SUM-100

SUMMONS COURT USE ONL Y

(SOLO PARA USO DE LA CORTE)
(CITACION JUDICIAL)
NOTICE TO DEFENDANT:
(A v/so AL DEMANDADO):
HELLIE, HOFFER AND COMPANY, LLP, a business entity, KENNETH HELLIE, c $""~=x QF""A*
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as an individual and as Trustee for the AJM Trust, JAMIE WILLIAMS, an FT*
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individual, and DOES 1-50, inclusive, . Ii.: .:L..:s

YOU ARE BEING SUED BY PLA|NTIFF: 849.15 12 H;M?

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(Lo ESTA DEMANDANDO EL DEMANDANTE): \

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DAVID BUGLIARI, an individual. AI yssA MILANO, an individual, A.J.M. Sf? f"g'

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NOTICE! You have been sued. The court may decide against you without your being heard unless you respond within 30 days. Read the informatiOn
below.
You have 30 CALENDAR DAYS after this summons and legal papers are sewed on you to file a written response at this court and have a copy
served on the plaintiff. A letter or phone call will not protect you. Your written response must be in proper legal fom if you want the court to hear your
case. There may be a court fom that you can use for your response. You can find these court forms and more infomation at the California Courts
Online Self-Help Center (www.courtinfo.ca.gov/selfhe/p), your county law library, or the courthouse nearest you. lf you cannot pay the filing fee, ask
the court clerk for a fee waiver form. lf you do not file your response on time, you may lose the case by default, and your wages, money, and property
may be taken without further warning from the court.
There are other legal requirements. You may want to call an attorney right away. If you do not know an attorney, you may want to call an attorney
referral service. lf you cannot afford an attorney, you may be eligible for free legal services from a nonprofit legal services program. You can locate
these nonprofit groups at the California Legal Services Web site (www./awhelpca/ifornia.org), the California Courts Online Self-Help Center
(www.courtinfo.ca.gov/se/fhe/p), or by contacting your local court or county bar association. NOTE: The court has a statutory lien for waived fees and
costs on any settlement or arbitration award of $10,000 or more in a civil case. The court's lien must be paid before the court will dismiss the case.
/A VISOI Lo han demandado. Si no responde dentro de 30 dfas, la corle puede decidir en su contra sin escuchar su versiOn. Lea /a informaciOn a
continuaciOn.
Tiene 30 D/AS DE CALENDARIO despu s de que le entreguen esta citaci n y pape/es /ega/es para presentar una respuesta por escrito en esta
corte y hacer que se entregue una copia al demandante. Una carta o una I/amada te/efOnica no lo protegen. Su respuesta por escrito tiene que estar
en formato legal correcto si desea que procesen su casa en /a corte. Es posible que haya un formulario que usted pueda usar para su respuesta.
Puede encontrar estos formularios de /a corte y m s informaciOn en el Centro de Ayuda de /as Cortes de California ( .sucone.ca.gov), en la
bib/ioteca de /eyes de su condado o en la carte que le quede m s cerca. Si no puede pagar la cuota de presentaciOn, pida al secretario de la corte
que le d un formulario de exenciOn de page de cuolas. Si no presenta su respuesta a tiempo, puede perder el caso por incumpllmlento y la corte le
podra quitar su sue/da, dinero y bienes sin mas advertencia.
Hay otros requlsitos legales. Es recomendable que /lame a un abogado inmediatamente. Si no conoce a un abogado, puede I/amar a un sewicio de
remislOn a abogados. Si no puede pagar a un abogado, es poslble que cumpla con /os requisitos para obtener semicios legales gratuilos de un
programa de servicios /ega/es sin fines de /ucro. Puede encontrar estos grupos sin fnes de lucro en el sitio web de California Legal Services,
(www.Iawhelpcalifornia.org), en el Centro de Ayuda de /as Cortes de Califomia, .sucone.ca.gov) o poni ndose en contacto con /a corte o el
co/egio de abogados locales. AVISO: Por ley, la corte tiene derecho a reclamarlas cuotas y los costos exentos por imponer un gravamen sobre
cualquier recuperacion de $10,000 6 mas de valor recibida mediante un acuerdo o una concesiOn de arbitraje en un caso de derecho civil. 'Hehe que
pagar el gravamen de la corte antes de que la oorte pueda desechar el caso.
The name and address of the court is: CASE NUMBER:
(El nombre y direcciOn de /a corte es): (NUmero de/ Casa):

Los Angeles County Superior Court L'\ W1 ru H _m

\ 4 ,1
East District \ J v u uf 1.1 ta

6230 Sylmar Avenue

Van Nuys, California 91401

The name, address, and telephone number of plaintiff`s attorney, or plaintiff without an attorney, is:
(El nombre, la direcciOn y e/ ndmero de tel fono de/ abogado de/ demandante, o del demandante que no tiene abogado, es):
Ellyn S, Garofalo, Esq., Patrick E. McCormick, Esq., (310) 500 -3500
LINER LLP
1100 Glendon Avenue, 14"1 Floor, Los Angeles, California 90024 i f""~{"*~r j"'*""""" 1""'\.
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DATE; J UH `f m gg]7 Execuuve Q M 9f1< : '
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(Fecha) ihenl FK. Carter, ecretario) (Ac#unto)

(For proof of service of this summons, use Proof of Sewice of Summons (form POS-010).)
(Para prueba de entrega de esta citatiOn use el formulario Proof of Service of Summons, (POS-010)).
[SEAL] NOTICE TO THE PERSON SERVED: You are sewed
1. E as an individual defendant.
2. E as the person sued under the fictitious name of (specify):

