Fight Club author Chuck Palahniuk has said that he is “close to broke” after it emerged that an accountant at his literary agency had been arrested for embezzling $3.4m (£2.5m) from the company.



Darin Webb, an accountant at Donadio and Olson in New York, was charged on 15 May with “defraud[ing] a literary agency during his engagement as that agency’s bookkeeper, by converting funds that belonged to the agency and its clients to his own use”. The charge states that Webb allegedly admitted in video interviews that he prepared monthly financial reports and sent emails to the agency’s clients “that contained false and fraudulent representations, in order to accomplish the theft and evade detection”. The complaint does not name the literary agency, but the name was confirmed to the New York Post by Donadio and Olson’s lawyer.

Palahniuk – one of many starry authors represented by the firm, including the estates of Mario Puzo and Studs Terkel – said his income had dwindled for several years. He had blamed multiple factors, including piracy and problems at his publisher, for the decline in earnings.

More recently, Palahniuk said, “the trickle of my income stopped” and payments for titles including Fight Club 2 “never seemed to arrive”. He wondered if the money had been stolen, but told himself he “had to be crazy” – until the news broke.

“All the royalties and advance monies and film-option payments that had accumulated in my author’s account in New York, or had been delayed somewhere in the banking pipeline, [were] gone. Poof. I can’t even guess how much income. Someone confessed on video he’d been stealing. I wasn’t crazy,” wrote Palahniuk in a statement on his website.

The novelist said that “this chain of events leaves me close to broke”, but that he had found himself to be “rich … with friends and readers who’ve rushed to my rescue”.

“On the minus side, the legal process will be long and offers an iffy reward. On the plus side, I’m not crazy. Nor am I alone,” added the author.

Webb’s alleged activities emerged when an unnamed author did not receive an expected payment of $200,000, and repeatedly asked him where it was. From November 2017 to March 2018, “Webb sent emails … to the author containing false explanations as to why the author had not yet received the funds he was owed. In truth and in fact, the author did not receive the payment because Webb had converted the funds to Webb’s own use,” says the charge.

Webb was arrested and is currently in custody. FBI assistant director William F Sweeney Jr said in a statement: “As alleged, Darin Webb was responsible for the financial welfare of the agency whose accounts he oversaw, but instead of upholding his fiscal responsibilities, he spent his time swindling more than $3.4m from his victims. Cooking the books rarely pays off in the long run, as the defendant has learned today.”

A lawyer for Donadio and Olson told the New York Post: “The agency’s singular focus at this time is ensuring that all of its impacted clients are made whole to the greatest extent possible, and the agency is co-operating in every possible way with the government’s efforts.”