Bankrupt Businessman James Agate Angles for a Slice of Billionaire Ted Forstmann's Riches

Like many Los Angeles businessmen who have fallen on hard times, James Agate is struggling to regain the lifestyle he once enjoyed.

Ted Forstmann

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• James Agate
• Ted Forstmann
• Spencer Segura
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As head of a Hollywood printing company, Agate claims to have eclipsed $100 million in sales and printed more than 5,000 movie posters for the likes of MGM and 20th Century Fox. He lived the good life, cruising on yachts in the Caribbean and flying on private jets to Vegas for gambling junkets. A scratch golfer, Agate belonged to the historic Wilshire Country Club and the exclusive Lakeside Country Club, a playground for Hollywood stars dating back to Clark Gable, Bing Crosby and Bob Hope.

But Agate's professional life took a nosedive in 1998, when Fox began investigating him and other printers around town for bribing studio executives. Fox later fired and sued several employees for accepting bribes and banned anyone at the studio from working with Agate's company again.

Then things got worse. Agate's business, Agate Printing, was suspended by the California Franchise Tax Board. He was hounded by the IRS for back taxes, and the State of California filed several liens against Agate, at least one in excess of $100,000.

Agate, who bears a striking resemblance to Rodney Dangerfield, was getting no respect.

By April of last year, Agate had "hit rock bottom," he wrote in an e-mail to a former golfing buddy. "I was evicted from my three previous residences, my car was repossessed, my residence has been burglarized three times (twice while I was hiding in the next room), resulting in a substantial financial loss. I have been kicked out of both golf clubs and no longer play golf. I am still massively in debt to the government."

By the time Agate wrote those lines, he had turned much of his attention toward a wealthy and famous golfing buddy, the billionaire Ted Forstmann.

At 70, Forstmann is one of the most powerful men in the sports and business worlds. He made a killing as a player on Wall Street in the 1980s and '90s, buying and selling big-name companies ­— Dr. Pepper, Gulfstream, 24 Hour Fitness — the way a kid trades baseball cards. His latest conquest and occupation is sports and media giant IMG Worldwide, which counts superstars Tiger Woods, Roger Federer, Gisele Bündchen and the NCAA as clients.

In the fall of 2007, Agate told Forstmann that he was sitting on explosive accusations that could destroy Forstmann's reputation. These included allegations that Agate had placed hundreds of thousands of dollars' worth of sports bets for Forstmann and that Agate had incurred tax liabilities as a result of the wagers. Agate later said, according to communications viewed by the Weekly, that he would seek his money in court if they couldn't settle the matter themselves.

Forstmann, who declined to be interviewed by the Weekly, denied he had any tax obligations related to Agate or gambling.

He also denied that he had wagered as much as Agate claimed and refused to pay him.

So in 2008, Agate sued Forstmann, claiming that he had reneged on promises to "indemnify" Agate for unspecified "services" and to get 24 Hour Fitness to do business with Agate's company. For the time being, Agate withheld any details of Forstmann's betting.

Forstmann denied the claims in the suit but, on the advice of his attorneys, eventually settled: In a confidential settlement, he paid Agate $575,000 to go away.

Agate agreed as part of the settlement to write an apology letter to Forstmann and never discuss the allegations or file more litigation.

"I deeply regret falsely attacking your character and falsely describing your activities to many people," Agate wrote in the apology letter. "I apologize for all my erratic and harassing e-mails."

But then, Agate in October filed a second lawsuit against Forstmann in Los Angeles Superior Court.

The accusations were nearly the same as in the earlier lawsuit, except this time Agate sued under his then-defunct company's name and he included detailed allegations that he placed close to $7 million worth of bets for Forstmann over eight years on pro and college sports, including wagers on or against IMG clients Federer and Woods. Agate claimed that the IRS wanted nearly a million bucks from him in back taxes for revenue that appeared to be going to Agate's company in the form of Forstmann's gambling checks, and that Forstmann had agreed to indemnify Agate Printing from tax liabilities related to his betting.

The claims quickly gained the attention of the media. Gossip website TMZ breathlessly reported, "A blockbuster lawsuit was just filed against the company that manages Roger Federer and Tiger Woods."

Within days news outlets, from little-known sports blogs to New York magazine, offered their take. Forstmann was on the national hot seat, dubbed the "Pete Rose of tennis" by AOL columnist Greg Couch.

Agate didn't stop there. He included a rash of additional allegations that had almost nothing to do with the tax liability or printing business issues at the heart of the lawsuit, and which Forstmann not only denies but which appear dubious: that Forstmann was racially insensitive to African Americans (even though he has adopted two children who are African) and that he conspired to destroy Tiger Woods' career (even though, as CEO of IMG, Forstmann benefits from the success of Woods).