The
following statements made by Neal Greenberg in his Complaint are factual and
accurate. All other statements in the Complaint
are, from my perspective, false, self-serving and a legal defense:
Defendant Leonard Cohen (“Cohen”), a noted recording artist,
acting directly on his own behalf, and through his agent and attorney, Robert
Kory (“Kory”), has threatened to take or has taken, improper and unlawful
actions, including bribery and intimidation of a witness, subornation of
perjury, defamation …
Cohen’s extortion scheme was eventually exposed by Lynch and
ultimately frustrated …
Cohen has made clear that he asserts rights over certain
investment funds that belong to Traditional Holdings, LLC (“Traditional
Holdings”), a dissolved Kentucky entity that was managed and 99.5% owned by
Lynch and 0.5% owned by Cohen.
From the early 1990s, impressed with a new strategy used by other
Hollywood celebrities to cash in on their future revenue streams from IP rights
and increase short-term income (called a "Pullman" or
"Bowie" bond, after the artist David Bowie who first used it), Cohen
… worked aggressively with advisors, including Greg McBowman, to auction off
portions of his IP to the highest bidder.
Lynch arranged for Cohen to have a first meeting with Greenberg
in 1996 to discuss Cohen’s investment options for the proceeds from the
anticipated First Sony Sale.
During this meeting, and at Cohen’s request, Greenberg suggested
ways in which Cohen could structure the investment of his proceeds from the
First Sony Sale so as to reduce tax consequences and generate substantial
income.
Cohen worked with, and began to be represented by, a creative
tax attorney and law professor from the University of Kentucky, Richard Westin
(“Westin”). Cohen also had other advisors and consultants working with Lynch on
his business, music and tax matters, including Greg McBowman … Ken Cleveland,
as well as Stuart Fried and other attorneys at the law firm of Grubman Indursky
& Schindler, P.C.
Ultimately, Cohen decided to transfer some of the income from
the First Sony Sale into charitable remainder trusts. On October 30, 1996,
Cohen established three trusts: the Sabbath Day Charitable Trust (the
"Sabbath Day Trust"), the Cohen Family Charitable Trust (the
"Cohen Family Trust"), and the Cohen Remainder Trust (the
"Remainder Trust") (collectively, the “Trusts”).
Cohen … repeatedly withdrew large amounts of the Trusts’ assets.
On repeated occasions, TAS notified Cohen (both directly, when possible, and
per instruction through Lynch) that Cohen was spending more than recommended
from the Trusts, and thus, was draining down the Trusts’ principal.
On one such occasion, on April 13, 2001, Greenberg, on behalf of
TAS, wrote to Cohen: “I am writing to
you to discuss the income withdrawals you’ve received from your portfolio and
to provide you with some helpful guidelines for the future. When we originally
constructed your portfolio in 1997, you may remember that we had extensive
conversations about how much you required for your annual living expenses.”
In or about 1999, Cohen put more of his IP up for auction. In
1999, Sony and Cohen … negotiated for a second sale of IP to Sony for about $8
million (the "Second Sony Sale"). The artist royalties to be sold
were represented by Cohen as being held by another … entity, Blue Mist Touring
Co., Inc. ("Blue Mist"). Cohen was the Chairman, President, and
majority shareholder of Blue Mist, owning 425 shares, while Lynch was the
Assistant Secretary and minority shareholder of Blue Mist, owning 75 shares, or
15% of the company.
Cohen asked Westin, and in the spring of 2000, Greenberg, to
provide advice about how to invest the anticipated proceeds from the Second
Sony Sale and minimize the sale’s tax burden.
Cohen leapt at this opportunity to minimize his tax burden [via
Traditional Holdings, LLC], just as he had explored all possible means of
reducing his taxes in years past, such as by seeking a tax credit for donating
his papers to a Canadian museum [University of Toronto], and using artifices in
dealing with Sony to avoid paying any Canadian taxes (as a Canadian citizen) on
his royalty income earned in Canada.
Westin’s proposed plan had the following basic components: a
limited liability company – which eventually became Traditional Holdings –
would be created. Blue Mist would transfer certain IP assets to Traditional
Holdings in exchange for a deferred annuity, to be paid to Cohen beginning in
about 10 years. Traditional Holdings would then sell the assets it received
from Blue Mist to Sony. The tax plan prevented Cohen, the annuitant, from
owning more than a de minimis interest in Traditional Holdings. Therefore, Cohen would own
less than 1%, and another person – who ultimately was Lynch – would own the
remaining LLC interest (more than 99 percent).
