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Glamor Girl Ripoff?

New York- In a move sending shockwaves through New York’s billion-dollar modeling industry, a pair of class-action lawsuits charge that the world’s leading agencies ripped off their glamour girls in a massive commission-fixing conspiracy that dates back more than 20 years.

The model management companies – including Ford, Wilhelmina, IMG and Elite – have been charged with stealing from their talent, taking kickbacks from agencies booking belles for television and film work, “billing models for phony expenses” and tax evasion.

The suits demand that agencies and their owners – 64 defendants in all – reimburse their human clothes hangers for the millions of dollars in commissions they earned preening and posing during the past six years. Should the plaintiffs win, the companies that launched a million beautiful faces could face some very ugly bankruptcies.

Even top models like Gisele Bundchen, Heidi Klum and Claudia Schiffer could share in any awards. All told, the “class” includes more than 10,000 current and former models.

“It could break all of us totally and it would mean the end of modeling in New York,” lamented the head of one major agency, asking that his name be withheld on his lawyer’s advice.

“Not only modeling, but all the photographers, designers, stylists, magazines, the garment industry, fitters, makeup artists, messengers – everything will be affected,” he added.

Documents filed by both sides in the cases provide an unusual look inside the workings of a glitzy world where cutthroat business practices prevail.

The suits are scheduled for hearings and trial beginning next month in state Supreme Court and federal court, both in Manhattan. Models are ready for the witness stand.

“The agencies have all these young girls, and I was one of them, so excited to be a model and so grateful about the money, and they rip us off,” said Carolyn Fears, 34, formerly under contract with Ford Models Inc. and one of those pressing the claims. Fears, a tall brunette with dramatic good looks, said she earned as much as $200,000 a year during her six years with Ford. She still models today and runs a surf shop with her husband in Sunset Beach, Calif.

Like other plaintiffs, Fears said the commissions she paid Ford were nonnegotiable and she had no way of monitoring expenses charged against her fees.

The suits describe modeling agencies as an “unregulated private club” generating hundreds of millions of dollars annually.

“You have to trust the agency and what they tell you. You sign a contract that binds you to the agency with a set commission rate and [it] promises you nothing in return,” Fears said.

‘There is no collusion’

Katie Ford, president of Ford Inc., along with the heads of other companies, declared the suits baseless in their responses.

“What Carolyn Fears didn’t tell you is that she lived at my parents’ house for free, that she was fed at our expense, and her paychecks were advanced with no interest expense,” Katie Ford told the Daily News.

“We provided her with many services, including travel arrangements, health care and housing at no expense to her. The expenses she’s complaining about were paid to outside vendors, not to us,” Ford said.

Wilhelmina Model Agency Chairman Dieter Esch was a bit more direct.

“This is the most vicious, competitive, nasty, bitchy business, and we wouldn’t and didn’t conspire on commissions or anything else,” he said.

“We couldn’t even agree on where to go to lunch, much less commissions,” he said. “There is no collusion, no anti-trust.”

The suits were brought by the powerhouse firm of Boies, Schiller & Flexner. It is steered by David Boies, who represented the Justice Department in its anti-trust suit against Microsoft and Al Gore in his unsuccessful bid for a recount in the 2000 presidential election.

The agencies have their own big courtroom guns, including Simpson Thacher & Bartlett, one the city’s largest firms.

All the attorneys involved in the cases declined comment.

At odds over commissions

According to the suits, 10 modeling agencies and their officials agreed to set their commissions at a uniform 20% of the amount models are paid for each job.

The plaintiffs charge that state law entitles the agencies to only 10% commission because they are effectively functioning as employment agencies.

The companies are masquerading as management firms that have no limit on commissions, the suits contend.

“We are management companies, not employment agencies like a temp agency,” said Esch, detailing how a model’s career is fostered.

“We fly them around, we put them in apartments, we develop their portfolios, we loan them money in advance of their work. Does that sound like an employment agency?” he said.

Gym dues, plastic surgery, other doctors’ visits, drug rehabilitation, dental work and family Christmas presents are among the expenses paid by the agencies, according to court papers.

The cost of runway walking lessons, messenger fees, even bail bond for models who are arrested, are also advanced, agency executives said.

The plaintiffs counter that those expenses typically are deducted from models’ pay, as are short-term loans, generally repaid at 5% interest.

In total, the agencies uniformly receive 40% of each model’s payment, the suits charge. That includes an additional 20% service fee paid by whoever hires the model.

For example, during Fashion Week, if a designer paid an agency $1,500 for a model to parade down the runway in one show, the agency kept 20% of that fee or $300, gave the model $1,200 and received an additional $300 from the designer.

Top runway models – such as Linda Evangelista in her heyday – are paid $10,000 for several hours’ work.

Then there are the superstar deals, such as Brazilian bombshell Bundchen’s $25 million, five-year contract with Victoria’s Secret, also subject to commission. Catalogue models are paid from $150 to $500 an hour; that pay is doubled for lingerie or swimsuit work.

“That’s because it’s harder to find a woman with the right body for lingerie or a bathing suit,” said the head of one agency. “You need the face and the body, and skinny doesn’t work there.”

Exceptions to 20% rule

Esch and the heads of other agencies acknowledged that a 20% commission is the industry standard but said there are exceptions, especially for top models.

“Wilhelmina has models with 20%, 10%, 5% and even 0% commissions,” Esch said. “Even the service charge is negotiable. Everything is negotiable, and it’s the same at other agencies.”

Kadra Omar, a model under contract with Elite, told The News, “I pay Elite a 15% commission.”

And IMG Models, today one of the largest agencies, states that it built its business by raiding other companies’ models with offers of lower commissions.

“During the period 1998-2003 alone, IMG Models recruited and ultimately represented over 66 models previously represented by other model management companies,” IMG’s Senior Vice President Charles Bennett said in court papers.

The head of another agency said rivals routinely try to steal his models.

“They come up to them at shows or at bars and whisper in their ears, offering them lower commissions, better jobs, and persuade them to break their contracts,” said the agency head, who asked for anonymity.

“We’re suing each other all the time over broken contracts, and that’s one reason why we couldn’t agree to all hire the same law firm to defend these suits,” he said.

The agencies already have spent millions of dollars preparing their defenses. “Nobody can easily afford this, even if we win,” Esch said.

Elite Model Management has spent $2 million for its lawyers while another defendant, Click Model Management, has spent more than $1 million on legal fees, according to industry sources.

The Boies firm, meanwhile, is representing the plaintiffs on a contingency basis.

 

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