New Line Rico

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

TONY DeROSA-GRUND and THE JURY TRIAL DEMANDED
DeROSA-GRUND FAMILY TRUST,

Plaintiffs,
CIVIL ACTION NO.
v.

NEW LINE CINEMA LLC, and
CRAIG A. ALEXANDER,

Defendants.

PLAINTIFFS ORIGINAL COMPLAINT
Plaintiffs TONY DeROSA-GRUND and THE DeROSA-GRUND
FAMILY TRUST (collectively, Plaintiffs) for their Complaint against
Defendants NEW LINE CINEMA LLC and CRAIG A. ALEXANDER
(collectively, Defendants) allege, upon information and belief, as follows:
SUMMARY OF THE CASE
1. Defendants NEW LINE CINEMA LLC (NLC) and CRAIG A.
ALEXANDER (ALEXANDER) have engaged in an ongoing pattern of
racketeering activity. Defendants use a bait-and-switch scheme to defraud
leavened with obstruction of justice and money laundering to acquire and
conceal their victims assets and to cheat their victims of their income.
Defendants employed this modus operandi against Plaintiffs.
Case 4:14-cv-03019 Document 1 Filed in TXSD on 10/22/14 Page 1 of 35
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2. First, Defendants convinced Plaintiffs to part with a narrow
category of intellectual property rights on the pretext of using those rights
solely to make theatrical motion pictures, including what became the
blockbuster movies called The Conjuring and "Annabelle." Then, as soon as
they duped Plaintiffs out of their property, the Defendants caused those
rights to be moved to another corporation in exchange for nothing.
Afterwards, Defendants proceeded to cheat Plaintiffs out of millions of dollars
of income.
JURISDICTION
3. This case arises under The Racketeering Influenced and Corrupt
Organizations Act, 18 U.S.C. 1961 et seq. (RICO). Subject-matter
jurisdiction exists pursuant to 28 U.S.C. 1331 and 18 U.S.C. 1964(c).
THE PARTIES
1. Plaintiffs
4. Plaintiff TONY DeROSA-GRUND ("DeROSA-GRUND") is a
citizen of the United States residing in Montgomery County, Texas.
5. At all relevant times, plaintiff DeROSA-GRUND has been a
motion picture producer and the sole manager of a company called Evergreen
Media Holdings, LLC (EMH).
6. Plaintiff THE DeROSA-GRUND FAMILY TRUST (TRUST), for
purposes of this action, is a citizen of the United States residing in Texas
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because the beneficiaries of plaintiff TRUST principally reside in the state of
Texas, including Montgomery County.
7. At all relevant times, plaintiff TRUST has been the owner of
EMH and, consequently, the direct beneficiary of EMHs intellectual property
rights and income-related rights.
8. EMH is the sole owner of certain intellectual property rights and
income-related rights associated with the paranormal-investigation activities
of Lorraine Warren and her now-deceased husband Ed Warren, including
various rights regarding stories that served as the basis for a film called the
The Conjuring and a film called "Annabelle."
2. Defendants
9. Defendant NEW LINE CINEMA LLC is a Delaware Corporation
principally operating at 116 North Robertson Los Angeles, California 90048.
Defendant may be served with process by delivering a copy of the Summons
and Complaint to defendant NLCs registered agent for service, the
Corporation Trust Company, Corporation Trust Center, 1209 Orange Street,
Wilmington, Delaware 19801.
10. Defendant CRAIG A. ALEXANDER is the Senior Vice President
and Head of Business and Legal Affairs for defendant NLC. He resides in the
Los Angeles, California-area and may be personally served with a copy of the
Summons and Complaint at his principal place of employment located at 116
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North Robertson Los Angeles, California 90048, or wherever he may be
found.
11. This Court has personal jurisdiction over Defendants NLC and
ALEXANDER because a substantial part of the events and omissions giving
rise to the claims alleged in this Complaint occurred in this judicial district.
GROUNDS FOR THIS ACTION
12. From on or about January 1, 2010, to the present in the Southern
District of Texas and elsewhere:
(a) Defendants NLC and ALEXANDER conspired with each other
and with others, known and unknown, including employees and non-
employees, to form and did form an association-in-fact enterprisecomposed
of Warner Bros. Entertainment, Inc. ("Warner Bros."), New Line Productions,
Inc. ("New Line Productions"), defendant NLC, defendant ALEXANDER, and
other conspirators, known and unknownthe affairs of which Defendants
and their co-conspirators conducted as an illegal racketeering enterprise
through a pattern of racketeering activity, as summarized below in
Paragraph 13.
(b) Defendants NLC and ALEXANDER conspired with each other
and with other employees and non-employees, known and unknown, to
conduct and did conduct the affairs of New Line Productions as an illegal
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racketeering enterprise through a pattern of racketeering activity, as
summarized below in Paragraph 13.
(c) Defendants NLC and ALEXANDER conspired with each other
and with other employees and non-employees, known and unknown, to
conduct and did conduct the affairs of Warner Bros. as an illegal racketeering
enterprise through a pattern of racketeering activity, as summarized below in
Paragraph 13.
A. Defendants Racketeering Conspiracy and Activities

