Private Internet Access CEO Scam Artist

Sheppard Mullin Hit With Suit Over Tech Co. 'Fraud Artist' Private Internet Access CEO

Share us on:   By Y. Peter Kang

Law360, Los Angeles (February 5, 2016, 6:32 PM ET) -- A technology company lobbed a negligence suit at Sheppard Mullin Richter & Hampton LLP on Thursday in California state court accusing the firm of helping its “fraud artist” former CEO set up sham entities for his own enrichment.

London Trust Media Inc., a virtual private network provider, claims the law firm was hired by the company’s former CEO Sung Park and helped the later-terminated executive set up a number of entities in which Park was the sole owner, and through which it acquired two businesses which were paid for by London Trust but were owned solely by Park, according to a complaint filed in Los Angeles Superior Court.

The company said Sheppard Mullin and corporate partner Will Chuchawat helped Park defraud London Trust through a series of self-dealing transactions.

“Defendants — without any conflict waiver — purported to act as London Trust's counsel in various business acquisitions and negotiations, all the while simultaneously representing Park in his individual capacity and effectuating deceitful schemes behind the scenes to profit both Park and themselves,” the 24-page complaint states.

Chuchawat and a Sheppard Mullin spokesman did not immediately respond to requests for comment Friday. An attorney for London Trust declined to comment.

According to the complaint, Park introduced himself to London Trust co-founder Andrew Lee in 2014 as the president of Feel Ghood Entertainment LLC, and held himself out as the manager of two popular Korean pop music artists. But in reality, Park had no connection to the Korean music label Feel Ghood Music, the suit said.

Lee, who had wanted to expand his growing VPN business into the entertainment sphere, enlisted Park as London Trust’s CEO. In October 2014, Park convinced Lee to acquire a Korean American magazine called KoreAm Journal but the acquiring entity, LTM Entertainment LLC, listed Park as its sole owner unbeknownst to Lee and London Trust, according to the complaint.

But Chuchawat told Lee that the acquisition was made by a wholly-owned subsidiary, the suit said.

“Chuchawat’s statements were patently false, and Chuchawat knew or should have known as much,” the complaint states. “As a sophisticated and knowledgeable partner practicing in the corporate transaction field, Chuchawat knew or should have known that Park was the sole owner of LTM Entertainment LLC and that London Trust had no ownership interest.”

A similar scheme was employed by Park in making a down payment for an L.A. nightclub called Feria, which caused London Trust to lose $150,000, according to the complaint.

In addition, London Trust says Sheppard Mullin advised the company regarding a potential sale of the business. In proposed ownership structure documents drafted by Sheppard Mullin, Chuchawat is listed as having a 0.5 percent to 0.75 percent equity stake in London Trust, the complaint states.

"For Chuchawat to himself have an interest in the sale in London Trust, all the while advising both Park and London Trust, creates an obvious conflict of interest and is a violation of the duties that Chuchawat owes to London Trust, especially because of the potential for Chuchawat to personally benefit from such a sale,” according to the complaint.

The suit brings claims of professional negligence, fraudulent misrepresentation, negligent misrepresentation, breach of fiduciary duty, among others.

“This is a case about how a sophisticated and prestigious international law firm knowingly aided a fraud artist in duping and taking advantage of a young, yet highly successful entrepreneur and the company that he co-founded,” London Trust said.

Park, who was fired as London Trust's CEO in March 2015, is being sued by the company in separate litigation which is currently in arbitration, according to the complaint.

London Trust Media is represented by James M. Lee, Nilay U. Vora and Tiffany S. Hansen of Lee Tran & Liang LLP.

Counsel information for Sheppard Mullin was not immediately available.

London Trust Media Inc. v Sheppard Mullin Richter & Hampton LLP, case number BC609316, in the California Superior Court, County of Los Angeles.