3.
under:
4.
Form Adopted for Mandatory Use
Judidal Council of California
SUM-1 O0 [Rev July 1, 2009]
U on behalf of (specify):
E CCP 416.10 (corporation) [I CCP 416.60 (minor)
U CCP 416.20 (defunct corporation) E CCP 416.70 (conservatee)
D CCP 416.40 (association or partnership) D CCP 416.90 (authorized person)
II] other (specify):
lj by personal delivery on (date):
Page 1 of 1
41220, 465 SUMMONS
American Lega|net Inc.
Code of Civil Procedure
www.coulfinfo.cagov
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6 Attorneys for Plaintiffs

DAVID BUGLIARI, an individual,
ALYSSA MILANO, an individua1_ and
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A.J.M. PRODUCTIONS, INC., a A
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SUPERIOR COURT OF THE STATE OF CALIFORNIA
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COUNTY OF LOS ANGELES, CENTRAL DISTRICT
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COMPLAINT FOR DAMAGES
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17 HELLIE, HOFFER AND COMPANY, LLP, a 5) THEFT
business entity, KENNETH HELLIE, as an 6) VIOLATION OF PENAL CODE
496(c)
18 individual and as Trustee for the AJM Tnlst,
JAMIE WILLIAMS, an individual, and DOES 7) ACCOUNTING
19 1-50, inclusive,
DEMAND FOR A JURY TRIAL
20 Defendants.

21

22

23

24

25

26

27

28

60549.002-4324929v l
COMPLAINT
 For their Complaint, Plaintiffs David Bugliari, Alyssa Milano and A.J.M. Productions, Inc.
1

2 (collectively, "Plaintiffs"), allege as follows:

3
INTRODUCTION
This case arises from the gross negligence and malfeasance of entertainment
4 1.
business management firm, Hellie, Hoffer and Company, LLP ("HHC" or "Defendants"), that left
5
its clients with millions of dollars of debt and their credit in ruins. In fact, Defendants failed to
6
competently perform the most basic and crucial function of business managers, which is to
7
manage, protect and safeguard the money and assets entrusted to them. Defendants then engaged
8
in a cover-up of the escalating financial chaos they created by withholding and actively concealing
9
material financial information from their clients. As elaborated below, Defendants completely
10

11 mismanaged Plaintiffs' finances by, among other things :

Failing to keep Plaintiffs informed of their financial condition;
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.cz Failing to timely pay Plaintiffs' obligations including credit card bills, mortgage
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cQ Engaging in a shell game by arranging loans for Plaintiffs from other HHC clients
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15 with exorbitant interest rates, pena ties and other unfavorable tenns, while at the
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3.1 same time making loans from Plaintiffs to other HHC clients;
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Ignoring and failing to alert Plaintiffs to negative, even alarming, financial
17
information, that required Plaintiffs' imme iate attention,
18 Repeatedly misleading Plaintiffs such that informed. financid decision maldng was
19 impossible; .
Forging Plaintiffs' signatures on financial documents before and after their
20
termination as Plaintlffs' business managers,
21 Placing Plaintiffs into highly risky investments in which Defendants and their other
22 clients were interested, and

23 Failing to disclose conflicts of interest.

As a result of Defendants' misconduct and malfeasance, Plaintiffs have suffered
24 2.
financial and reputational devastation that will take years and millions of dollars - to repair.
25

26
THE PARTIES
3. Plaintiff David Bugliari ("Bug1iari") is and at all relevant times was, an individual
27

28 residing in the State of California, County of Ventura.

60549.002-4324929v I 1
COMPLAINT
 1 4. Plaintiff Alyssa Milano ("Milano") is, and at all relevant times was, an individual

2 residing in the State of California, County of Ventura. Milano was the Settlor of two revocable

3 trusts, the AJM Trust and Milano Family Trust.

4 5. Plaintiff A.J.M. Productions, Inc. ("AJM") is, and at all relevant times was, a

5 corporation organized and existing under the laws of the State of California, with its principal

6 place of business in Ventura County, California. AJM is what is commonly known in the

7 entertainment industry as a "loan out" company, through which Milano's services are provided

8 and paid for.

9 6. Defendant Hallie, Hoffer and Company, LLP is, and at all relevant times was, a

10 limited liability partnership organized and existing under the laws of the State of California, with

11 its principal place of business in Los Angeles County. HHC holds itself out as a certified public

12 accounting and financial management firm. HHC has been Plaintiffs' business manager since

13 2006.

14 7. Plaintiffs are infonned and believe, and on that basis allege, that Defendant

15 Kenneth Hellie ("He1lie") is, and at all relevant times was, an individual residing in the State of

16 California, County of Los Angeles. At all relevant times, Hellie was an HHC partner responsible

17 for the Plaintiffs' account and Trustee of the AJM and Milano Family Trusts.

18 8. Plaintiffs are informed and believe, and on that basis allege, that Defendant Jamie

19 Williams ("Willia1ns") is, and at all relevant times was, an individual residing in the State of

20 California, County of Los Angeles. At all relevant times, Williams was an HHC employee

21 assigned to Plaintiffs' account.

22 9. Plaintiffs are currently unaware of the true names and capacities of defendants

23 Does l through 50, inclusive, 'and therefore sue those defendants by fictitious names. Plaintiffs

24 will seek to amend this complaint to allege the true names and capacities of Does l through 50,

25 inclusive, when and if they are discovered. Plaintiffs are informed and believe, and on that basis

26 allege, that Does l through 50, inclusive, knew and participated in one or more of the specific acts

27 committed by HI-IC, counseled HHC and other Doe defendants in perpetrating those wrongful

28 acts, and/or aided and counseled HHC and other Doe defendants in concealing those acts from

60549.002-4324929V l 2
COMPLAINT
 1 Plaintiffs, as alleged more fully herein.

