Bristol-based digital music distributor 3tone owes numerous artists and managers tens of thousands of pounds in unpaid royalties and has racked up a string of unsettled employment tribunal judgements for unlawful deduction of wages from employees.
It's also facing legal action from suppliers, is accused of running fake competitions and repeatedly breaking promises to artists, suppliers and staff.
Current staff have not been paid for months and former staff have been threatened with legal action by the company. Those threats have been made, we believe, as a direct result of us informing 3tone that we were going to publish this article.
CMU has also been provided with information indicating that the company has - on at least one occasion - sent faked remittance advice indicating that a payment had been made when in fact funds were never sent. This was seemingly an attempt to stop action that would have had significant implications for the company's ability to operate. Multiple sources have told us that they company policy was "don't pay anyone unless they make a fuss".
We have also been shown documents that appear to show revenue figures being altered. This could of course be simply someone correcting incorrect figures - but multiple sources say that the company often made these “corrections” to documents in this way.
On top of this, we have uncovered a company culture of intimidation, fear and bullying that has left some employees scared to speak for fear of what the company’s co-founder Dean Roberts might do.
A six week investigation with 50 hours of interviews
CMU has approached numerous people in a wide ranging investigation into 3tone that has lasted six weeks and includes more than 50 hours of on and off the record interviews with more than 30 people who have been involved with 3tone as customers, suppliers, contractors, or staff.
Several former employees told CMU that they could not speak to us because they have signed NDAs. We later found out that a number of staff from 3tone (but by no means all) had been asked to sign wide-ranging NDAs, which former employees who refused to sign described as a "sudden" and "coercive" process where staff - in particular junior staff - were given little option but to comply.
We have since obtained copies of the NDA template used by 3tone. Whether those NDAs are even legally valid is questionable - particularly given the alleged coercive procedures, the apparent flagrant breach of contract on 3tone's part in relation to some former employees, and the repeated allegations of unreasonable behaviour by management.
Another former staffer would only speak under the conditions of strictest anonymity, and another initially gave us a statement but withdrew it in fear of repercussions.
“I spent one of the worst periods of my life working at this company for this man. He’s a sociopath who has lied to artists, suppliers and employees”.
To protect our sources - many of whom are very genuinely scared of Dean Roberts - we have taken the decision not to name any sources unless they have explicitly asked to be named. That does not lessen the truth of their testimony.
The fall out from publication
CMU informed Dean Roberts and the other company directors at 2pm Wed 25 Oct that we would be publishing a detailed, comprehensive and robustly sourced article today.
After we told 3tone that we would be publishing this article we understand that a number of former employees were sent messages by Mr Roberts threatening legal action.
However, in some cases these threats have apparently been sent to people who we did not talk to, but who are in touch with sources - many of whom were friends with each other before they joined the company, and some of whom became friends through the shared experience of working at 3tone.
"I never truly hated a person till now... He's the worst person I've ever met”.
In reality, a lot of what has happened at 3tone is public record; by searching “3tone employment tribunal” for example it’s easy to see actions filed by former employees. In some cases CMU has also been able to locate supporting documents for these claims.
At the same time that legal threats are being made to former staff it appears that the current remaining staff - who CMU understands have not been paid for three months - have been unable to access email.
Earlier this week, CMU was shown evidence that Dean Roberts' access to the 3tone office had been restricted. The office is located within Bristol's Old Stock Exchange building, 34 St Nicholas Street, and next door to Bristol's vanguard live music venue Mr Wolf - both of which are owned by Bristol businessman Mark Wolff.
This was denied by Mr Roberts, but we have since been shown compelling evidence that 3tone's access to the premises has indeed been cut off.
Who are Dean Roberts and Christoffer Borud of 3tone Music?
On 6 Sep 2022 Music Business Worldwide - part owned by Penske Media Corporation - published a story that claimed a Bristol-based distribution company called 3tone had raised $50 million from Carlton James Global Investment Group.
"After seeing in the music press they'd had an additional $50 million funding, I was quite patient with them while they had website issues and I believed their narrative about making positive changes and growing as a company”.
