Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 1 of 36

UNITED STATES DISTRICT COURT DISTRICT OF PUERTO RICO CIVIL ACTION NO: ___________________________________ ANGEL MARTINEZ ALICEA (p/k/a RUF EL FANTAZTIKO), REYNALDO COLON VEGA (p/k/a LIMITS) RAUL RIVERA ROLDAN (p/k/a THILO), FREDDY MONTALVO, (p/k/a/ FREDDY FANTAZTICO) GLEN TURLEY, (p/k/a/ VARON) , ANTHONY CALO COTTO, (pka "NALES"), And AARON PENA, (pka "Doble A") v. Plaintiffs ) ) ) ) ) ) ) ) ) ) ) ) )

) ) ) LTS BENJAMIN RECORDS, INC., ) FRANCISCO SALDANA (p/k/a LUNY), ) VICTOR CABRERA (p/k/a TUNES), ) UMG RECORDINGS, INC., dba/ ) MACHETE MUSIC, ) MAS FLOW, INC., ) RAMON AYALA RODRIGUEZ(p/k/a ) DADDY YANKEE), EL CARTEL ) RECORDS, ) LOS CANGRIS PUBLISHING, ) FRANCISCO SALDANA dba/ ) BLUE KRAFT PUBLISHING and ) WHITE KRAFT MUSIC PUBLISHING, ) EMI MUSIC PUBLISHING ) ) Defendants ____________________________________ COMPLAINT AND DEMAND FOR JURY TRIAL INTRODUCTION The Plaintiffs, Angel Martinez Alicea (p/k/a Ruf El Fantaztiko), Reynaldo Colon Vega (p/k/a Limits), Raul Roldan Rivera (p/k/a/Thilo), Freddy Montalvo, Glen Turley, p/k/a Varon, Aaron Pena, pka Doble A and Anthony Cotto pka Nales, collectively (Plainitiffs), by and through their attorney, allege, upon knowledge and upon information and belief, the following against defendants, LTS

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 2 of 36

Benjamin Records, Inc., Mas Flow, Inc., Francisco Saldana (p/k/a Luny), Victor Cabrera (p/k/a Tunes), Machete Music a division of UMG Recordings, Inc., Francisco Saldana, dba/ White Kraft Publishing, Blue Kraft Publishing, El Cartel Records, Los Cangris Publishing, and Ramon Ayala (pka Daddy Yankee), (collectively, Defendants)

FACTUAL ALLEGATIONS (ALICEA, MONTALVO,VEGA)

1.

This is a civil action for breach of contract, fraudulent inducement of services, unjust enrichment, false designation of origin under the Lanham Act, copyright infringement, and RICO violations.

2.

Plaintiffs were at all times related to this complaint, producers of music in the genre entitled Reggaeton at Mas Flow/LT's Benjamin Records.

3.

Also with Mas Flow were Thilo, who had been a Mas Flow Producer since 2004, and producers, Nales and Doble A, aka/ Los Presidentes, who had been with Mas Flow since 2006. In fact, Los Presidentes and Thilo were responsible for many of Mas Flow's hits including, but not limited to Mirala Bien and Paleta, and Los Presidentes' 2007 Grammy nominated CD Sobre Natural (Alexis Y Fido artists).

4.

Plaintiffs, Alicea, Montalvo, and Vega contracted with Mas Flow and Saldana pursuant to Artist/Producer Agreements and a separate Management Agreement. (see agreements attached hereto as Exhibits A-F and incorporated herein by reference ).

5.

The Erre XI CD released in August 2008, was their debut CD as music producers with Mas Flow.

6.

Gerry Capo p/k/a Lionize, Reynaldo Colon Vega, p/k/a Limits, and Raphael Flores, p/k/a/ Raphy vocalists made up the trio, Erre XI. Alicea, Montalvo, Etienne Gagnon, pka Demi were producers, Los Fantazticos. Erre XI was their rst of three full length CD's mas Flow contracted Los Fantazticos to produce.

7.

The Producer agreements for Montalvo and Alicea, and Artist Agreements for Vega and Capo,

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 3 of 36

granted Mas Flow all right title and interest in the copyrights of the masters, yet excluded the copyrights in the Compositions therein. 8. In the summer of 2007, the above listed plaintiffs created original musical compositions at Mas Flow's studios for their debut album, pursuant to producer and artist agreements. 9. The defendants Mas Flow, LTs Benjamin Records, and UMG Recordings, Inc. accepted completed master recordings for La Carta, Dimelo, Ella Me Amo, Al Desnudo, Te Hice Volar, Carita Bonita, and MSN, which were written and produced by plaintiffs, Alicea, Gagnon, Montalvo, Roldan, and Vega, which were then altered by defendants, Mas Flow/LTs Benjamin Records and Machete/UMG, by removing plaintiffs from the nal version of many of these works, and replacing their parts with other artists work, attributing the entire work to the second,artist, thus depriving plaintiffs of their right of rst publication, under the Copyright Act, right to make derivative works, and is a violation of the Lanham Act. The second artists were usually more known names in the genre.

9.

Defendants then released altered and versions, without attributing credit of authorship to Plaintiffs Vega, Alicea, and Montalvo. Defendants, LT Benjamin Records and Machete therefore, falsely designated the origin of the above-referenced musical compositions. As a result, plaintiffs were only able to obtain copyright registrations for Carita Bonita, (Roldans parts were not removed), MSN (Vegas part remained), and Salgo Pa La Calle. (Alicea, Montalvo, and Vegas parts remained while Gerry Capos vocals were removed)

10.

As a result of these actions, plaintiffs seek damages pursuant to the Lanham Act against defendants (LTs Benjamin Records, Inc. Mas Flow, Inc., UMG Recordings) for their actions in failing to attribute authorship and source of the product, for the original compositions, MSN, Carita Bonita, La Carta, Dimelo, Al Desnudo, Te Hice Volar, and Salgo Pa La Calle.

11.

Salgo Pa La Calle (the Daddy Yankee Composition), was intended as musical track for the plaintiffs CD, Erre XI, but ended up somehow as track number seven (7) on an album entitled, Talento De Barrio by artist Ramon Ayala, p/k/a/ Daddy Yankee and distributed by Machete

Case 3:12-cv-01568-GAG Document 1 Music. 12.

Filed 07/13/12 Page 4 of 36

Daddy Yankee was not a Machete Artist. The plaintiffs submit that upon learning that Salgo was not included in Erre XI, rather in Ayala's CD, Talento de Barrio' plaintiffs were assured by Saldana that they would be paid their royalties for the song.

13.

The plaintiffs ratied the authorship of Salgo post-facto, but were not paid monies owed to them. Salgo Pa La Calle was apparently originally licensed to Machete from Ayala and Los Cangris Publishing, but is, at the present, not subject to any licensing agreement. According to , Ayala, the licensing agreement between Los Cangris had expired in 2010. In any event, the actions of defendants have rendered any license the plaintiffs may have granted for any song, as being terminated or void from the inception.

14.

In fact, the plaintiffs in the above-entitled action are not the only artists who have not been paid by UMGMachete, UMG has witheld over One Million Dollars from Ramon Ayala pka/ Daddy Yankee for several works Yankee released with Machete, including Barrio Fino, and Talento de Barrio which contains the song Salgo Pa La Calle

15.

Machete has witheld the One Million Dollars in light of lawsuits led against Machete with regard to these albums.Three hundred thousand dollars ($300,000.00 ) of the One Million is alleged to be witheld to indemnify Machete for the present claims the plaintiffs have against Machete.

16.

In 2010 Ayala sued Machete in the United States District Court of Puerto Rico, CA. No. 1001349. This suit Yankee seeks payment of the one million dollars ($1,000,000.00) in royalties witheld by Machete, including an amount set aside for any libility UMG might incur to the the plaintiffs, of $300,000.00.

17.

This $300,000.00 Machete has witheld has been made a part of Machete's coffers to ght and defend their original theft of plaintiffs' royalties for Salgo Pa La Calle. (see motion of Ayala attached hereto as Exhibit G and incorporated herein by reference.)