2 10. Plaintiffs are informed and believe, and on that basis allege, that in doing the acts

3 alleged herein, each of the Defendants was the agent, principal, employee, or alter ego of one or

4 more of the other Defendants, and acted with the other Defendants' knowledge, consent, and

5 approval. As such, each of the Defendants is responsible for the liabilities of the other

6 Defendants, as alleged herein.

7 GENERAL ALLEGATIONS
8 ll. David Bugliari is a successful and respected talent agent. His wife, Alyssa Milano

9 is a well-known motion picture and television actor and producer who, among other things, starred

10 in the television series Who 's the Boss, Melrose Place, Charmed, My Name is Earl, Romantically

11 Challenged and Mistresses.

12 12. For over a decade, Milano entrusted Defendants with the management and control

13 of her finances, including collecting income and compensation on her behalf, maintaining and

14 safeguarding her bank and investment accounts, paying her bills, overseeing her household and

15 employees and generally managing her personal and business affairs. Defendants were also

16 responsible for Milano's tax matters, including the calculation of taxes owed, preparation of tax

17 returns and other tax forms and the payment of state and federal taxes owed by Milano. When

18 Milano and Bugliari married, Defendants assumed the same obligations for Bugliari and for

19 Plaintiffs' joint household.

20 13. Milano's trust and confidence in Defendant Hellie was so great that she designated

21 him as a trustee of the AJM and Milano Family Trust, Milano's revocable trusts.

22 14. On June 14, 2016, Plaintiffs terminated Defendants as their business manager after

23 discovering that although paid handsomely, they did not competently perform any of the duties for

24 which they were engaged or behave in an honest, forthright and truthful manner.

25 15. The termination was prompted by, among other things, a rise in calls from vendors

26 and collection agencies for unpaid obligations, a notice of default on their mortgage, complaints

27 from Plaintiffs' employees of untimely and incomplete payments and Defendants' increasing

28 refusal to communicate or respond to inquiries in a timely or complete fashion. In fact,

60549002-4324929v I 3
COMPLAINT
 1 Defendants outright refused to provide information to Bugliari on the pretext that he was not their

2 client - even though he had been married to Milano for years and Defendants handled Bugliari's

3 personal finances, including collecting and managing Bugliari's compensation and other income.

4 16. A subsequent review of Plaintiffs' financial records by their new business manager

5 disclosed extensive malfeasance which left Plaintiffs finances in shambles. HHC's tiles included

6 financial documents with forged signatures, loans from Plaintiffs' accounts to other HHC clients

7 at times when Plaintiffs had insufficient funds to meet their own financial needs, undisclosed

8 amendments to notes in favor of other HHC clients, undisclosed and unapproved capital

9 contributions to a failing investment in which Hellie personally invested and late home mortgage

10 payments for eight of the prior thirteen months. The full extent of Defendants' breaches and the

11 havoc wreaked on Plaintiffs' finances are still being investigated. However, the relevant facts,

12 currently known to Plaintiffs, are set forth below. .

13 A. The Home Improvement Debacle.

14 17. The financial disaster was triggered by a home improvement project mismanaged

15 by Defendants. The proj ect was a fiasco, with uncontrolled spending, little or no oversight and a

16 failure to address citations which ultimately resulted in hundreds of thousands of dollars in

17 penalties and liens which have made it impossible to refinance the property.

18 18. Defendants knew, or should have known, that expenditures that ultimately

19 exceeded $2 million were financially unsound. Although Plaintiffs poured over $5 million into

20 the property, its appraised value has never exceeded $3 million -- $2 million less than the total

21 amount invested on Defendants' watch.

22 19. Not only did Defendants allow construction costs to run wild, they concealed

23 building code violations from Plaintiffs that were not discovered until after Defendants'

24 termination. On December 18, 2009, HHC received a notice from the County of Ventura of five

25 code violations. The notice allowed thirty days to cure the violations before daily penalties began

26 to accrue. All five violations were relatively simple problems that would have been easily fixed

Z7 with a day or two of work.

28

60549.002~4324929v1 4
COMPLAINT
 1 20. Defendants not only failed to correct the violations, they failed to notify Plaintiffs

2 of the violations. Plaintiffs only discovered the violations over live years later when the county

3 garnished Bugliari's wages.

4 21. When confronted on April 22, 2016, Williams feigned ignorance. When Plaintiffs

5 attempted to refinance their residence after terminating Defendants (in an attempt to obtain funds

6 to dig out of the financial hole created by HHC), they discovered that the County lien was still on

7 their residence and 3376,950 in fines that had accrued since December 2009.

8 B. Plaintiffs' Unpaid Mortgage.

9 22. The home improvement debacle set off a domino effect. Gn February2, 2016,

10 Plaintiffs received a Notice of Default from Wells Fargo for the mortgage on their personal

11 residence. After Plaintiffs terminated Defendants in June 2016, Plaintiffs discovered there had

12 been eight late mortgage payments over a thirteen month period. When Plaintiffs questioned

13 Williams, she acknowledged that Defendants had been "aware of the matter for sometime [sic]"

14 and that it was "a balancing act." Plaintiffs were, to say the least, surprised to learn of the

15 "balancing act" and risk of foreclosure.

16 23. The late payments, coupled with the Ventura County lien and plummeting credit

17 scores caused by Defendants' negligence, have prevented Plaintiffs from refinancing the property

18 to obtain funds sorely needed pay the debts accrued on Defendants' watch.

19 c. Plaintiffs' Unpaid Taxes.

20 24. Defendants did not pay Plaintiffs' 2013 and 2014 federal income taxes. Instead,

21 Defendants continued to pour any available funds into the ill-conceived construction project,

22 without advising Defendants that they lacked the funds to pay their taxes and the remodeling

23 costs.

