Cera aneen 10 u 12 1B 14 15 16 7 18 19 20 21 22. 23 24 25 26 27 28 Richard A. Kolber, Esq, (SBN 125869) LAW OFFICES OF RICHARD A. KOLBER, 2029 Century Park East, Suite 900 ORIGI Los. “Angeles. CA ‘90067-2910 North AE PIL ED Telephone: (310) 557-1902 1Strict Fax: G10) 557-1904 MAY 10 2011 Attorneys for Plaintiffs George Pajon, Jr. and El Cubano Music, Inc. LOS ANGEL LES SUPERIOR CouRT SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF LOS ANGELES Case No.: 10093578 GEORGE PAJON, JR. and EL CUBANO ) MUSIC, INC., ) ) COMPLAINT FOR: Plaintiff, d ) 1. BREACH OF ORAL CONTRACT FOR vs. ) PROFESSIONAL SERVICES ), 2. BREACH OF ORAL INDEMNITY SEAN LARKIN, an individual and doing ) ~ AGREEMENT; business as LARKIN BUSINESS ) 3. PROFESSIONAL NEGLIGENCE; MANAGEMENT; LARKIN BUSINESS ) 4. BREACH OF FIDUCIARY DUTY; MANAGEMENT, LLC; and DOES 1-50, ) 5. CONSTRUCTIVE FRAUD inclusive, ) ) Defendants, ) Plaintiffs George Pajon, Jr. and El Cubano Music, Inc. allege as follows: Parties 1, Plaintiff George Pajon, Jr, (referred to herein as Plaintiff or “Pajon”) is, and at all times mentioned herein was, an individual residing in the County of Los Angeles, State of California. 2.” Plaintiff El Cubano Music, Ine. is a California corporation with its principal place of business in the County of Los Angeles, State of California. i 3. Defendant Sean Larkin (referred to herein as the “Larkin”) is, and at all times mentioned herein was, an individual residing in the County of Los Angeles, State of California, at times doing business as Larkin Business Management. 1 COMPLAINTCaer aneoen 10 ae 2 1B 4 15 16 7 18 19 20 m1 2 2B 24. 25 26 27 28 4, Plaintiff is informed and believes and based thereon alleges that Defendant Larkin Business Management, LLC (referred to herein as “LBM”) is a limited liability company organized under the laws of the State of California, Plaintiff is informed and believes, and based thereon alleges, that at all times mentioned herein and relevant hereto, each of the Defendants was the agent, servant, and/or employee of each of the remaining Defendants, and in doing the things hereafter alleged was acting within the course and scope of such agency, servitude and/or employment. 5. The names and capacities of DOES 1 through 50, inclusive, whether individual, corporate, associate or otherwise, are presently unknown to Plaintiff, who sues these defendants by such fictitious names. Plaintiff will seek leave of this Court to amend this complaint to show the true names and capacities of such defendants when ascertained. 6. Defendant Larkin is liable for the acts of each of the other Defendants as alleged in this complaint as the alter egos of each other. Recognition of the separate existence of these defendants would promote injustice because Larkin dominated and controlled LBM and each of the other Defendants as follows, on information and belief: he used the corporate identities as an instrumentality to commit the fraud alleged herein, ignored corporate separateness and formalities, failed to properly capitalize the business, co-mingled funds, and formed the business entity for ‘fraudulent purposes and to shield himself from liability for his wrongful acts and omissions. Fa To All 7, Plaintif Pajon is a respected and successful guitar player, songwriter and music producer, most known for his involvement with the musical group Black Eyed Peas. El Cubano Music, Inc. ("El Cubano”) is Pajon’s “loan-out” company. At all relevant times, Defendant ‘Larkin, doing business as Larkin Business Management, and Defendant LRB, were in the business of providing so-called professional business management services to individuals including, but not limited to, receiving, managing and disbursing their income, paying their bills, preparing tax returns, evaluating and making investments, as well as handling other matters pertaining to generally-accepted practices of business managers representing individuals in the entertainment industry. 