18.

On or about March 12, 2010, plaintiffs Alicea, Montalvo applied for copyright registration for the song Salgo and other works.

19.

On March 2, 2012, plaintiffs were granted copyright registration for Salgo Pa La Calle. The

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 5 of 36

effective date of registration is March 12, 2010. (see Registration attached hereto as Exhibit H and incorporated herein by reference ). 20. On the same date, Registrations were granted for Carita Bonita and MSN effective March 15, 2010. (see Registrations attached hereto as Exhibits I and J, and incorporated herein by reference.) As the original versions of the other songs on Erre XI remained with Saldana, plaintiffs were unable to produce deposit copies at this time, and cannot register the remaining copyrights. 21. The CD, Erre XI was created pursuant to the Joint Venture agreement entered into between Saldana/Mas Flow and UMG Recordings, Inc. / Machete Music on August 13, 2007. 22. This agreement was entered into, to create a new label, LTs Benjamin Records, (hereinafter, LT), which would be the vehicle to produce a series of Reggaeton albums which UMG/Machete would then distribute and share the prots with LT. (see Prot Sharing Agreement attached hereto as Exhibit K , and incorporated herein by reference.) 23. The plaintiffs, Vega, Alicea, Montalvo, and Gagnon did, in fact create and complete one studio album pursuant to the JV, Erre XI, along with producing approximately 45 other compositions pursuant to the agreement, which were intended for future albums. 24. The Joint Venture Agreement (hereinafter referred to as the JV was actually based around UMG acquiring the rights to distribute the up and coming musical duo, known as Wisin Y Yandel. It was originally intended to be effective in 2006, but the nal version was not signed by all parties until August 13, 2007. 25. Previously, in 2004, UMG and Saldana/Mas Flow had signed a Distribution Agreement wherein Machete/UMG would distribute Mas Flow's work. This agreement was cross-collateralized with the 2007 JV Agreement. (see Distribution Agreement attached hereto as Exhibit L and incorporated herein by reference ). 26. Additionally, the JV Agreement specied if UMG were to recoup their initial investment within two years, UMG?Machete would pay Mas Flow an additional One Million Dollars. (see agreement, Exhibit K D (1) (b), p 2 ). 27. Juan L. Morera Luna and Llandel V. Malave, pka Wisin Y Yandel, had been working with Mas

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 6 of 36

Flow (Mas Flow having produced Wisin Y Yandel's 2005 album, P'Al Mundo). They ultimately signing a production agreement with Machete in June 2005. (see Agreement attached hereto as Exhibit L and incorporated herein by reference.) The P'Al Mundo CD is specically mentioned in the JV, in which Machete agrees to pay Mas Flow a portion of the royalties and granted Mas Flow a 25% ownership interest in P'Al Mundo, and an interest in future Wisin Y Yandel CD's. Wisin Y Yandel had been signed with another production company before they were bought out by Machete. 28. Roldan, as outlined below, wrote and produced two of the musical compositions in PAl Mundo, including the original Composition, Mirala Bien, which was authored by Roldan and Glen Turley, pka Varon, and a second song, Paleta. Juan L. Morera Luna Wisin and Llandel V. Malave Yandel are co-authors. 29. The parties, including Varon and Thilo did not come to an agreement on publishing splits for P'Al Mundo until the formation of the JV. At that time, in order for the JV to work, the parties agreed to a ve way split with Thilo and Varon each receiving a 20 % interest in Mirala Bien, and Thilo receiving his share of Paleta. Daddy Yankee, (Ayala) was also an author of Paleta.

THILO 30. Raul Roldan Rivera/pka Thilo is a world renowned producer/engineer/artist of reggaeton music and has authored/jointly authored many successful musical compositions with LT/Mas Flow, including Adictos, Bailadome, Carita Bonita, Carita Bonita Reggaeton Club Mix, Cuernos, Ella, Fiera Callada, Hay de Sobra, Intro, MIA, Mira La Bien, No Te Obligo, Caile, Paleta, Reggaeton, Say It, Suave El Oido, Te Hice Volar, Vamos a Ver, Yamileth Beat , Dimelo, La Carta, Ella Me Amo, MSN, and Al Desnudo. 31. In 2004, plaintiff, Raul Rivera Roldan began working with Francisco Saldana, pka Luny and Mas Flow, Inc.. Roldan had signed a management agreement with Mas Flow in 2004, and signed a producer/management agreement with Mas Flow and Saldana on June 26, 2006. 32. During the period between 2004-June 2006, Roldan created many musical compositions, including but not limited to Fiera Callada, and two other original compositions, Mirala Bien

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 7 of 36

and Paleta, which were produced for and with Wisin Y Yandel. 33. Wisin Y Yandels album, PAl Mundo was released on or about November 5, 2005 with Machete, and included the original musical compositions, jointly authored by Roldan (Paleta and Mirala Bien), and Turley (Mirala Bien lyrics). 34. Roldan, and Turley own a copyright interest in the two original compositions, Mirala Bien and Paleta. The album and a derivative Deluxe version have sold over 4 million copies. 35. On or about June 26, 2006, Roldan signed a producer contract with Mas Flow, naming him as head producer. The agreement language stated it was effective for musical compositions created on or after June 26, 2006. It also provided that Thilo would retain ownership of the underlying compositions, granting Mas Flow title to the masters. 36. The agreement also provided that Roldan would assign his right to administer the collection of his copyright royalties to either Blue Kraft Publishing (BMI) or White Kraft Music Publishing (ASCAP) depending on which one Roldan chose. Roldan was a member of ASCAP and therefore White Kraft should have been the designated entity. 37. To date, Thilo has been paid some royalties (from ASCAP) for the performance of said works but has not been otherwise compensated. (see Contract and song list for Thilo, attached hereto as Exhibit M and N and incorporated herein by reference.)

LOS PRESIDENTES

38.

Anthony Calo Cotto (pka Nales and Aaron Pena (pka Doble A) Los Presidentes were producers at Mas Flow/LT's Benjamin from 2006 through 2008.

39.

Los Presidentes were responsible for creating many hits at Mas Flow including Caile with Tito El Bambino, and a Grammy nominated album entitled Sobrenatural (Alexis Y Fido artists) which was released by Sony. (see contract of Nales attached as Exhibit O and song list of Nales attached hereto as Exhibit P , Doble A songlist as Exhibit Qand incorporated herein by reference.)

40.

Plaintiffs were specically named in the JV Agreement of 2007 and were necessary parties to

Case 3:12-cv-01568-GAG Document 1 the agreement as their work was required. 41.

Filed 07/13/12 Page 8 of 36

Los Presidentes produced many works which were distributed by Machete and one work, Los Benjamins was produced under the JV Agreement, along with Erre XI.

42.

Los Presidentes also had signed Producer/Management Agreements with Mas Flow, similar to that of Thilo. As in Thilo's contract, the amount of royalties paid to the plaintiffs waere dependant on the amount of money received by Mas Flow/LT's Benjamin Records fromUMG/Machete.

