The 42 year-old singer's lawyer, Larry Mark Bakman argued Gilles stole $300,000 from his client.
He also claimed that the Giles and Mel B's former husband Stephen Belafonte are hoarding sex videos of the former Spice Girl and threatening to release them.
The ex-nanny, Gilles and her legal team however denied all the accusations, claiming she is merely caught up in the middle of a bitter divorce between Mel and Belafonte.
Bakman painted a picture of Gilles being in league with Belafonte, telling her to rent a public storage unit to keep the embarrassing videos in and refusing to tell Mel B where the lockup is.
The attorney claimed, Gilles - who earned $6,667 a month as a nanny - was paid $300,000 by Belafonte to 'do his bidding' - a sum that was shelled out without Mel B's consent, alleged Bakman.
'Miss Gilles was stealing money from Miss Brown. No nanny can be expected to make $300,000. The payment of such a vast sum of money by Mr Belafonte to Miss Gilles could not be justified for nanny services.'
Bakman accused Gilles of conspiring with Belafonte to threaten Mel B with the release of the sex videos 'which would damage my client ….and threaten her career and reputation.'
And when Gilles' attorney, Todd Eagen - who denied that his client had stolen from Mel B - objected that there's 'absolutely no proof' of Gilles threatening the star either, Bakman retorted: 'Whether those threats were made by Mr Belafonte or Miss Gilles, she was part and parcel of it.'
As the exchanges between the two lawyers got more and more heated, Eagan said of Bakman: 'The papers he's filed in this case are all salacious. Miss Gilles doesn't have a public storage unit - it's all made up!
'She has nothing - and they have no proof. She's a nanny caught in the middle of a bitter divorce. She doesn't have any video tapes.'
Dailymail
