Professional Documents
Culture Documents
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SUPERIOR COURT OF THE STATE OF CALIFORNIA
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COUNTY OF LOS ANGELES
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COMPLAINT
1 Plaintiffs BIG BALLER BRAND LLC, a Wyoming limited liability company ("BBB LLC")
3 PREFATORY ALLEGATIONS
4 Summary of Case
5 1. This is a case about a fraudulent scheme orchestrated by a convicted felon who, after
6 gaining the trust and confidence of Plaintiff BALL and his family, conspired to embezzle millions of
7 dollars and then divert those funds for his personal use, including to acquire assets in Ethiopia.
9 basketball player, Defendant Gregory Alan Foster ("FOSTER") presented himself to BALL as an
10 experienced business manager with a vision for maximizing BALL' s financial opportunities. What
11 FOSTER failed to tell BALL was that in 2002 he was convicted of mail fraud and money laundering
12 and sentenced to 7 years in federal prison. FOSTER was convicted of defrauding investors of
13 millions of dollars through a "Ponzi scheme." After breaching the terms of his parole, FOSTER was
15 3. Shortly after his release from prison, FOSTER embarked on his plan to target BALL
16 and his family. FOSTER became a close family friend whose son grew up with BALL. Once he
17 gained the confidence of BALL and his family, FOSTER fleeced them of millions of dollars by,
18 among other things, creating a variety of corporate entities, in which he gave himself ownership
19 interests and managerial control. FOSTER used these entities, some of which appear to be nothing
20 more than shell entities, to directly and indirectly funnel substantial amounts of BALL family money
21 to himself.
22 4. Though the full extent of FOSTER' s unscrupulous and predatory conduct has yet to
23 be uncovered, it is clear from information gathered to date that FOSTER abused his position of trust
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COMPLAINT
l The Parties
3 in California with its principal place of business located in the County of Los Angeles, State of
4 California.
6 California and is, among other things, a professional basketball player and a manager of BBB LLC.
8 California.
9 8. Plaintiffs are ignorant of the true names and capacities of defendant DOES 1 through
10 50, inclusive, and therefore sues these defendants by such fictitious names. Plaintiffs will amend
11 this complaint to allege their true names and capacities when ascertained. Plaintiffs are informed
12 and believe and, based thereon, allege that each of the fictitiously named defendants is responsible in
13 some manner for the occurrences herein alleged, and that Plaintiffs' damages as herein alleged were
15 9. At all times herein mentioned, each of the defendants, including DOES 1 through 50,
16 inclusive, was an agent, servant, employee and/or joint venturer of each of the remaining defendants,
17 and in doing the acts hereinafter alleged was acting within the course and scope of said agency,
18 service, employment and/or joint venture. Because of the agency, service, employment and/or joint
19 venture relationship between defendants, each defendant had actual and/or constructive knowledge
20 of the acts of each of the other defendants. Each defendant ratified, approved, joined in, acquiesced
21 and/or authorized the wrongful acts of co-defendants, and each of them, as set forth below, and/or
25 10. Until recently, BALL and his family had no knowledge of a criminal complaint
26 (United States of America v. Gregory Alan Foster, United States District Court, Central District of
27 California Case No. 2:0l-cr-00237-WDK) filed on March 6, 2011 against FOSTER and an
28 accomplice for orchestrating a "Ponzi scheme" that bilked investors out of more than $4 million.
2
COMPLAINT
1 FOSTER misrepresented to victims that he was the managing director of a financial services firm.
2 As part of his fraudulent scheme, FOSTER misrepresented to victims that his clients included
3 numerous famous professional basketball players. Rather than investing the funds received,
4 FOSTER used the money given to him for his personal benefit.
5 11. On or about June 24, 2002, FOSTER pied guilty to felony counts of money
6 laundering and mail fraud and was sentenced to more than 7 years in federal prison followed by 3
7 years of probation. As part of FOSTER' s parole, he was ordered to "not engage, in any business
8 involving investments, asset management or protection, or any other business involving the
9 solicitation of funds ... " for 3 years following his release from prison.
