A civil complaint filed by Echo Fox co-owner Rick Fox on Tuesday details new allegations of fraud, deceptive business practices and racism against Echo Fox business partners that, he believes, merit over $14,800,000 in damages. Lawyers representing the complaint’s defendants claim that it contains numerous falsities and unsupported accusations.
The complaint is the latest burst of controversy in the increasingly hairy and complicated story of Echo Fox’s ongoing implosion. The saga began in April when Echo Fox investor Amit Raizada allegedly referred to another investor, Jace Hall, via the n-word. Since then, the company’s leadership has been in public disarray; Rick Fox said he would to leave Echo Fox (and has not), its partners penned a letter about pushing him out, and League of Legends publisher Riot Games removed Echo Fox from its esports league.
Echo Fox is one of the biggest names in esports, claiming top players in Super Smash Bros. Ultimate, Dragon Ball FighterZ, Fortnite and Street Fighter. Forbes reported that the organisation was worth around $220 million last October. According to Tuesday’s complaint, however, that valuation is now off-base.
The lengthy complaint, filed in Los Angeles Superior Court, describes allegations of fraud against Raizada and paints the Echo Fox investor as a double-dealing business partner. “Raizada began manipulating numbers behind the scenes to his benefit while Fox engaged publicly as the face of esports, spreading the gospel of esports on panels,” the complaint reads, adding, “Raizada’s fraudulent activity included self-dealing where he and [Echo Fox partner Stratton] Sclavos put Echo Fox into a tailspin by controlling the company’s debt.”
It also alleges that he and Stratton Sclavos, former co-owner of the San Jose Sharks, drove down Echo Fox’s value as a result of Sclavos’ alleged “drug-fuelled lifestyle,” as well as Raizada misrepresenting the company’s financial dealings. The complaint says the two siphoned millions to themselves or companies they own.
In a call to the Associated Press Thursday, Fox referred to Raizada as “a con man.”
The complaint also offers more specifics about the racist comments Raizada allegedly made against both Hall and Fox, which had sparked the initial public controversy. It alleges that Raizada referred to Hall as a “n-word” and Fox as a “Sand n-word.” It continues on to claim that Raizada threatened Fox’s family, saying he would “PERSONALLY [F-WORD] HIM AND HIS FAMILY FOR THE REST OF MY LIFE IN ANY WAY POSSIBLE.”
Last week, ESPN reported that Raizada, Sclavos and other partners had signed a letter intending to remove Fox from the company. According to ESPN, “The letter says that Fox repeatedly worked against the best interest of the company and his partners, alleging that he was negligent, forced the sale to auction by Riot Games and told others he would, ‘burn this company to the ground.’”
Over email, Raizada’s lawyer sent a statement to Kotaku referring to Fox’s lawsuit as “a transparent attempt to divert attention from the train wreck he left behind at Echo Fox. . . Even worse, the lawsuit is littered with categorically false allegations about Amit Raizada, Stratton Sclavos, and others. If Rick Fox wants to blame someone for Echo Fox’s failures, he should start by looking in the mirror.”
While Sclavos’ lawyer did not respond to Kotaku’s request for comment, she did tell ESPN that “Rick Fox’s lawsuit is a senseless diatribe replete with false and wholly unsupported accusations about Stratton Sclavos and Amit Raizada. . . Contrary to Fox’s propaganda, neither Sclavos nor Raizada misappropriated or misused any company funds. No monies paid to or for Raizada for his services were paid by Echo Fox or depleted any Echo Fox resources. Rather, Sclavos, Raizada, and their affiliates infused millions of dollars into Echo Fox over several years just so it could survive. Fox cannot say the same.”
The full complaint is here:
Rick Fox, for his part, says that the situation has “100% not tainted my love for esports,” and he plans to “continue on in esports.”