13. From on or about January 1, 2010 through the present,
Defendants and their co-conspirators have engaged in the following unlawful
and illegal racketeering activities:
(a) Defendants NLC and ALEXANDER and various co-
conspirators conspired to and did engage in obstruction of justice, in violation
of 18 U.S.C. 1503, by corruptly influencing the trustee in the Chapter 7
bankruptcy of plaintiff DeROSA-GRUND to file a motion with the U.S.
Bankruptcy Court for the Southern District of Texas advocating for the
approval of a proposed transaction transferring a narrow category of
intellectual property rights to New Line Productions.
(b) Defendants NLC and ALEXANDER and various co-
conspirators conspired to and did engage in numerous acts of mail and wire
fraud, in violation of 18 U.S.C. 1341 and 1343, to induce Evergreen Media
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Holdings, LLC through false or fraudulent pretenses, representations, or
promises to transfer to New Line Productions what was supposed to be a very
narrow category of intellectual property rights concerning theatrical motion
pictures including what became the films The Conjuring and "Annabelle."
(c) Defendants NLC and ALEXANDER and various co-
conspirators conspired to and did cause the commission of numerous acts of
money laundering, in violation of 18 U.S.C. 1956, with the intent to
promote the carrying on of the unlawful activities described above in
Paragraph 12.
B. Defendants Pattern of Racketeering Activity: Mail and Wire
Fraud, Obstruction of Justice, and Money Laundering

