IN THE COURT OF COMMON PLEAS HAMILTON COUNTY, OHIO. FRISCH’S RESTAURANTS, INC. 2800 Gilbert Avenue Cincinnati, OH 45206 Plaintiff, ve MICHAEL L. HUDSON SREP Cincinnati, OH 45245 and PAMELA 8. HUDSON and H-3 DEVELOPMENT, LLC 602 Main Street, Suite 704 Cincinnati, OT 45202 C/O Statutory Agent: Michael L, Hudson 602 Main Street, Suite 704 Cincinnati, OH 45202 and WPMH PROPERTIES, LLC 3250 West Market Street, Suite 205 Fairlawn, OH 44333 ELECTRONICALLY FILED 01/20/2016 07:13 / IFW / A 1500301 / CONFIRMATION NUMBER 986224 Case No.: Sudge: ‘COMPLAINT FOR MONEY DAMAGES FOR BUSINESS FRAUD, ‘UNJUST ENRICHMENT AND CONVERSION JURY DEMANDC/O Statutory Agent: Jacob Varghese United States Corporation Agents, Inc. 3250 West Market Street, Suite 205 : Fairlawn, OF 44333 : and WADE T. PYLES 5105 Marion Avenue Cincinnati, OH 45212 Defendants, INTRODUCTION 1. This is a Complaint against Michael L, Hudson (“Hudson”), a former employee of Plaintiff Frisch's Restaurants, Inc, (“Plaintif?"), who fraudulently took, and converted to his benefit, substantial amounts of Plaintiff's money by intentionally manipulating accounting records and then created false documents to cover his defalcation, 2. ‘Through these acts, Hudson unlawfully transferred Plaintiff's funds to himself, and to his wife, Pamela 8. Hudson (“P. Hudson”), his adult children and other members of his family, to two limited liability companys he formed, and/or to Wade T, Pyles (“Pyles”), a business associate. All of these Defendants have possession and/or control of Plaintif's funds that have been fraudulently transferred to them, These transfers include, but are not limited to, real and personal property purchased in the Defendants’ names using the Plaintiff's funds. PARTIES 3, Plaintiff Frisch’s Restaurants, Inc. is a corporation organized under the laws of the State of Ohio, with its principal place of business in Hamilton County, Ohio, ELECTRONICALLY FILED 01/20/2015 07:13 / IFIY /A1500301 / CONFIRMATION NUMBER 9862244. Defendant Hudson is a resident of Clermont County, Ohio and was an employee of Plaintiff until his resignation on December 17, 2014. At the time of his resignation, Hudson ‘was an assistant treasurer of 5. Plaintiff, 6. Defendant P, Hudson is the wife of Hudson and resides with him. P, Hudson shared joint bank accounts with Hudson. 7. Defendant H-3 Development, LLC (“H-3 Development” is a for-profit limited liability company formed by Hudson under the laws of the State of Ohio. Hudson is its managing member, 8. Defendant WPMH Propertios, LLC (“WPMH Properties”) is a for-profit limited liability company formed under the laws of the State of Ohio. Its members include Pyles and Hudson, with Hudson its managing member. 9. Defendant Pyles is Hudson’s business partner in WPMH Properties. Pyles received unlawful transfers from Hudson of the Plaintif’s fands and property acquired using Plaintiff's funds, including partial ownership of a house and various motor vehicles. JURISDICTION AND VENUE 10. This Court has jurisdiction over these matters pursuant to R.C. 2305.01 and Ohio common law. LL, Venue is proper with this Court pursuant to Civ.R. 3(B) as the claims that are the basis of this action arose in Hamilton County, Ohio. FACTUAL ALLEGATIONS 12. Plaintiff owns and operates a chain of 95 restaurants in Indiana, Kentucky and Ohio, and maintains its corporate offices in Cincinnati, Ohio. ELECTRONICALLY FILED 01/20'2015 07:13 / IFW / A 1500301 / CONFIRMATION NUMBER 38622413, Defendant Hudson, a former employee, began his employment with Plaintiff approximately thirty-two (32) years ago and was promoted to a variety of positions over the course of his employment. In 2004, Hudson was promoted to assistant treasurer. Hudson held this position until his resignation. 14, As assistant treasurer, Hudson supervised certain accounting records and procedures, including the submission of PlaintifPs payroll file to US Bank for payment to Plaintiff's employees. 15, As part of his duties each pay period, Hudson received a preliminary payroll file from Plaintiff's payroll department. This payroll file contained the amount to be paid into cach employee's direct deposit personal account. Upon receipt of the payroll file from Hudson, US Bank then directly deposited each employee's pay into the bank accounts designated by each employee, including Hudson. 