UMG/MACHETE AND LT'S BENJAMIN RECORDS TWO ENTITIES-ONE BAD ACT 43. The plaintiffs had signed Producer/Artist and management agreements with Mas Flow/LT's Benjamin and Mas Flow/LT's Benjamin had agreements with UMG/Machete, including the JV agreement in which Thilo, Double A and Nales were specically named. Their performance was a necessity to the JV, and gave consideration for same. 44. Despite these written agreements it appears now that during the pendancy of these contracts, Mas Flow/LT had no intention of paying the plaintiffs, and UMG/Machete had no intention of paying anybody. 45. On or about August 11, 2006 a copyright (PA- Performing Art) registration/application was led for the song Mirala Bien by EMI Music Publishing, (EMI). EMI named Plaintiff, Raul Rivera Roldan pka/ Thilo as one of three authors, the others being Wisin Y Yandel, Morera Luna p/k/a/Wisin, Llandel V. Malave, p/k/a/ Yandel. (attached hereto as Exhibit R and incorporated herein by reference.) 46. On the same date, EMI led a copyright registration (PA), for the song Paleta naming Juan L. Morera Luna p/k/a/Wisin, Llandel V. Malave, p/k/a/ Yandel, Ramon Ayala pka Daddy Yankee, and Raul Rivera Roldan, pka Thiloas authors. (attached hereto as Exhibit S and incorporated herein by reference.) 47. Previously, on May 4, 2006, Universal Music Publishing, UMP, filed Copyright registration

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 9 of 36

applications for the songs Mirala Bien on behalf of Wisin Y Yandel and a producer named Joaias de la Cruz (pka/Nely). On the same day a copyright registration application was filed by UMP on behalf of Wisin Y Yandel, Nely and Ayala for the song Paleta 48. In the summer of 2007, the plaintiff Thilo and Varon negotiated and came to an agrement with the other parties, Machete and LT's Benjamin Records with regard to the parties' percentage of the song Mirala Bien. This was necessary, Roldan was told, in order for the JV Agreement to work. 49. 50. 51. The plaintiffs, Thilo and Varon each agreed to 20% for Mirala Bien. Thilo also agreed to a 20% ownership of the composition, Paleta. On May 1, 2009, UMG/Machete sent a letter to Francisco Saldana and LT's Benjamin Records, reserving their rights, due to alleged breaches of the Distribution Agreement and the JV Agreement by Saldana and LT. (see letter attached hereto as Exhibit T and incorporated herein by reference.) This letter has been described by Saldana as a pretense by which UMG/Machete would not have to pay Saldana LT's Benjamin Records the monies due Saldana pursuant to the Distribution Agreement and the JV Agreement, especially the proceeds from P'Al Mundo. 52. 53. This letter or its contents were never disclosed to the plaintiffs by Saldana or LT. The plaintiffs continued to expect payment of their royalties, and relied on assurances from Saldana that they would be paid. Many of the splits for the songs were not finalized until late 2008. The plaintiffs therefore did not assume there were problems until late 2009. 54. On or about October 15, 2009, LT's Benjamin Records, Inc. filed suit in the Circuit Court of the 11th Judicial Circuit in and for Miami-Dade County, Florida, No. 09-75954CA32. In this action, LT's Benjamin Records alleged corectly, the defendant, Machete, breached the August 13, 2007 Profit Sharing Agreement, including violations that have caused damage to the plaintiffs. The included a breach of Section E(2) of the Contract as the producers were not paid for the tracks

Case 3:12-cv-01568-GAG Document 1 they produced. E(2) states:

Filed 07/13/12 Page 10 of 36

LT and its Principal will also furnish the services of the producers known as Underage, Tainy, Nales, A & A (Doble A), and Thilo. (the LT Producers) to the Label ...LT will be solely responsible for compensating the LT Producers or engaging or compensating any other producers it may engage to assist with therecordings hereunder, including without limitation the producer services of the producer professionally known as Tunes. Notwithstanding the foregoing, it is the intention of the parties that the LT producers shall be compensated on a flat fee basis of up to Two Thousand Dollars ($2,000.00) per track which will be taken from the relevant artist's recording budget or a royalty of three percent (3%) if the relevant artist's authorized recording budget provides for an all in royalty, to be decided on a case to case basis. Any additional funding required for the LT producer services shall be provided directly and solely by LT or Principal. (Emphasis added)

55.

LT also alleged that Machete was required and failed to pay $150,000 for the artist signing advance of former plaintiff, Gerry Capo. Capo, an LT Artist, was signed to Machete pursuant to paragraph T of the Profit Sharing Agreement, which gave Machete the option to transfer any LT artist to Machete. Gerry Capo (Erre XI artist) was one of two artists who's contracts were transferred to Machete.

56.

Machete failed to pay LT or Capo. (Capo and three of the other plaintiffs in this action filed suit against Ayala, Machete and LT in Massachusetts, USDC Mass. Western Div. CA. No.10-30002 MAP. In that suit Capo alleged LT failed to pay Capo his $150,000 advance and other royalties.Los fantazticos and Thilo sought payment as third party beneficiaries of the Joint Venture (JV), , or Profit Sharing Agreement, as it was called.

57.

In the Florida case, LT also alleged Machete failed to pay its share of the profits (12), studio time (13) and $4000.00 advances for songs produced for Wisin Y Yandel (14) These advances were pursuant to K of the Profit Sharing Agreement. This section states that the LT producers would be paid $4,000.00 per track for tracks produced for Machete and Machete's non label artists.

58.

The Profit Sharing Agreement also stated, pursuant to R, LT was to receive 25% of Machete's

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 11 of 36

net proceeds in the album P'Al Mundo beginning January 1, 2007, and 50% of subsequent Wisin Y Yandel recordings. (see JV/Profitsharing Agreement R,) (see Florida Complaint 15 attached hereto as Exhibit U and incorporated herein by reference.) 59. Machete's failure to pay these amounts affected the amounts plaintiffs are entitled to receive, as plaintiffs' royalties depended on the recoupment of advances and other costs, including, but not limited to recording costs, marketing, etc. 60. In fact, Paragraph D(1)(b) of the Profit Sharing Agreement provided that Machete would pay LT an additional One Million dollars ($1,000,000.000) upon recoupment of advances. D(1)(b) states: In the event that the LT and Mas Flow Accounts are fully recouped (and in the case of LT such recoupment must be from sales corresponding to artists signed under this profit share agreement) at any time within the first twenty four (24) months of this agreement, then Machete shall pay LT an additional Profit Advance in the amount of One Million Dollars ($1,000,000.00) to LT promptly following delivery to LT of the accounting statement reflecting such recoupment. 61. Defendant, Machete never paid LT the $200,000.00 for the delivery of Erre XI, the recording costs, and intentionally failed to market the CD Erre XI. Machete also refused to accept addional works/Artists/CD's from LT. These acts were designed to ensure, among other things that Machete did not trigger the One Million Dollar recoupment under D(1)(b). 62. In fact, as discovery in the Florida action revealed that Machete/UMG falsified accounting statements to appear that Mas Flow did not fully recoup UMG's advances, when, in fact, they did. (see Plaintiff's and Counter Defendant's Opposition to Defendant Counter Claimant's Motion for Protective Order, attached hereto as Exhibit V and incorporated herein by reference.) Here, UMG has falsified over six hundred and fifty thousand dollars ($650,000.00),

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 12 of 36

in accounting chargebacks in order to ensure that Machete did not recoup its advances. 63. In fact, Saldana and LT correctly point out that UMG/Machete never intended to honor the August 13 2007 agreement from the start, as Exhibit V points out.

64.

Plaintiffs could not find Florida counsel and filed suit in Massachusetts. However, the Florida lawsuit is not the only instance of Machete's malfeasance.

65.

Plaintiffs have recently discovered that Ayala/Daddy Yankee and his label/publishers filed suit in U.S.D.C. Puerto Rico CA. No. 10-30419.

66.

Apparently, Machete/UMG is witholding over One Million Dollars ($1,000.000.00) for two CD's that Ayala produced with Machete, Barrio Fino, and Talento de Barrio, Talento de Barrio contains the song Salgo Pa La Calle which was co-authored by the plaintiffs.

67.

Ayala has alleged that UMG/Machete underestimated royalty payments owed to Ayala by charging unauthorized expenses to his label, Los Cangris, Inc.'s account.

68.

Yankee stated, in the last Net Proceeds Statement from Universal Music, there appeared a substantial withholding of $300,000.00 dollars allegedly as reduction for the Alicea v. LT Benjamins Case. (see Motion attached hereto as Exhibit W and incorporated herein by reference)

69.

Therefore, Machete/UMG is using proceeds they gained from failure to pay LT and their producers, along with illegal falsification of accounting records chargebacks, as shown in Exhibit , to fund the lawsuit which plaintiffs filed in Massachusetts, in order to recover royalties due them as a result of Machete's original wrongful witholding of funds. This activity is a violation of the RICO Statute 18 U.S.C. 1964.

70.