The story was repeated by Billboard - also owned by Penske Media Corporation - a few weeks later on 13 Oct 2022. A number of other music business publications ran the story after it ran in MBW and Billboard, including Hypebot on 7 Sep 2022 and Digital Music News on 16 Oct 2022.
The story gave further detail on Dean Roberts and Chris Borud, the founders of the company, saying:
“Dean Roberts possesses over 25 years of experience within the music business, having worked with artists including Amy Winehouse”.
It seems likely that the MBW piece took this from information on the Carlton James website which says:
Dean Roberts, director, possesses over 20 years’ experience at the highest levels within the music business, working alongside world renowned platinum selling artists to establish their careers on a worldwide global scale.
A key role within Amy Winehouse’s camp, using his valued wealth of industry knowledge helped orchestrate over fifteen million sales of ‘Back To Black’: it is at this point in his career he felt the need for a change to the dated music business model.
After procuring another artist John Newman in 2013, he decided that he would utilise his ideas and business acumen again to help assist Newman’s career within the industry, achieving over four million sales worldwide. In addition, Roberts has worked with The Kills, Echo And The Bunnymen, Regina Skeptor, The Charlatans, Mastodon, The Distillers, Turbonegro, Doves, The Rapture, Vendetta Red, Queens Of The Stone Age and James.
Quite what Dean Roberts' involvement in orchestrating 20 million sales of ‘Back To Black’ might have been is somewhat hazy. A quick check of the liner notes for the album shows extensive thanks to numerous people including mix engineers, assistants, friends, family, and many others - but no mention of Roberts.
Former staff, artists and managers say that Roberts would often boast of having "carried the casket" at Amy Winehouse's funeral. One manager CMU spoke to say: "I find it such a strange thing to say, to be proud of. If you'd done that, if you were that close to her and the family, I don't understand why you would be going around telling people about it. That sort of thing is really private”.
"Dean pissed off so many people, but John thought he was great, wouldn't hear a word against him..."
Roberts' involvement with John Newman is a little less fuzzy - in fact, it's detailed quite specifically in John Newman's book, ‘Revolve’.
"I met Dean when I was working at [Finsbury Park music venue] The Silver Bullet. I would often go in on my nights off, to get drunk for free and chill with my mates who all lived upstairs above the venue. One night I was there with my good friend Max, he got talking to a guy stood at the end of the bar - who I can only describe as a man who looked like he owned a whippet - wearing a flat cap, blazer, and brogues”.
“He told Max he was a tour manager and had looked after the likes of Amy Winehouse, Florence And The Machine, The Doves, Queens Of The Stone Age and loads of other incredible acts. I thought the guy must be talking out of his arse... 'that man from the bar' contacted my managers and continued trying to get through to me”.
The managers that Dean Roberts was continually contacting, says Newman in the book, were Ollie Clueit - who he also met in The Silver Bullet - and Paul MacDonld.
“Ollie was getting us gigs every week”, he says, “but it was my ambition to go further. Ollie and I were both learning the ropes so we decided that we should bring in an extra force and approached Paul MacDonald … my now manager … I knew the labels seeing me live would help. Ollie pulled together a couple of showcases in pubs around North London, including the Old Queen’s Head on Essex Road, and the Bull & Gate in Kentish Town. Both gigs were rammed full of the ‘right’ people; heads of the music industry and everyone I’d ever met in London”.
In an article published on 25 Jun 2019 in the Swindon Advertiser - seemingly prompted by a press release from Carlton James - Roberts is positioned as the man who "found singer songwriter John Newman and helped him to make it as a top artist worldwide achieving more than four million sales worldwide".
After the Finsbury Park pub meeting, Roberts went on to become John Newman's tour manager – as well as fulfilling a role as confidant and general fixer.
Screenshots from 3tone’s website, taken in March 2019 and obtained by CMU, show an "associated artists" page that lists Amy Winehouse, Alison Moyet, CeeLo Green, The Charlatans, Charlotte Church, Gabrielle, James Blake, John Newman, Lily Allen, Plan B and Tove Lo amongst others.
Who are Carlton James Global Investment Group, the investors?
Carlton James, in its own words (capitalisation and spelling are as found on their website) is a “private Investment group specializing in diversified portfolios across different global asset classes across varying jurisdictions, Industries and economies with the goal of investing in a diverse portfolio with a capital protection focus and the potential to generate higher returns and secure their capital against global financial upset”.