14. On or about sometime in early 2009, plaintiff DeROSA-GRUND
acquired the entirety of the exploitation rights to life story ("Life Rights") and
investigative files (Case Files) of individuals named Ed Warren and
Lorraine Warren, who claimed to have investigated instances of paranormal
activity (Warren Agreements). The Warren Agreements gave Plaintiffs the
sole and exclusive right to exploit, inter alia, film and television rights in and
to the Life Rights of the Warrens and all of their Case Files.
15. On or about February 12, 2009, Evergreen Media Group, LLC
was formed with plaintiff DeROSA-GRUND as its sole manager. The
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plaintiff transferred the rights he had in the Warren Agreements to
Evergreen Media Group, LLC.
16. On or about May 7, 2009, an involuntary Chapter 7 petition was
filed against plaintiff DeROSA-GRUND in the U.S. Bankruptcy Court for the
Southern District of Texas. On or about June 8, 2009, the bankruptcy court
appointed a trustee to administer the assets of the plaintiff DeROSA-
GRUNDs bankruptcy estate.
17. On or about June 30, 2009, EMH was formed with plaintiff
DeROSA-GRUND as its sole manager. Shortly thereafter, Evergreen Media
Group, LLC transferred its rights in the Warren Agreements to EMH.
18. Subsequently, in or about late 2009, Defendants NLC and
ALEXANDERacting through New Line Productionscommenced
negotiations with plaintiff DeROSA-GRUND and EMH, as well as the
bankruptcy trustee, to acquire theatrical motion picture rights in a limited
number of the Case Files and the Warrens Life Rights.
19. During the negotiations, Defendants NLC and ALEXANDER
insisted that New Line Productions be allowed to intervene in plaintiff
DeROSA-GRUNDs bankruptcy proceeding and that the bankruptcy court
approve any purported agreement negotiated with the trustee and with
plaintiff DeROSA-GRUND and EMH.
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20. On or about January 1, 2010, Warner Bros. entered into an
agreement with New Line Productions pursuant to which:
(a) New Line Productions irrevocably assigned to Warner Bros.
all rights that New Line Productions had in any Content and Physical
Materials acquired through Content Agreementsas those quoted terms
were defined in the assignment agreementacquired after January 1, 2010.
(b) The assignment agreement identifies no specific
consideration paid or to be paid by Warner Bros. to New Line Productions for
its irrevocable transfer of all the future content and physical materials it
acquired, regardless of the price paid by New Line Productions.
(c) Warner Bros. assumed no obligations with respect to those
content agreements.
(d) Warner Bros. would reap all the financial benefits with
none of the responsibilities for complying with the Content Agreements
entered into by New Line Productions.
(e) The role of New Line Productions was to deal directly with
contracting parties on the opposite side of those Content Agreements in order
to maximize Warner Bros. revenue stream.
21. Previously, in or about March 2008, defendant NLC became a
subsidiary of Warner Bros.
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22. Among defendant NLCs own subsidiaries is New Line
Productions.
23. Subsequent to March 2008, defendant NLC has always
maintained separate development, production, marketing, distribution, and
business affairs operations from Warner Bros. However, even while
maintaining its independence from Warner Bros., defendant NLCacting in
combination with defendant ALEXANDER and other coconspirators, known
and unknownhas still coordinated its various business functions with
Warner Bros.
24. So on or about early January 2010, Defendants NLC and
ALEXANDER presented a proposed final version of an agreementcalled a
Deal Memoto plaintiff DeROSA-GRUND, EMH, and the bankruptcy
trustee.
25. What was significant at this point about the Deal Memo is that
Defendants NLC and ALEXANDER made sure that New Line Productions
would be the only bankruptcy court-approved option of both plaintiff
DeROSA-GRUND and EMH to make a theatrical motion picture based on the
Warrens Life Rights and Case Files. In other words, EMH would have to get
separate approval of the bankruptcy court, if the trustee required, for any
future or alternative theatrical motion picture rights deal based upon the
Warren's Life Rights or Case Files. Consequently, Defendants NLC and
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ALEXANDER obtained enormous leverage over plaintiff DeROSA-GRUND
and EMH.
26. Defendants NLC and ALEXANDER divided the Deal Memo into
two parts. Part I covered Underlying Rights and Part II covered Producer
Fees.
27. When Defendants NLC and ALEXANDER negotiated the Deal
Memo, however, they never stated or required that any Producer Fees
would be limited to an initial theatrical motion picture. Just the opposite is
true, as Defendants themselves included the term sequels in the court-
approved document. Defendants did so to induce the bankruptcy court and
the trustee to approve Defendants proposal based on the understanding
thatin the event the movie project was a success and led to a sequelthen
the bankruptcy estate may stand to realize additional monies to pay the
existing creditors.
28. Also, nothing in Defendants court-approved and trustee-
approved Deal Memo specified or required that EMHs trademark rights to
the The Conjuring name - a valuable asset - would have to be transferred to
New Line Productions and thus Warner Bros.or any other rights besides
theatrical motion picture rights.
29. At no point in time during negotiations did Defendants NLC and
ALEXANDER request that any other rights, besides theatrical motion
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picture rights, be granted to New Line Productions and, by automatic
assignment, Warner Bros.).
30. Specifically not included therefore in the Deal Memowhen
negotiations involving the bankruptcy trustee were ongoingwere such
rights as television rights and direct-to-video rights (i.e., the right to
initially release a motion picture in a video format), which are entirely
separate from theatrical motion picture rights.
