The Prince Who Built the Rolling Stones' Financial Empire

Laurie Dieffembacq/Belga Photos/Getty ImagesMick Jagger of the Rolling Stones
In the summer of 1968, the Rolling Stones were in financial trouble. Between an onerous (some would say unethical) contract with manager Allan Klein and a set of draconian U.K. tax laws, there was a real possibility that -- like some of their contemporaries -- they would be forced to pack it in. What they needed was a white knight. Instead, they got a prince.

Rupert Louis Ferdinand Frederick Constantine Lofredo Leopold Herbert Maximilian Hubert John Henry zu Loewenstein-Wertheim-Freudenberg was technically a count, but everyone referred to him as "prince." Born to aristocratic parents, Lowenstein studied at Oxford and after school worked his way up through London's financial industry, first as a stockbroker, and then a financier when he and a group of investors bought the venerable bank Leopold Joseph & Sons in 1963.

The Stones? Who Are They?

Loewenstein was introduced to Mick Jagger by Christopher Gibbs, a London art-dealer and mutual friend, who thought the prince could help clean up the Stones' finances and extricate them from Klein's clutches. Though not familiar with him nor his band -- he had to ask his wife, who was younger and more in-tune with the music scene, who they were -- he immediately took a liking to Jagger.

Getty ImagesRupert Loewenstein
"I realized there was something exceptional in his makeup, that his personality was able to convert his trade as itinerant performer into something far more intriguing," Loewenstein wrote in his 2013 autobiography "A Prince Among Stones."

The first order of business was avoiding England's punitive tax structure, which levied a rate of 83 percent on its top earners and as much as 98 percent on investments. Loewenstein accomplished convinced the Stones to relocate to the South of France -– where they recorded "Exile on Main Street" -- in effect becoming "non-residents" for tax purposes.

Keeping taxes down was a consistent theme during his tenure, by channelling the group's earnings through Dutch-chartered companies and encouraging the band to rehearse in Canada, rather than the U.S. He reduced the band's tax rate on hundreds of millions of dollars of earnings to just 1.6 percent.

Getting Rid of the New Jersey Businessman

The second order of business was unravelling the relationship with Klein, a hard-nosed New Jersey businessman, whom Jagger suspected was not paying them everything they were due. Through a series of tense negotiations, Lowenstein got the Stones released, but not without granting Klein the rights to all their music recorded before 1971, something Keith Richards described as "the price of an education."

With their new-found freedom, he was able to move them from Decca to Atlantic Records, where they could get major distribution, and began to maximize the group's touring revenue by enlisting sponsors and advertising deals. He also copyrighted the infamous red tongue and lips logo, which helped make the band an international brand.

In Keith Richards' book "Life," he describes what Loewenstein's moves meant. "On a fifty-dollar ticket, up till then, [the band got] three dollars. He set up sponsorship and clawed back merchandising deals. He cleaned out the scams and fiddles, or most of them. He made us viable."

Close in Body, but Not in Musical Tastes or Lifestyle

And for 39 years, "Rupie the groupie," as he was affectionately called in the Stones' camp, was present on every tour, always right next to the "glimmer twins," Mick and Keith.

Ironically, Prince Rupert was never a fan of the music produced by his star clients, nor their lifestyles, preferring Mozart to Mick, and a "good vintage wine" to Jack Daniels or cocaine.

Loewenstein's last bit of financial advice before parting ways with the band in 2008 was to sell their assets and massive back catalog for a tremendous amount of money and wind down their touring and recording careers. This was one bit of advice that the Stones did not take.

The Lund Loop is a free once-weekly curated slice of what I am writing, reading and hearing about in finance, tech, music, pop culture, humor and the good life. But not sports or knitting ... ever!

Top 10 Tax Cheaters of the Past Decade
See Gallery
The Prince Who Built the Rolling Stones' Financial Empire
As if his $65 billion Ponzi scheme and serving a 150-year federal prison sentence for it wasn't enough, prosecutors in January 2014 revealed an IRS analysis showing Madoff didn't report $242.9 million in federal taxes from 1993 through 2007. Some of his former employees are also accused of having unreported income, one as high as $3.5 million.
Wilson, the self-proclaimed "First Lady" of tax fraud, was sentenced in July 2013 to 21 years in prison, according to an IRS list of top cases it prosecuted focused on identity theft. Wilson, then 27, of Tampa Bay, Fla., was also ordered to pay $2.2 million. Larry was sentenced to 14.5 years in prison and ordered to forfeit $2.2 million. From at least April 2009 through their arrests in September 2012, the pair fraudulently obtained tax refunds by receiving U.S. Treasury checks and pre-paid debit cards loaded with proceeds from false tax returns they filed in the names of other people without those persons' permission or knowledge, according to the IRS. Wilson boasted on Facebook that she was untouchable and spent lavishly, including $90,000 on an Audi A8 and $30,000 on her son's first birthday party.
In May 2012 the leaders of a multimillion dollar fraud ring were sentenced to 334 months (Dale) and 310 months (Grant) in prison and ordered to pay more than $2.8 million in restitution to the IRS. From 2009 through 2010 they filed false tax returns using stolen identities. Dale admitted to filing more than 500 fraudulent returns that sought at least $3.7 million in tax refunds, using the names of Medicaid beneficiaries that Dale obtained while working for a company that serviced Medicaid programs.
In February 2014, Hilton, 68, was among 13 people indicted in Los Angeles and Riverside counties in California for using stolen identifies to file fraudulent tax returns. Hilton's tax scheme sought nearly $2.9 million in fraudulent tax refunds for the 2008 tax year. Hilton owns two tax preparation businesses
The doomsday prophet from Cincinnati was convicted in June 2012 of five counts of tax evasion for not paying more than $300,000 in taxes between 2005 and 2010. He funneled money into a foreign bank account, lied on his tax forms and wrote off personal expenses as church expenses, a grand jury found. Weinland has wrongly predicted the world would end a few times.
The former chief administrator of the small California city of Bell, Rizzo was sentenced in April 2014 to 33 months in federal prison for tax evasion. He also faces 10 to 12 years in prison on 69 corruption counts. He was ordered to pay nearly $256,000 in restitution to the IRS after pleading guilty in January to federal counts of conspiracy and filing a false federal tax return. Rizzo paid himself as much as $1.1 million as Bell's top administrator before he was fired in 2010. Federal prosecutors say that from 2005 to 2010 he claimed more than $770,000 in phantom losses on his tax returns. 

How Do I File Back Tax Returns?

It's never too late to file your taxes. Here's how to file your back tax returns in five simple steps.

Read More

Brought to you by

Charitable Contributions You Think You Can Claim but Can't

Knowing what you can and can't claim as charitable contributions helps you maximize the potential tax savings that the charitable tax deduction offers.

Read More

Brought to you by

Filing Your Taxes Late

What do you do if you can't meet the IRS filing deadline? Learn more about filing a tax extension, late payment and late filing penalties, and what to do if you can't pay your taxes.

Read More

Brought to you by

Deducting Health Insurance Premiums If You're Self-Employed

Most self-employed taxpayers can deduct health insurance premiums, including age-based premiums for long-term care coverage. Write-offs are available whether or not you itemize, if you meet the requirements.

Read More

Brought to you by
Read Full Story
Your resource on tax filing
Tax season is here! Check out the Tax Center on AOL Finance for all the tips and tools you need to maximize your return.