A federal criminal investigation is underway after $1.25 million in songwriter royalties allegedly was embezzled from the Songwriters Guild of America by its royalty manager and her family members.

The SGA's special counsel, Charles Sanders, said the FBI, the Internal Revenue Service and the U.S. Postal Service are working with the guild to determine the full extent of any criminal activities.

The SGA represents about 5,000 songwriters and their estates. Members may elect to have the guild collect royalties for them from publishers, collecting societies and others.

The SGA collects nearly $16 million in royalties annually and holds about 2 percent of that amount when it cannot find current addresses for writers.

According to a federal civil lawsuit the SGA filed in July, Marsha Aiken became the guild's royalty manager in 2002 and created a fraudulent membership account under the name Anthony Ray, whom the IRS later identified as her cousin.

Aiken allegedly began writing unauthorized royalty checks to Ray from the SGA's general account -- where the unlocated writers' funds are held -- and mailing them to him in Rhode Island.

A Rhode Island bank complied with federal banking regulations by notifying the IRS when someone attempted to cash an SGA check for more than $10,000, Sanders said.

The IRS then contacted the SGA, but Aiken, as royalty and office manager, took charge of the inquiry herself, and stalled the IRS with various excuses, Sanders said. In June the IRS contacted an SGA executive and pointed out that Aiken and the recipient of the check were cousins.

The guild launched an investigation and discharged Aiken. Several specialists are working to implement security improvements and to file insurance claims, Sanders said.

The U.S. District Court in Brooklyn issued an injunction Aug. 17 prohibiting Aiken, Ray, Michael Levy, Monique Aiken Adams and anyone "in active concert" with any of them from selling property in St. Albans, N.Y., that the SGA claims was acquired with the allegedly embezzled funds.

Aiken declined to comment. Ray, Levy and Adams could not be reached.