Kylie Jenner could be the subject of a criminal investigation into allegations of excessive business value

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Kylie Jenner could face a criminal investigation into allegations of hype in the value of her business, a lawyer who specializes in financial fraud revealed.

The cosmetic entrepreneur was excluded on Friday from Wealth magazine’s coveted list of Forbes Billionaire after media reported that financial documents filed with the Securities Exchange Commission (SEC) showed that she may have been lying about the success of his cosmetics company.

In an exclusive interview with DailyMail.com, the internationally renowned lawyer Jan Handzlik, who has served for five years as a federal attorney in Los Angeles and now defends celebrities and big business in financial fraud cases, said that the alleged exaggerations could bring Jenner into a world of legal trouble. .

“I suppose the SEC will at least start what it calls an informal investigation, and then possibly turn it into an official investigation, which will give it powers of subpoena,” said Handzlik.

Kylie Jenner could face criminal investigation into allegations of exaggeration in business value, financial fraud lawyer told DailyMail.com

Kylie Jenner could face criminal investigation into allegations of corporate value hype, financial fraud lawyer told DailyMail.com

Impressive: in 2019, Kylie was hailed as the youngest self-taught billionaire for the second year in a row (pictured on the 2018 cover)

Impressive: in 2019, Kylie was hailed as the youngest self-taught billionaire for the second year in a row (pictured on the 2018 cover)

He added: “In this case, you have a mix of things that can lead to civil and criminal review very early on: obviously the celebrity aspect, the sheer amount of alleged exaggeration and the highly public nature.

“This is all like catnip for a prosecutor or the SEC, because it will result in very high coverage of what is going on. “

Friday, after the bomb report was announced, Kylie went on Twitter to slam Forbes.

Jan Handzlik, who has served five years as a federal attorney in Los Angeles and is now defending celebrities and big companies in financial fraud cases, said that the alleged exaggerations could cause Jenner to be in a world of legal problems

Jan Handzlik, who has served five years as a federal attorney in Los Angeles and is now defending celebrities and big companies in financial fraud cases, said that the alleged exaggerations could cause Jenner to be in a world of legal problems

The 22-year-old reality star was taken aback by the article, tweeting, “What am I even waking up to?” I thought it was a reputable site. all i see are a number of inaccurate statements and unproven assumptions lol. I never asked for a title or tried to lie. period.’

She continued with a quote from the Forbes report which accused the Jenners and their accountant of filing false tax returns. “Even by creating tax returns that have probably been tampered with, is that your proof? so you THINK they were forged? like actually what I’m reading, ”tweeted Kylie incredulously.

In another article, she added, “Okay, I’m blessed beyond my years, I have a beautiful daughter and a successful business, and I’m doing great. “

Forbes put Kylie on the cover of her female billionaires in 2018, making her the youngest self-taught billionaire in the world in 2019 and again in 2020.

Handzlik, who has more than 100 lawsuits to his credit, said that after a possible fence by the SEC, Kylie could also be the subject of a criminal investigation by the Ministry of Justice (DoJ).

“These things could very well cause the United States Attorney’s office and the Southern District of New York in particular to jump earlier than they could otherwise,” he said.

“If the Ministry of Justice decides to make it a criminal matter … if there were to be a conviction, this could include prison terms for anyone responsible. “

'Inaccurate statements': After the bomb report was released on Friday, Kylie went on Twitter to slam Forbes. The 22-year-old reality star was surprised by the article, tweeting, `` What am I even waking up to? I thought it was a reputable site. all i see are a number of inaccurate statements and unproven assumptions lol. I never asked for a title or tried to lie. period'

“Inaccurate statements”: After the bomb report was released on Friday, Kylie went on Twitter to slam Forbes. The 22-year-old reality star was taken aback by the article, tweeting, “What do I even wake up to. I thought it was a reputable site. all i see are a number of inaccurate statements and unproven assumptions lol. I never asked for a title or tried to lie. period’

Not worried: Kylie reacted to a tweet that asked why she cared about this with so much in the news

Not worried: Kylie reacted to a tweet that asked why she cared about this with so much in the news

Jenner, the youngest sister of the Kardashian family, started her makeup line with lipstick kits in 2015. Kylie Cosmetics signed an agreement with Ulta Beauty Inc to put its products in all of the retailer's 1,163 US stores (above)

Jenner, the youngest sister of the Kardashian family, started her makeup line with lipstick kits in 2015. Kylie Cosmetics signed an agreement with Ulta Beauty Inc to put its products in all of the retailer’s 1,163 US stores (above)

The controversy exploded around a $ 1.2 billion deal for Kylie Cosmetics, in which Kylie sold a 51% stake to makeup giant Coty for $ 600 million in January.

