8:20pm PT by Alex Ben Block
New David Bergstein Lawsuit References Secret Recordings, Sidney Lumet and the FBI
David Bergstein's latest legal salvo against Aramid Entertainment's David Molner reads like the script of a thriller: Secretly taped phone calls, the promise of a role in a Sidney Lumet movie and a self-confessed secret government agent and an FBI probe of Bergstein.
On Tuesday, Bergstein filed a lawsuit in L.A. Superior Court against Molner, Aramid and related companies -- along with Bergstein’s former business partner Paul Parmar -- charging them with extortion and conspiring against him. According to the suit, Parmer surreptitiously recorded hours of phone calls with Bergstein, which Molner has acquired in a related legal case.
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“Parmar and Molner have been engaged in a nefarious conspiracy to financially and personally damage Bergstein, each with their own motive, but working together,” according to the civil suit filed in state court on his own behalf and that of Pineboard Holdings, a company he formed with Parmar several years ago.
Molner disagrees. In a statement he sent The Hollywood Reporter on Tuesday:
“This is Episode 5 of the 'Why David Bergstein is the Victim' movie, a film most agree should never had been made. Bergstein’s sob story is a joke and so are the legal theories in this complaint. What Bergstein is really worried about is Parmar’s tapes. There are hundreds of hours of phone conversations that were recorded with Bergstein’s knowledge and produced in another legal proceeding. This is the latest trick to keep those from ever seeing the light of day.”
The suit comes just days after Judge Barry Russell approved bankruptcy trustee Ronald Durkin's motion to let Molner's companies try to recover assets from the companies Bergstein once controlled, including Capitol and ThinkFilm. The motion lets Molner trace missing funds and assets, even if they lead to third party companies controlled by Bergstein and his former business partner Ronald Tutor, and others. Molner has already filed more than 90 lawsuits in pursuit of the missing assets.
Judge Russell stated in court that Bergstein “could not be trusted,” which has since been approved by the court as at statement of fact. The judge also said of Bergstein: “Apparently the approach is that anybody who gets in his way, he files a lawsuit."
“I guess that can be effective,” added Russell, the second-longest-serving bankruptcy judge in the U.S., “but it's not going to work in this court.”
Earlier this month, Russell issued sanctions against Bergstein and one of his attorneys, Victor Sahn, for their handling of a related matter that has to do with an insolvency case in the U.K.
On July 16, the judge will declare the monetary damages Bergstein and Sahn will be assessed.
Bergstein, alone and with Tutor, has filed many other lawsuits including suing Molner’s lawyers -- he has lost those suits, and faces the legal bills. He's appealing those suits.
Russell also found Bergstein’s claim that Molner's Aramid actually owes millions to the bankrupt companies “dubious,” and said a court victory Bergstein won against his former lawyer Susan Tregub earlier this year is meaningless to the bankruptcy case.
Bergstein's latest lawsuit charges Molner's Aramid has been cheating investors “Bernie Madoff style,” as the Cayman Island-based fund sought to “raise more money to cover his losses.”
“Molner stole or misappropriated more than $60 million,” according to the suit, and is being sued by investors. But Molner says that argument is circular; the suits filed against him came at the behest of Bergstein and Tutor.
Bergstein describes himself in his suit as “a successful entrepreneur with business interests in a variety of industries, including entertainment.” He says he did business with Molner for several years but then it was Molner’s plan to “blame Bergstein for what Molner had done, then bury Bergstein to make it all disappear.”
“For the past several years,” says Bergstein’s suit, “Molner has laid siege to Bergstein on a global basis, literally attacking Bergstein and his business interests around the world.”
Then, according to Bergstein, Molner went after dozens of Bergstein’s business associates for help, including Parmar. Parmar, whose real name is Parmjit Singh Parmer, worked at Paine Weber in the 1990s before leaving to form his own investment firm, Pegasus Blue Star Fund. According to Bergstein’s suit, at one point Parmar was worth $400 million, with investments in aviation, health care and other things. Parmar appeared on ABC’s Nightline in 2008 to show off his 39,000 square foot home in New Jersey boasting he was “recession proof.”
Parmar also formed a movie company called Funky Buddha, which invested in several movies produced by Bergstein-controlled companies, including Sindney Lumet's last film, Before The Devil Knows You’re Dead -- which according to IMDB cost $18 million but had a domestic gross of about $7 million -- and Black Water Transit, made at an estimated cost of $23 million but never released.
But it turned out Parmar wasn't recession-proof. His fortune tumbled, that home went into foreclosure and was auctioned off. Among other losses, Parmar's Florida home, bought for $12 million, was sold last year for $3.8 million, according to the Wall St. Journal.
When Parmar’s financial problems mounted, says the suit, he turned to Bergstein for help. Bergstein says he invested “significant time and money” to help Parmar. He says Parmar told him Molner promised “if I joined him against David Bergstein… he would give me a role in the next (Sidney) Lumet film, which Molner would greenlight through Aramid.”
Sidney Lumet died in April 2011; it's unclear, from the lawsuit, when the part was allegedly offered.
Bergstein spoke to Parmar frequently by phone, and Parmar taped those conversations. Bergstein claims he did not know he was being taped. Eventually Molner subpoenaed Parmar in another ongoing legal battle, and Parmar turned over some 100 hours of recordings in a deposition.
Bergstein is now seeking an injunction to stop those tapes from being made public because, he says, under California law they were recorded illegally.
Enter the feds: According to Bergstein’s suit, in the summer of 2010, Parmar informed him he had been contacted by the FBI as part of an investigation into Bergstein “instigated by Molner.” Parmar said he was later interviewed by three FBI agents in New Jersey.
When asked why he had been singled out for an interview, Parmar told Bergstein he had been working for the Federal Department of Homeland Security and the National Security Agency as a “counter terrorism asset,” which was why he made frequent trips to India and Pakistan. “Parmar,” says the suit, “told Bergstein that since he was a trusted asset, they relied on him for the truth and explained to Bergstein he had significant access to the FBI and other law enforcement and government relationships.”
Bergstein says Parmar then tried to “extort” him for money he said he was owed by threatening to work with Molner against him. “Parmar promised he would use his relationship with Federal law enforcement officials to help Molner and punish and prosecute Bergstein,” says the suit.
Bergstein said he paid Parmar until he realized “Parmar would never stop,” says the suit. “Parmar proceeded to publicly provide Molner with the illegally recorded telephone conversations,” along with other information he had obtained by pretending to be Bergstein’s friend.
Bergstein charges Molner guided Parmar’s actions and counseled him on how to “deliver his extortionate demands with the maximum effect.”