charges are the result of letters Tate Publishing reportedly sent to authors saying they must pay $50 to prevent the destruction of their manuscripts.
Prosecutors say that with 800 complaints against the firm, it is likely that the founder and CEO will face additional charges.
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