In 1992 a letter, marked "extortion" by the FBI, was sent to Houston's New Jersey offices of Nippy Inc., in which a woman demanded that unless Houston paid $100,000, "certain details" of her "private life" would be revealed. A later letter upped the ante to $250,000 and claims to have "intimate details" of Houston's "romantic relationships."
The FBI interviewed Houston, two lawyers and her father, John Houston. The singer tells agents she considered the woman "a friend" and "did discuss personal things" with her.
It appears from the documents that Houston's father next sends the person a confidentiality agreement along with a sum of money (the amount is blacked out in FBI documents) and the case was closed soon after.
(Via Rod 2.0)