At the time, Wall Street suspected Coty of overpaying for the majority stake. The concerns were fueled by new financial information provided by the publicly traded company, which revealed that Kylie Cosmetics’ profits were much lower than those of Kylie.

In a fierce campaign to get Forbes to rank the Kardashian-Jenner family at the top of their richest list, the famous family told Kylie Cosmetics magazine that they had made $ 360 million in revenue for 2018.

But Coty SEC documents revealed that the figure was in fact about $ 125 million – less than a third of their claims.

The magazine reported that Kylie representatives told them that its new skin care line, launched in May 2019, had generated $ 100 million in revenue in its first month and a half.

But Coty’s figures show the product line “on track” will only make $ 25 million in sales for the year.

Forbes claims that since 2016, representatives from the reality TV family have invited the list authors to Kylie’s mansion and have held meetings with their accountants to try to convince the magazine to increase the list of wealthy.

In August 2018, the family got what they wanted: Kylie was pictured on the front page under the title “America’s Women Billionaires”.

Kylie is not a billionaire, Forbes said on Friday. They accused the 22-year-old `` self-made '' makeup tycoon of turning `` a web of lies '' on business figures and of `` falsifying tax returns ''

Kylie is not a billionaire, Forbes said on Friday. They accused the 22-year-old “self-made” makeup tycoon of turning “a web of lies” on corporate figures and “falsifying tax returns”

The controversy exploded around a $ 1.2 billion deal for Kylie Cosmetics, in which Kylie sold a 51% stake to makeup giant Coty for $ 600 million in January. At the time, Wall Street suspected Coty of having overpaid the majority stake. The concerns were fueled by new financial information provided by the publicly traded company, which revealed that Kylie Cosmetics' profits were much lower than those of Kylie.

The controversy exploded around a $ 1.2 billion deal for Kylie Cosmetics, in which Kylie sold a 51% stake to makeup giant Coty for $ 600 million in January. At the time, Wall Street suspected Coty of overpaying for the majority stake. The concerns were fueled by new financial information provided by the publicly traded company, which revealed that Kylie Cosmetics’ profits were much lower than those of Kylie.

“I’m so proud,” Kylie’s brain mother Kris Jenner wrote in an Instagram post in response.

In the bombed article by Forbes that degraded Kylie’s net worth from more than $ 1 billion to just under $ 900 million, the magazine claimed that the family had probably shown them income tax returns with “False figures”.

“Although we cannot prove that these documents were false (although this is likely), it is clear that Kylie’s camp lied,” said the report.

Handzlik told DailyMail.com that the revelations are an obvious target for a possible SEC investigation, and would likely attract the attention of federal prosecutors.

“Part of the purpose of investigations and enforcement is to deter others. So when a case comes out with a lot of personalities and a natural attraction for many members of the public, that would be a good way to do it – whether or not it is warranted in this case, “he said.

“In entertainment and perhaps even advertising, hype, swelling if you will, is a centuries-old tradition. But here, a private company was sold for a lot of money to a large publicly traded company. It brings a lot more control.

“The claims may sound good if you’re on Instagram or Facebook. But when you transfer this to a publicly traded company, you find yourself in a situation where you could be accused of not only exaggerating, but also defrauding the financial statements. “

Everything changes: Coty, which is struggling to reduce its sales, saw its share increase by 5% after Jenner's announcement last year. The share price was $ 12.32

Everything changes: Coty, who is struggling to reduce sales, saw its share increase by 5% after Jenner’s announcement last year. The stock price was $ 12.32

Friday after Forbes dropped the bomb news, shares fell slightly to $ 3.60

Friday after Forbes dropped the bomb news, shares fell slightly to $ 3.60

Senior Lawyer Said If Federal Investigation Reveals Kylie Committed Financial Fraud, She Could Be Sentenced To Prison Terms And “Stupid Amounts” Fines For “Making Coty Whole Again” In The Agreement $ 1.2 billion.

“We don’t know if there is something here that doesn’t meet the eye. But taking the allegations at face value, there is certainly a basis for investigating and perhaps going ahead with coercive action or criminal prosecution, “he said.

“If this leads to a formal investigation and this formal investigation concludes that there has been fraud on the financial statements or other aspects, the tools available to the SEC are quite powerful.

“In fact, if the court decides that the Jenners or Jenner companies received ill-gotten gains, took advantage of financial statement fraud or financial mischief, then these rather staggering amounts of money that were paid or distributed on the Jenner orbit, the SEC could order the return. In other words, they would seek to restore Coty’s integrity. “

Handzlik has been named one of the top 100 lawyers in California by the leading law publication The Daily Journal, and is known for defending highly publicized financial fraud cases to large clients.

He has represented Steven Seagal, owner / producer of Girls Gone Wild Joe Francis and other celebrities, as well as multinational corporations in historical cases.

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