LT's Benjamin Records subsequently filed two amended complaints. The Second Amended Complaint is attached hereto as Exhibit and incorporated herein by reference. This complaint expands upon UMG/Machete's having not only witheld payments due LT and consequently the

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 13 of 36

plaintiffs, but alleges correctly that UMG/Machete has committed acts of accounting fraud and payola. 71. Saldana and his alter ego Mas Flow and LT Benjamin Records suffer from unclean hands as well. All plaintiffs in the above-entitled action agreed to have Blue Kraft (BMI) or White Kraft (ASCAP) administer their royalties. To date, however, none af the eight plaintiffs have received any mechanical royalties, or royalties of any kind except for performance royalties. 72. Blue Kraft and White Kraft are not incorporated. They are the alter-ego of Saldana and Saldana is personally liable for the missing payments to the plaintiffs. Saldana has been co-mingling the funds belonging to the plaintiffs with his own royalties, and has kept same to his benefit and use. 73. The mechanical royalties for Mirala Bien and Paleta alone, which Saldana has not paid total $800,000.00 each, for Varon and Thilo. 74. Saldana and LT have also comitted other acts which have harmed plaintiffs and are violations of the RICO statute such as filing false affidavits in a federal court. JURISDICTION AND VENUE 75. This Court has jurisdiction over the parties and subject matter of this action pursuant to 28 U.S.C. 1331 and 1338 (copyright), 17 U.S.C. 101 et seq. and the Lanham Act.15 U.S.C 1125(a), and RICO statutes, including 18 U.S.C. 1964. 76. Venue is appropriate in this district pursuant to 28 U.S.C. 1391 (b) as a substantial portion of the events or omissions giving rise to the Plaintiffs causes of action occurred in this district and/or the Defendants transact business in this judicial district, and pursuant to 18 U.S.C. 1965. PARTIES 77. Plaintiff, Angel Martinez Alicea (p/k/a Ruf El Fantaztiko), is a known and talented producer, composer, arranger, author and performer of musical compositions and beats in the musical

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 14 of 36

genre known as reggaeton. Mr. Alicea is a copyright owner, producer, composer and arranger of the Original Compositions listed above. Mr. Alicea resides in Springeld, Hampden County, Massachusetts, and has a valid copyright registration for Salgo Pa La Calle. 78. Plaintiff, Reynaldo Colon Vega (p/k/a Limits), is a known and talented composer, arranger, author and performer in the musical genre known as reggaeton. Mr. Vega is a resident of Florida, and is copyright owner and performer of the Original Compositions, and has a valid copyright registration for Salgo Pa La Calle and MSN. 79. Plaintiff, Freddy Montalvo, is a resident of Springeld, Massachusetts, a known and talented producer, composer, arranger, author and performer of musical compositions and beats in the musical genre known as reggaeton. Mr. Montalvo is a copyright owner and performer of the Original Compositions, and in particular, has a copyright registration for Salgo Pa La Calle. 80. Plaintiff Glen Turley, (pka Varon), is a composer, and a resident of Puerto Rico and is coauthor of Mirala Bien. 81. Raul Roldan Rivera (p/k/a/Thilo), is a resident of Rio Grande, Puerto Rico. Mr. Rivera is a known and talented producer, composer, arranger, author and performer of musical compositions and beats in the musical genre known as reggaeton. Mr. Rivera is a author, copyright owner and performer of the Original Compositions, including, but not limited to Mirala Bien, Paleta, Carita Bonita, and many others. 82. Defendant, LTs Benjamin Records, Inc., is a corporation duly organized and existing under the laws of the Commonwealth of Puerto Rico, with its principal place of business in Carolina, Puerto Rico. The company is a successor in interest of Mas Flow Inc. an independent record label founded by Defendants, Francisco Saldana (p/k/a Luny) and Victor Cabrera (p/k/a Tunes). 83. Upon information and belief, LTs Benjamin Records has materially breached its contractual obligations to the Plaintiffs. 84. Defendant, Francisco Saldana (p/k/a Luny), who allegedly resides in Puerto Rico, is a successful and well-known producer of reggaeton music and a member of the production duo known as, Luny Tunes. Mr. Saldana is a co-founder of the record label Mas Flow, Inc. and its successor in interest, LTs Benjamin Records, Inc. On the album, Luny Tunes Presents: Erre

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 15 of 36

XI, Mr. Saldana, as part of the production duo, Luny Tunes, claims credit as an Executive Producer. Saldana has also been collecting royalties on behalf of himself and the six producers named herein through the unincorporated entities known as Blue Kraft and White Kraft Publishing. They are merely the alter ego of Saldana as they have no independent identity. 85. Defendant, Victor Cabrera (p/k/a Tunes) is a resident of Puerto Rico, and is a successful and well-known producer of reggaeton music and a member of the production duo known as, Luny Tunes. Mr. Cabrera is a co-founder of the record label Mas Flow, Inc. and its successor in interest, LTs Benjamin Records, Inc. On the album, Luny Tunes Presents: Erre IX, Mr. Cabrera, as part of the production duo, Luny Tunes, claims credit as an Executive Producer. 86. Defendant, UMG Recordings, Inc. (UMG) is a corporation duly organized and existing under the laws of the State of Delaware, with its principal place of business in the State of California. 87. Machete Music is a division of defendant, UMG Recordings, Inc. and has a usual place of business in Santa Monica California. 88. Defendant, Ramon Ayala pka/ Daddy Yankee is a world renowned reggaeton artist who, on or about August 12, 2008 released an album entitled Talento de Barrio, which included the song Salgo Pa La Calle. Upon information and belief, Ayala resides in Puerto Rico. Ayala is coauthor of the song Paleta. 89. Upon information and belief, defendant El Cartel Records (hereinafter El Cartel), is a corporation organized and existing under the laws of the Commonwealth of Puerto Rico with its principal place of business located at Calle Yaboa Real #874 Urb, Country Club., San Juan, Puerto Rico 00924. 90. El Cartel is in the business of producing, recording, manufacturing, distributing and selling musical albums worldwide. El Cartel is the company responsible for producing, recording, manufacturing, distributing, selling, exploiting and licensing the Talento De Barrio albums which feature the Salgo Pa La Calle musical recording. 91. Upon information and belief, defendant Los Cangris Publishing. (hereinafter Los Cangris), is a corporation organized and existing under the laws of the Commonwealth of Puerto Rico with

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 16 of 36

its principal place of business located at Calle Yaboa Real #874 Urb, Country Club., San Juan, Puerto Rico 00924. Los Cangris is a music publisher that is in the business of licensing and publishing musical compositions. 92. Defendant EMI Music Publishing dba EMI April and EMI Blackwood is a Corporation with a usual place of business in New York, New York and Miami Florida.

COUNT I Breach of Contract (All Plaintiffs v. Mas Flow/LT's Benjamin Records) 93. Plaintiffs repeat the allegations contained in paragraphs 1 through 92 , and, by this reference, incorporate them herein. 94. The plaintiffs, contracted with defendants Francisco Saldana, Victor Cabrera, Mas Flow, and LTs Benjamin Records, successor in interest to Mas Flow, Inc., to produce music and pay them for their share of the royalties due from the sale, and/or distribution of the musical works he created. 95. Plaintiffs were to receive mechanical and other royalties including but not limited to royalties from sales of the compositions, but mechanical and performance royalties derived from radio play, and sales of digital media. 96. Although Plaintiffs were paid for some radio royalties, and despite demand for same, they have received no other compensation. The defendants, LTs Benjamin Records, Francisco Saldana, and Victor Cabrera, are liable to Plaintiffs for breach of contract, by failing to account for or pay plaintiffs the agreed upon mechanical and other royalties.

As a result of the Defendants actions, the Defendants are liable to Plaintiffs for the total amount of income, monies, royalties and other remuneration Plaintiffs are reasonably entitled to receive, as a result of Plaintiffs creating, composing, arranging, authoring, producing and/or performing the Original Compositions embodied in the Musical Works, and the sale thereof, in

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 17 of 36

an amount to be established at trial, but are in no event less than $1,000,000.00 (ONE MILLION DOLLARS).

