Music mogul Russell Simmons is challenging the government’s attempt to seize stocks he contends are rightfully his. He also spoke out this month before the Department of Justice responded days later in court by claiming he doesn’t own any of the contested shares.
In a recent interview in Bali with journalist Graham Bensinger, Simmons claimed that his ex-wife, Kimora Lee Simmons embezzled a significant portion of shares now worth $800 million from him. The shares were used to secure bond for her then-husband, former Goldman Sachs investment banker Tim Leissner, who had been indicted on federal charges of bribery and conspiracy to money laundering in connection with the infamous 1MDB Malaysian sovereign wealth fund embezzlement scandal. The government has yet to release the money put up for bail.
Simmons opposes prosecutors’ request to dismiss the petition he filed in connection with the criminal case of Leissner.
Simmons and Lee were married from 1998 to 2009. Lee later married Leissner in 2014. Despite their divorce, they maintained a business relationship and a publicly friendly demeanor.
In 2018, Leissner was arrested for his involvement in the money laundering scheme. After posting a $20 million bond, secured with shares at the center of Simmons’ dispute, he was allowed to remain free during the unfolding criminal case, ultimately pleading guilty and agreeing to repay $43 million in cash.
Part of Leissner’s posted bond included 3.3 millions of shares in the energy company Celsius, valued at $13 million. In 2021, Simmons filed a lawsuit against Lee and Leissner, alleging that roughly half oof the stock used for the bond rightfully belonged to him. The lawsuit claimed that the defendants engaged in fraud to raise funds for Leissner’s legal expenses and victim compensation.
Simmons accused his ex-wife and her husband of transferring stocks owned by him into their account. Earlier this year, as part of Leissner’s criminal case, the government demanded the forfeiture of millions of shares held in Lee’s bank account. Lee contested, claiming that 892,000 of the shares were hers, purchased with her own funds.
“So, I tried to be flexible, and accommodating, and supportive,” Simmons said in the interview with Bensinger. “And sometimes, things don’t work out. You’ve seen the lawsuit. I had no choice. I think Jesus Christ, Lord Buddha, anybody would have sued. […] She gave what is now, today, based on the value of the stock, $800 million to the government illegally, and now I’m fighting to get my half of it back.”
Lee has disputed the claim, asserting that her share of the stocks were acquired in 2017 through her private bank account, funded by income from her modeling career and apparel line. Lee insisted that Leissner had no involvement or interest in these personal business ventures.
Simmons Wealth Accumulation
By most media accounts, Simmons is still rolling in the dough. Many outlets peg his current net worth to be between $340 million and $350 million.
Considered a pioneer of hip-hop culture, Simmons co-founded the groundbreaking rap label Def Jam Recordings with Rick Rubin in 1984. He played a pivotal role in shaping the landscape of hip-hop music, fostering the careers of iconic artists. Def Jam’s success, marked by groundbreaking releases from artists like LL Cool J and Run-DMC, contributed significantly to Simmons’ financial prosperity. Beyond music, Simmons ventured into the fashion industry, establishing the influential urban fashion label Phat Farm.
In his legal battle with the government, Simmons claimed that he owned 49 percent of the shares the government sought to seize. The government requested the dismissal of Simmons’ motion in a response on Dec. 7, as HipHopDox reported, supporting Lee’s assertion that Simmons had transferred all of his interest in the relevant company to her in 2019 and also maintaining that as investor in company that owned the shares he did not own the company’s assets.
Simmons responded, criticizing the government’s attempt to dismiss the petition as a “shocking” effort to seize property worth over $500 million from an innocent person. His lawyer argued that it was implausible to allow the government to take all the interest of an innocent member of an LLC based on the actions of a criminal member.
The music mogul claimed that since Leissner negotiated a deal with the government, the value of the stocks rose from $13 million to over $500 million. Under the deal, Leissner is set to receive $43.7 million, the government will receive $456 million, while Nu Horizons and Simmons will allegedly receive nothing.
