Legendary rapper C.L. Smooth, whose real name is Corey Penn, sued an Elmsford, New York, couple in federal court, alleging they diverted $132,000 in royalties owed to him.
C.L. Smooth filed the suit on Sept. 13 in the U.S. District Court for the Southern District of New York in White Plains. He alleges that Nikolas and Nichelle Taylor redirected his SoundExchange royalty payments without his knowledge.
The suit also names St. Nick Entertainment Inc., a Mount Vernon hip-hop label founded by Nikolas Taylor in 2006, and Taylor Your Care, a home care staffing company founded by Nichelle Brown-Taylor.
Penn alleges he has known Nikolas Taylor since 1989 through New York’s music and social circles. Around 2001, Taylor began assisting Penn with booking performances, according to the complaint.
The parties never executed a written management agreement. Instead, their arrangement allegedly relied on personal trust and their longstanding relationship.
Hip-Hop Legend C.L. Smooth Files Lawsuit Against Mount Vernon Couple For Unpaid Royalties
Penn also gave Taylor confidential information, including his passport, for international performances, the complaint says.
Their relationship later deteriorated over financial and business disputes involving St. Nick Entertainment and Penn’s independent recordings and projects. Penn alleges he ended his business dealings with Taylor around 2007.
Around that time, a SoundExchange account was allegedly established in Penn’s name. The complaint says royalty payments were sent to addresses associated with the Taylors.
Penn discovered the account in March while attempting to establish his own SoundExchange account. SoundExchange subsequently investigated the account and identified approximately $132,000 in royalty payments dating to early 2006, according to the complaint.
The investigation allegedly found tax forms and royalty checks sent to the Taylors’ Elmsford residence and other addresses associated with them in Pleasantville and Yonkers.
Penn alleges the checks were payable to him but endorsed by Nichelle Taylor before being deposited by the Taylors.
Penn says he has since taken control of the SoundExchange account and received approximately $30,000 in accumulated royalties for 2023 through 2026.
He asserts claims for fraud, conversion, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and unjust enrichment.
Penn seeks recovery of allegedly diverted funds and unspecified punitive damages. The Taylors could not be reached for comment.
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