10 12. Remarkably, FOSTER continued his fraudulent conduct after being released from
11 prison. In September 2009, only months before meeting BALL and his family, FOSTER' s parole
12 was revoked and he was sentenced to an additional 5 months in federal prison for violating the terms
13 of his parole. In concluding that FOSTER violated the terms of his parole, the court determined that
14 FOSTER failed to show that: (1) "he has not engaged in new criminal conduct while on supervised
15 release"; and (2) "he has not demonstrated that he can comply with the conditions of his supervised
16 release."
17 13. It was shortly after his release from prison the second time that FOSTER planted the
18 seeds of his fraudulent scheme to steal millions of dollars from BALL and his family. At no time
19 did FOSTER disclose to BALL or his family that he was a convicted felon and had served prison
20 time for financial crimes. At no time prior to the recent discovery of FOSTER' s criminal past did
21 BALL or his family have reason to suspect that FOSTER was a convicted felon who intended to
24 14. FOSTER met the Ball family in or around 2010 when BALL attended middle school
25 with FOSTER's son. During the ensuing several years as it became evident that BALL was looking
27 positioned himself as a trusted business advisor and mentor to BALL and the Ball family.
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COMPLAINT
1 15. After BALL declared himself eligible for the National Basketball Association draft in
2 2017, FOSTER began to implement his fraudulent scheme in earnest. Having convinced BALL of
3 his bona tides as an experienced business manager, FOSTER began recommending the formation of
4 various business enterprises designed to provide opportunities for FOSTER to capitalize on BALL' s
6 BBBLLC
7 16. One such enterprise was Plaintiff BBB LLC. FOSTER persuaded BALL that it
8 would be in his best financial interest to form his own company and his own brand of apparel and
9 merchandise rather than aligning himself with established brands that had expressed substantial
11 17. After securing BALL' s agreement and using the services of an attorney whom BALL
12 has never met, FOSTER formed BBB LLC by changing the name of a previously existing Wyoming
13 limited liability company, "NeXt Catch, LLC", to BBB LLC. In connection with the name change,
14 FOSTER created an operating agreement for BBB LLC that appointed himself as a managing
15 member with a 16.33% vested ownership interest in the company. FOSTER contributed none of his
17 18. Among the numerous questionable provisions contained in the BBB LLC operating
18 agreement is a provision that permits title to assets to be held in the company' s name or "the name of
20 19. Plaintiff BALL held and continues to hold a 51 % ownership interest in BBB LLC.
21 20. Pursuant to the BBB LLC operating agreement, all of the members, including
22 FOSTER, were appointed Managers of the company. However, the fact is that using his position of
23 trust and confidence with the Ball family, FOSTER exercised nearly exclusive and full control over
24 the company. In connection with qualifying BBB LLC to do business in California, FOSTER
25 caused a Statement of Information to be filed with the California Secretary of State designating
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COMPLAINT
1 21. Upon discovering the actions of FOSTER as alleged herein, BALL, exercising his
2 power as the holder of a majority ownership interest in the company, removed FOSTER as a
5 22. In addition to BBB LLC, FOSTER purportedly acting in BALL' s interests formed
6 multiple other Wyoming corporate entities. BALL is informed and believes and, based thereon,
7 alleges that in doing so FOSTER continued to use the services of an attorney with whom BALL has
8 never met and never discussed any of the corporate documents purporting to state BALL' s rights or
9 obligations related to BBB LLC. Moreover, BALL is informed and believes that FOSTER gave
10 himself ownership interests in the companies and full or part managerial control of the entities.
11 BALL is further informed and believes FOSTER formed the companies for the primary purpose of
12 extracting capital from the Ball family and operating the entities so that FOSTER could thereafter
15 23. FOSTER' S ongoing conspiracy to defraud BALL began to unravel in 2018, when a
16 financial advisor working on BALL' s behalf discovered discrepancies in the finances of BBB LLC.
17 Specifically, it was discovered that FOSTER took cash withdrawals from BBB LLC accounts
18 totaling at least $1.5 million during the period of approximately May 2016 through September 2018.