COUNT II Breach of Contract (Third party BeneciaryUMG/Machete) 97. Plaintiffs repeat the allegations contained in paragraphs 1 through 96, and, by this reference, incorporate them herein. 98. The plaintiffs, are all direct beneciaries of the contract between LT's Benjamin Records and defendant UMG/Machete. 99. 100. Defendant Machete has breached said agreement. The JV Agreement provides in paragraph R that the PAl Mundo Album was to be incorporated therein. Paragraph E(2) provided Producers were to furnish their services and be paid , among other amounts, $2,000.00 per track. Paragraph K provided compensation for providing outside services to Machete. 101. Thilos, Nales, and Doble A's contract of June 26, 2006, specifically provide for royalties, dependent, in part, on the royalties/profits paid to LTs Benjamin Records from Machete/UMG. Paragraph H of the JV provides LT will receive 49% of the profits, which renders Plaintiffs' 2006 agreements dependent and related to said JV. As a result of the Defendants actions, the Defendants are liable to Plaintiff for the total amount of income, monies, royalties and other remuneration Plaintiffs are reasonably entitled to receive, as a result of Plaintiffs creating, composing, arranging, authoring, producing and/or performing the Original Compositions embodied in the Musical Works, in an amount to be established at trial, but are in no event less than $1,000,000.00 (ONE MILLION DOLLARS).

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 18 of 36

COUNT III Breach of ManagementContract (All Plaintiffs v. Mas Flow/LT) 102. Plaintiffs repeat the allegations contained in paragraphs 1 through 101, and, by this reference, incorporate them herein. 103. Plaintiffs engaged Mas Flow and LT, as its successor, as their exclusive personal manager, business manager, representative, and advisor for their activities in the Entertainment industry in all matters pertaining to your career. 104. The defendant Saldana and LT instead sabotaged Limits career, by not including him ias part of Erre XI, despite promises made and his performance. 105. Saldana and LT further damaged all plaintiffs careers by their actions described above, including violations of the Lanham Act, and their breach of the Producer/Management Agreements. 106. As a result of the Defendants actions, the Defendants are liable to Plaintiffs for the total amount of income, monies, royalties and other remuneration Plaintiffs were reasonably entitled to receive, had defendants lived up to their agreement, in an amount to be established at trial, but are in no event less than $1,000,000.00 (ONE MILLION DOLLARS).

Count IV Breach of Contract 107. Plaintiffs repeat the allegations contained in paragraphs 1 through 106, and, by this reference, incorporate them herein. 108. Plaintiffs Montalvo, Alicea, Gagnon and Vega produced/composed the song Salgo Pa La Calle in July/August of 2007, and are the valid and undisputed owners of the copyright to same,. (evidenced by Exhibit X, which is incorporated herein by reference) Moreover Plaintiff Raul Rivera Roldan, pka Thilo is the author of Carita Bonita, and has a valid copyright therein. (see ExhibitY attached hereto and incorporated herein by reference) Reynaldo Colon Vega is the author of MSN and has a valid copyright therein. (see ExhibitZ

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 19 of 36

attached hereto and incorporated herein by reference) 109. In 2007, plaintiffs, by way of their producer contracts, had granted defendants a license to reproduce and sell the sound recording of Salgo Pa La Calle, Carita Bonita, Te Hice Volar, MSN, and Salgo Pa La Calle. 110. After LT's ling of the October 15, 2009 lawsuit, LT's Benjamin Records v. UMG/ Machete in Dade County Florida, plaintiffs realized Machete and LT had no intention of paying LT or plaintiffs. In fact, to date, neither Machete or LT have paid plaintiffs any royalties. 111. The defendant, Saldana and LT, through plaintiffs Producer Contracts, and Machete directly agreed to pay plaintiffs mechanicaland other royalties for the songs on Erre XI,Te Hice Volar, MSN, and Carita Bonita, and Salgo Pa La Calle. (see letter from defendant UMG stating they were paying mechanical for the Erre XI songs, of which Salgo was originally a part attached hereto as Exhibits AA and incorporated herein by reference).

As a result, defendants, UMG/Machete, LTs Benjamin Records, Saldana and Cabrera, are liable to plaintiffs for mechanical royalties for the songs Salgo Pa La Calle, Te Hice Volar, MSN, and Carita Bonita.

Count V Copyright Infringement (Machete)

112.

Plaintiffs repeat the allegations contained in paragraphs 1 through 111, and, by this reference, incorporate them herein.

113.

UMG/Machete is not an author or a copyright holder of the Song Salgo Pa La Calle, embodied in the album Talento de Barrio. UMG was merely a licensee.

114.

Upon information and belief, on January 10, 2005, Daddy Yankee (hereinafter DY), El Cartel Records, Los Cangris and UMG Recordings entered into an Exclusive License Agreement for the album Barrio Fino, and the albums which were listed on Schedule A of the Agreement. (tsee the license Agreement attached hereto as Exhibit BB )

Case 3:12-cv-01568-GAG Document 1 115.

Filed 07/13/12 Page 20 of 36

The second part of their contractual relation was a Distribution Agreement (the Distribution Agreement) between El Cartel Records, Los Cangris and UMG Recordings for the exclusive distribution of the albums listed in Schedule A of the agreement. (see agreement attached hereto as Exhibit CC, and incorporated herein by reference.).

116.

The term of the license agreement commenced at the date of the agreement and would end ve (5) years after the date of delivery by DY of all the Masters and corresponding production parts of the Albums included in the license.

117.

The Distribution Agreement had a term of three years, according to the complaint led by DY in this action, The United States District Court, District of Puerto Rico, 10-cv-01349-JAG. (see complaint, Exhibit DD incorporated herein by reference).

118.

On March 28, 2008, the parties entered into a Digital and Mobile Distribution Agreement (the DMD Agreement) for several albums, including Talento de Barrio.

119.

On March 31, 2008 the parties further amended the Distribution Agreement to include the album Talento de Barrio to Schedule A

120. 121. 122.

Reference was not made to the Exclusive license agreement. According to Ayala, the Distribution Agreement expired on January 10, 2010. Defendant, UMG/Machete does not have a license from Plaintiffs, nor do they have an assignment of copyright.

123.

Defendants have, without Plaintiffs authorization, or the authorization of Ayala, Los Cangris, or any other copyright holder, continued to copy, distribute, and manufacture, disseminate, or otherwise exploit Plaintiffs copyrighted compositions and sound recordings. This constitutes copyright infringement.

As a direct and proximate result of the acts of infringement committed by defendants, Plaintiffs Alicea, Gagnon, Montalvo, and Vega have suffered, and will continue to suffer substantial economic and non-economic injuries and damages. Plaintiffs are therefore entitled to recover actual damages suffered as a result of the infringement and any prots of the Defendants attributable to the infringement of Plaintiffs copyrights and exclusive rights in and to the

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 21 of 36

Original Compositions in an amount to be established at trial, but are in no event less than $1,000,000.00 (ONE MILLION DOLLARS);

Plaintiffs are further entitled to attorneys fees and full costs pursuant to the Copyright Act, 17 U.S.C. 505. Count VI ContributoryCopyright Infringement

124.

Plaintiffs Montalvo, Alicea, Gagnon and Vega, repeat the allegations contained in paragraphs 1 through 123 and, by this reference, incorporate them herein.

125.

Defendants, UMG/Machete, Saldana, Cabrera, LT Benjamin Records, willfully, knowingly and intentionally induced, caused, encouraged and/or assisted various third parties, including, but not limited to, various radio and televisions stations, to broadcast, publicly perform and/or otherwise exploit the Infringing Musical Work, containing the Original Composition, Salgo pa La Calle throughout the United States and Overseas even though Defendants knew or should have known, that they did not have Plaintiffs written authorization or written consent to reproduce, broadcast, publicly perform or otherwise exploit the Original Composition.

126.

The conduct of the Defendants, constitutes contributory infringement of Plaintiffs copyrights and exclusive rights in and relating to the Original Compositions in violation of the Copyright Act, 17 U.S.C. 106, 115 and 501.