31. Had Defendants NLC and ALEXANDER wanted to obtain any
additional content or intellectual property rights nominally for New Line
Productionsbut, in fact, for Warner Bros.from plaintiff DeROSA-GRUND
and EMH, then Defendants would have had to expressly seek the approval of
first the bankruptcy trustee and then the bankruptcy court itself in the form
of an order.
32. Defendants NLC and ALEXANDER, however, were careful never
to ask the trustee and the bankruptcy court to approve, for a mere $100,000,
a wholesale assignment of all content and intellectual property rights of
every kind imaginable from plaintiff DeROSA-GRUND and EMH.
33. On the other hand, Defendants NLC and ALEXANDER
represented to the bankruptcy trustee while negotiating the Deal Memo that
plaintiff DeROSA-GRUND would be attached as a producer, credited as a
producer, and paid as a producer on any and all sequels, prequels, or
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remakes of any theatrical motion picture made by New Line Productions
pursuant to the terms of the Deal Memo. This representation was a material
inducement for the trustee and bankruptcy court to approve the Deal Memo,
along with plaintiff DeROSA-GRUND and EMH, because Defendants were
enticing the trustee with the potential of additional moneys in the future that
could increase the bankruptcy estate and compensate the creditors and
plaintiff DeROSA-GRUND with potential additional sources of employment
and income.
34. On or about January 27, 2010, the bankruptcy court, on the
trustees recommendation and motion, approved Defendants proposed Deal
Memo.
35. On or about late January or early February 2010, Defendants
NLC and ALEXANDER then caused New Line Productions to pay $25,000 to
the bankruptcy trusteeas required to trigger the terms of the Deal Memo.
36. Upon the $25,000 payment, all the Content that Defendants
caused New Line Productions to obtain under the Deal Memo was
immediately assigned to Warner Bros. without any compensation, pursuant
to their January 1, 2010 assignment agreementan eventuality never
disclosed to the bankruptcy court, the bankruptcy trustee, or Plaintiffs.
37. On or about January 27, 2010, Defendants NLC and
ALEXANDER caused New Line Productions to corruptly influence, obstruct,
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and impede, and to endeavor to influence, obstruct, and impede, the due
administration of justice in the U.S. Bankruptcy court for the Southern
District of Texas, as described in Paragraphs 14-36, in violation of 18 U.S.C.
1503.
38. On or about late January or early February 2010, Defendants
NLC and ALEXANDER caused New Line Productions to engage in a
financial transaction involving property used to conduct or facilitate specified
unlawful activityi.e., a scheme to defraud plaintiff DeROSA-GRUND and
EMH described in Paragraphs 14-36, in violation of 18 U.S.C. 1341,
1343with the intent to promote the carrying on of such specified unlawful
activity, in violation of 18 U.S.C. 1956.
39. On or about March 2010, Defendants NLC and ALEXANDER
made specific representations calculated to mislead plaintiff DeROSA-
GRUND into continuing to believe he would be attached to all future
productions by New Line Productions that were to be based on EMHs
content and intellectual property, including all productions based on what
eventually became the highly successful The Conjuring franchise of
plaintiffs based upon the Warren's Life Rights and Case Files.
40. On or about March 2010, Defendants NLC and ALEXANDER
also misrepresented that New Line Productions never included contingent
compensation in a rights agreement. In truth and in fact, as Defendants
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NLC and ALEXANDER well knew, New Line Productions had in fact
included contingent compensation in the previous rights agreements entered
into with third parties including without limitation with Miramax and the
Weinstein Brothers in connection with what ultimately became The Hobbit
trilogy of theatrical motion pictures.
41. During the negotiations, Defendants NLC and ALEXANDER also
falsely represented that EMH would reserve the right to exploit the unused
Warren Case Filesi.e., all of the Case Files except for the 25 Case Files
selected by New Line Productions for theatrical motion picturesfor
television, graphic novels, comic books, and specific ancillary rights related to
the reserved rights.
42. In order to lull EMH and plaintiff DeROSA-GRUND into trusting
them, Defendants NLC and ALEXANDER falsely stated that New Line
Productions had no interest in any television rights in any of EMHs content,
property, or intellectual property because New Line Productions did not have
a television production unit and was therefore not interested in exploiting
television rights related to the Life Rights and any of the non-selected Case
Files.
43. Defendants NLC and ALEXANDER also falsely represented in
negotiations that no limitation would exist on the use by EMH and plaintiff
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DeROSA-GRUND of the title of the franchise The Conjuring in connection
with the rights that Plaintiff DeROSA-GRUND and EMH had reserved.
44. On or about sometime on or about late 2010 or early 2011,
Defendants NLC and ALEXANDER began direct negotiations with Lorraine
Warrendespite the fact that she had already entered into the Warren
Agreements.
45. On or about early 2011, Defendants NLC and ALEXANDER,
falsely represented orally and in writing to plaintiff DeROSA-GRUND and
EMH, in furtherance of a scheme to cheat EMHand thus plaintiff TRUST
out of their rights under the Warren Agreements, that nothing Defendants
would agree to with Lorraine Warren would diminish EMHs rights under the
Warren Agreements.
46. On or about February 2012, Defendants NLC and ALEXANDER
caused New Line Productions to pay an additional $75,000 to the bankruptcy
trustee, as required by the bankruptcy courts prior January 27, 2010
approval of the Deal Memo, when principal photography commenced on the
content covered by the Deal Memo.
47. On or about February 2012, Defendants NLC and ALEXANDER
caused New Line Productions to engage in a financial transaction involving
