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FBI Searches LMNO Productions in Embezzlement Scandal

The FBI is searching the Encino offices of LMNO Productions, the reality show producer that is reeling from an alleged embezzlement scandal.

“The FBI executed federal search warrants this morning,” said Lourdes Arocho, an FBI spokeswoman, who confirmed that the searches were limited to the LMNO offices, but declined additional comment.

The search warrants were sealed by a federal judge. No arrests are expected today, the FBI said.

LMNO confirmed that the agents were at its offices. “We are fully supportive of and cooperating with the full investigation of criminal activity perpetrated against our company,” a spokeswoman said.

In a federal lawsuit filed last week, LMNO alleged that its former accountant had stolen hundreds of thousands of dollars from the company over the course of several years. The accountant allegedly falsified documents and left the company’s financial statements in disarray, according to the lawsuit. When the embezzlement was uncovered last year, the accountant allegedly threatened to expose the company’s beleaguered condition to Discovery Communications, which distributed a half dozen of its shows, including “The Little Couple.” The accountant allegedly demanded an $800,000 payment to keep quiet, according to the suit.

The company says it did not pay. Discovery has said that it undertook a review of its relationship with LMNO, and found “procedures and practices” that were lacking. It terminated its contracts with LMNO two weeks ago, and according to LMNO has been producing its own episodes of “The Little Couple” without the production company.

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