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Magic Johnson’s Development Co. to be Added to List of Defendants in $21 Million RICO Suit

Former Los Angeles Lakers point guard and NBA legend Magic Johnson is currently negotiating with two unions to keep his name and the name of his real estate development company, Canyon-Johnson Urban Funds, out of a civil suit that was covered last week on this site. The suit, which was filed by Metallic Lathers Union Local 46 and the Mason Tenders District Council, claims that multiple companies conspired to cheat union workers out of proper pay. The main companies involved include Lalezarian Developers, JMH Development, the principals of HRH Construction and, allegedly, Canyon-Johnson Urban Funds.

Between 2007 and 2011, JMH Development, HRH Construction, and Lalezarian Developers combined to cheat union workers out of $7 million in wages and benefits. According to Sister 2 Sister Magazine,

“To avoid paying contractual wages and fringe benefits, chief of HRH Construction Brad Singer has allegedly created a front company called Leviathan. The suit alleges that the developers diverted payments that should have been made to HRH Construction—a unionized general contractor—to the non-union front, to help skirt expensive union contracts. According to Local 157, in the projects at the center of the legal action, workers were paid $12 an hour without benefits, instead of the going union rate of about $55 an hour with benefits. In August of 2010 Canyon-Johnson is suspected to have cut a deal with HRH to use the bogus company. “

Labor committee lawyer Thomas Kennedy has publicly stated that “Canyon Johnson is not in this suit at present.” However, Canyon-Johnson and its CJUF III investment fund are one of twenty defendants to be named today in a Civil Racketeer Influenced and Corrupt Organization (RICO) suit filed on behalf of the affected unions.

In 1994, Lalezarian Singer spent two years in jail after being found guilty of fraud, money laundering and racketeering related to a junk bond insider trading scheme. In 2007, HRH had to pay the MTA $6.5 Million in 2007 for overbilling the agency while doing a major project for them. The suit would force HRH, Lalezarian, and JMH to pay out close to $21 million.


One Comment on “Magic Johnson’s Development Co. to be Added to List of Defendants in $21 Million RICO Suit”

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