24 25. Un1ik a delay in construction, the delay in paying federal taxes resulted in

25 substantial penalties and interest. Plaintiffs, however, were not provided the information that

26 would have permitted an informed decision on whether to proceed with the construction or pay the

27 IRS. Had Plaintiffs been provided with adequate information, the choice would have been clear -

28 pay the tax man and delay the construction until funds were available.

60549.002-4324929v I 5
COMPLAINT
 1 26. When Plaintiffs questioned Williams about the penalties and interest, Williams

2 assured them in a text message that Defendants had negotiated a "deal" with the IRS that Plaintiffs

3 would not be charged l2% interest. There was no such "deal."

4 27. Defendants also failed to pay Plaintiffs' employees' taxes. This too was concealed

5 from Plaintiffs who only learned of the failure to submit the tax payments when, on or about

6 March23, 2016, the California Franchise Tax Board began sending notices of wage garnishment

7 to Bugliari's place of employment,

8 28. Defendants not only failed to pay Plaintiffs' employees in a timely fashion, they

9 and failed to remit their employees' taxes. Plaintiffs only discovered this failure when the

10 California Franchise Tax Board garnished Bugliari's wages directly from his employer.

11 D. The Lapse of Plaintiffs' Insurance Policies.

12 29. Plaintiffs have now discovered that HHC allowed their insurance policies,

13 including Plaintiffs' homeowners insurance, automobile insurance and umbrella policy, to lapse

14 for significant periods of time.

15 30. This lapse in coverage exposed Plaintiffs to significant liability, particularly since

16 Plaintiffs' home was a virtual construction site. HHC deliberately concealed its failure to pay the

17 premiums, and the resulting lapse in coverage, to Plaintiffs who believed that they were

18 adequately insured.

19 3 l. HCC forged Plaintiffs signatures on documents necessary to reinstate the policies,

20 in order to further conceal the lapse in coverage.

21 E. HHC's Shell Game of Loans Between Clients.

22 32. Defendants engaged in a shell game with the client money entrusted to their care,

23 by shuffling funds between client accounts in the guise of "1oans." Plaintiffs are informed and

24 believe, and based thereon allege, that these maneuvers were necessary to shore up the liquidity of

25 HHC clients with cash flow problems created by the same mismanagement and lack of internal

26 controls that afflicted Plaintiffs.

27 33. For instance, when skyrocketing construction costs, unchecked by Defendants,

28 created a severe cash crunch, rather than properly counsel Plaintiffs on the need to cut expenses,

60549.002-4324929v1 6
COMPLAINT
 on August 11, 2014, Defendants arranged a one year, $2 million loan from another HHC client,
1

2 Lisette Aekerberg (the "Aekerberg Loan"). As structured by Defendants, Plaintiffs paid upfront

3 interest in the amount of $180,000, leaving only $1,820,000 in proceeds to Plaintiffs.

Without disclosure to Plaintiffs , Defendants included an attorney's fees provision

4 34.
in the loan agreement which inured solely to Ackerberg's benefit, as only Plaintiffs could breach
5
6 the loan agreement. Defendants did so knowing full well that Plaintiffs lacked the financial

7 wherewithal to repay the $2 million loan when it came due, insuring a default and exposing

8 Plaintiffs to the imposition of attorney's fees.

9 35. When the inevitable happened, Defendants secretly "renegotiated" the Ackerberg

Loan. The new agreement extended the due date for an additional year and increased the interest
10
from 9% to 10%, with a $50,000 penalty for a failure to timely repay the loan. HHC forged
11

12 Plaintiffs' signatures on this "extension note."

13 36. Defendants well knew that it would take nothing short of a miracle for Plaintiffs,

14 whose finances continued to deteriorate, to timely repay the Ackerberg Loan. Nevertheless,
Defendants forged Plaintiffs' signatures on the amended agreement which promised to reward
15

16 Ackerberg with a $50,000 penalty and her attorney's fees when the loan came due.

17 37. As the due date approached, Defendants scrambled to arrange for new loans from

18 other HHC clients to reduce, if not repay, the outstanding balance on the Ackerberg Loan.

19 Defendants purportedly bon'owed $310,000 from Joanne Crossley and $150,000 from Sully

20 Properties LP on Plaintiffs' behalf. The loan documents were not signed by the "lenders" or

21 "borrowers" This did not stop Defendants from transferring the money from the Crossley and
22 Sully accounts, which Defendants controlled, to Ackerberg. This ploy was to no avail.

23 38. When the one year term expired, Ackerberg sued Plaintiffs, who settled by paying

24 Ackerberg $932,771 .50. lt is unclear from the records available to Plaintiffs how this sum was

25 calculated, whether Defendants paid the $50,000 penalty to Ackerberg and whether the Sully and

26 Crossley loans were used to offset sums owed by Plaintiffs to Ackerberg. Plaintiffs also incurred

27 $l5,63 l .48 in attorneys' fees to defend and settle the Ackerberg matter.

28

60549.002_4324929V1 7
COMPLAINT
 1 39. Incredibly, while Defendants were borrowing money to cover Plaintiffs' expenses,

2 they were simultaneously lending money from Plaintiffs' accounts to other HHC clients. For

3 instance, in November 2014, three months after the Ackerberg Loan, Williams asked Bugliari to

4 extend a $350,000 loan to another HHC client, payable in two weeks with $7,000 in interest.

5 Two days later, Williams informed Bugliari that the loan was for $400,000, with $7,500 in

6 interest. Although the last due date was May 6, 2015, it remains unclear from HHC records

7 released to Plaintiffs whether this loan was repaid.

