Cohen was at the Mount Baldy Zen Centre east of Los Angeles when the alleged skimming began. The defendants are the former manager, Kelley Lynch, and a tax lawyer she introduced to the singer identified as Richard Westin.
The star, whose most famous songs include "Bird on a Wire", "Suzanne" and "The Future", fired Ms Lynch last October. The suit was filed on Monday in the Los Angeles superior court.
The filing said: "This civil action is another case of a tragedy that has become all too familiar in the music industry: a business manager and professional advisers exploit an immensely talented artist's loyalty and trust through greed, self-dealing, concealment, knowing misrepresentation and reckless disregard for professional fiduciary duties."
The suit says that while Cohen was not touring but attending to his spiritual well-being, Ms Lynch began increasing the cut she took of his royalties. It also says she introduced him to Mr Westin who organised ways to sell his artistic and publishing royalties without his knowledge. It accuses both defendants of breach of contract and fiduciary duty, common-law fraud and professional negligence.
Cohen fans can be reassured that if his money has deserted him, his humanity has not. "I don't want anybody hurt," he told Macleans magazine in Canada. "It's not my nature to pursue and contend with people that way."