Models Rock Industry With $20 Million Fraud Lawsuit

Susan Scafidi in Jezebel, October 18, 2012

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Two new lawsuits are rocking the New York modeling industry today. First, a model named Louisa Raske (not pictured) is the lead plaintiff in a class-action lawsuit against a sheaf of New York City's top modeling agencies that alleges agencies conspired to defraud their model clients. The suit alleges that agencies regularly give inaccurate financial statements, conceal funds received intended for models, and improperly used money that belonged to models. Raske's suit puts the total value of New York models' losses to their agencies at $20 million.

Meanwhile, the Ford agency is suing two top models, Karolina Waz and Alanna Zimmer, for leaving their contracts and going to the competing agency Women. Ford is also suing Women for allegedly offering Zimmer and Waz improper enticements. Ford is seeking $1 million each in damages from Waz and Zimmer and $2 million from Women. Nearly all lawsuits over the contract disputes arising from agency switches are settled out of court or dismissed.

The class-action suit is a little different. In a statement, Fordham law professor and expert in the field of fashion law Susan Scafidi called Raske's suit "quite dramatic" in its scope. "Many models have raised concerns about lack of financial transparency," said Scafidi. "In the long term, this case has the potential to change industry accounting practices. Models' bodies are in effect small businesses — with the potential for big profits — and should be managed accordingly." A class-action lawsuit against New York agencies filed in the 1990s over accounting standards was eventually resolved in the models' favor in 2005 — but the $22 million in damages the models won went mostly unclaimed. After the claim period had expired, a judge ordered that the remaining millions be donated to an eating-disorder charity. This story is developing. [NYPost, Vogue UK]