Westin outlined this proposal to Cohen and Lynch both orally and
in a series of letters and other written communications between October 2000
and December 2000. See, e.g., Exh. 1 attached.
In these written communications, Westin explicitly warned Cohen
that since the annuity plan gave significant transactional control to Lynch,
and also potentially placed tax and other burdens upon her as majority
shareholder, the plan would work only if Cohen and Lynch maintained (as they
had in the past) a long-term relationship of personal and professional trust
which would secure their mutual obligations as manager of the obligor (Lynch)
and annuitant (Cohen). See, e.g., Exh. 2 attached.
Cohen carefully reviewed, understood, and signed off on the
ownership structure of Traditional Holdings – including the fact that Lynch
would own 99 percent of Traditional Holdings’ membership interests, so as
(among other reasons explained by Westin) to avoid any suggestion of
self-dealing.
First, Cohen reviewed the Traditional Holdings Articles of
Organization, and reviewed and executed the Traditional Holdings Operating
Agreement, which set forth in detail the entity’s ownership structure and
managerial procedures. See, Traditional Holdings Articles of Organization and
Operating Agreement (Exh. 3 attached).
Second, Cohen participated, at his request, in conference calls
with Westin and Lynch and/or Greenberg during which the structure was carefully
reviewed.
Third, Cohen talked about the structure of Traditional Holdings
privately with Lynch, including when he forced her to discuss it with him while
he took a bubble bath.
Fourth, in addition to several explanatory faxes he received
from Westin describing Traditional Holdings, Cohen communicated specific
questions, through Lynch, relating to Traditional Holdings’ ownership and
transactional structure, which questions Westin answered in a letter written
directly to Cohen on December 4, 2000, and faxed (as with his prior memos)
directly to Lynch and Cohen. See, Exh. 2.
Moreover, regardless of whether Lynch owned 1 percent or 100
percent of the shares of Traditional Holdings, Cohen knew or should have known
that she had or came to have authority – through a durable power of attorney
and pursuant to her role as Traditional Holdings’ manager – to act, and give
directions, on Traditional Holdings’ and on his own behalf. See, e.g., Exh. 3.
Likewise, no matter who
owned the majority of shares of Traditional Holdings, the obligation to fulfill
a deferred annuity obligation to Cohen remained the same. Thus, Cohen's
interests in the firm (the long term annuity payments) were identical, no
matter how his purported ownership interest in the assets were held and
invested in the interim.
In December 2000, Westin created Traditional Holdings as a
Kentucky limited liability company. Lynch was named as the initial manager in
the Articles of Organization, and both Cohen and Lynch were appointed as
managers in the Operating Agreement. Id. Also in December 2000, Cohen signed a
Private Annuity Agreement with Traditional Holdings which document sets forth
Traditional Holdings’ annuity obligations to Cohen. See, Private Annuity
Agreement (Dec. 7, 2000) (Exh. 4 attached). Lynch signed the Private Annuity
Agreement on Traditional Holdings’ behalf. Westin maintained, and continues to
maintain, that the company and its annuity contract with Cohen are legitimate
under prevailing interpretations of the federal tax code.
To purchase her ownership interest in Traditional Holdings,
Lynch was required to submit to Traditional Holdings a promissory note for
$240,000. It was agreed that Lynch would receive a salary and/or distributions
from Traditional Holdings sufficient to pay down the $240,000 promissory note
and to cover tax liabilities. See, Exhs. 2 and 3.
As set forth in the
Operating Agreement, Traditional Holdings was authorized to issue loans to its
members, Cohen and Lynch, as long as the loans were paid back before the
annuity obligations commenced. See, Exh. 3.
In April 2001, the Second Sony Sale was completed. The gross
proceeds of the Second Sony Sale were approximately $8 million, less certain
identified costs, expenses, and holdbacks for undelivered work.
Of these proceeds, Cohen had already requested and received $1
million as an advance in November 1999. Cohen was well aware of this $1 million
advance because it became the subject of a tax dispute with the Internal
Revenue Service in 2002.
Of the remaining proceeds of the Second Sony Sale, [certain] amounts
were paid to cover the costs involved in closing and negotiating the Second
Sony Sale:
$350,000 Grubman Indursky & Schindler, P.C. (attorneys for Cohen)
$333,750 McBowman Consulting Group (consultants for Cohen)
$30,450 Epstein Backer & Green, P.C.
