The supermodel and entrepreneur claims her managers siphoned millions, leaving her family with debt and shattered dreams.
(CN) — Kathy Ireland, a supermodel-turned-entrepreneur who built a major lifestyle brands, claims in a lawsuit filed Monday that her longtime personal managers orchestrated a scheme to misappropriate her finances and leave her and her family without the retirement they were promised.
In her complaint, filed in the Anacapa Division of the Santa Barbara Superior Court, Ireland names as defendants Jason Winters and Erik Sterling, a married couple who served her managers since 1989. She also names several associates as defendants, accusing them of helping to conceal the fraud.
Ireland’s husband, Dr. Gregory Olsen, an emergency room physician and commercial fisherman, and her mother are also plaintiffs in the lawsuit.
Ireland and her co-plaintiffs are seeking damages believed to reach or exceed $100 million.
“This case is about trust betrayed on a staggering and unconscionable scale,” Ireland says in the complaint.
More than three decades ago, when Ireland was 26 years old, she says Winters and Sterling convinced her to hand them sweeping powers of attorney and full control over her personal and professional finances. They promised to handle everything so she could focus on her family and her career, she says in the complaint.
For more than 35 years, the plaintiffs say, Winters and Sterling cultivated the illusion of an intimate personal relationship, calling themselves family and assuring the couple they were building extraordinary wealth on their behalf.
“Winters continually preached to Kathy and Greg about the great personal ‘wealth’ he and Sterling were creating for them, and the very successful financial ‘investments’ he and Sterling were managing for them.”
When the couple asked about their finances, the managers told them they were so wealthy they would never have anything to worry about, the plaintiffs say in the complaint.
The illusion shattered in recent years when Ireland and Olsen attempted to co-sign a mortgage for their son. They were denied. When they pressed Winters and Sterling to access their supposed investments to help with a down payment, the defendants claimed the holdings were too complex to liquidate quickly and demanded six months’ notice, according to Ireland.
The plaintiffs say that what the eventually uncovered was devastating.
“Kathy and Greg now know there are no substantial retirement accounts. There are no prudently managed investments securing their future, as promised. There is no wealth securing their retirement and their children’s futures, as they were led to believe,” the plaintiffs say in the complaint. “Instead, in the wake of defendants’ misconduct, there was staggering debt, misused credit, secret loans and missing funds.”
The plaintiffs say that over decades, Winters and Sterling took all of Olsen’s career earnings, including more than $5 million from his medical practice and over $3.2 million from his commercial fishing business, 4th Watch Seafood.
A $400,000 inheritance Olsen received was taken and spent rather than invested as he had directed, according to the plaintiffs. Approximately $369,000 in principal remains unrepaid. The plaintiffs also claim Sterling took out a $150,000 Small Business Administration loan in Olsen’s name without his knowledge.
Barbara Ireland, Kathy Ireland’s elderly mother lost $60,000, the plaintiffs claim in the lawsuit.
They accuse the defendants of using the guise of family closeness to insulate themselves from scrutiny.
“Their message was clear: this was not a business subject to oversight; it was a ‘family’ never to be questioned,” the plaintiffs say in the lawsuit.
The plaintiffs argue the harm they experienced extends far beyond a financial dispute.
“This is not a dispute over a failed investment. It is about fiduciaries who obtained absolute control over their clients’ life and finances, falsely assured them they were secure, lied and left them in turmoil,” they say in the lawsuit.
The plaintiffs are represented by Jared Katz and Andrew Cox of Mullen & Henzell LLP., a Santa Barbara law firm.
Representatives for Kathy Ireland, Jason Winters and Erik Sterling did not immediately respond to requests for comment.
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