In the lead-up to their final performance on NBC’s “America’s Got Talent,” Recycled Percussion had to not only deal with coming up with a final performance, but also deal with tabloid rumors and news reports revealing financial disputes between band member Justin Spencer and former associates of the band.

TMZ.com, a gossip Web site, reported recently that Spencer allegedly embezzled nearly $200,000 from the account of the company that manages Recycled Percussion. Spencer said the allegations stemmed from a civil complaint against him by Alexandria Thompson, who became an equal shareholder in the band with Spencer in 2006, according to papers filed with Hillsborough Superior Court.

According to a Union Leader report, Manchester police conducted an investigation into possible fraud, and the result of the investigation was forwarded to the Hillsborough County Attorney’s Office for possible prosecution.

“There is no criminal investigation for embezzling of $200,000 at all,” Spencer said recently. “No other credible news source would break that story … it’s a tabloid,” he said.

Thompson first filed a suit against Spencer in June 2007, accusing him of diverting corporate funds to pay for personal items. That suit was settled in October 2007, but the matter came back to court in January when Thompson accused Spencer of violating the settlement by creating a bank account that only he had access to, according to court documents. Thompson petitioned for ex-parte attachment of a total of $150,000 against Spencer, including funds he had access to in accounts at St. Mary’s Bank and Bank of America.

Spencer shot back with counter-claims, saying Thompson misappropriated funds and assets, interfered with prospective business, and committed unfair business practices.

“Alex is a good person. She’s trying to do right by the company and the band that she believed in, and I think that the circumstances here are that we’re hoping and we’re putting our faith in the fact that the court is going to take the appropriate actions,” Thompson’s lawyer, Tracy Burnson, said.

She said Spencer’s accusations against Thompson came only after she filed suit.

“I would give his claims the weight that they deserve as a result of how that presented itself,” Bernson said.

But Spencer said the timing of the accusations on TMZ had to do with the band’s appearance on the NBC show.

“Now that we’re on America’s Got Talent about to win, there’s a whole embezzlement story,” he said.