$1,101,250 Stranger Management (commissions to Lynch's company)
Address the
additional amounts Cohen has listed in his complaint. Westin received $14,500 – attach his invoice.
None of these listed expenses had anything to do with either the
formation of the annuity plan or
with Traditional Holdings’ dealings … Westin did receive a
modest fee for his work on the Traditional Holdings documents, and for
consulting with Sony on Cohen and Traditional Holdings’ behalf.
Agile Group [sent] official monthly statements to Cohen at the Larchmont
Address (the record address for Traditional Holdings) setting forth the
performance of the Traditional Holdings’ funds invested in the Agile Safety
Fund. See, e.g.,
Exhibit 6 (example of monthly statements sent by independent outside
administrator). In addition, Agile Group, LLC sent monthly letters to Cohen
which, as a courtesy, summarized the deposits into and withdrawals from the
Agile Safety Fund by Traditional Holdings. Id. (example of monthly summaries
sent by Agile Group, LLC).
No sooner had Traditional Holdings been funded, however, than
Cohen – just as he had done with the Trusts’ assets from the First Sony Sale,
and notwithstanding Greenberg’s prior warnings about draining down investment
money – began to dissipate the Traditional Holdings funds, jeopardizing his own
long-term annuity interests, as well as the company’s legitimacy. Greenberg and
others were immediately alarmed by Cohen's desire and tendency to treat this
company like his own personal piggybank, out of which he could borrow or take
distributions against his annuity benefits.
For example, almost immediately after the funding of Traditional
Holdings, Cohen took out a loan for $50,000. This was followed, during 2001 and
2002 alone, by several loans to Cohen … to cover tax liabilities, houses for
Cohen's son and his current girlfriend, and living expenses. These 2001-2002
loans to Cohen –amounting to over $1 million – were deposited directly into
Cohen’s personal bank account at City National Bank in Beverly Hills, California.
In March 2002, Greenberg [spoke to] Cohen directly by telephone,
Cohen “admitted he was spending too much and seemed a little shaken when
[Greenberg] reminded him how much he had just spent on gifts to friends."
Lynch repeatedly assured Agile Group, LLC and TAS that the loans
from Traditional Holdings were being properly documented with Westin’s
assistance. Cohen’s tax attorney Westin also was aware of and in regular
communication with Lynch concerning the shareholder loans and other aspects of
the affairs and management of Traditional Holdings.
The March 5, 2002 Traditional Holdings Board Meeting Minutes,
prepared at Westin’s direction, state “that the level of borrowing was
undesirable and [the members] expressed their assent that further borrowing was
discouraged, even though the borrower’s [Cohen’s] credit and collateral were
good.”
Cohen, however, gave no sign that he had any intention of
abating his spending habits. In an e-mail to Lynch dated March 4, 2002, Cohen
thanked Lynch for “keeping [him] informed,” and instructed her to “give lots of
money to everyone.”
Because these shareholder loans were to be repaid, and because
it was necessary to protect the entity’s integrity for tax purposes, these
shareholder loans were properly characterized, on Cohen’s tax attorney Westin’s
advice, as Traditional Holdings assets when calculating the entity’s value.
Lynch, on Cohen’s behalf, sent e-mails to Colorado in response
to Greenberg’s warnings, defending the loans, giving assurances that all of the
loans were proper and documented, and assuring that they would be paid off when
Cohen received the money from another, upcoming Sony transaction.
In October 2004, Cohen and Lynch had a major falling out, the
details of which remain unknown to Plaintiffs. As a result of this falling out,
the Third Sony Sale – which appeared to be on the verge of consummation – never
happened.
On October 21, 2004, Cohen personally contacted Greenberg by
e-mail and informed him that Lynch was “busy with other aspects of [his] career,”
and therefore, Cohen had “relieved her of all financial responsibilities.”
Cohen further stated that Lynch “need not be copied on your statements or
reports,” and that Cohen's new accountant would “be in touch.”
On October 22, 2004,
Cohen sent another e-mail to Greenberg stating that Lynch “no longer represents
me,” and directing Greenberg not to “respond to any of her instructions.”