The company’s global HQ is apparently a small office in a semi-rural industrial estate a few miles outside Swindon.
"You're the old guard, I'm the new kid on the block... I've got $50 million in my back pocket, so you had better do what I say...”
Quite what Carlton James is, and quite what it does, is pretty opaque. The company website contains pages and pages of financial jargon and legalese, seemingly indicating that it operates a number of specialist investment funds.
What we have been able to establish is that Carlton James Diversified Alpha Fund utilises a complex structure of companies in the UK, British Virgin Islands and other jurisdictions including the Cayman Islands to operate.
Carlton James Global Management Limited acts as the UK entity and as such has provided a secured lending to 3tone Music Limited and 3tone Limited. Meanwhile, a Cayman Islands company and regulated entity "Mollitium Investment Management" - formerly known as "Carlton James Mollitium Investment Management" - manages and controls another Cayman Islands company called "Navigator Global Fund Management Platform SPC” - formerly known as "Carlton James Mollitium Offshore Fund Manager Platform SPC".
A further Cayman Islands company "Diversified Global Investment Advisors Limited" acts as an advisor to Mollitium and "maintains an investment committee to support the services to Mollitium" on which Simon Calton, CEO of Carlton James Global Management Limited, sits.
Cayman Islands SPCs - or Segregated Portfolio Companies - are a [complex corporate structure that allows the operation of specific types of investment funds](https://www.ogier.com/news-and-insights/insight/segregated-portfolio-companies-in-the-cayman-islands/#:~:text=The concept of an SPC,SPC's general assets and liabilities.).
Conversations with both Roberts and Calton suggest that funds are gathered from investors by the offshore company structure, before being provided to companies like 3tone as secured loans.
Where did the $50 million that Carlton James invested into 3tone go?
On 22 Sep 2023, CMU contacted Carlton James asking for an introduction to the executive team at 3tone after we received multiple reports from artist managers - in the UK and around the world - that 3tone had stopped replying to emails, stopped posting on social media - and, more worryingly - stopped paying out royalties.
Within 20 minutes of our request, Dean Roberts the CEO contacted us by phone. CMU explained why were were trying to contact the company and let Mr Roberts know that we felt we had enough to publish an article.
"Simon Calton and Dean have a strange relationship... More like mates who go out and party than business partners”
When asked why a company that had raised $50 million in investment would be facing what appeared to be a cashflow crisis, Mr Roberts explained that that the $50 million was, in fact, a “commitment” rather than a “money in the bank” investment and a “change in the overall economic climate” meant that the “priorities of some of the investors changed” meaning that there was a “hold up on the fund side”.
However, said Mr Roberts, things were “days away” from being resolved to unlock the "next tranche" of finance, and asked CMU not to move forward with publication because any “last minute hiccups” could spook the investors and lead to them withdrawing funding.
Not wanting to upset what, on the face of it, seemed to be a relatively convincing explanation for what was being presented as a short term financing issue, CMU maintained contact with Dean Roberts, and held off moving forward with any coverage. We also maintained contact with the artists and managers we had been talking to, and had wide ranging conversations about 3tone with as we tried to establish what was going on.
"It makes me sick to my stomach that I then worked for a company that has since contributed to ripping off under the radar and independent artists..."
As these conversations progressed it rapidly became clear that the story Dean Roberts had told us about a hold up with investment that would be resolved in a matter of days was nothing new - and was, in fact, one that he’d been telling to artists, managers, suppliers, contractors and staff for months.
As time went by - and excuses became more elaborate and convoluted - and more and more sources came to us - we realised that the issue went far beyond "just a few" artists facing problems getting royalties from the company.
Where did it all go wrong?
Over the past five weeks we’ve spoken to numerous artists, managers, contractors, suppliers and other sources, and had multiple calls with Roberts and Borud. In fact, over the course of this investigation we’ve conducted more than 50 hours of on and off the record interviews with people who have been involved with 3tone.
In a series of calls, Roberts revealed more of his side of the story - including admitting that he had used artist royalties to cashflow the company “over the bump” between the last “investor money” and the purported “any day now” arrival of new funds.