40. In December 2014, Williams informed Bugliari that she had arranged for Plaintiffs

9 to lend another HHC client $175,000, payable in one month with interest of $7,500. On January

10 23, 2015, Williams acknowledged that the loan had not been repaid. Williams asked Bugliari to

11 increase the loan by $200,000 and extend the due date for three weeks in exchange for $12,500 in

12 interest. ln an email, Williams assured Bugliari that the loan was "Not bad, no risk, we have a

13 large sum guaranteed for the second week of February." lt is unclear from HHC's records

14 whether this loan was ever repaid to Plaintiffs.

15 41. The November and December 2014 loans were made to other HHC clients while

16 Plaintiffs owed over $800,000 to Ackerberg, and while Plaintiffs federal income taxes were

17 delinquent.

18 42. In fact, between January 2012 and April 2015, I-IHC made at least 10 loans from

19 Plaintiffs to other HHC clients, at APRs ranging from 12% to 53%, for periods ranging from 14

20 days to one year, in amounts ranging from $150,000 to $500,000, for a total of $3,125,000 As

21 noted, Williams would persuade Plaintiffs to make the loans by telling them they were "no risk"

22 and "a large sum guaranteed," statements that better suit a snake oil salesperson than a CPA.

23 F. Hellie's Conflicted and Negligent Investment Advice.

24 43. Defendants made questionable and undisclosed investments with Plaintiffs' funds.

25 44. I-lellie was the Trustee for the AJM and Milano Family Trusts. In direct

26 contravention of his duties as Trustee, Hellie invested Trust assets in multiple investment vehicles

27 in which he was also an investor or other HHC clients were controlling members. At no time did

28 Hellie or HHC disclose to Plaintiffs that Hellie was invested in the same investments in which he

60549.0()2-4324929v l 8
COMPLAINT
 1 placed Trust assets. Indeed, Hellie was so anxious to pour capital into companies to shore up his

2 own investments, that on at least four occasions, Hellie wire transferred funds without obtaining

3 Mi1ano's signature. For instance, on February 17, 2006, Hellie scotch-taped a copy of Mi1ano's

4 signature on a $150,000 wire transfer to Fidelity National Title Co. for an investment by the AJM

5 Trust in FMS Investment V, LLC, an entity in which Hellie's own trusts were invested.

6 45. Hellie also invested in FMS XVII, LLC, another investment in which he placed

7 Trust assets. I-Iellie wired $150,000 from Milano's personal account to FMS XVII, LLC by using

8 a scotch-taped facsimile of Milano's signature on the wire transfer authorization.

9 46. Defendants convinced Milano to approve a $50,000 investment by the AJM Trust

10 in 110 West Propeities LLC, a parking lot venture in which Hellie was an investor. Defendants

11 did not disclose Hellie's investment, much less explain the potential ramifications of the conflict.

12 47. Hellie knew, or should have known, that this was a highly risky investment,

13 unsuitable for the AJM Trust. Hellie, however, did not apprise Plaintiffs of the significant risk.

14 Instead, between June 2009 and February 2016, Hellie approved at least $351 ,323.17 in capital

15 contributions to 110 West Properties. Hellie approved these capital contributions without

16 notifying Plaintiffs or obtaining their approval.

17 48. During this period, Hellie was receiving quarterly reports showing a significant

18 negative cash flow. Hellie did not inform Plaintiffs of these quarterly reports before committing

19 over $300,000 of Plaintiffs' money to the failing investment.

20 49. The parking lot venture has yet to produce a dime in income. A letter of intent

21 purportedly has been signed with a potential buyer who would have more than two years to

22 consummate the purchase. It is unknown whether any profit will generated for the investors,

23 however there continue to be cash calls to keep the property out of foreclosure.

24 50. Hellie negligently invested Plaintiffs' personal funds in two other high-risk

25 investments, Kingswood Hero Holdings, LLC, and MC Swan LP, when Defendants knew that

26 Plaintiffs were cash strapped and struggling to meet their obligations. Again, Hellie failed to

27 advise his clients of the risk involved, the potential that the investments might be lost and that

28 Plaintiffs did not have sufficient liquidity to enter into such investments.

60549002-4324929v I 9
CGMPLAINT
 1 G. Defendants' Failure to Advise Pl_aintiffs of the Gravity of their Financial

2 Situation.

3 51. In the decade they worked for Plaintiffs, Defendants did not provide Plaintiffs with

4 a single financial statement, As Plaintiffs' financial picture darkened, Defendants continued to

5 lead them down the garden path. When questions arose about notices of late credit card or

6 mortgage payments, Defendants routinely assured Plaintiffs that it was a mistake or

7 misunderstanding. At one point, Defendants advised that an overdue payment was due to

8 fraudulent charges on Mi1ano's credit card. These false assurances lulled Plaintiffs into believing

9 that their finances and credit were in order. In fact, on March 29, 2015, Williams assured

10 Plaintiffs that "I can tell you without a doubt that your finances including investments are in good

11 shape."

12 52. Nothing could have been further from the tmth. In February 2016, Plaintiffs

13 received a call from Wells Fargo Bank informing them that their mortgage payment was late and

14 the loan was in default. Williams told Plaintiffs that it was a "mistake" that would be corrected.

15 53. In the dark about the true state of their financial plight, in or about 2014, Milano

16 turned down a third season of the television show Mistresses. At the time, Defendants were well

17 aware of Plaintiffs' dire financial condition. Had Defendants properly advised Plaintiffs of their

18 precarious financial state, Milano would never have turned down a job which would have

19 generated $1 .3 million for Season 3, and the potential for an even more lucrative renegotiated deal

20 for Season 4.

