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Man files federal lawsuit seeking control of popular online video game wagering system

By Jonathan Bilyk | Mar 12, 2014

Editor's note: The lawsuit that is the subject of this story has been dismissed. Court records show the plaintiff filed a notice of voluntary dismissal on May 21 and a judge terminated the case on May 22.

A Florida man who claims to have pioneered an online video game wagering system very similar to one operated under the name Virgin Gaming has filed a lawsuit against a group of Canadian businessmen, alleging they stole his idea, secretly cut him out of the venture and sold his idea to the business empire founded and run by billionaire Richard Branson.

And as compensation, he has asked a federal court in Chicago to effectively order that Virgin Gaming be turned over to his control.

On Monday, Michael Egan, of Boca Raton, Fla., filed a fraud and intellectual property theft suit in Chicago's federal court against a group of defendants that include Virgin Gaming co-founders William Levy and Zachary Zeldin, as well as Ryan Tenbusch, and two companies in which the three men were involved. It does not name Virgin Gaming.

In the complaint, Egan alleges the three men have fraudulently represented themselves to be the inventors and masterminds behind the concept of Virgin Gaming and the technology that powers it, knowing that the idea and much of the technology behind the system was the brainchild of the partnership that Egan claims included him in a lead role.

Egan, who suffers from cystic fibrosis, claims he began his business relationship with Zeldin, Levy and Tenbusch in 2006, when he sold Levy and Zeldin shares in his refrigerant supply company, Cool Comfort USA Inc., in Boca Raton.

Around the same time, Egan contends he began drafting plans for a business idea he called e-bet/Game4Green.

This system would essentially allow video gamers to wager on online video games they played against other gamers of similar skill levels, according to the suit that explains the e-bet/Game4Green host company would then claim a portion of each pot cashed out.

The suit asserts that many of the key details were laid out in an “Executive Summary” and other documents drafted by Egan and distributed to his alleged partners in the venture, including Levy, Zeldin and Tenbusch.

Egan also claims that many of the central conversations concerning the development of the gaming system were carried out in a group email exchange.

However, as the venture gained steam and the partners began to work toward raising capital to finance the rollout, Egan alleges his partners took advantage of his medical condition and began “secretly removing” him from the business.

He claims his partners in summer of 2006 began to communicate without his knowledge, revising key documents to make it appear a company known as “Impact Entertainment” was behind the development of the system and began pitching the idea to other businesses, all while they “deliberately strung Mr. Egan along.”

In October 2006, Egan alleges that Levy sent him an email informing him the system had encountered “MAJOR problems with verification,” potentially rendering it unmarketable.

From then, Egan asserts in his suit he lost communication with his partners almost entirely, believing for more than three years the “major problems” had killed the venture.

In 2010, however, Egan said he discovered that his former partners had sold the idea to Branson’s Virgin Group Ltd., never acknowledging his role in the development of the concept and system.

Virgin introduced Virgin Gaming in June 2010.

Egan alleges that at that time and since, Zeldin and Levy have consistently and fraudulently identified themselves as the originators and developers of the concept behind Virgin Gaming, which Egan contends is too similar to his idea to be a coincident.

“Simply put, the direct parallels between the service ‘Virgin Gaming’ and Mr. Egan’s original business concept and the signature components of the Joint Venture (e-bet/Game4Green) are unmistakable,” the complaint asserts. “It is obvious that idea behind the Joint Venture and its distinct features created by Mr. Egan are now the key elements of the service ‘Virgin Gaming.’

Among other demands, Egan has asked the court to issue an injunction barring Virgin Gaming from operating and to order his former business partners to “destroy all computer programs, business plans and any other material” derived from the plans and documents he alleges they stole from him.

The suit, which does not name Virgin Group as a defendant, also seeks a court order that Virgin Gaming, along with all rights to it, and any similar services affiliated with his former business partners be placed “in a constructive trust” for Egan.

In addition, Egan has asked for actual and punitive damages, although an exact figure was not included in the 39-page complaint.

Court records show a status hearing has been set for May 9 before U.S. District Court Judge Ronald A. Guzman.

Egan is being represented in the action by attorney John D. Cox of Lynch, Cox, Gilman & Goodman P.C. in Louisville, Ky.

And while none of the parties named in the suit currently reside or have a place of business in the state, Egan asserts that enough of the business alleged in his suit was conducted in Chicago that the city's federal court is a proper venue for the matter.

Editor's note: The lawsuit that is the subject of this story has been dismissed. Court records show the plaintiff filed a notice of voluntary dismissal on May 21 and a judge terminated the case on May 22.

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