A former West Publishing Co. executive who has spent his retirement years as a patron of the arts and promoter of Armenian causes has accused a longtime employee of embezzling millions of dollars from him and his companies, StarTribune reports.

Gerard Cafesjian, 86, now living in Naples, Fla., made the accusations in a federal lawsuit he filed Monday in St. Paul. The suit came as a reply to a lawsuit filed last month by a former employee, John Joseph Waters Jr., 55, of Eden Prairie.

Waters' suit, filed without an attorney, alleges that Cafesjian has become increasingly paranoid, miserly and vindictive as he has aged, and stiffed him out of more than $5 million in salary.

"Waters believes that Cafesjian, angry with Waters over Waters' [2009] departure from the day-to-day operations of the Cafesjian Family Office, [is] seeking to avoid paying his outstanding obligations to Waters, fearful of the sensitive and confidential information Waters possesses regarding Cafesjian, and bitter over the poor performance of the Cafesjian Holdings subsequent to Waters' departure, is intentionally working to cause harm to Waters and to Waters' reputation," he wrote in his suit.

Cafesjian, the primary benefactor of the historic State Fair carousel that now bears his name in Como Park, fired back in a counterclaim against Waters and his wife, Cheri Kuhn Waters.

"Waters initiated this lawsuit in an audacious gambit to rationalize his illegal diversion of Mr. Cafesjian's funds," the suit says. The suit, filed by Andrew Luger of the Greene Espel law firm in Minneapolis, says that Waters exploited his position of trust to embezzle nearly $3 million over five years.

Cafesjian alleges that Waters also may have engaged in tax fraud, money laundering and illegal structuring of banking transactions to conceal the alleged theft.

The FBI is investigating the allegations.

Waters started working for Cafesjian at West in 1994, when Cafesjian oversaw sales and marketing. He says Cafesjian reaped about $300 million from his shares in West when Thomson Corp., now Thomson Reuters, bought the company in 1996.

Waters worked for Cafesjian's "family office" from mid-1998 until he quit in March 2009, though he continued doing odd tasks for Cafesjian until the middle of last year.

Over the years, Waters has represented Cafesjian in business deals in Armenia and elsewhere around the world. He said he also served as Cafesjian's point man on a project to build a museum about the Armenian genocide. The museum, in Washington, D.C., was stalled by litigation in 2008.

Cafesjian's lawsuit says that after Waters quit in 2009, his replacement found previously unknown bank accounts and discovered the alleged embezzlement.

An investigation found that from July 2004 through April 2009, Waters transferred $2,987,148 of Cafesjian's funds into an account Waters controlled and then withdrew the money for his own use, the suit says.

Cafesjian alleges that Waters made numerous cash withdrawals on consecutive days in amounts below $10,000, "a pattern that appears to be illegal structuring," the suit says. The money was then deposited into accounts held by Waters or by Waters and his wife, it says.

Banking regulations require that cash transactions of $10,000 or more be reported. It is a crime to deliberately conduct transactions to avoid detection by the IRS, law enforcement or regulators.