property used to conduct or facilitate specified unlawful activityi.e., a
scheme to defraud plaintiff DeROSA-GRUND and EMH described in
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Paragraphs 14-46, in violation of 18 U.S.C. 1341, 1343with the intent to
promote the carrying on of such specified unlawful activity, in violation of 18
U.S.C. 1956.
48. On or about December 21, 2012, Defendants NLC and
ALEXANDER falsely represented that New Line Productions had no interest
in negotiating for the reserved television rights held by EMH in connection
with the Warren's Life Rights and non-selected Case Files. The development
of those reserved rights would directly benefit plaintiff TRUST. Defendants
made the false and fraudulent representation in furtherance of their ongoing
scheme to defraud plaintiff DeROSA-GRUND and EMH and as part of their
continuing pattern of racketeering activity.
49. On or about December 21, 2012, in furtherance of a scheme to
defraud plaintiff DeROSA-GRUND and EMH, described in Paragraph 48,
Defendants NLC and ALEXANDER caused a wire transmission in the form
of an email sent from attorney John Gatti to defendant ALEXANDER, in
violation of 18 U.S.C. 1343.
50. On or about early January 2013, in reliance on the false and
fraudulent representations of Defendants NLC and ALEXANDER, made on
or about December 21, 2012, plaintiff DeROSA-GRUND and EMH executed a
term sheet with Lions Gate Television Development LLC for the reserved
television rights in the Warren's Life Rights and non-selected Case Files.
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51. On or about January 7, 2013, Defendants NLC and
ALEXANDER caused a wire transmission in the form of an email from
Kavita Amar of New Line Productions to attorney John Gatti, in furtherance
of a scheme to defraud plaintiff DeROSA-GRUND and EMH, described in
Paragraph 48, in violation of 18 U.S.C. 1343.
52. On or about January 7, 2013, in furtherance of a scheme to
of an email sent from attorney John Gatti to Kavita Amar of New Line
Productions, in violation of 18 U.S.C. 1343.
53. On or about May 20, 2013, Defendants NLC and ALEXANDER
caused New Line Productions to make statements to Lions Gate Television
LLC (LGTV) that New Line Productions retained certain rights in the
reserved television rights owned by EMH, which statements were calculated
to mislead LGTV into terminating its television project with plaintiff
DeROSA-GRUND and EMH.
54. On or about May 20, 2013, Defendants NLC and ALEXANDER
caused the use of the mails, in the form of a letter from Kavita Amar of New
Line Productions to Sandra Stern of LGTV, in furtherance of a scheme to
defraud plaintiff DeROSA-GRUND and EMH, described in Paragraph 48, in
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55. On or about May 24, 2013, in furtherance of a scheme to defraud
plaintiff DeROSA-GRUND and EMH, described in Paragraph 48, Defendants
NLC and ALEXANDER caused the use of the mails, in the form of a letter
sent from attorney John Gatti to Kavita Amar of New Line Productions, in
56. On or about July 19, 2013, Warner Bros. released and distributed
The Conjuring theatrical motion picture, which eventually grossed more
than $318 million worldwide.
57. The cost of production for The Conjuring was approximately
$20 millionresulting in an enormous windfall for Warner Bros.
58. Because of its January 1, 2010 assignment agreement with New
Line Productions, Warner Bros. had the rights to all the revenues but none of
the responsibilities for the false and fraudulent promises and representations
that Defendants NLC and ALEXANDER caused New Line Productions to
make to plaintiff DeROSA-GRUND and EMH.
59. Since on or about the January 2014 to the present, Defendants
NLC and ALEXANDER have caused Warner Bros. to refuse to pay more than
$2 million in producer and rights fees owed to plaintiff DeROSA-GRUND and
EMH based on the representations and promises that Defendants NLC and
ALEXANDER caused New Lines Production to makebut which Defendants
NLC and ALEXANDER never intended would be satisfied.
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C. Defendants Acts of Racketeering Activity are Related
60. The acts of racketeering activity committed by Defendants NLC
and ALEXANDER have had the same or similar methods of commission.
61. The acts of racketeering activity committed by Defendants NLC
and ALEXANDER have had the same or similar objective:
(a) Illegally obtain all rights, including the intellectual rights
and income-related rights, concerning all of the Warren's Life Rights and
Case Files and all property covered by the Warren Agreements, all of which
are owned by EMHwhich in turn is the property of plaintiff TRUST;
(b) Cheat plaintiff DeROSA-GRUND out of substantial
amounts of income related to all Warren Life Rights and Case Files and all
property covered by the Warren Agreements, including The Conjuring
theatrical motion picture;
(c) Cheat plaintiff DeROSA-GRUND out of substantial
amounts of income related to all Warren Life Rights and Case Files and all
property covered by the Warren Agreements, including the Annabelle
theatrical motion picture;
(d) Illegally obtain substantially all rights, including the
intellectual rights and income-related rights, for sequels for The Hobbit
theatrical motion picture owned by Miramax, LLC and Harvey and Bob
Weinstein.
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(e) Cheat Miramax, LLC and Harvey and Bob Weinstein out of
substantial amounts of income related to sequels for The Hobbit theatrical
motion picture.
62. By committing these acts of racketeering activity, Defendants
NLC and ALEXANDER have thereby increased the asset base, while
avoiding any increase in liabilities, as well as the revenues and principal cash
flow, of Warner Bros.
63. Such acts of racketeering activity committed by Defendants NLC
and ALEXANDER are also otherwise related by distinguishing
characteristics including, but not limited to, the involvement of both
Defendants, executives, and officers at NLC, known and unknown.
D. The Acts of Racketeering Activity Committed by Defendants
Involve a Distinct Threat of Long- Term Racketeering Activity