On or about October 24, 2004, Cohen again communicated directly
with Greenberg by e-mail, stating that his business address was no longer the
Larchmont Address or Keniston Address. With allegations flying fast and furious
from Cohen – and later Kory – that Lynch was acting without due authority from
Cohen, remarkably, a request to change Cohen's record address was left on
Plaintiffs’ general voice mailbox by Anjani Thomas. Only later did Plaintiffs
learn the identity of Ms. Thomas – Cohen’s current girlfriend, and Kory’s
ex-wife. Thus, Plaintiffs demanded an
original signature from Cohen on a document verifying the new address
Given Lynch’s position as manager and 99.5% owner of Traditional
Holdings, and learning of the apparent schism between Lynch and Cohen, Agile
Group, LLC became concerned about whose directions as to the Traditional
Holdings account it was legally obligated to follow. On October 24, 2004, Agile
Group, LLC communicated with Westin – Cohen's attorney who had created
Traditional Holdings – and inquired: “Does Leonard in your view have equal
authority over the accounts that we manage? What if there are contradicting
directive on those accounts that we manage? For example if KL says 'take money
out' and LC says don’t take money, what is your view . . . .” Westin confirmed
that because Cohen held a membership interest in Traditional Holdings, Agile Group,
LLC could share information with him about Traditional Holdings’ investments.
Westin could not, however, answer the issue of conflicting directives, and instead referred Agile Group, LLC to
Traditional Holdings' governing documents (drafted by Westin), which
documents provided little, if any, guidance on the issue.
At or about this same time (October 22-24, 2004), Cohen phoned
Greenberg. Cohen said that he thought Lynch had been taking money from
Traditional Holdings without Cohen's authorization. He claimed that Lynch was
using the money to support a gigolo and
to fund shopping sprees at Neiman Marcus, and suggested that Lynch and Westin
may have colluded to defraud him. When Greenberg reminded Cohen that Westin had
warned Cohen in 2000 that "the biggest risk" from Westin's tax
avoidance plan "was that Lynch would own his assets and he would have lost
control," Cohen stated that he recalled that initial warning.
According to Lynch, however, Cohen regularly visited his
management offices, often in Lynch’s presence, and reviewed and discussed his
mail with her, all of which was kept on his desk to facilitate such review,
including all correspondence, reports, and statements from the Agile Safety
Fund’s independent, outside administrators, and from Plaintiffs.
Cohen then turned to his agent and attorney Kory to deal with
Lynch, Westin, and Plaintiffs.
Based on these checks, Agile Group, LLC calculated that, of the
loan money withdrawn from Traditional Holdings:
a. $2,084,518 had been deposited into Cohen’s own personal bank
account [NOTE: It is my belief that
Cohen’s loans were far in excess of this amount but it requires an actual audit
of Greenberg’s accounts and an accounting];
b. Lynch personally had outstanding loans of approximately
$293,000, which loans she represented had been disclosed to and sanctioned by
Cohen;
Her abrupt termination frustrated Lynch's ability to make good
on any loans through her share of receipts from the Third Sony Sale, the
"Dear Heather" album, a pending sale of original lithographs, or
other sources, and left her in a precarious financial position …
In November 2004, Lynch was asked by Kory [by Cohen] to appear
without the benefit of counsel at a meeting with Cohen, Kory, and Richard
[Ricardo] Cisneros of the Greenberg, Glusker law firm acting as legal counsel
for Cohen, and to sign certain legal documents related, inter alia, to unwinding
Traditional Holdings on the spot. Lynch refused to do so without benefit of
counsel, and subsequently received advice from a variety of legal, accounting
and tax professionals, including but not limited to Mike Taitelman, Dale
Burgess, Dianne DiMascio, and an IRS officer named Betzer, that she was wise
not to sign, because such action could have been fraudulent.
Lynch claimed that she had substantial, unsatisfied interests in
Cohen's business entities and/or intellectual property. If Cohen were to
attempt to recover money from Lynch, she would likely assert counterclaims
alleging that Cohen owes her, and has never paid, substantial amounts of money;
and, according to Lynch, and upon information and belief, such possible
improprieties included, but were not limited to, the retention by Blue Mist and
other persons or entities of IP that should have passed through Traditional
Holdings to Sony, the failure to reference or disclose the annuity obligation,
loan obligations, and other important matters on Traditional Holdings’
corporate tax returns, and Cohen’s failure properly to document Traditional
Holdings’ transactions.