21 54. As s Plaintiffs' financial situation deteriorated, Plaintiffs found it increasingly

22 difficult to obtain information. Defendants failed to communicate with Plaintiffs to the point that

23 Plaintiffs were forced to monitor the status of payments, follow up with Defendants on behalf of

24 vendors and employees, and ask for information multiple times before it was forthcoming,

25 Bugliari was denied information on the pretext that he was not a firm client. As noted, on June 14,

26 2016, Plaintiffs terminated Defendants and replaced them with new and competent business

27 managers who began to unravel the financial mess.

28

60549.002-4324929v I 10
COMPLAINT
 1 H. Defendants' Post Termination Misconduct,

2 55. Defendants' misconduct continued even after they were terminated on June 14,
3 2016. A week later, on June 22, 2016, HHC sent Plaintiffs an unsigned check payable to HHC

4 from AJM in the amount of $25,919.00 purportedly for professional services. Plaintiffs refused to

5 sign the check. Undeterred, HHC created a duplicate check, forged Plaintiffs' signatures and

6 deposited it, thereby stealing $25,919.00 from Plaintiffs. Defendants concealed this deposit from

7 Plaintiffs, who only discovered this deposit when Plaintiffs overdrew their account.
56. As noted -- after Defendants were terminated and had no authority to act for
Plaintiffs _._ Defendants paid $25,350.67 in "interest" to their other clients, Crossley and Sully,

10 from Plaintiffs' City National Bank account, using forged signatures. This interest was paid by

11 HHC to its other clients even though Plaintiffs did not obtain any benefit from the Crossley and

12 Sully loans.
13 57. In June 2016 .... after Defendants were terminated and had no authority to act for

14 Plaintiffs -- Defendants issued two checks from Plaintiffs' City National Bank account to pay

15 seven months interest to Crossley and Sully. Plaintiffs' signatures were forged on the checks,

16 which totaled $25,350.67. Plaintiffs are informed and believe, and based thereon allege, that in or

17 about 2016, the funds were transferred back to Crossley and Sully for the secret, unsigned loans.

18 Thus, Plaintiffs paid interest on loans from which they received no benefit whatsoever.

19 FIRST CAUSE OF ACTION

20 (Negligence)

21 (Against All Defendants)

22 58. Plaintiffs reallege and incorporate by reference each and every allegation set forth

23 in paragraphs 1 through 57 above, as though fully set forth herein.

24 59. Between approximately 2006 and June 14, 2016, Defendants served as Plaintiffs'

25 business managers. As such, Defendants were entrusted with control and management of

26 Plaintiffs' finances including collecting income and compensation on Plaintiffs' behalf,

27 maintaining Plaintiffs' bank and investment accounts, paying Plaintiffs' bills, overseeing

28 Plaintiffs' household and employees and generally managing Plaintiffs' personal and business

60549.002-4324929V1 11
COMPLAINT
 affairs. Defendants were also responsible for Plaintiffs' tax matters, including the calculation of
1
taxes owed, preparation of tax returns and other tax forms and the payment of state and federal
2

3 taxes owed by Plaintiffs.

4 60. Defendants, and each of them, had a duty of care to use such skill, prudence, and

5 diligence as other members of the accounting and financial management profession commonly

6 possess and exercise in providing financial and business management services to Plaintiffs.

7 61. Defendants breached their duty of care by failing to competently perform their

professional services and recklessly mismanaging Plaintiffs' finances. Among other things,

9 Defendants failed to install proper internal controls; failed to keep Plaintiffs informed of their

10 financial condition, failed to make timely payments on Plaintiffs' credit cards, mortgage and

11 income taxes, and failed to properly manage and monitor Plaintiffs' bank and investment accounts.

12 62. As a proximate result of Defendants' negligence, Plaintiffs were damaged in an

13 amount to be proved at trial, but not less than $10 million.

14 SECOND CAUSE OF ACTION

15 (Breach of Fiduciary Duty)

16 (Against All Defendants)

17 63. Plaintiffs reallege and incorporate by reference each and every allegation set forth

18 in paragraphs 1 through 63 above, as though fully set forth herein.

19 64. As Plaintiffs' business manager, entrusted with management and control of

20 Plaintiffs' finances and accounts, Defendants owed fiduciary duties to Plaintiffs, including of the
21 utmost loyalty, due care, disclosure, good faith and fair dealing and the duty to place Plaintiffs

22 interests over those of Defendants. Included in these duties was the duty to provide honest

23 services and full disclosure of all financial matters sufficient to allow Plaintiffs to make fully

24 informed decisions on their finances.

25 65. Defendants, and each of them, breached their fiduciary duties by, among other

26 things1

(a) Failing to manage Plaintiffs' financial affairs with the prudence and skill
27

28 required of those entrusted with the management of a third party's assets,

60549.002-4324929v l 12
COMPLAINT
 1 (b) Failing to disclose material information to Plaintiffs that would have

2 allowed Plaintiffs to make informed financial decisions;

(0) Recommending highly risky investments without fully advising Plaintiffs

on the risk,

5 (d) Recommending highly risky investments without advising Plaintiffs that

6 Defendants were self-interested and conflicted,

7 (s) Making capital contributions from Plaintiffs' accounts to investments in

which Defendants had an interest, without informing Plaintiffs,

9 (f) Failing to advise Plaintiffs of negative financial information, such as that

10 their mortgage was in arrears,

11 (8) Failing to take action to cure code violations, or alert Plaintiffs to notices of

12 violation.

