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WWE Celebrity Hall of Famer Mike Tyson and WWE Hall of Famer Ric Flair, along with cannabis companies Carma and LGNDS filed a 76 page federal lawsuit alleging "a brazen RICO conspiracy involving criminal wire fraud, embezzlement, money laundering, and extortion, as well as securities fraud and shameless self-dealing that enriched the Defendants to the tune of tens of millions of dollars."
In all, the lawsuit, filed before The U.S. District Court for the Northern District of Illinois alleges 21 counts of wrongdoing against several former Carma executives, including Chad Bronstein, Adam Wilks, Nicole Cosby, and James Case. Pro wrestling fans may recognize Bronstein from being behind the Hulk Hogan Real American Beer and the Real American Freestyle league currently streaming live events on FOX Nation.
The lawsuit alleges wide-ranging RICO conspiracy involving Wire fraud, Embezzlement, Money laundering, Extortion, Securities fraud and Self-dealing that allegedly enriched the defendants to the tune of tens of millions of dollars at the expense of the plaintiffs.
Carma and LGNDS jointly distribute cannabis brands Tyson 2.0 and Ric Flair Drip, which use their names and likenesses. The lawsuit is claiming that Bronstein, the former Carma president and chairman, Wilks, their former CEO, Cosby, their former chief legal and licensing officer and Case, a Carma shareholder were allegedly selling licensing rights related to Tyson and Flair that they did not have authorization to sell, allegedly had a "secret kickback agreement" with a Vape company, DomPen, that saw payments concealed in exchanged for the execs overlooking that company using intellectual property they didn't have the authorization to use, and that Bronstein and Wilks each allegedly treated Carma as a “personal piggy bank,” misusing more than $1 million for personal expenses, including private jet travel, yacht costs, home renovations, mortgage payments, and lavish entertainment.
The lawsuit also alleges that Bronstein entered into agreements without the knowledge of the company, including a sponsorship for Flair's Woo Energy Drink with All Elite Wrestling. The lawsuit alleges Bronstein did this in order to build a relationship with The Khan family in order to "build his own brand and personal interests." After entering into the sponsorship agreement, the lawsuit alleges Bronstein did not "initially disclose" to CARMA and LGNDS that he had entered them into the agreement.
"Instead, several months after Bronstein entered the agreement, CARMA and LGNDS received a draft complaint on behalf of AEW, stating that CARMA and LGNDS would be sued if they did not pay the $1.5 million owed for AEW’s performance of the contract. CARMA and LGNDS, despite never having authorized Bronstein to enter into the agreement in the first place, paid the $1.5 million to AEW."
"In addition, the complaint alleged that CARMA had negotiated the terms for Flair’s sponsorship. However, in reality, Bronstein had negotiated the terms of Flair’s sponsorship by falsely holding himself out as Flair’s agent. Flair had never agreed to the terms of the sponsorship agreement."
It should be noted that Flair made a number of appearances for AEW while that sponsorship was being publicly promoted on AEW programming.
The lawsuit notes that Flair and Bronstein met as their boats were on neighboring slips in Tampa and that Bronstein "spotting an opportunity to grift", approached Flair about whether he owned the rights to license his Intellectual Property, which Flair confirmed he did. That led to the creation of the Ric Flair Drip, Inc. company, which was assigned Flair's IP. The lawsuit alleges that Flair was not aware he was not "the full, or even majority owner" of the corporation. The corporation was later sold to CARMA, which Flair was allegedly not aware or, not did not "not receive any of the funds from this purchase." The purchase was completed in September 2022, with CARMA providing the owners of Ric Flair Drip interest in CARMA equity in exchange, but in doing so Bronstein and Wilks allegedly "functionally
reassigned themselves an extra interest in CARMA through instructing this purchase, without Board approval or disclosure to any authority, including Flair." So, the allegation is that they enriched themselves and in doing so, Flair was "robbed of any proceeds" of the initial purchase of the Ric Flair Dip, Inc. and when the complete acquisition was finalized, "Flair was shorted a significantly higher stake in CARMA than he was entitled to."
Once CARMA acquired Ric Flair Drip, the lawsuit alleges Bronstein began selling Flair's IP rights, granting LGNDS the right to manufacture "various types of products pursuant to the brand and trademarks—i.e., hemp products, mushroom products, nicotine products, kava products, smelling salts, beverages, and other merchandise, such as shirts, pants, sweaters, and footwear" to the tune of $400,000.
In speaking to Front Office Sports, attorneys for the defendants strongly denied the allegations, describing the lawsuit as “fiction dressed up as a lawsuit” and characterized prior settlement demands as coercive. Wilks’s attorney stated the claims as baseless and sensational, asserting the facts and law favor the defense.
The Plaintiffs are seeking a jury trial, more than $50 million in damages and reimbursement of their legal fees and related costs. The defendants have not officially responded to the lawsuit before the court.
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