19 There is no legitimate business purpose for cash withdrawals of such substantial amounts. When
20 asked, FOSTER refused repeated requests to explain the withdrawals and to account for the missing
21 funds.
23 $475,000 during the period of approximately February 2017 through July 2018 were initiated by
24 FOSTER from BBB LLC accounts to Marathon Consulting Inc. ("MCI"), an entity controlled by
25 FOSTER who thereafter caused some or all of said funds to be transferred to undisclosed bank
26 accounts which Plaintiffs are informed and believe and, based thereon, allege are owned or
27 controlled by FOSTER personally. Some of the withdrawal slips associated with these payments
28 contain notations indicating the payments were "expense reimbursements. " However, FOSTER has
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COMPLAINT
1 failed to produce any documentation substantiating the purported expenses and Plaintiffs are
2 informed and believe and, based thereon, allege that there were no proper purposes for these
4 25. Additional payments from BBB LLC initiated by FOSTER and made to MCI
5 similarly lack any substantiation. Moreover, additional company funds under FOSTER' s control
6 remain unaccounted for. The total amount of these additional unexplained and unjustified payments
8 26. Plaintiffs are informed and believe and, based thereon, allege that the funds taken by
9 FOSTER from BBB LLC were used by FOSTER to purchase assets in Ethiopia as a means of,
10 among other things, secreting the stolen funds and interfering with any potential recovery and
12 27. Additional harmful actions taken by FOSTER in connection with BBB LLC causing
13 financial harm to BALL include, failure to make member distributions to BALL despite the
14 company having distributable income; failure to file state tax returns and to pay sales taxes; and,
17 28. Upon further investigation into FOSTER' S actions and overall management of
18 BALL' s affairs, it has been discovered that FOSTER arranged for substantial loans to be taken out
19 by BALL and another entity owned in whole or in part by BALL, Family Matters, LLC in order to
20 acquire or refinance assets all purportedly for the benefit of BALL. BALL is informed and believes
21 that some or all of said loans were obtained from non-traditional lenders and included exorbitant
22 financing charges that were paid, in whole or in part to FOSTER without BALL' s knowledge or
23 consent. For example, FOSTER arranged for at least 8 loans with financing fees of nearly $950,000
24 to date. BALL is informed and believes and, based thereon, alleges that the financing fees include
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COMPLAINT
1 FOSTER 's General Mismanagement
3 financial affairs. This mismanagement includes, without limitation, improper accounting practices;
5 recommendations; inadvisable titling of real properties; and, failure to properly and adequately
7 30. Plaintiffs are continuing to investigate the full scope of FOSTER' s thefts and
8 mismanagement of BBB LLC's and BALL' s affairs and Plaintiffs will amend this Complaint as
11 31. Upon being confronted with the discovery of his illegal conduct, FOSTER responded
12 not by explaining or justifying the questioned payments and actions; rather, FOSTER responded by
13 threatening to publicly disseminate false and misleading information concerning BALL and his
14 family. BALL is informed and believes and, based thereon, alleges that such threats are intended to
15 intimidate BALL in an effort to discourage BALL from taking any legal action against FOSTER.
17 (For Fraud in the Inducement By BALL Against Defendant FOSTER and Does 1 through 15)
18 32. BALL repeats and realleges the allegations set forth in Paragraphs 1 through 31
21 induced BALL to enter into the business venture known as BBB LLC with FOSTER. Specifically,
22 FOSTER represented to BALL in or around late 2014 that the formation of BBB LLC with FOSTER
23 as a co-member would be in BALL's best financial interests and that FOSTER had the skill and
24 experience necessary to properly manage the company for the benefit of its members.