He admitted that had had received "£3.8 million" from Carlton James in "tranched payments" and provided documents to support this claim dated 12 Dec 2018 and 9 Oct 2020 that appear to show Carlton James Management Group Limited advancing secured finance of £1.275 million in Dec 2018 and a further $1.877 million (£1.44 million) in Oct 2020.
Somewhat confusingly, there is also a news article on the Carlton James website linking to a Swindon Advertiser article suggesting an additional $1.8 million "line of credit" in June 2019. Based on the paperwork we have been provided the total amount of credit extended to 3tone is £2.7 million; if we incorporate the additional £1.4 million reported in June 2019 this sum increases to £4.1 million.
Alongside this, 3tone provided us with screenshots appearing to show substantial transfers from Carlton James to 3tone at regular intervals, suggesting that at least £835,000 was paid into the company bank account. The last of these payments is dated December 2022. Conversations with artists and other sources close to the company suggest that it was around this time that money began to run out.
"What happens with our funds is that they go into groups of funds of funds across Europe, across Israel, UAE, South America and those funds of funds just insert our structure into their funds and then they allocate the funds over..."
At the same time, the excuses for why artists were not being paid became more elaborate and more convoluted. What started as "this will be sorted out in a matter of days" turned into "the money is coming from overseas and there's a problem with the withholding taxes on the investment" which turned into "the money is coming from Israel".
On 9 Oct - the Monday after the Israel-Hamas conflict began - we received an email saying: "The certificate has had the new taxation amendments implemented on Friday and has its final review today, all concerned are expecting this imminently and are keeping the pressure on, as am I. I am in regular communication with all concerned, however today has been a little slower due to the conflict on the Israeli side”.
A day later we were told "the withholding tax amendments have been signed off which is positive and its now going through their final compliance review (as a priority) then the certificate will go live on the platform. At this point the Israelis will be in a position to transfer the first tranche as previously discussed”.
By Wed 13 Oct we were told: "I now have assurity that everything is in place with our first tranche scheduled for Wednesday - Thursday next week, I will have a firmer understanding of this on Monday".
On Mon 23 Oct we were told: "I can confirm with great relief that we will receive the first tranche on Wednesday 25 Oct". We asked for confirmation that everyone would be paid on Wednesday and we were told: "I'm going to say Thursday to allow us time to schedule everything".
Later that day, CMU's Sam Taylor was invited to attend a 3tone "directors meeting" on Wed 25 Oct at 2pm with the suggestion that “it would be advantageous for all if you join our directors meeting this Wednesday to discuss all matters in hand”.
On that call which Roberts and Calton - who is also the CEO of Carlton James Investment Group - attended. Calton struggled to remember the term “facility” in relation to the secured loan agreements that are apparently core to his company's business, saying: “So what we’ve got is Dean has a… a… a… " before turning to his assistant to ask "What do you call it? A facility, that's it, a facility. Dean has a facility for 50 million. That’s still in place”.
Pressed for clarity on what the delay with this "facility" was - and why we had been led to believe that funds would arrive with 3tone on Wed 25 Oct, Mr Calton gave an explanation - very similar to explanations that both CMU and artists have heard multiple times saying "what happens with our funds is that they go into groups of funds of funds across Europe, across Israel, UAE, South America and those funds of funds just insert our structure into their funds and then they allocate the funds over".
Mr Calton went on to explain that "final terms" still needed to come back and that a "term sheet" was required for the "funds of funds" to "transfer the money over to our certificate".
It became immediately apparent that while Roberts had told us that the "first tranche" would be paid on Wed 25 Oct this was simply not true - and Calton was providing exactly the same opaque explanations that Roberts has been trotting out for months.
Is there any money left?
Without seeing detailed accounts for the company it's impossible to tell whether there is any money left. However, what we can say with certainty is a small number of artists and managers who were particularly vocal about payment problems received some payments - but many are still waiting for money. It now looks increasingly unlikely that they will receive what is owed.
