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BDO has been ordered to pay more than $5mn in damages to Jay-Z’s former tax adviser, who said he was unfairly dismissed for disclosing confidential information to celebrity clients who accused a firm employee of stealing money.
Kashyap Bakhai, a BDO partner with 35 years of experience advising wealthy individuals including sports stars and entertainers, was fired almost two years ago when the accounting firm was dealing with accusations that the employee dipped into client accounts for personal use, according to people familiar with the dispute and legal filings.
A three-person arbitration panel found in Bakhai’s favour in September after hearing from witnesses and reviewing hundreds of exhibits, according to a court filing. Such disputes normally remain confidential, but limited details have become public in this case because BDO has failed to pay the money awarded to Bakhai.
Bakhai petitioned a federal court in Miami, where he was based, to confirm the award and force BDO to pay, listing the money at issue as “in excess of $5mn”. A judge has yet to rule on the enforcement request.
BDO claimed Bakhai had improperly passed information to staff of Jay-Z’s management company, Roc Nation, people familiar with the dispute said. Fat Joe, a rapper in the Roc Nation stable who was a client of a different BDO partner, sued the accounting firm in 2022 claiming he was a victim of theft. Roc Nation staff had pressed Bakhai to help them investigate what had happened, the people said.
Bakhai denied he acted improperly and took BDO to the arbitration panel to contest his dismissal, according to court filings. He said he was unfairly stripped of his partnership interest just months before BDO’s remaining partners received a windfall from converting the firm into a corporation and selling a stake in the firm to an employee trust.
The Financial Times reported in September that rappers including Jay-Z and Megan Thee Stallion ditched BDO as their adviser as a result of the theft allegations. BDO denied the claims in Fat Joe’s lawsuit, which was settled earlier this year.
Also in September, a former BDO employee, Vanessa Rodriguez, was indicted in Miami on four counts of fraud, accused of spending on credit cards that did not belong to her. She has pleaded not guilty and is awaiting trial.
BDO declined to comment on the dispute leading up to Bakhai’s dismissal, or on the petition to confirm the arbitration award. An attorney for Bakhai declined to comment.
The two sides are still in arbitration over whether BDO should cover Bakhai’s legal fees.