Former Exec Files $15.5M Fraud Suit Against BioTelemetry, Inc

LONG BEACH, Calif. - Sept. 21, 2016 - PRLog -- Christian Teague, a former CardioCore LAB, LLC executive, filed  suit in San Francisco Superior Court on  Monday against BioTelemetry, Inc. (BEAT) and two of their subsidiaries. The suit alleges fraud, breach of written contract, and fraudulent misrepresentation among other counts on an 'alter ego' theory and seeks more than $15.5 million in damages.

BioTelemetry, Inc. owns numerous subsidiaries that perform services ranging from medical research to rendering patient care. On or about June 3^rd, 2014, Biotelemetry acquired Radcore, a company then co-owned by Plaintiff Christian Teague. As partial consideration for the acquisition, Plaintiff entered into an employment contract with CardioCore LAB, LLC, stated in which Plaintiff would be employed by CardioCore LAB, LLC as Vice President, Imagining Services for an annual salary plus "commissions in the amount equal to three percent (3%) of gross imagining revenue booked by the Company under new contracts entered into by the Company during the (36) thirty-six month period commencing on the date of this agreement." At the time this agreement was entered into, Plaintiff alleges CardioCore LAB, LLC was the only subsidiary of BioTelemetry, Inc. working to secure imaging contracts.

Plaintiff alleges in his Complaint that two BioTelemetry, Inc. subsidiaries, CardioCore LAB, LLC and VirtualScopics, Inc. are acting, impermissibly, as alter egos of BioTelemetry, Inc., essentially failing to adhere to the corporate formalities that afford parent companies the liability shields they enjoy from their wholly owned subsidiaries. Specifically, Plaintiff alleges three of the same executives serve as the CEO, CFO, and General Counsel for BioTelemetry, Inc., CardioCore LAB, LLC, and VirtualScopics Inc., and that these companies so completely commingle their funds as to make the companies legally indistinguishable from each other. As such, Plaintiff alleges, when entering into a contract with CardioCore LAB, LLC guaranteeing Plaintiff 3% of all imaging contracts signed by "the Company," Plaintiff understood it to mean all imaging contracts secured by any BioTelemetry, Inc. subsidiary or alter ego.

When CardioCore LAB, LLC, terminated Plaintiff one day before BioTelemetry Inc. acquired VirtualScopics, Inc. (a company which, Plaintiff alleges, secures imaging contracts), it became clear that "Defendants intended to defraud him out of his rightfully owed commission by signing imaging contracts under the wholly owned subsidiary VIRTUALSCOPICS for the propose of circumventing Plaintiff's Employment Agreement with CARDIOCORE LAB which, for all intents and purposes, is the same as a contract with BIOTELEMETRY or VIRTUALSCOPICS as they act as alter egos of each other." Complaint, ¶ 21.

Essentially, Plaintiff alleges that a company's subsidiary cannot simply make an agreement to pay a commission on all of a certain type of contract and then simply funnel all of such contracts through a different subsidiary for purposes of circumventing the agreement. Based upon Plaintiff 's allegations of commonality of management among the three Defendant companies as well as a commingling of assets, Plaintiff further alleges that there was a conspiracy among the three companies to defraud Plaintiff, both in the inducement of his employment agreement as well as upon his termination. Plaintiff now seeks over $1.5 million in lost profits as well as over $14 million in punitive damages as a result of the alleged fraud.

This case was filed under case number CGC 16-554341 in the Superior Court of The State of California, County of San Francisco. Plaintiff is represented by Daniel L. Hitzke, Esq. and Alexander C. Eisner, Esq. of Hitzke & Associates. http://www.hitzkelaw.com