Because any attempt to recover money from Lynch was likely to be
both futile and treacherous, Cohen, Kory, and other unnamed co-conspirators
(including Steve Lindsay, Betsy Superfon, and John Doe Nos. 1-25) … conspired
...
Thus, for example, although the attorneys and accountants
involved in the Second Sony Sale structured and received hefty fees for that
transaction, which Kory charged were excessive, Cohen and Kory decided not to
pursue any of those persons because they would not be easy targets, and because
many of them – principally Sony and its law firm and advisors –continued to do
business with Cohen profitably. Instead, Cohen and Kory decided to go after
Plaintiffs, none of whom had any role whatsoever in that Sony transaction
and/or received any benefit therefrom.
He [Leonard Cohen] told Greenberg to "be a man" and
contact his insurance company. “Please
do talk to the insurer. A great deal of suffering can be avoided.”
Cohen with affirmative support from Kory, Steve Lindsay and
Betsy Superfon, and John Doe Nos. 1-25, all acting toward a common end and each
for his or her own purposes, began to direct an extortion scheme …
Cohen and Kory indicated that, unless Plaintiffs obtained
insurance funds … Cohen would go out on tour to promote his new album, and
would give interviews to reporters in which he would state or insinuate that he
was touring because he had been bankrupted by the improprieties of his
financial advisors. [NOTE: Instead,
Cohen used this tactic against Lynch; Kory advised Lynch’s lawyers that Cohen
planned to go on Oprah and blow the whistle on Greenberg and Westin.] Cohen and Kory knew full well that, from
Plaintiffs’ perspective, once a celebrity were to raise such allegations of
fraud and breach of duty against them, the damage would already be done, no
matter the ultimate outcome.
Cohen and Kory began to pressure Lynch to assist in the
extortion scheme against Plaintiffs. Specifically, they requested that she
falsely testify … Cohen sought to obtain … testimony from Lynch knowing that the
testimony would be false.
Lynch's cooperation in Cohen’s extortion scheme was critical.
Cohen believed that he could not only could use Lynch as a witness against
Plaintiffs, but could also buy or coerce her silence as against himself at the
same time.
Thus, Cohen pressed for private "mediation" as an
alternative to a public lawsuit, knowing full well that with Lynch's
cooperation and silence, many of the critical documents concerning Cohen's
financial affairs – documents that indubitably show … his aggressive tactics to
avoid taxes at all costs, and his desire to capitalize on and benefit from all
of his intellectual property during his lifetime to fuel an extravagant
lifestyle – would not be the subject of discovery
Thus, by deliberate misrepresentations and omissions of critical
facts … Cohen could knowingly and deliberately misrepresent his objectives and
sophistication as an investor, his long history of aggressive tax management,
his long history of exploitation of his IP for immediate gain and profit, his
profligacy …
For example, Cohen affirmatively misrepresented to Plaintiffs
that Lynch had simply forged his signature on various documents, knowing full
well that she had not done so, or had signed with his full authority (as borne
out by his subsequent actions – such as purporting to state claims based on
agreements with TAS bearing his signature, and revoking a power of attorney
bearing his signature that he acknowledged executing).
Cohen likewise falsely asserted that at no time had he
authorized any of the shareholder loans from Traditional Holdings, and made various
accusations against Lynch for which he had no basis in fact …
As one example, he claimed never to have known, prior to
November 2004, that Lynch was the majority shareholder of Traditional Holdings,
thereby implying that he had been deceived by Plaintiffs and Westin. He also
denied receiving information about Lynch's role as managing the obligation to
pay his annuity, and denied ever receiving any information from Plaintiffs
other than some monthly email summaries, even though he was easily able to retrieve
Plaintiffs’ other written warnings, reports and correspondence from his own
Keniston office address in 2004, and was reported by Lynch to have regularly
visited the office, reviewed his mail, and discussed Traditional Holdings'
loans and his other accounts with her on a regular basis.
In particular, starting in March 2005, Cohen began to assert
that Plaintiffs were responsible for the loss of $8 million, which figure
included many millions of dollars which they knew Cohen
had, in fact, received and previously spent in support of his own extravagant lifestyle.
… according to Lynch and others, he was prepared to admit or
agree with Lynch that she owed Cohen nothing.
