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Mike Tyson and Ric Flair have sued several former executives and a shareholder of Carma for alleged fraud, breach of contract, and other claims in relation to the cannabis businesses that use their likenesses.
In a 76-page, 21-count suit filed last week in U.S. District Court in Illinois, Tyson, Flair, Carma, and LGNDS allege Chad Bronstein, Adam Wilks, Nicole Cosby, and James Case participated in a “brazen RICO conspiracy involving criminal wire fraud, embezzlement, money laundering, and extortion, as well as securities fraud and shameless self-dealing that enriched the Defendants to the tune of tens of millions of dollars.”
Bronstein, Wilks, and Cosby previously served as Carma’s president and chairman, CEO, and chief legal and licensing officer, respectively. Case is a shareholder in the company. Carma and LGNDS have collaborated to distribute the Tyson 2.0 and Ric Flair Drip cannabis products named after the legendary former boxer and pro wrestler.
Among the claims are allegations that Bronstein, Wilks, and Cosby sold licensing rights they were not allowed to under agreements with Tyson and Flair. The suit also accuses Wilks of having an undisclosed “kickback” deal with vape maker DomPen, under which he received “concealed payments in exchange for turning a blind eye to DomPen’s unauthorized use of CARMA’s intellectual property,” according to the filing. DomPen is not named as a defendant.
Attorneys for the defendants pushed back on the lawsuit.
“The complaint is fiction dressed up as a lawsuit,” Jonathan Cyrluk, the attorney for Bronstein and Cosby, told Front Office Sports in a statement. “Before filing, the plaintiffs tried to intimidate my clients with settlement demands that read more like a shakedown than a legal claim—demanding millions of dollars and attempting to force others to surrender their Carma shares.”
“My clients won’t be bullied and are prepared to knock out this meritless lawsuit in court,” Cyrluk added.
Wilks’s attorney Terry Campbell said, “These claims are as credible as the people they come from—in short, the allegations are without substance. This is nothing more than an attempt to spit out an earful of salacious headlines and attempt to coerce my client into paying money to them when he did nothing wrong. We will fight these meritless allegations—both the facts and the law are squarely on our side.”
The suit, which can be read in full at the bottom of this story, claims, “Throughout their time at CARMA, Bronstein and Wilks treated CARMA as their own personal piggy bank, using more than $1 million to pay for unauthorized personal travel on private jets, costs associated with Bronstein’s personal yacht, renovations to Bronstein’s personal residence, a mortgage payment for Wilks’ personal residence, and lavish entertainment expenditures for Wilks, including exorbitantly priced meals and travel expenditures, as well as excessive and unapproved compensation and bonuses.”
The lawsuit seeks a jury trial and more than $50 million in damages, legal fees, and other associated costs.
Bronstein is currently an executive at Real American Freestyle, the real wrestling promotion company that was formed in partnership with late WWE legend Hulk Hogan that has a distribution deal with the Fox Nation streaming service.
Carma previously sued Bronstein and Cosby in July, accusing them of “misappropriating confidential information about a beer brand development project” related to Hogan’s Real American Beer. The defendants filed a motion to dismiss in October, and the suit remains ongoing.
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