MÖTLEY CRÜE Frontman VINCE NEIL Accused Of Defrauding Investors In Las Vegas Outlaws Arena Football League Franchise
December 15, 2015, 8 years ago
Mötley Crüe lead singer Vince Neil helped defraud investors in the ill-fated Las Vegas Outlaws Arena Football League franchise, which folded in August, an investment group claims in court, according to Courthouse News Service.
Outlaws Investment Group and Sohrob Farudi sued Rockstar Investment Group, two other Rockstar entities, Neil and two other men on Friday in Clark County Court. Farudi claims the defendants told him the deal to take over the team was fully funded with $3 million, but he after he gave them $500,000 for shares in Rockstar Sports Group, which would own and operate the team, he learned they still owed the AFL $2.5 million.
Neil was chairman and CEO of RockStar Sports Group at the time, and defendants Mark Daniels its president and Robert Hewko, a former NFL quarterback, its treasurer and vice president, according to publicly available corporate information.
Farudi says he met with Daniels and Hewko on July 20, 2014 and they told him that they and Neil owned the Jacksonville Sharks AFL franchise in Florida - which was not true - and that they had been awarded an AFL franchise in Las Vegas, to be called the Outlaws.
"Daniels, Hewko and Neil falsely represented to S. Farudi that they had paid $3,000,000 cash up front for the Outlaws," and asked if he wanted to buy a piece of the team, Farudi says in the complaint.
They sent him a series of emails that included documents stating that "based on their experience owning a team in Jacksonville, Florida," revenue for the Outlaws was "conservatively projected to be $6,666,500 with a net operating income of $4,087,512," according to the lawsuit.
So on August 12th, 2014, Farudi says, he gave them $500,000 for 150 of the 1,000 total shares in Florida-based RockStar Sports Group, which would own and operate the team. Eight days later, on August 20th, Farudi says, he attended an AFL owners meeting in Cleveland, where he learned that Neil, Hewko and Daniels were not part owners of the Jacksonville Sharks AFL franchise, that they had paid only $500,000 of the $3 million owed for the Las Vegas franchise, and that the franchise still owed the AFL $2.5 million, which it agreed to recoup via deferred payments and future league revenue distributions.
On August 21st, Farudi says, he received an email from Daniels saying that the defendants had paid only $500,000 to the AFL and that the rest of the money was in an escrow account. Two weeks after that, he says, the league informed him that the franchise hadn't fully paid its membership fees, had not posted required letters of credit, and that its first payment to the league bounced.
Read the full story at Courthouse News Service .