Having garnered the support of Lynch's then-attorney, Dianne
DiMascio (“DiMascio”), Cohen felt
confident enough in January 2005 to misrepresent to Plaintiffs’
counsel, through Kory, that Lynch was
then of the view that she, along with Cohen, was a victim of the misconduct of
Plaintiffs and Westin.
Cohen and Kory continually sought to purchase or coerce Lynch’s
cooperation
In a demand letter from Kory to DiMascio, Kory wrote: I want to reemphasize my position that I am
willing to work with you as part of a settlement between Mr. Cohen and Ms.
Lynch in going after Westin’s and Greenberg’s insurers as a source of
restitution.
Thereafter, on January 11, 2005, Kory wrote to DiMascio, telling
her that “properly framed letters to
Greenberg and to Westin would cause their insurance companies to show up.”
Lynch declined to attend the meeting in person. Instead,
DiMascio went to the meeting on Lynch’s behalf in early February 2005, after
which she reported to Lynch: “[Cohen and Kory] want your cooperation in
pursuing [the Plaintiffs] and Richard Westin. In this regard, they seem to want you to
acknowledge that you knew that Neal [Greenberg] and Richard [Westin] wanted to defraud
Leonard and that you approved their conduct.”
Repeatedly, from at least November 2004 through April 2005, Kory
made known to Lynch, directly, through counsel, through Steve Lindsay (the
father of Lynch’s youngest child and one of Cohen’s record producers), through
Lynch’s accountant Dale Burgess … and through others among her friends and
relatives, that he had extraordinary negotiating authority from Cohen to
"forgive" any obligations of Lynch, to treat them as a gift, to make
additional payments to her or her family members (including disguised as
"palimony,” to make good on Lynch's shares of IP rights or legal entities
…
Kory tried to do this directly in late spring 2005 when he met
Lynch for lunch and tried to persuade her to work with Cohen to "go
after" Plaintiffs.
Cohen and Kory also worked indirectly. For example, they
recruited Lynch’s erstwhile friend and longtime "friend" of Steve
Lindsay, Betsy Superfon, a person of some notoriety due, among other reasons,
to her entrepreneurship in the telephone sex trade. On numerous occasions, Kory
used Lindsay and Superfon to try to "broker" deals with Lynch …
In one such conversation, in May 2005, Superfon, according to
Lynch, called Greenberg “the kingpin” and a “criminal” and pleaded with Lynch
to cooperate with Cohen for “[her] heart, [her] health, and [her] kids” and
recommended that Lynch “get out of this.”
Superfon promised that she could “settle this for [Lynch] immediately,”
and stated that “Leonard and Kory [are] trying to get you out of this
situation.”
When Lynch requested a settlement agreement in writing during a
later conversation, Superfon, according to Lynch, stated that when she asked
Kory to fax Lynch a settlement, Kory said “you can’t fax this kind of a deal.
It has to be discussed.”
Through Lindsay, Superfon and other friends, relatives and
acquaintances, Cohen and Kory delivered the message that giving in to Cohen’s
wishes would be in Lynch’s best interest.
When these tactics to draw Lynch into his extortion scheme
proved futile, Cohen and Kory – according to Lynch – turned to far more
aggressive means to obtain her cooperation.
Indeed, as heard by other witnesses, Cohen and Kory vowed to "crush
her," and planned to use
restraining orders and other means to prevent her from serving as a credible
witness regarding both Cohen's affairs and in regard to the scheme into
which they had tried without success to draw her.
Consistent with that vow and plan, and according to Lynch and
other witnesses, and on information and belief, Cohen and Kory's tactics to
terrorize, silence, or disparage Lynch have included, inter alia, the
following:
a. contacting City National Bank, where Lynch, Lynch’s son ..,
all had personal banking accounts, and convincing City National Bank to put a
freeze on … their accounts;
b. alleging that Lynch's father and mother were depositing funds
for Lynch in secret offshore bank accounts, even while, in fact, Lynch's mother
was suffering from Alzheimer's and had moved to Texas to be in the care of her
other daughter in light of Lynch's precarious financial circumstances;
c. threatening Lynch that she would go to jail if she did not
cooperate, and having her younger son's father, Steve Lindsay, who was also
Cohen’s record producer, repeat these threats in the child's presence;
d. threatening to "go to child services,” encouraging Steve
Lindsay to file legal action to remove Lynch’s younger (and his) son from her
custody, and submitting affidavits (from Kory and Superfon) supporting that
effort;
e. in a coordinated fashion with Lindsay’s child custody
petition, encouraging or directing Steve Lindsay to call in a warning to the
LAPD (not related to Traditional Holdings, but on some other, unknown pretext)
that caused a police team to descend, guns drawn, on Lynch's home, resulting in
her being handcuffed and taken involuntarily, in her bathing suit, to a
hospital psychiatric ward and medicated without her consent, before being
released the next day, during which time Kory attempted to persuade Lynch’s
older son, Rutger, to sell Lynch’s house and provide $3 million; and
f. paying two paroled convicts to make statements that they had
observed Lynch's older son brandishing a gun and threatening to kill someone.