As a direct and proximate result of the acts of contributory infringement committed by Defendants, Plaintiffs have suffered, and will continue to suffer substantial economic and noneconomic injuries and damages. Plaintiffs are therefore entitled to recover actual damages suffered as a result of the infringement and any prots of the Defendants attributable to the infringement of Plaintiffs copyrights and exclusive rights in and to the Original Compositions in an amount to be established at trial, but are in no event less than $1,000,000.00 (ONE MILLION DOLLARS);

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 22 of 36

Plaintiffs are further entitled to attorneys fees and full costs pursuant to the Copyright Act, 17 U.S.C. 505.

Count VII Vicarious Copyright Infringement 127. Plaintiffs Montalvo, Alicea, Gagnon and Vega, and Roldan repeat the allegations contained in paragraphs 1 through 126, and, by this reference, incorporate them herein. 128. Defendants, their employees, agents and representatives, commercially released and/or distributed the Infringing Musical Works, containing the Original Composition, Salgo Pa La Calle in the United States and overseas. 129. Defendant UMG/Machete and their employees, agents and representatives: (i) falsely indentied and designated a person or persons other than the Plaintiffs as the author, creator, performer, producer and or arranger of the Infringing Musical Works; (ii) manufactured, distributed, used, commercialized, sold and otherwise exploited the Infringing Musical Works; (iii) unlawfully proted from said exploitation of the Infringing Musical Works; and (iv) deprived Plaintiffs of substantial income directly or indirectly related to the exploitation of the Infringing Musical Works. 130. Defendants and their employees, agents and representatives have the right and ability to manage, supervise and control the Infringing Musical Works and have a direct nancial interest in the Infringing Musical Works. 131. Defendants including but not limited to UMG,/Machete derived substantial nancial benet from the infringing conduct of Defendants and as a result vicariously infringed Plaintiffs copyright and exclusive rights in and to the Original Compositions, in violation of the Copyright Act, 17 U.S.C. 106, 115 and 501.

As a direct and proximate result of the acts of vicarious infringement committed by defendants, Plaintiffs have suffered, and will continue to suffer substantial economic and non-economic

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 23 of 36

injuries and damages.Plaintiffs are therefore entitled to recover actual damages suffered as a result of the infringement and any prots of the Defendants attributable to the infringement of Plaintiffs copyrights and exclusive rights in and to the Original Compositions in an amount to be established at trial, but are in no event less than $1,000,000.00 (ONE MILLION DOLLARS);

Plaintiffs are further entitled to attorneys fees and full costs pursuant to the Copyright Act, 17 U.S.C. 505. Count VIII Disgorgement of Funds

132.

Plaintiffs repeat the allegations contained in paragraphs 1 through 131, and, by this reference, incorporate them herein.

133.

Defendants have collected monies from, among others, the sale, licensing, performance, reproduction and distribution of the musical compositions and sound recording works as included in the phonorecords and/or compact discs and any other compilations they have produced, manufactured, distributed and/or sold and the use of such works in digital/emobile/synchronizations formats, use in ad campaigns and any other use that contain Plaintiffs works.

134.

Plaintiffs demand that defendants be ordered to disgorge and account to Plaintiff, all monies received in relation to the musical compositions and sound recording works as included in the phonorecords and/or compact discs and any other compilations they have produced, manufactured, distributed and/or sold that contain Plaintiffs works.

As a result of the Defendants actions, the Defendants are liable to Plaintiffs for the total amount of income, monies, royalties and other remuneration Plaintiffs are reasonably entitled to receive, as a result of Plaintiffs creating, composing, arranging, authoring, producing and/or performing the Original Compositions embodied in the Musical Works, in an amount to be

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 24 of 36

established at trial, but are in no event less than $1,000,000.00 (ONE MILLION DOLLARS)

Count IX Unjust Enrichment (LT and UMG/Machete) 135. Plaintiffs repeat the allegations contained in paragraphs 1 through 134, and by this reference, incorporate them herein. 136. Defendants have unlawfully, willfully, fraudulently, illegally and without the consent and/or authorization of Plaintiffs, who are authors of the musical compositions and sound recordings, been manufacturing, distributing, selling, advertising, marketing and exploiting, the albums P'Al Mundo, Talento de barrio and Erre XI, featuring the aforementioned works. 137. Defendants have unlawfully, willfully, fraudulently and illegally not provided Plaintiffs all revenues, statements, reports and/or pertinent royalty payments for the use, administration, and/or exploitation of the aforementioned works. 138. By reason of all of Defendants acts as alleged above, defendants have unjustly enriched themselves and Plaintiff is entitled to just compensation therefore.

As a result of the Defendants actions, the Defendants are liable to Plaintiffs for the total amount of income, monies, royalties and other remuneration Plaintiffs are reasonably entitled to receive, as a result of Plaintiffs creating, composing, arranging, authoring, producing and/or performing the Original Compositions embodied in the Musical Works, in an amount to be established at trial, but are in no event less than $1,000,000.00 (ONE MILLION DOLLARS).

Count X Violation of RICO Statute (UMG Recordings, Inc. / Machete) 139. Plaintiffs repeat the allegations contained in paragraphs 1 through 138, and, by this reference, incorporate them herein.

Case 3:12-cv-01568-GAG Document 1 140.

Filed 07/13/12 Page 25 of 36

In July of 2007, December of 2008 and February of 2010, UMG/Machete caused to be sent throught the United States mail fraudulent accounting statements which intended to prot UMG/Machete an amount totalling over One million Sic Hundred and fty thousand dollars. ($1,650,000.00)

141.

The actions of the defendant UMG/Machete directly affect the plaintiffs. Paragraph D (1) (b) of the August 13, 2007 Protsharing Agreement states: In the event that the LT and Mas Flow accounts are fully recouped (and in the case of LT such recoupment must be from the sales corresponding to artists signed under this prot share agreement) at any time within the rst twenty-four (24) months of the agreement, then Machete shall pay LT an additional Prot Advance in the amount of One Million Dollars ($1,000,000.00) to LT promptly following delivery to LT of the accounting statement reecting such recoupment. (Prot Share Agreement p. 2 )

142.

The defendant UMG/Machete, at best, sent false accounting statements through the mails for an expectation of prot, and at worst, UMG/Machete has continued to be involved in a pattern of payola, and has provided false accounting statements in support thereof.

143.

In July of 2007, the defendant, UMG/Machete sent Saldana and Mas Flow an accounting statement that contained fraudulent expenses, that not only would prohibit the One Million Dollar payment triggered by Paragraph D(1)(b) of the Protsharing Agreement, but was also evidence that UMG/Machete continued to practice the art of Payola in contravention of their admissions made of same and their assurances to the New York Attorney General, Eliot Spitzer, that the practice of payola was to be discontinued. (See Exhibit DD attached hereto and incorporated herein by reference )

144.

UMG/Machete sent another accounting statement by mail to LT in December 2008, and February of 2010, in which there were accounting misrepresentations, including but not limited to payments of $152,000.00 to an entity called Paul's Boutique, all totalling approximately $650,000.00.

145.