16. Before sending the file to US Bank, however, Hudson unlawfully and substantially increased the amount of Plaintiff's funds to be paid into his account as “payroll.” In addition, Hudson created and transmitted to US Bank a totally fictitious separate payroll file transferring to himself additional amounts, These supplemental files were for his pay only and divected direct deposits into his accounts, but not into other employees? accounts, 17, Hudson ditected deposits of his fraudulently obtained amounts into at least three different personal bank aecounts ~ two at US Bank and one at Key Bank, Each bank account ‘was a joint account with P, Hudson, in which he, as well as P. Hudson, had withdrawal rights, 18, To hide his defalcation, Hudson created false and fictitious accounting entries and documents to circumvent Plaintiff's internal accounting controls, ELECTRONICALLY FILED 01/202015 07:18 / IF) / A1800301 / CONFIRMATION NUMBER 38622419, Hudson used Plaintiff's funds, which he had unlawfully obtained, to purchase real ‘and personal property for himself, his wife, his family, and his affiliated business entities and business associates. ‘The affiliated business entities include Defendants H-3 Development and WEMH Properties. His business associates include Pyles, 20, Plaintiff's funds that have been converted by Hudson include property fraudulently conveyed ta those Defendants in the form of more than 19 parcels of real property in Hamilton County and Clermont County, Ohio, as well as vehicles and jewelry, COUNT I FRAUD CLAIM AGAINST HUDSON 21, Plaintiff incorporates by reference the allegations contained in this Complaint as if fully written herein, 22, Defendant Hudson intentionally devised a scheme to defraud Plaintiff out of its funds by eteating false accounting entries, documents and accounting records which, among other things, grossly inflated amounts that were paid by Plaintiff into his bank accounts, 23, Defendant Hudson did so with the intent to defraud. 24, As a result of Defendant Hudson's scheme and wrongful actions, Plaintiff sustained substantial damages in amounts being determined, 28, In carrying out his scheme, Defendant Hudson’s conduct was malicious and demonstrated aggravated fraud, entitling Plaintiff to punitive damages, COUNT2 UNJUST ENRICHMENT AGAINST ALL DEFENDANTS 26. Plaintiff incomporates by reference the allegations contained in this Complaint as if fully written herein, ELECTRONICALLY FILED 01/20/2015 07:13 / IF / 1800301 / CONFIRMATION NUMBER 38622427, The scheme perpetrated by Hudson has conferred a substantial benefit upon all Defendants in the form of substantial real and personal property to which Defendants were not entitled 28, All Defendants have been unjustly enriched at the expense of Plaintiff and retention of that benefit would be unjust. 20, Plaintiff is entitled to compensatory damages, plus interest, attorney fees and costs. 30, To prevent and correct the unjust enrichment of Defendants, a constructive trust is appropriate and should be imposed on any and all funds in Defendants’ possession that belong to Plaintiff and/or on any real and personal property that Defendants obtained using such funds, COUNT3 CONVERSION AGAINST DEFENDANT HUDSON 31, Plaintiff incorporates by reference the allegations contained in this Complaint as if fully written herein, 32, Plaintiff owns and has the right to the possession of the funds embezzled by Defendant Hudson through his deceptive and illegal scheme. 33, As described in detail above, as a result of his deceptive and illegal practices, Hudson converted money fo which Plaintiff possessed ownership and the right to possess at the time of Hudson’s conversion. 34,” Plaintiff suffered damages as a result of Hudson’s conversion. ELECTRONICALLY FILED 01/20/2015 07:13 / IFLI / A 1800301 / CONFIRMATION NUMBER 386224WHEREFORE, Plaintiff prays for the following relief: ‘A. Compensatory damages, including pre-judgment and post-judgment interest; B. Restitution through, among other things, the attachment of and a constructive trust ‘on assets purchased with Plaintif?’s funds or transferred to any Defendant; C. An award of punitive damages against Defendant Hudson in an amount to be determined; D. An award of reasonable costs and expenses incurred in this action, including reasonable attomey fees and other costs; and E. A grant of such other relief as this Court deems just and proper. JURY DEMAND Plaintiff hereby demands a trial by jury of all issues so triable, Respectfully submitted, By: s/ Je ins James R. Cummins (0000861) Phyllis #. Brown (0037334) Cummins & Brown LLC 312 Walnut Street, Suite 1000 Cincinnati, OF 45202 Telephone: 513-241-6400 Facsimile: 513-241-6464 Email: jcummins@cumminsbrownlaw.com Email: pbrown@cumminsbrownlaw.com ELECTRONICALLY FILED 01/20/2015 07:13 / IFW) / A1500301 / CONFIRMATION NUMBER 386224