64. The acts of racketeering activity by Defendants NLC and
ALEXANDER involve a distinct threat of long-term racketeering activity.
65. The racketeering activities of Defendants NLC and
ALEXANDER, including the commission of mail and wire fraud, to obtain the
content rights, including intellectual property and income-related rights, to
inflate the asset base of Warner Bros., while excluding any related liabilities,
as well as Warner Bros. revenues and cash flow, has continued for several
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years, is ongoing at the present time, and will continue into the future unless
halted by judicial intervention.
66. The racketeering activities of Defendants NLC and ALEXANDER
to inflate the asset base of Warner Bros., while excluding any related
liabilities, as well as Warner Bros. revenues and cash flow, is part of the
Defendants regular way of conducting business.
E. The Enterprises
67. Defendants NLC and ALEXANDER have engaged in an ongoing
pattern of violations of 18 U.S.C. 1341, 18 U.S.C. 1343, 18 U.S.C. 1503,
and 18 U.S.C. 1956 since at least as early as on or about January 2010
through their participation along with third parties, including executives and
officers, in an association-in-fact enterprise composed of Warner Bros., New
Line Productions, defendant NLC, defendant ALEXANDER, and other
conspirators known and unknown, pursuant to 18 U.S.C. 1961(4).
through their participation in the affairs of New Line Productions, an
enterprise pursuant to 18 U.S.C. 1961(4).
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through their participation in the affairs of Warner Bros., an enterprise
pursuant to 18 U.S.C. 1961(4).
70. Each such enterprise affects interstate commerce because they
involve the production and distribution of theatrical motion pictures in
interstate and the costs and revenues for which involve millions of dollars.
CLAIMS AGAINST THE DEFENDANTS
FIRST CAUSE OF ACTION
RICO Conspiracy
(Enterprise: Association in Fact)

