NASHVILLE (CN) — The owner of a historic Memphis recording studio destroyed in an arson fire tried to cheat his insurer by submitting claims for over $10 million in recording equipment that "never existed," the insurer claims in federal court.
Hanover American Insurance Company sued Tattooed Millionaire Entertainment, its CEO, Christopher Brown, and two studio leasees, Daniel Mott and John Falls, on Oct. 14.
Hanover claims Brown and his co-defendants conspired from the beginning to submit false information in their insurance applications with the anticipation that they would ultimately attempt to cash-in on bogus insurance claims.
Each said that there was over $10 million worth of musical equipment and music recording equipment spread throughout the building's three recording studios, Hanover claims.
Brown formed the music production company in late 2014 after he purchased a historic two-story House of Blues recording studio in Memphis for $250,000, according to the lawsuit.
By November 2015, the building was the scene of an arson fire "by someone pouring gasoline on the first floor of the building and igniting it."
All three defendants claimed to be on vacation at the time of the blaze, and law enforcement and fire investigation officials found no evidence connecting them to the fire.
The insurance company says that Brown blamed "local street gang members" for the fire, and that "these gang members had removed and stolen most of the over $10 million in recording equipment before setting fire to the insured premises."
As proof of the equipment, Brown handed over receipts from liquidation companies supposedly showing hundreds of thousands of dollars worth of purchases. However, a Hanover investigation exposed the receipts as phony knockoffs when the companies said the sales never happened.
The three defendants have refused Hanover's opportunity to rebut the companies' responses, or provided additional records, the lawsuit says.
"The three purported transactions never occurred; the claim documentation submitted by defendants to support a collective $10.5 million business personal property claim was fabricated and fraudulent; and the defendants knew the recording equipment was never purchased and thus was never at the insured premises to be stolen," according to Hanover.
The insurance company seeks recession of the policy and over $2.8 million in insurance claim payments wrongly induced by the trio.
Hanover is represented by Nashville attorney John Anderson Sr. with Dickinson Wright PLLC.