13 (h) Playing a shell game with client funds by shuffling "loans" and loan

ua
8 14 proceeds between and among HHC client accounts,

15 (i) Renegotiating a loan from another client for a higher interest rate and

16 default penalty without advising Plaintiffs,

17 (i) Deliberately misleading clients as to the state of their finances including

18 misrepresenting that Defendants had arranged a "deal" with the IRS ,

19 (1<> Forging Plaintiffs' signatures on financial documents,

20 (1) Paying their own fees over Plaintiffs' obj ections, and after Defendants were

21 no longer authorized on Plaintiffs' behalf; and

22 (ffl) Paying "interest" from Plaintiffs' accounts to other clients for "loans" that

23 did not benefit Plaintiffs, without informing Plaintiffs, and by use of forged

24 signatures.

25 66. As a direct and proximate result of Defendants' breaches of fiduciary duty,

26 Plaintiffs have suffered damages in an amount to be proven at trial, but not less than $10 million.

27 67. Defendants' acts were undertaken intentionally and in conscious disregard of

28 Plaintiffs' interests and rights, and with fraud, oppression, and malice. Therefore, Plaintiffs are

60549.002-4324929v l 13
COMPLAINT
 1 entitled to an award of punitive and exemplary damages sufficient to punish Defendants and deter

2 similar conduct in the future.

3 THIRD CAUSE OF ACTION

(Breach of Fiduciary Duty)

5 (Against Hellie)

6 68. Plaintiffs reallege and incorporate by reference each and every allegation set forth

7 in paragraphs 1 through 67 above, as though fully set forth herein.

69. As Trustee of the AJM and Milano Family Trusts, Hellie owed a duty of the utmost

9 loyalty and care to the Trust and its beneficiaries. This duty included the duty of full disclosure,

10 the duty to avoid conflicts and the duty to place the interests of the Trust and its beneficiaries

11 before his own.

12 70. Hellie breached his fiduciary obligations by, among other things:

13 (a) Committing Trust assets to investments in which Hellie was an investor,

14 <b) Failing to disclose, and actively concealing, his financial interests in

15 investments made on behalf of the Trusts ,

16 (c) Failing to advise Plaintiffs to seek independent advice on the investments

17 recommended by Hellie, in which he was self-interested,

18 <d) Failing to conduct adequate due diligence on Trust investments,

19 (e) Investing Trust assets in highly risky and unsuitable investments.

20 (15) Approving capital contributions to a failing parking venture without

21 disclosure to, or authorization from, Plaintiffs, and

22 (8) Making risky loans of Trust assets to HHC clients without fully

23 disclosing the terms of the loans or their risk, and

24 (h) Concealing negative financial information about Trust investments.

25 71. As a direct and proximate result of He1lie's breaches of fiduciary duty, Plaintiffs

26 have suffered damages in an amount to be proven at trial, but not less than $10 million.

Z7 72. Defendants' acts were undertaken intentionally and in conscious disregard of

28 Plaintiffs' interests and rights, and with fraud, oppression, and malice. Therefore, Plaintiffs is

60549.002-4324929v1 14
COMPLAINT
 1 entitled to an award of punitive and exemplary damages sufficient to punish Defendants and deter

2 similar conduct in the future.

3 FOURTH CAUSE OF ACTION

4 (Fraud)

5 (Against All Defendants)

6 73. Plaintiffs incorporate by reference and reallege each and every allegation set forth

7 in paragraphs 1 through 72 above, as though fully set forth herein.

8 74. Defendants made the following material misrepresentations to Plaintiffs :

9 (a) Defendants had the requisite skill, training, experience and expertise to act

10 as business managers,

11 (b) Hellie was overseeing the management Plaintiffs' accounts,

12 (0) Plaintiffs' finances were in order and being properly managed,

13 (d) Late credit card and mortgage payments were errors that would be _

m 35 14 corrected, and

15 (e) Defendants had negotiated a "deal" with the IRS which relieved Plaintiffs

16 from interest and penalties on unpaid taxes.

17 At the time Defendants made these representations, they knew they were false.

18 At the time Defendants made these representations, Plaintiffs believed them to be

19 true.

20 77 I Defendants also omitted and actively concealed the following material facts from

21 Plaintiffs :

22 (H) Hellie had a personal interest in the same investments he made on behalf of

23 Plaintiffs and the Tmst;

24 (b) Neither Hellie nor HHC had conducted adequate due diligence on the

25 investments to which they committed Plaintiffs' personal funds and funds

26 from Plaintiffs' Trust,

27 (c) The financial investments recommended by Defendants were highly risky

28 and unlikely to be profitable;

60549.002-4324929v l 15
COMPLAINT
 1 (d) Hellie authorized substantial capital contributions to prop up 110 West and

2 protect I-Iel1ie's personal investment, without informing Plaintiffs,

3 ( Defendants were entering Plaintiffs into highly risky investments when

Defendants knew they were cash strapped and unable to meet their

5 obligations;

6 (D Defendants mmtgage payments were in arrears, leading to a risk of

7 foreclosure,

8 (8) Defendants had renegotiated the $2 million Ackerberg Loan at a higher

9 interest rate, with a $50,000 penalty,

10 (h) Defendants were forging Milano's signature on financial documents,

11 including the extension of the Ackerberg loan,

12 (1) Plaintiffs had been cited with five code violations on for construction

13 defects at their home, and

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8 14 G) Plaintiffs had received notices of code violations from the County of

15 Ventura pursuant to which liens were accruing on a daily basis.

16 78. Plaintiffs are informed and believe, and based thereon allege, that Defendants

17 intended to induce Plaintiffs to act on Defendants' material misrepresentations and omissions.

18 79. Plaintiffs acted upon Defendants' material misrepresentations and omissions with

19 justifiable reliance.

20 80. As a direct and proximate result of Defendants' fraud, Plaintiffs have been

21 damaged in an amount to be proven at trial, but not less than $10 million.