71. Plaintiffs repeat and reallege the allegations contained in
Paragraphs 1-70, as if set forth fully herein.
72. Defendants NLC and ALEXANDER have conspired to violate the
RICO Act, 18 U.S.C. 1962(c), by conspiring with each other and with other
persons employed by or associated with an enterprise the activities of which
affect interstate commerce, that is, an association-in-fact of Warner Bros.,
New Line Productions, defendant NLC and defendant ALEXANDER, and co-
conspirators known and unknown, to conduct or participate, directly or
indirectly, in the conduct of such enterprises affairs through a pattern of
racketeering activity, all in violation of 18 U.S.C. 1962(d).
73. Specifically, Defendants NLC and ALEXANDER have conspired
to violate, and have repeatedly committed, the following criminal activities
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under federal law, which constitute a pattern of racketeering activity under
18 U.S.C. 1961(1): mail fraud in violation of 18 U.S.C. 1341; wire fraud in
violation of 18 U.S.C. 1343; obstruction of justice in violation of 18 U.S.C.
1503; money laundering in violation of 18 U.S.C. 1956; and aiding and
abetting these violations in violation of 18 U.S.C. 2.
74. On or about the dates below, in the Southern District of Texas
and elsewhere, Defendants committed the following overt acts of racketeering
activity in furtherance of such conspiracy to violate the RICO Act, in violation
of 18 U.S.C. 1962(d):
(a) On or about January 27, 2010, Defendants NLC and
1503.
(b) On or about late January or early February 2010,
Defendants NLC and ALEXANDER caused New Line Productions to engage
in a financial transaction involving property used to conduct or facilitate
specified unlawful activityi.e., a scheme to defraud plaintiff DeROSA-
GRUND and EMH described in Paragraphs 14-36, in violation of 18 U.S.C.
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1341, 1343with the intent to promote the carrying on of such specified
unlawful activity, in violation of 18 U.S.C. 1956.
(c) On or about February 2012, Defendants NLC and
ALEXANDER caused New Line Productions to engage in a financial
transaction involving property used to conduct or facilitate specified unlawful
activityi.e., a scheme to defraud plaintiff DeROSA-GRUND and EMH
described in Paragraphs 14-46, in violation of 18 U.S.C. 1341, 1343with
the intent to promote the carrying on of such specified unlawful activity, in
(d) On or about December 21, 2012, in furtherance of a scheme
to defraud plaintiff DeROSA-GRUND and EMH, described in Paragraph 48,
(e) On or about January 7, 2013, Defendants NLC and
ALEXANDER caused a wire transmission in the form of an email sent from
(f) On or about January 7, 2013, in furtherance of a scheme to
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(g) On or about May 20, 2013, Defendants NLC and
ALEXANDER caused the use of the mails, in the form of a letter sent from
Kavita Amar of New Line Productions to Sandra Stern of LGTV, in
furtherance of a scheme to defraud plaintiff DeROSA-GRUND and EMH,
described in Paragraphs 48-53, in violation of 18 U.S.C. 1341.
(h) On or about May 24, 2013, in furtherance of a scheme to
Defendants NLC and ALEXANDER caused the use of the mails, in the form
of a letter sent from attorney John Gatti to Kavita Amar of New Line
75. As a result of Defendants overt racketeering acts of mail and
wire fraud, obstruction of justice, and money laundering, Plaintiffs suffered
and are continuing to suffer injury to their business and property including,
but not limited to, substantial loss of income, loss of benefits, and loss of
reputation.
76. Plaintiff DeROSA-GRUND and plaintiff TRUST have been
injured by reason of such violations of the RICO Act, 18 U.S.C. 1962(d), and
therefore are entitled to three times their actual damages sustained and the
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costs of suit, including all attorneys fees in the trial and appellate courts and
costs of investigation and litigation reasonably incurred, pursuant to 18
U.S.C. 1964(c).
SECOND CAUSE OF ACTION
RICO Conspiracy
(Enterprise: New Line Productions, Inc.)