These and other tactics brought Lynch to the point of physical
and emotional collapse, as well as financial ruin.
Cohen’s scheme to force Plaintiffs into a contrived mediation
without discovery or publicity might have succeeded, had not Lynch refused to
cooperate. Instead, she made the unilateral decision to provide to Plaintiffs'
legal counsel a variety of documents and other information that they might not
have otherwise seen … See, e.g., Facsimile Message from K. Lynch to S. Posel
(March 17, 2005) (Exh. 11 attached).
Fortunately, Lynch turned over not only historical files, but
also the details of Cohen and Kory's illicit offers made to her through
attorney DiMascio, through accountant Dale Burgess, and through other
intermediaries, and shared every detail of Cohen and Kory's attempts to
negotiate with or threaten her in order to obtain … testimony ...
Cohen and Kory continued to heighten their efforts to bribe or
coerce Lynch into giving … testimony … without knowing that Lynch had already
exposed their scheme …
Cohen and Kory alleged that Plaintiffs "proposed the sale
of Cohen's 'illiquid assets,' including Cohen's various royalty
interests," and contended that "Cohen was convinced by [Greenberg] of
the financial necessity to sell off his royalty interests during his lifetime .
. . ."
Cohen and Kory alleged that Plaintiffs were liable for
"actual damages of at least $8 million," which was an amount even
greater than the total proceeds of the Second Sony Sale. In fact, Cohen and
Kory made this allegation with full knowledge that Cohen had already received
at least $1 million in advance of the Sale closing, that the gross proceeds had
been reduced by specific costs and charges, that were well over $1 million had
been paid out to third parties to cover closing costs from the Sale, and that
Cohen had received at least $2 million of the remainder into his own personal
bank account.
Cohen reviewed the Traditional Holdings governing documents (detailing
that arrangement), that he repeatedly received and understood both oral and
written explanations of this very fact, and that none of the Plaintiffs were
behind the formation or structure of Traditional Holdings.
Thereafter, on June 3, 2005, Plaintiffs provided Kory, as
promised, a draft complaint which detailed, with extensive documentary support
… The draft complaint also revealed to Cohen and Kory, for the first time, that
Lynch and others had already exposed the extortion scheme. In particular, the
draft complaint demonstrated that Plaintiffs were aware of Cohen’s scheme to
use economic compensation, emotional intimidation, and other forms of undue
pressure to coerce Lynch to provide … testimony …
At all relevant time periods stated herein, Kory acted, at a
minimum, as an agent, attorney, joint venturer, and/or co-conspirator of Cohen
…
Cohen and Kory knew that the false, disparaging, and defamatory
press release was not made in furtherance of any lawful objective or within the
scope of the litigation commenced by Plaintiffs, and that the intended
recipients were not involved in or closely connected with the litigation.
Greenberg’s
lawsuit goes onto argue that Cohen and Kory engaged in civil extortion and
civil conspiracy. That is precisely what
I witnessed.
Cohen and other co-conspirators not currently named as
Defendants herein (including Robert Kory, Steve Lindsay and Betsy Superfon)
committed one or more unlawful acts in furtherance of these common goals and
objectives.
Cohen and the other co-conspirators not currently named as
Defendants herein (including Robert Kory, Steve Lindsay and Betsy Superfon)
knowingly conducted or participated, directly or indirectly, in such enterprise
through a “pattern of racketeering activity” … The acts of racketeering
activity which Cohen and the unnamed co-conspirators, and the enterprise
committed, attempted to commit, conspired to commit, solicited, coerced or
intimidated others to commit included, inter alia: (a) Mail fraud; (b) Wire fraud; (c) Interference with commerce
by threats; (d) Criminal extortion; (e) Bribing a witness;
(f) Intimidating a witness; (g) Tampering with a witness;