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Electronically FILED by Superior Court of California, County of Los Angeles on 04/02/2019 06:35 PM Sherri R.

Carter, Executive Officer/Clerk of Court, by N. Alvarez,Deputy Clerk


19STCV11404
Assigned for all purposes to: Stanley Mosk Courthouse, Judicial Officer: Monica Bachner

1 BLANK ROME LLP


Gregory M. Bordo (SBN 156147)
2 GBordo@BlankRome.com
Christopher J. Petersen (SBN 251439)
3 CJPetersen@BlankRome.com
2029 Century Park East, 6th Floor
4 Los Angeles, CA 90067
Telephone: 424.239.3400
5 Facsimile: 424.239.3434

6 Attorneys for Plaintiffs


BIG BALLER BRAND LLC and
7 LONZO ANDERSON BALL

8
SUPERIOR COURT OF THE STATE OF CALIFORNIA
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COUNTY OF LOS ANGELES
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11 BIG BALLER BRAND LLC, a Wyoming Case No.


limited liability company; and, LONZO
12 ANDERSON BALL, an individual,
COMPLAINT FOR:
13 Plaintiffs,
(1) FRAUD;
14 vs.
(2) BREACH OF FIDUCIARY DUTY;
15 GREGORY ALAN FOSTER, an individual;
and, DOES 1 THROUGH 50. (3) CONVERSION; and,
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Defendants. (4) ACCOUNTING.
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COMPLAINT
1 Plaintiffs BIG BALLER BRAND LLC, a Wyoming limited liability company ("BBB LLC")

2 and LONZO ANDERSON BALL ("BALL") allege as follows:

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.

8 2. In or around late 2015, recognizing BALL' s impending success as a professional

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

14 sentenced to an additional 5 months in prison.

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

24 and confidence for his own personal financial gain.

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1
COMPLAINT
l The Parties

2 5. Plaintiff BBB LLC is a Wyoming limited liability company authorized to do business

3 in California with its principal place of business located in the County of Los Angeles, State of

4 California.

5 6. Plaintiff BALL is an individual residing in the County of Los Angeles, State of

6 California and is, among other things, a professional basketball player and a manager of BBB LLC.

7 7. Defendant FOSTER is an individual residing in the County of Los Angeles, State of

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

14 proximately caused by their conduct.

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

22 retained the benefits of said wrongful acts.

23 GENERAL FACTUAL ALLEGATIONS

24 FOSTER's Undisclosed Criminal Convictions

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.
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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

22 earn their trust in order to steal from them.

23 Formation o(FOSTER's Relationship with BALL

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

26 forward to a lucrative career in professional basketball, FOSTER intentionally and successfully

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

5 growing financial success.

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

10 interest in signing BALL to lucrative endorsement contracts.

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

16 own money to the company.

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

19 any nominee the Managers may designate."

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

26 himself as the only manager of BBB LLC.

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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

3 manager of BBB LLC.

4 Additional Corporate Entities Created in Furtherance ofFOSTER's Fraudulent Scheme

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

13 siphon the capital for his personal uses.

14 Discovery of FOSTER 's Fraudulent Scheme

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.

22 24. In addition to the aforementioned cash withdrawals, payments totaling at least

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

3 transfers were made only to enrich FOSTER personally.

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

7 is presently unknown to Plaintiffs.

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

11 repatriation of the funds.

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,

15 payment of personal expenses.

16 FOSTER's Undisclosed Loan Referral Fees

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

25 substantial undisclosed referral fees paid to FOSTER.

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COMPLAINT
1 FOSTER 's General Mismanagement

2 29. FOSTER's egregious misconduct includes widespread mismanagement of BALL' s

3 financial affairs. This mismanagement includes, without limitation, improper accounting practices;

4 improper payment of personal expenses by corporate entities formed on FOSTER's

5 recommendations; inadvisable titling of real properties; and, failure to properly and adequately

6 insure BALL's assets.

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

9 additional facts are uncovered.

10 FOSTER's Threats o(Retribution

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.

16 FIRST CAUSE OF ACTION

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

19 inclusive, as though set forth fully herein.

20 33. By representing himself as a skilled and experienced business advisor, FOSTER

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

2 interest to previously existing liabilities.

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

5 FOSTER bilked unsuspecting investors out of millions of dollars.

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

9 business venture with FOSTER.

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

13 himself at BALL' s expense.

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

17 with him for the actual purpose of swindling BALL.

18 39. As a result of FOSTER' s fraudulent conduct, and as a result of FOSTER' s actions

19 while in control of BBB LLC, BALL has been materially and financially damaged in multiple ways

20 including, without limitation, the following:

21 a. Failure to receive distributions of BBB LLC income; and

22 b. Incurrence of tax liability for BBB LLC income without having received income

23 distributions;

24 40. The total amount of damages sustained by BALL as a result of FOSTER' s

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

28 punitive and exemplary damages in favor of BALL and against FOSTER.


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COMPLAINT
1 SECOND CAUSE OF ACTION

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

4 though set forth fully herein.

5 43. As BALL's financial and business advisor, FOSTER occupied a position of

6 confidence and trust as to BALL.

7 44. In said capacity, FOSTER acted on BALL's behalf with respect to his financial

8 affairs, including by arranging for personal loans for BALL.

9 45. In connection therewith, FOSTER caused BALL to enter into unnecessary,

10 disadvantageous and excessive loans from non-traditional lenders carrying exorbitant financing fees.

11 In so doing, FOSTER failed to use the reasonable care expected of a fiduciary.

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

14 personally, improperly and financially benefitted at BALL's expense.

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

22 sum exceeds the jurisdictional minimum of this Court.

23 49. FOSTER' actions were malicious and oppressive warranting an award of punitive and

24 exemplary damages in favor of BALL and against FOSTER.

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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

4 though set forth fully herein.

5 51. At all times relevant herein, BBB LLC owned and had a right to possess income

6 generated by BBB LLC.

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.

13 FOURTH CAUSE OF ACTION

14 (Accounting By BBB LLC Against FOSTER and DOES 35 through 50)

15 54. BBC LLC repeats and realleges the allegations set forth in Paragraphs 1 through 31 as

16 though set forth fully herein.

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

19 failed and refused to render and accounting to BBB LLC.

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

22 funds received and/or taken by FOSTER from BBB LLC.

23 PRAYER FOR RELIEF

24 WHEREFORE, Plaintiffs pray for judgment in their favor and against Defendants, as follows:

25 FIRST CAUSE OF ACTION

26 1. For damages according to proof in excess of $2 million, plus interest;

27 2. For punitive damages and exemplary damages according to proof;

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COMPLAINT
1 SECOND CAUSE OF ACTION

2 3. For damages according to proof in excess of $2 million, plus interest;

3 4. For punitive and exemplary damages according to proof;

4 THIRD CAUSE OF ACTION

5 5. For damages according to proof, in excess of $2 million, plus interest;

6 6. For costs, including attorneys' fees in pursuit of the converted property;

7 FOURTH CAUSE OF ACTION

8 7. For an accounting;

9 ALL CAUSES OF ACTION

10 8. For costs of suit incurred herein including attorneys' fees; and

11 9. For such other and further relief as the Court may deem proper.

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14 DATED: April 2, 2019


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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