affect interstate commerce, that is, New Line Productions, and with others
known and unknown, to conduct or participate, directly or indirectly, in the
conduct of such enterprises affairs through a pattern of racketeering activity,
all in violation of 18 U.S.C. 1962(d).
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and elsewhere, Defendants committed the following overt racketeering acts
in furtherance of such conspiracy to violate the RICO Act, in violation of 18
U.S.C. 1962(d):
1503.
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reputation.
U.S.C. 1964(c).

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THIRD CAUSE OF ACTION
RICO Conspiracy
(Enterprise: Warner Bros. Entertainment, Inc.)

affect interstate commerce, that is, Warner Bros., and with others known and
unknown, to conduct or participate, directly or indirectly, in the conduct of
such enterprises affairs through a pattern of racketeering activity, all in
violation of 18 U.S.C. 1962(d).
and elsewhere, the Defendants committed the following overt racketeering
- 31 -
acts in furtherance of such conspiracy to violate the RICO Act, in violation of
18 U.S.C. 1962(d):
1503.
- 32 -
- 33 -
reputation.
U.S.C. 1964(c).

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PRAYER FOR RELIEF
WHEREFORE, Plaintiffs respectfully pray that this Court enter
judgment in their favor and against Defendants for:
A. Three times the actual damages sustained by Plaintiffs, pursuant
to 18 U.S.C. 1964(c).
B. All attorneys fees in the trial and appellate courts and costs of
investigation and litigation reasonably incurred through entry of a final,
unappealable judgment, pursuant to 18 U.S.C. 1964(c).
C. Pre-judgment and post-judgment interest on all amounts
awarded pursuant to the RICO Act, including lost compensation, treble
damages, and litigation expenses including attorneys fees, costs, and costs of
investigation and litigation of this action.
D. A declaration, pursuant to 28 U.S.C. 2201, that Defendants
have violated the RICO Act with respect to Plaintiffs.
E. All such other and further relief as the Court may deem just and
proper.
DEMAND FOR JURY TRIAL

Plaintiffs demand a jury trial on all issues triable of right by a
jury.

- 35 -
Respectfully submitted,

By: /s/ Sanford L. Dow
Sanford L. Dow
S.D. Texas No. 17162
Texas Bar No. 00787392
Nine Greenway Plaza, Suite 500
Houston, Texas 77046
(713) 526-3700/FAX (713) 526-3750
dow@dowgolub.com

ATTORNEY-IN-CHARGE FOR PLAINTIFFS

OF COUNSEL:

DOW GOLUB REMELS & BEVERLY, LLP
Stephanie A. Hamm
S.D. Texas No. 108779
Texas Bar No. 24069841
Nine Greenway Plaza, Suite 500
Houston, Texas 77046
(713) 526-3700/FAX (713) 526-3750
sahamm@dowgolub.com

GRIMES LLC
Charles W. Grimes
Connecticut Juris No. 304368
(to be admitted pro hac vice to S.D. Texas)
grimes@gandb.com
Michael R. Patrick
Connecticut Juris. No. 423632
(to be admitted pro hac vice to S.D. Texas)
patrick@gandb.com
488 Main Avenue
Norwalk, Connecticut 06851
Tel: (203) 849-8300/FAX: (203) 849-9300


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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF TEXAS

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