25 34. While making said representations, FOSTER knew but failed to disclose that, in fact,
26 FOSTER had no such skill or experience and was entirely unqualified to form, manage or control a
27 corporate entity such as BBB LLC and the business it was intended to conduct. FOSTER also failed
28 to disclose that he had failed to form BBB LLC as a new entity. Instead, he changed the name of a
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COMPLAINT
1 previously existing Wyoming limited liability company, thereby potentially subjecting BALL' s
3 35. Moreover, and more egregiously, FOSTER failed to disclose his criminal history and,
4 specifically, his felony conviction for wire fraud and money laundering in connection with which
6 36. At all times that FOSTER made the aforementioned misrepresentations and failed to
7 disclose his criminal history, FOSTER knew that his representations were false and that he was
8 failing to disclose material information that would have impacted BALL' s decision to enter into a
10 37. FOSTER made the aforementioned representations and failed to disclose his criminal
11 history for the purpose of inducing BALL to enter into the business venture to defraud BALL and to
12 take advantage of BALL' s growing financial success and notoriety by enabling FOSTER to enrich
14 38. Based upon the personal relationship formed between FOSTER and BALL and his
15 family, BALL reasonably and justifiably relied on FOSTER' s representations and had no reasonable
16 basis to suspect that he was being fraudulently induced by FOSTER to enter into a business venture
19 while in control of BBB LLC, BALL has been materially and financially damaged in multiple ways
22 b. Incurrence of tax liability for BBB LLC income without having received income
23 distributions;
25 misconduct is presently unknown to BALL who is informed and believes and, based thereon, alleges
26 that the total sum exceeds the jurisdictional minimum of this Court.
27 41. FOSTER' s actions were fraudulent, malicious and oppressive warranting an award of
2 (For Breach of Fiduciary Duty By BALL Against FOSTER and DOES 10 through 25)
3 42. BALL repeats and realleges the allegations set forth in Paragraphs 1 through 31 as
7 44. In said capacity, FOSTER acted on BALL's behalf with respect to his financial
10 disadvantageous and excessive loans from non-traditional lenders carrying exorbitant financing fees.
12 46. Additionally, inasmuch as BALL is informed and believes and, based thereon, alleges
13 that FOSTER received undisclosed referral fees paid from the exorbitant financing fees, FOSTER
15 47. In taking the actions herein alleged, FOSTER also breached his duty of loyalty to
16 BALL by knowingly acting against BALL's interests in connection with the aforementioned loans.
17 Since the monies received by FOSTER in connection with said loans were undisclosed there was no
18 basis upon which BALL could have given informed consent for FOSTER to receive the undisclosed
19 payments.
20 48. As a result of FOSTER' s actions, BALL has been damaged in a total amount
21 presently unknown to BALL who is informed and believes and, based thereon, alleges that the total
23 49. FOSTER' actions were malicious and oppressive warranting an award of punitive and
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COMPLAINT
1 THIRD CAUSE OF ACTION
2 (For Conversion By BBB LLC Against FOSTER and DOES 20 through 35)
3 50. BBC LLC repeats and realleges the allegations set forth in Paragraphs 1 through 31 as
5 51. At all times relevant herein, BBB LLC owned and had a right to possess income
7 52. As alleged herein, FOSTER wrongfully took possession of and secreted at least $2
8 million of BBB LLC monies and converted said monies for his personal use.
9 53. As a result of FOSTER' s conversion of at least $2 million of income from BBB LLC,
10 BBB LLC has been damaged in an amount to be proven at trial but believed to be in excess of $2
11 million, plus interest thereon, and costs, including attorneys' fees in connection with the pursuit of
12 said funds.
15 54. BBC LLC repeats and realleges the allegations set forth in Paragraphs 1 through 31 as
17 55 . As a result of his conversion of assets from BBB LLC, FOSTER has become
18 indebted to BBB LLC. Despite BBB LLC ' s repeated requests for an accounting, FOSTER has
20 56. BBB LLC is entitled to a full accounting from FOSTER with respect to the income
21 and expenses of BBB LLC during the time that FOSTER was the manager of BBB LLC and all
24 WHEREFORE, Plaintiffs pray for judgment in their favor and against Defendants, as follows:
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COMPLAINT
1 SECOND CAUSE OF ACTION
8 7. For an accounting;
11 9. For such other and further relief as the Court may deem proper.
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16 By:
. o do
17 Christopl . Petersen
Attorneys for Plaintiffs
18 BIG BALLER BRAND LLC and LONZO
ANDERSON BALL
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COMPLAINT