2 ‘COMPLAINTSeow r.3] i 12 B 14 15 16 7 18 9 20 a 2 2B 24 25 26 27 28 8 At all relevant times hereto, Plaintiffs were the business management clients of Defendants, and at all times they placed their faith and confidence in Defendants, whom they entrusted with their financial well-being. The business relationship commenced in or about 1999 for Pajon and 2004 for Fl Cubano and terminated in or about July 2009. In exchange for Defendants’ agreement to provide professional business management services to Plaintfis, Plaintiffs agreed to pay and did pay Defendants pay five percent (5%) of Plaintiffs’ total gross ‘compensation, except for Plaintiff's touring income, during the entirety of Defendants’ representation of Plaintiffs, 9. During the 10-year business relationship, Defendants represented that Sean Larkin ‘was a certified public accountant with tremendous experience in the entertainment industry. In fact, albeit it unknown to Plaintiff, Larkin was not a CPA nor did he have any other professional credentials in accounting. Based on Defendants* representations regarding Larkin’s credentials and experience, Plaintiff entrusted Defendants with - and Defendants voluntarily and expressly undertook responsibility for - rendering to Plaintiff’ various standard business management services, including but not limited to maintenance of all of Plaintfi’s bank accounts, payment of PlaintifP’s bills; obtaining mortgage loans, handling Plaintiff's investments and retirement funds, and handling all tax matters on behalf Plaintiff, including but not limited to the preparation of tax returns and payment of taxes on Plaintiff's behalf. Each year, Defendants represented to Plaintiffs that they paid Plaintiff taxes. 10. Inor about July 2009, Plaintiff became aware that Defendants, who were still acting as his business manager, and who were responsible for the preparation, filing and payment of taxes on behalf of Plaintiff and his loan-ont corporation, failed to prepare or file any Federal or State tax rotums or pay any taxes on behalf of Plaintiff or his loan-out corporation for a sequential period of six (6) years from 2004-2009, ‘This resulted in a large tax liability, including significant penalties and interest charges, that accrued over time without Plaintiff's knowledge. As a direct result of Defendants’ acts and omissions, Plaintiff's loan-out corporation was suspended by the State of California, having been deemed an invalid corporation several years earlier without Plaintif?'s knowledge. At the same time, Plaintifis leamed that Defendants had mismanaged merchant 3 ‘COMPLAINTrn rs 10 iv 12 14 15 16 17 18 19 20 21 2 23 24 25 26 7 28 account and other financial relationships utilized to pay for Pajon’s wedding, and such mismanagement caused Pajon to incur in excess of $20,000 of losses. Further, Plaintiffs learned that Defendants steered them into investments that were not only unsound, but in which Defendants had an ownership interest that they intentionally hid from Plaintiff's, ‘Through said investments, Defendants caused Plaintiffs to ineur more than $25,000 in losses. 11, In or about July 2009, upon leaming of Defendants? failure to prepare tax returns, promptly pay taxes, and do other actions required to be done by Defendants pursuant to their professional duties owed to Plaintiff, Plaintiff terminated Defendants’ services. 12, When Plaintiffs confronted Larkin after learning that Defendants failed to file tax returns or pay taxes on his behalf or on behalf of his loan-out corporation, Larkin - on his own behalf and on behalf of LBM - admitted Defendants? failures, apologized for his actions and agreed to indemnify Plaintiffs in the same manner and under the seme terms as Defendants had agreed to indemnify certain members of the Black Eyed Peas, who were also Defendants’ clients (hereinafter the “BEP Clients”) and whose finances Defendants had mismanaged in an identical fashion, 13, Plaintiffs are informed and believes and based thereon allege that Defendants had previously agreed in writing to indemnify the BEP Clients, after acknowledging Defendants? failure to prepare and file their tax retums for numerous years (hereinafter the “BEP Indemnity Agreement”),. Plaintiffs are informed and believes and based thereon alleges that, in the BEP Indemnity Agreement, Defendants acknowledged that they failed to file tax returns on behalf of the BEP Clients and agreed to indemnify the BEP Clients for all costs associated with Defendants? facts and omissions, including payment of any unpaid back taxes and all other fees and charges associated or connected therewith, 14, In consideration for Defendants’ oral agreement to indemnify Plaintiffs in accordance with and pursuant to the terms of the written BEP Indemnity Agreement, Plaintiffs agreed to refrain from exercising their legal rights to seek redress for the wrongs and damages they sustained as a result of Defendants’ acts, omissions, breach of contract, breach of fiduciary duties and professional negligence. Additionally, Larkin also confirmed to the Black Eyed Peas? 4 COMPLAINT