22 81. Defendants' acts were undertaken intentionally and in conscious disregard of

23 Plaintiffs' interests and rights, and with fraud, oppression, and malice. Therefore, Plaintiffs are

24 entitled to an award of punitive and exemplary damages sufficient to punish Defendants and deter

25 similar conduct in the future.

26

27

28

60549002-4324929v1 16
COMPLAINT
 1 FIFTH CAUSE OF ACTION

2 (Theft)

3 (Against All Defendants)

82. Plaintiffs incorporate by reference and reallege each and every allegation made in

5 paragraphs 1 through 81, as though fully set forth herein.

6 83. Plaintiffs have an ownership interest in, and have the right to immediately possess

7 Plaintiffs' assets, as described above.

8 84. On or about June 22, 2016, after Plaintiffs terminated Defendants' authority to act

9 on Plaintiffs' behalf , Defendants, without Plaintiffs' knowledge, approval or consent, intentionally

10 stole at $25,919.00 by forging Plaintiffs' signatures on checks drawn on Plaintiffs' City National

11 Bank account.

12 85. On or about June 22, 2016, after Plaintiffs terminated Defendants' authority to act

13 on Plaintiffs' behalf, Defendants, without Plaintiffs' knowledge, approval or consent,

14 misappropriated approximately $25,350.67 from Plaintiffs to pay interest on "loans" never

15 received by Plaintiffs.

16 86. As a result of Defendants' theft, Plaintiffs have been damaged in the amount of

17 $51,279.67.

18 87. Defendants' actions were taken willfully, maliclously and with a conscious and

19 reckless disregard for Plaintiffs' rights, such as to constitute oppression, fraud, or malice, entitling

20 Plaintiffs to and award of exemplary and punitive damages in an amount appropriate to punish or
21 set an example of Defendants and deter such conduct in the future.

22 SIXT_H CAUSE OF ACTION

23496(c)) (Violation of Penal Code

24 (Against All Defendants)

25 88. Plaintiffs incorporate by reference and reallege each and every allegation made in

26 paragraphs 1 through 87, as though full set forth herein.

27 89. On or about June 22, 2016, Defendants misappropriated $25,919.00 of Plaintiffs'

28 funds by forging Plaintiffs' signature on a check and depositing said check. Defendants have

60549.002-4324929v I 17
COMPLAINT
 1 received, concealed and withheld these ds from Plaintiffs.
90. On or about June 22, 2016, Defendants misappropriated $25,350.67 from
2
Plaintiffs' City National Bank account by forging Plaintiffs' signatures on checks drawn on
3
Plaintiffs' City National Bank account, and transferred these funds to HHC clients Crossley and
4
Sully, Defendants received, concealed, withheld and transferred these funds from Plaintiffs.
5
91. Plaintiffs have been injured by Defendants' violation of Califomia Penal Code
6
and been deprived of the stolen funds received, concealed,
7
8 and withheld by Defendants.
496(a), Plaintiffs are
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California
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the Code
9
amount of actual damages that they have sustained, as well as payment of its reasonable attorneys'
10

11 fees and costs of suit incurred in this action.

12 SEVENTH CAUSE OF ACTION

13 (For an Accounting)

14 (Against HHC)
93. Plaintiffs incorporate by reference and reallege each and every allegation made in
15

16 paragraphs l through 92, as though full set forth herein.

94. As set forth more fully above, a fiduciary relationship existed between Plaintiffs
17
and Defendants, and a balance is due Plaintiffs that can only be ascertained by an accounting.
18
19 PRAYER FOR RELIEF

20 WHEREFORE, Plaintiffs respectfully pray for the following relief:

21 ON THE FIRST CAUSE OF ACTION:

1. For actual, compensatory and consequential damages in an amount to be proven at
22

23 trial, but not less than $10 million.

24 ON THE SECOND CAUSE OF ACTION:
1. For actual, compensatory and consequential damages in an amount to be proven at
25

26 trial, but not less than $10 million, and

27 2. For exemplary and punitive damages.

28

60549002-4324929v1 18
COMPLAINT
 1 ON THE THIRD CAUSE OF ACTION:

2 1. For actual, compensatory and consequential damages in an amount to be proven at

3 trial, but not less than $10 million, and

4 2. For exemplary and punitive damages.

5 ON THE FOURTH CAUSE OF ACTION:

6 1. For actual, compensatory and consequential damages in an amount to be proven at

7 trial, but not less than $10 million, and

8 2 For exemplary and punitive damages.

9 ON THE FIFTH CAUSE OF ACTION:

10 1. For actual and compensatory damages in an amount to be proven at trial, but not

11 less than $51,269.6'7, and

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17 3. For attorneys' fees.

18 ON THE SEVENTH CAUSE OF ACTION:

19 1. For an accounting.

20 ON ALL CAUSES OF ACTION:

21 1. For prejudgment interest,

22 2. For attorney's fees and costs of suit, and

23 3. For such other and iinther relief as the Court deems just and proper.

24 Dated: June 12, 2017 LINER LLP

25 By: 4
Ef yn S. arof o
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26
Attorneys for Pla' _
27 DAVID BUGLI I\ . 3 ALYSSA MILANO, and
4

A.J.M. PRODUCTIONS, INC.

28

60549.002~4324929v1 19
COMPLAINT
 1 JURY DEMAND
2 Plaintiffs demand a trial by jury.

4 Dated: June 12, 2017 LINER LLP

6
By: (44
7 llyn S. Gar6fa1o
Attorneys for Plintifj
8 DAVID BUGL . ALYSSA MILANO, and
A.J.M. PRODUCTIONS, INC.
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60549.002-4324929vl 20
COMPLAINT