Roberts admitted to CMU that 3tone had been using artist royalties to "cashflow over the bump" between investments. However, that "bump" may have been going on since December 2022 - or possibly even earlier. While CMU has been able to establish that 3tone may have received a payment from Carlton James in December 2022 we have also been able to establish that the company may already have been facing financial issues at this point, meaning that the funds received at that time may have been almost immediately allocated to settle liabilities.
Simultaneously, CMU has been able to verify that distribution royalty receipts received by 3tone in respect of works distributed for customers were in the region of £20k for September – but, we are told – this has fallen over the course of the year as more and more people have removed tracks from 3tone. While we have not been able to establish a definitive figure, it's been indicated that receipts could have been around £25k - £35k and may have peaked higher in some months. However, what is not clear is whether the figures that our sources are going off are genuine figures or “manually corrected” figures which may paint an incomplete picture of the distribution royalties.
Even if the problems have only been occurring since January 2023, and even if distribution receipts received by 3tone have only been £20,000 per month, then if that money has been used to cashflow the company then that potentially means that the company could have "borrowed" as much as £200,000 from the artist royalties account.
The gravity of the situation was seemingly confirmed by Simon Calton on Wednesday's call, during which he told CMU that "if the article comes out" that may mean that Carlton James would be unable to proceed with any funding and as a result the "current cash flow problem" may not be able to be resolved, whereas if funding were to go ahead then the artists could get "back on track pretty easily" from the royalties that they are due.
This seemed to contradict earlier statements from Dean Roberts that the total amount owed to artists in respect of royalties was "£45,398".
One manager who is owed royalties by 3tone - studio owner, artist manager and label boss Dr Yasin El Ashrafi, who was awarded the British Empire Medal in the 2020's New Year Honours - told CMU:
"My experience with 3tone Music has been extremely detrimental, nearly bankrupting my label. Initially, they appeared fine, but issues quickly arose. As these issues escalated they implemented changes to their website leading to metadata issues across my entire catalogue of 450 tracks”.
Isn't it better to let 3tone agree financing with Carlton James and pay the artists what they are owed?
When CMU first began looking into what was happening at 3tone, we were very much of the opinion - from what we were told by Roberts - that the best option was to sit back, do nothing and allow what seemed to be an honest mistake to pass.
It's now very clear that the excuses that we have been given since 22 Sep are the tip of an iceberg. Numerous artists and managers we have spoken to have said that they have been given exactly the same excuses since early 2023. We - and they - have been told repeatedly that it's "just a matter of days" before financing is completed.
As mentioned earlier, a number of small payments were made to some of the most vocal artists at the end of September - but the date of this payment corresponds almost exactly to the date the 3tone last received distribution royalties into its bank account.
It has become abundantly clear that each month the situation continues, the more artist royalties are being used to cashflow the company.
It's not entirely clear what that cashflow is being used for though, as we've been able to establish that current junior members of staff have not been paid for months - and payments made before they stopped entirely may not have been the full amounts owed.
Robert Roig of Keter Management in Los Angeles - who manages Hot Chelle Rae - says:
"3tone has continuously broken their word to our artist about royalties being paid. In an industry where every penny counts for musicians, 3tone has exploited our trust and exemplifies and perpetuates the bad actors stigma that gives the industry a bad name”.
Over the period since we first engaged with 3tone on 22 Sep, more and more people have come forward to talk to CMU on or off the record. As time went by - and excuses became increasingly rococo - we realised that the issues at 3tone went far beyond a few artists facing problems getting royalties from the company.
Our investigation took on a whole different aspect when a source tipped us off to the existence of multiple employment tribunal judgements against the company by former staff.
We were able to confirm through trusted third parties some of the circumstances that led to legal action being taken against 3tone by those individuals. More disturbingly, as we talked to people in Bristol, London and Liverpool who were aware of 3tone, we uncovered an entirely different side to 3tone.
"My experience with 3tone has left me dealing with stress and anxiety that I've never experienced before... I know that this is not a unique experience and there are plenty more who are dealing with their own trauma, many of whom are small artists without platforms, or staff who have had their voices robbed by an NDA agreement they were coerced into signing back in 2022 stating it was related to a '£50 million investment' which never came in..."
In fact, what we discovered was a company built on lies, on broken promises, and staff who had been - in their own words - "intimidated", "bullied", "gaslit".
We have more updates on this story coming...
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