Rapper Dr. Dre and music executive Jimmy Iovine have been hit with a fraud lawsuit by their former partner in Beats Electronics.
Noel Lee, founder of video and audio cable maker Monster LLC, filed a complaint in California's San Mateo Superior Court on Tuesday (06Jan15), accusing his former partners of duping him prior to selling trendy headphone manufacturer Beats to Apple for $3 billion last year (14).
Lee once held a five per cent stake in Beats as part of their partnership, which ended in 2012. He alleges in the lawsuit that ever since then, Dre, Iovine and Beats have attempted to erase Monster's contribution to the popular headphones.
Lee later dropped his stake in Beats to only 1.25 per cent, then sold his remaining shares in late 2013, after he was allegedly told by Beats executives that they had no plans to sell the company for at least several years.
So when bosses at Apple bought out Beats last year (14), Lee would have received more than $30 million in the deal, had he kept the 1.25 per cent stake.
In the complaint, Lee accuses Beats of having a "pattern and practise" to "lure entrepreneurs, musicians, and electronic product developers with promises of growing a business as partners," then quickly turn around and "squeeze the trusting partner out of the equation."