Saldana and his representatives have alleged these expenses amount to illegal payola on the part of UMG/Machete. Upon information and belief, UMG/Machete's payment of the $650,000.00

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 26 of 36

amounts to payola and/or a false accounting to deprive LT and his Producers, the plaintiffs, funds they would have otherwise been entitled to. Moreover, the letter sent to Mas Flow on May 9, 2009 was fraudulent as it was intended solely to avoid payment of royalties due. 146. The actions of UMG/Machete constitute violations of 18 U.S.C. 1962 (a) and (b) 18 U.S.C. 1341 (mail fraud) and 18 U.S.C. 1343 (wire fraud). 147. 148. This action is brought pursuant to 18 U.S.C 1964 ( c ). The plaintiffs, pursuant to their Producer Agreements with Mas Flow, receive income that is dependent on the amount of income that was paid by UMG/Machete to LT/Mas Flow pursuant to the prot sharing agreement. 149. 150. The actions of UMG/Machete directly harmed plaintiffs' income. Specically plaintiff Roldan is owed income as a result of his authoring of Mirala Bien and Paleta in P'Al Mundo. Thilo also produced for Los Benjamins La Continuacion, a cd which plaintiffs and Saldana state was produced pursuant to the Prot Sharing Agreement. He produced Mia and Que Passo. 151. UMG/Machete's false accounting practices have caused the computation of royalties owed to LT and consequently to Roldan to be reduced by over 1.65 million dollars. As plaintiff's income is dependent on LT's net prots, Roldan has been directly affected by UMG/Machete's RICO violations. Moreover, Varon as co-author of Mirala Bien (P'Al Mundo) has also been harmed. 152. Los Presidentes, Anthony Cotto Nales and Aaron Pena Doble A have also been injured by UMG/Machete's actions. They produced for Los Benjamins, La Continuacion Lo Nuestro se fue remix, (Nales and Doble A), Vete (Nales), Camara, (Nales), I think Im in Love (Nales), Luny Tunes and Nales Remix, (Nales), Ando en Esa, Te Toco (Nales and Doble A), Reggaeton Ripiao (Nales and Doble A), on the DVD to this package songs by Nales, Noche de Entierro, Esta Noche and Alocate. La Continuacion was part of the Prot Sharing Agreement. Therefore they were directly injured by UMG/Machete's actions. 153. 154. Plaintiffs Alicea, Montalvo, Vega, and Gagnon also have standing and have also been harmed. Alicea, Gagnon and Montalvo Los Fantazticos and Vega, are the authors of Salgo Pa' La Calle, along with Daddy Yankee.

Case 3:12-cv-01568-GAG Document 1 155. 156.

Filed 07/13/12 Page 27 of 36

This song was also produced pursuant to the Protsharing Agreement. Plaintiffs have been harmed by Machete's failure to pay plaintiffs mechanical, and other royalties. Machete/UMG had acknowledged their obligation to pay mechanical royalties, and a fee per track for Salgo Pa la Calle.

157.

Instead, UMG/Machete has re-invested the ill gotten funds ( received by way of their failure to pay royalties to plaintiffs and Daddy Yankee) in an amount of Three hundred thousand dollars ($300,000.00) to fund their defense in the subsequent Massachusetts lawsuit. These actions violate 18 U.S.C. 1964 (b). Moreover, as author of MSN in Erre XI, Colon has been directly harmed by UMG/Machete's illegal accounting practices. He would have received royalties had UMG recouped their advances.

158.

Moreover, UMG/Machete has violated 18 U.S.C. 1341 and 1343 by and through action of their counsel. Counsel, in the Massachusetts action delayed and hindered discovery by making false statements to plaintiffs' counsel, requesting depositions be continued due to scheduling conflicts. Defendant's counsel never intended to produce their witnesses as evidenced by the correspondence attached as Exhibit EE and incorporated herein by reference)

159.

Defendant, through their attorneys have hindered plaintiffs' attempts to prosecute their claims and plaintiffs were harmed by same as they were not able to obtain necessary evidence to prosecute their case.

As a result of the Defendants actions, the Defendants are liable to Plaintiffs for the total amount of income, monies, royalties and other remuneration Plaintiffs are reasonably entitled to receive, as a result of defendants violation of the RICO statute, in an amount to be established at trial, but are in no event less than $1,000,000.00 (ONE MILLION DOLLARS). Plaintiffs also demand treble damages pursuant to 18 U.S.C. 1964(c ).

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 28 of 36

Count XI Saldana (RICO) Violations 160. Plaintiffs repeat the allegations contained in paragraphs 1 through 159, and, by this reference, incorporate them herein. 161. The defendant Francisco Saldana on or about November 9, 2010 approached plaintiff, Gerry Capo and convinced him to sign an afdavit he knew was false. The afdavit stated Capo never heard of the lawsuit. (see afdavit attached as Exhibit FF and incorporated herein by reference) 162. Saldana, after having been provided with evidence that negated Capo's assertions had another false afdavit sent to plaintiff's counsel and led with the U.S.D.C Massachusetts in Civil Action No. 10-30002 MAP. This second afdavit alleged a whole new story that he did know about the lawsuit but was promised a million dollars. (See Afdavit of counsel and second afdavit of Capo attached hereto as ExhibitsGG and HH and incorporated herein by reference.) 163. The actions of Saldana constitute violations of 18 U.S.C. 1341 and 1343 and constitute a pattern of racketeering as dened in 18 U.S.C. 1962. These actions also violate 18 U.S.C. 1512 (1) and (2) (A). (witness tampering). Plaintiffs have been harmed by said actions as their attempts to prosecute their lawsuit in Massachusetts was compromised. As a result of the Defendants actions, the Defendants are liable to Plaintiffs for the total amount of income, monies, royalties and other remuneration Plaintiffs are reasonably entitled to receive, as a result of defendants violation of the RICO statute, in an amount to be established at trial, but are in no event less than $1,000,000.00 (ONE MILLION DOLLARS). Plaintiffs also demand treble damages pursuant to 18 U.S.C. 1964(c ).

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 29 of 36

Count XII Daddy Yankee -Joint Author 164. Plaintiffs repeat the allegations contained in paragraphs 1 through 163, and, by this reference, incorporate them herein. 165. At all times pertinent to this complaint, the defendnt, Raymon Ayala pka/ Daddy Yankee was the co-author of Salgo Pa La Calle and are the holders of a copyright registration of same. 166. Defendant, Ayala has led suit in Puerto Rico CA No. 10-3149 to recover royalties owed for Salgo. 167. As joint authors, plaintiffs Alicea, Montalvo, Gagnon, and Vega are entitled to share in any amounts recovered by Ayala from UMG/Machete. As a result of the Defendants being a joint author, the Defendant is liable to Plaintiffs for the total amount of income, monies, royalties and other remuneration Plaintiffs are reasonably entitled to receive, as a result of joint authorship with Ayala, in an amount to be established at trial, but are in no event less than $1,000,000.00 (ONE MILLION DOLLARS).

Count XIII Lanham Act 168. Plaintiffs repeat the allegations contained in paragraphs 1 through 167, and, by this reference, incorporate them herein. 169. Plaintiffs are authors of several musical compositions released in the CD Erre XI on or about August 12, 2008. The defendant Machete released said CD without attributing authorship to the following: -Limits or Reynaldo Colon Vega for his authorship of MSN - Thilo for his authorship of Carita Bonita 170. Plaintiffs Montalvo, Vega, Alicea and Gagnon are authors of Salgo Pa La Calle which appears

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 30 of 36

on Daddy yankee's CD, Talento de Barrio, sold and/or distributed by Machete/UMG. 171. Machete/UMG has failed to attribute authorship of the plaintiffs to same on the CD As a result of the above acts described in paragraphs 167-169, the general public was misled due to the packaging of the CD as to the plaintiffs' authorship of Salgo and they have therefore been harmed and have suffered nancial loss.

As a result of the Defendants violation of the Lanham Act plaintiff's have been harmed and the Defendant is liable to Plaintiffs for the total amount of income, monies, royalties and other remuneration Plaintiffs are reasonably entitled to receive, as a result of said violations, in an amount to be established at trial, but are in no event less than $1,000,000.00 (ONE MILLION DOLLARS).

Count XIV All Plaintiffs v. Saldana dba/ Blue Kraft and White Kraft 172. Plaintiffs repeat the allegations contained in paragraphs 1 through 171, and, by this reference, incorporate them herein. 173. Pursuant to their contracts, the plaintiffs agreed to have Blue Kraft Music Publishing or White Kraft Music Publishing administer their royalties. 174. 175. 176. To date the plaintiffs have received no payment of their royalties Blue Kraft and White Kraft are not incorporated. They are merely extensions of Saldana. Saldana is liable to plaintiffs for breach of contract for non payment of royalties, including, but not limited to mechanical royalties.

