Rolled in Hollywood,|Investors Say

LOS ANGELES (CN) - Four Los Angeles men fleeced Korean investors for $2.5 million by pretending to have a movie distribution deal with Universal Pictures, the investors claim in court.

Plaintiffs CJ Venture Investment, Hype Nation Korea and Planis Entertainment sued Yong Jin Lee, Bret Lewis, Paul Ring, and John Ferguson in Superior Court.

Also sued are Lee and Lewis' company Hypenation, and Fase 1 Films/Universal UMGD, the allegedly "fabricated" distribution company.

According to the complaint, the Korean investors provided $2.5 million to finance Hypenation's movie, "Hype Nation 3D." The defendants allegedly told them the movie would be widely release throughout North America by a Universal affiliate.

But the movie never saw the light of day, the complaint states.

"The defendants, who had never before produced or distributed such a theatrical motion picture, and who lacked the millions of dollars, expertise and extensive facilities with which to produce and distribute the picture, misrepresented their abilities and qualifications to the plaintiffs, concealed the true facts, fabricated documents and made statements falsely asserting that an affiliate of Universal Pictures would be distributing the picture," the 28-page lawsuit states.

Universal Pictures is not a party to the complaint.

After hatching the scheme in 2009, the defendants went to some lengths to convince investors that the Universal deal was bona fide, says the lawsuit.

The defendants stuck a Universal logo on the first page of a distribution agreement, rented a conference room at Universal City to make it appear they had offices at the studio, and circulated a 2-year-old publicity email to investors from a Universal Music Group executive, the complaint states.

The investors say none of the defendants had "any relationship with Universal Pictures" and that Fase 1 Films/Universal UMGD was formed to pull the wool over their eyes.

"The only relationship any of the defendants had with any 'Universal' entity was through defendant Ring's Bungalo Records label. Ring was the president of Bungalo Records, which is a small, independent record label that is merely distributed by Universal Music Group Distribution ('UMGD'). However, although UMGD has the word 'Universal' in its name, it has no relationship whatever with Universal Pictures," the complaint states.

Planis paid Hypenation $500,000 for development of "Hype Nation" for a 49 percent share of net profits, and credit on the film, which was slated for a 2011 release, according to the complaint.

CJ Venture and its fund formed Hype Nation Korea and agreed to invest $2 million in return for 30 percent of net profits, the companies say. Both agreements were negotiated in South Korea and California, according to the lawsuit.

"Pursuant to the terms of the CJ Investment and Planis agreements, as well as the temporal nature of the picture's audience appeal, the timely production and distribution of the picture was of the essence of both agreements. However, as of the date this complaint is filed, defendants have neither completed the picture nor theatrically distributed it in the U.S. or in any other country," the complaint states.

According to industry website IMDB, "Hype Nation," is about an American dance crew that competes with dancers from South Korea.

No contact information was available for the defendant companies.

The plaintiffs seek more than $2.75 million in damages for intentional misrepresentation, intentional concealment of material facts, breach of contract, and unfair competition.

They are represented by Michael Bergman, of Encino.

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