Good Intentions Don’t Excuse Theft

Readers may remember the news breaking earlier this year about the author Chuck Palahniuk being robbed of several million dollars worth of royalties by his agency. Palahnuik was not the only victim of the agency’s bookkeeper.

That agency has filed for Chapter 7 protection, because the bookkeeper skimmed royalties from Palahnuik, Edward Gorey’s Estate, and others to fund a corporation that did good works .

As the Publishers’ Weekly article puts it: “In a pre-sentencing memo filed last week, Webb’s attorneys detailed the theft, explaining that the vast majority of the stolen funds went to support Webb’s business, Sum Innovation, which, as part of its mission, had included a non-profit arm that provided “training and employment opportunities for underserved communities.”

Theft is still theft, and authors need to be wary. Yes, it is very difficult getting royalty statements. Yes, we are supposed to trust agencies to keep their books in order.

Trust, but verify.

Publishers’ Weekly article here, and here.

H/T ThePassiveVoice {Writers, you do look at his site at least twice a week, don’t you? Why not? Tsk, tsk.}



  1. Have heard similar stories all the way back (and not just in publishing; actors’ agents were notorious for skimming, and I’ve personally caught an extras-casting agency doing so, right there on the set), tho none on such a grand scale. But that’s a good deal of why I’d decided, even back before Indy was a Thing — no agencies for me. I’m not that desperate.

    And if you think more than the federally-mandated minimum of the embezzled money went to “good works”, do I have a bridge for you…

    1. I’d say Hollywood movie studios are the worst for skimming…if your take is x% of Net Profits, well, with Hollywood accounting, even profitable movies never show a “Net Profit”!

      1. Oh yeah, Hollywood Accounting. Since the true purpose of films is to launder money, no one should be surprised. They actually don’t _want_ most to turn a profit, only just enough to keep shareholders from jumping ship, so they’re fine with box office failure. Everyone involved gets paid regardless (unless they’re dumb enough to accept a cut of the ‘profits’) and vast amounts of money disappear into Hollywood’s endless waste (~90% of production costs).

        I’ve opined that the real reason CBS came down on the big Star Trek semi-pro productions wasn’t over copyright, but because they’re demonstrating that they can make a far more entertaining product on 1% of the budget, and if shareholders ever catch on, the Hollywood gravy train will end.

      1. I was not happy being reminded that those sorts of truths need to be said.

        The reasons I have very thoroughly learned those lessons have left me with a bit of a temper on the subject.

        1. Part of my mental discomfort in our current area is that a sizable portion of the population doesn’t realize that to build, you need a pile of bricks.

          If someone snags those bricks, because you have “so many” that you are “not using right now,” nothing gets built.

  2. Personally, I’d have more sympathy with the thief that stole to enrich themselves and understood that they were a bad person, (not a *lot* but more), than I’d have for someone who created a “story” where they could pretend they were Good.

    1. I’m sure he saw himself as a Robin Hood. Only problem being that Robin Hood didn’t steal ****, he returned the stuff that was being stolen from the people.

      1. Unless he was all “okay, you contributed thre’pence, here”s your thre’pence back”, yes he did. He redistributed his take without regard to what people actually put in, and gave a lot more to those who gave a lot less. And given that the King still needed to be ransomed, his acticities simply meant that people already being squeezed would be squeezed some more/again.

    2. The mental fig leaf of self-proclaimed Good Guy Socialism is exactly that – creating a narrative where they could all pretend they’re Doing Good, versus actually doing good. The latter takes effort and does not benefit them in kickbacks and privileges.

  3. I have to say that the way literary agencies do things is insane. Imagine saying to a waitress, “Hey, I have an idea. I’ve got a lot of friends who work at your restaurant, so why not have your employer pay me directly into my bank account, and send me all the paperwork about how much you’re owed in tips. I’ll make sure that you eventually get paid.” If the waitress was a charitable person and didn’t immediately slug you upon making that suggestions, I assume she would say, “Are you on crack?” And yet trad published authors are expected to accept that this is just the way things are done.

  4. Wow. And I thought the thief was a worm before. 🙄 Probably thought they could afford it, since they’re rich white guys, or some other such nonsense.

  5. Stole money to give to an organization that “does good work”…who does this guy think he is, the government?

  6. I do take issue with the idea that this was good intentions in any way. Mr. Webb wanted the accolades that go with being seen handing out, without putting up anything of his own.

  7. Considering how corrupt many nonprofits are, I’d be surprised if it wasn’t just a money laundering scheme to enrich the owner.
    (Which distinguishes it from Goodwill how? Good question.)

    1. Goodwill has people choose to give property and cash, freely, and they actually deliver good results.

      Counter to the popular claim, they not only don’t pay their leadership amazingly high salaries, they’ve got regional leadership and pay the higher folks rather lower than is the norm for charitable groups.

      Unless they’ve greatly cleaned up in the ish years, Komen for a Cure is a better example– although most of their charity is obtained freely, they don’t do much for actually finding a cure, and greatly enrich their leadership.

      1. United Way does. In 1992 when i needed some help, UW was paying their CEO 800k a year. UW consumes 85% of their budget before it gets to anyone.

    2. (Goodwill is probably one of the biggest recycling organizations in the country, too– you can’t take bags of absolute trash, but the only thing I’ve ever had refused there was because the guy was lazy and didn’t want to move it– I drove to a different donation site and the guy thanked me for the donation.)

  8. I seriously doubt that there is a publisher currently in existence, large or small, that could survive a detailed investigation by an independent forensic accountant.
    Always remember that social progressives are extremely generous and charitable just so long as the largess comes from someone else’s pockets.

  9. Lets consider that the training and employment opportunities offered by this person would have been teaching bad practices of employment and business.

  10. “It’s just a loan. I’ll pay it back.”

    I think that most embezzling starts out that way. Most of the rest is just “I’m in a bind, it will only be this one time.”

    And pretty soon (and I knew someone caught and convicted who did just this) it’s because you don’t have the cash for the expensive restaurant you want to take friends to for your husband’s birthday.

    I believe that only a very few people start out with “I’m so smart, look what I can do.”

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