As a result of the Defendant Saldana's breach of contract, plaintiff's have been harmed and the Defendant is liable to Plaintiffs for the total amount of income, monies, royalties and other remuneration Plaintiffs are reasonably entitled to receive, as a result of said violations, in an amount to be established at trial, but are in no event less than $1,000,000.00 (ONE MILLION

Case 3:12-cv-01568-GAG Document 1 DOLLARS).

Filed 07/13/12 Page 31 of 36

Count XV All Plaintiffs v. Saldana dba/ Blue Kraft and White Kraft (Breach of Fiduciary Duty)

177.

Plaintiffs repeat the allegations contained in paragraphs 1 through 176, and, by this reference, incorporate them herein.

178. 179.

Upon information and belief, Saldana has co-mingled monies belonging to the plaintiffs. Due to plaintiffs also being signed to Saldana's label, and Producers having management contracts with Saldana/LT, there exists a special relationship between Saldana and the plaintiffs.

180.

Saldana has a duciary duty regarding the safekeeping and correct accounting of plaintiffs' royalties and income.

181.

Plaintiffs gave Saldana complete control over collection of their royalties, and Saldana placed himself in a position of trust.

182.

Saldana breached that duciary duty by witholding said royalties belonging to plaintiffs and converting same for his personal use.

As a result of the Defendant Saldana's breach of fiduciary duty, plaintiff's have been harmed and the Defendant is liable to Plaintiffs for the total amount of income, monies, royalties and other remuneration Plaintiffs are reasonably entitled to receive, as a result of said violations, in an amount to be established at trial, but are in no event less than $1,000,000.00 (ONE MILLION DOLLARS).

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 32 of 36

Count XVI 183. Plaintiffs repeat the allegations contained in paragraphs 1 through 182, and, by this reference, incorporate them herein. 184. The defendant EMI Music Publishing, Mas Flow, LT, Francisco Saldana, Victor Cabrera, and Francisco Saldana dba Blue Kraft and White Kraft had a contract to administer and pay royalties to plaintiffs. 185. The defendants have failed to pay and have breached said contract.

As a result of the Defendant s breach of contract, plaintiff's have been harmed and the Defendant is liable to Plaintiffs for the total amount of income, monies, royalties and other remuneration Plaintiffs are reasonably entitled to receive, as a result of said breach in an amount to be established at trial, but are in no event less than $1,000,000.00 (ONE MILLION DOLLARS). Count XVII 186. Plaintiffs repeat the allegations contained in paragraphs 1 through 185, and, by this reference, incorporate them herein. 187. The defendants EMI Music Publishing, Mas Flow, LT, Francisco Saldana, Victor Cabrera, and Francisco Saldana dba Blue Kraft and White Kraft contracted to administer and pay royalties to plaintiffs. 188. Defendants have converted or fraudulently transferred plaintiffs royalties or have otherwise acted fraudulently in safegarding, paying and accounting for plaintiffs' royalties, including Saldana having borrowed funds on behalf of Blue Kraft and White Kraft and therefore encumburing plaintiff's copyright ownership in the original compositions, and continue to do so

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 33 of 36

on and through the date of the filing of this complaint. Moreover, no mechanical or other royalties have been paid to plaintiffs.

As a result of the Defendants' fraudulent conduct, plaintiff's have been harmed, and the Defendants are liable to Plaintiffs for the total amount of income, monies, royalties and other remuneration plaintiffs are reasonably entitled to receive, as a result of said violations, in an amount to be established at trial, but are in no event less than $1,000,000.00 (ONE MILLION DOLLARS).

REQUESTS FOR RELIEF

WHEREFORE, the Plaintiffs, requests that this Court: Enter judgment for Plaintiffs on all counts of this Complaint, including but not limited to:

Enter DECLARATORY JUDGMENT for all plaintiffs against all defendants in that the copyright assignments to Blue Kraft, White Kraft, and EMI are void, and revert back to plaintiffs. That defendants Saldana dba/Blue Kraft, White Kraft, and EMI have no ownership or claim to plaintiffs' percentage of ownership that can be attributed to said percentage owned immediately prior to the assignments of copyright outlined above, and which were allegedly transferred to defendants.

CONSTRUCTIVE TRUST Order that EMI, Blue Kraft and/or White Kraft pay the proceeds from this date forward, for income from all of the original compositions, listed above and in plaintiffs' Exhibits into a judicial account or trust account until this matter is resolved.

Order further that the proceeds from any work or original composition which defendant Francisco Saldana may have with EMI Music Publishing be placed in a judicial account until an

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 34 of 36

accounting can be rendered on behalf of the plaintiffs.

Appoint a master to oversee the accounting and copyright assignment issues

Award Plaintiffs all income, monies, royalties and other remuneration Plaintiffs are reasonably entitled to receive, as a result of creating, composing, arranging, authoring, producing and/or performing the Original Compositions embodied in the above-referenced Musical Works, as joint authors, in an amount to be established at trial, but which are in no event less than $1,000,000.00 (ONE MILLION DOLLARS);

Award Plaintiffs their actual and compensatory damages and any and all gains, prots and advantages Defendants obtained as a result of falsely designating Defendants, LTs Benjamin Records, Francisco Saldana (p/k/a Luny), Victor Carbrera (p/k/a Tunes), Daddy Yankee, El Cartel Records, Los Cangris Publishing as the sole creators, producers, authors, arrangers and/or composers of the above-referenced Musical Works, containing the Original Compositions, in violation of the Lanham Act, in an amount to be established at trial, but which are in no event less than $1,000,000.00 (ONE MILLION DOLLARS);

Award Plaintiffs statutory damages against Machete, upon election by Plaintiffs prior to nal judgment and in lieu of actual damages and prots from copyright infringement pursuant to the Copyright Act, U.S.C. 17 504 (c);

Award damages including, but not limited to awarding their actual and compensatory damages and any and all gross revenues, gains, prots and advantages defendant Machete Music obtained as a result of their infringement of the Original Composition, Salgo Pa La Calle, in an amount to be established at trial, but which are in no event less than $1,000,000.00 (ONE MILLION DOLLARS);

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 35 of 36

Order the Defendant UMG Machete to render an accounting to ascertain the total amount of proceeds, royalties, prots, fees, licenses and other compensation Defendants received as a result of Defendants distribution, sale, use, commercialization, licensing, broadcasting, public performance, collection/administration, and other exploitation of the Musical Works, containing the Original Compositions and award Plaintiffs any such proceeds, royalties, prots, fees, licenses and other compensation due.

Award Plaintiffs their actual and compensatory damages as a direct result and proximate cause of Defendants Ayala, El Cartel, Los Cangris Publishing, Machete, Saldana, Mas Flow LT, and Cabrera Francisco Saldana dba/Blue Kraft, and White Kraft's unjust enrichment at Plaintiffs expense, in an amount to be established at trial, but which are in no event less than 1,000,000.00 (ONE MILLION DOLLARS);

Award Plaintiffs their actual and compensatory damages as a direct result and proximate cause of being third party beneciaries of the JV Agreement, in an amount to be established at trial, but which are in no event less than 1,000,000.00 (ONE MILLION DOLLARS);

Award Plaintiffs their actual and compensatory damages as a direct result and proximate cause of Defendants breach of contract against Mas Flow/LTs Benjamin Records, (producer and Management), in an amount to be established at trial, but which are in no event less than 1,000,000.00 (ONE MILLION DOLLARS); Award Plaintiffs reasonable attorneys fees, costs and expenses relating to this action;

Award amages for Machete and Saldana/LT's violation of the RICO statute. Treble damages and; Grant Plaintiffs such other relief as the Court may deem just and proper.

Case 3:12-cv-01568-GAG Document 1

Filed 07/13/12 Page 36 of 36

JURY DEMAND Plaintiffs demand a jury trial on all issues so triable.

Dated: July 12, 2012 Respectfully Submitted, /s/ Jorge Maldonado-Rios _______________________________ Jorge Maldonado-Rios Bar number:214207 PO BOX 373127 Cayey, Puerto Rico,00737-3127 (787) 263-1940