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COMMONWEALTH OF MASSACHUSETTS

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COMMONWEALTH OF
MASSACHUSETTS,
Plaintiff,
v.
BOSTON GRAND PRIX, LLC and
JOHN CASEY,
Defendants,

COMPLAINT
1.

'his is an action by the Commonwealth of Massachusetts, by and through its

Attorney General, Maura Healey, alleging unfair or deceptive business practices in violation of
the Massachusetts Consumer Protection Act, G.L. c. 93A, 2 and 4, and regulations
promulgated thereunder. This action seeks injunctive relief and assessment of penalties in a
matter arising from the Defendants' failure to refund deposits received from consumers through
advance ticket-sales foxthe Boston Grand Prixrace scheduled for the 20115 Labor Day weekendin Boston's Seaport District (the "Race"). The Defendants, Boston Grand Prix, LLC ("BGP")
and John Casey ("Casey"), are the Race's organizers and promoters who solicited advanced
ticket sales for the Race, despite knowing that their business venture was insolvent and that they
could not cover the costs of mounting pre-event expenses without using ticket purchasers'
deposits, well before they had assurances from the City of Boston that the Race could go
forward, Rather than cancel the Race when they knew the venture was insolvent and that they
had not secured all necessary permits, the Defendants accepted the deposits from consumers and
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provided a written guarantee of a full refund in the event of cancellation. The Defendants failed
to hold those deposits in trust or provide some other mechanism to secure that (i) refunds were
available pending final government approvals, (ii) the event's vendors were paid, and (iii) the
venture was once again solvent and ready to proceed. To the contrary, the Defendants drew
upon those deposits to pay continuing and mounting pre-event costs, leaving only $400,000 for
refimds when the event was ultimately cancelled on or around May 5, 2016. The Defendants
continue to fail to refund the deposits to the consumers who paid money for tickets based upon
the Defendants' assurances that the race would proceed as advertised or they would get their
money back.

JURISDICTION AND VENUE


2.

The Court has jurisdiction over these claims pursuant to G.L. c. 93 A, 4;

G.L. c. 212, 3 and 4; G.L. c. 214, 1; and G.L. c. 223A, 3. This action is brought in
the Superior Court of Suffolk County pursuant to G.L. c. 223, 5 and G.L. c. 93 A, 4, as
there are multiple defendants and/or at least one defendant has its principal place of
business in the county.

PARTIES
3.

The Commonwealth of Massachusetts, through its Attorney General, whose

principal place of business is One Ashburton Place, Boston, Massachusetts, brings this action in
the public interest pursuant to G.L. c. 93 A, 4.
4.

BGP is a limited liability corporation organized and existing under the laws of the

Commonwealth of Massachusetts and has a principal place of business at 425 Summer Street,
Boston, Massachusetts. BGP was at all relevant times in the business of organizing, planning,
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promoting, marketing and implementing the Race.


5.

Casey is BGP's Manager and was, at all relevant times, BGP's Chief Executive

Officer or Chief Financial Officer. As such, Casey is and was personally responsible for BGP's
business operations, including, without limitation, retaining investors, soliciting sponsors,
overseeing all Race preparations, ensuring that the Race secured all necessary permits and other
government approvals and overseeing all of the Race's finances, including daily financial
transactions.
FACTS
6.

Prior to April 26, 2012, Casey and others formed a group to explore the

possibility of holding an INDYCAR race in Boston. On April 26, 2012, Casey and others filed a
Certificate of Incorporation for BGP, the entity through with they would ultimately conduct
operations that led to the Boston Grand Prix. Casey assumed the role of BGP's Chief Financial
Officer, a role in which he had responsibility for overseeing BGP's finances and which related to
BGP's daily operations. In or around December of 2015, Casey became BGP's Chief Executive
Officer and became solely responsible for BGP's finances and operations.
7.

BGP entered a sanctioning agreement with IndyCar, Inc. and/or Human

Motorsports, Inc., ("INDYCAR"). INDYCAR is the sanctioning body for Grand Prix auto races
like the Race. Under the sanctioning agreement, the Race would be sanctioned as one within the
Verizon INDYCAR Series, where participants are awarded points based upon race results.
Drivers competing in the Verizon INDYCAR Series participate in racing events around the
country throughout the year, with the top point earner winning the Verizon INDYCAR Series
championship. BGP paid INDYCAR $487,000 as a down payment towards the sanctioning fee
INDYCAR charged and, in return, INDYCAR agreed to provide technical assistance.

promotional assistance and other oversight over the event, to ensure that the Race met the
Verizon INDYCAR Series standards.
8.

As an INDYCAR sanctioned event, the Race was the City of Boston's inaugural

INDYCAR race and expected to be a major event and profitable for its promotors. Planning,
however, would be extensive and required BGP to hire engineers, environmental specialists and
other consultants to assist in race logistics. BGP incurred other significant expenses, including
paying staff salaries, attorneys' fees, permitting costs, and deposits under contracts with
IND YCAR, the Massachusetts Convention Center Authority ("MCCA") and other third parties
with whom BGP contracted for goods or services related to the Race.
9.

BGP financed these pre-Race operations through money received from investors

and by soliciting sponsorships. BGP raised millions of dollars from investors and sponsors with
the intent that those funds be used for expenses incurred during the planning and implementation
of the Race.
10.

BGP exhausted all of the investor and sponsorship funding before completing pre-

Race operations, including obtaining all permits or other government approvals to hold this event
on public streets in Boston.
11.

In late 2015 or early 2016, BGP and Casey learned that the Federal Emergency

Management Agency ("FEMA") had only recently revised its flood plain map of the Seaport
District, which placed a portion of the Race's course within a flood plain. They knew that the
Race could not go forward until they either changed the Race's course or obtained a "Certificate
of Non-Applicability" from the Boston Conservation Commission to allow the course to go
through the revised flood plain.
12.

Knowing that they had exhausted or were about to exhaust investors and

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13.

Between on or around March 11 and May 5, 2016, BGP, through its merchant

services provider, engaged in over 4,000 transactions and collected at least $2,086,798.67 in
deposits from ticket purchasers. BGP advised each of the purchasers that their tickets would be
delivered on some future date during the summer, closer to the Labor Day event date.
14,

Each ticket purchaser was provided a written confirmation of their transaction

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"ALL SALES ARE FINAL. Event schedule is subject to change or
modification for any reason including weather. No exchanges or refunds shall be
issued except under the terms and concntions hereoi. JH tits eveitt oj
cancellation for which there is no rescheduled date, the purchase price shall be
refunded. Refund for any other reason shall be at the sole discretion of Boston
Grand Prix, LLC (the 'Issuer')," (emphasis added).
This language not only provided a guarantee for a full refund upon cancellation, but confirms
that BGP and Casey knew that cancellation was possible.
15.

BGP and Casey were obliged to hold those deposits in trust for the ticket

purchasers, until such time that they knew the Race had been approved to go forward and would
take place as advertised. If they did not hold them in trust, then they should have put in place
some mechanism by which the refunds to which the ticket purchasers were entitled upon
cancellation were protected. The Defendants, instead, took that money and used it for their own
puiposes, knowing that the Race had not received all of the necessary permits or governmental
approvals.
16.

On or about April 29, 2016, the Defendants cancelled the Race without a new

date, because they were unable to obtain approval needed from the Boston Conservation
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Commission, which was necessitated b)' the change in the FEMA flood plain map. The
Defendants, thereafter, refunded only $400,000 to ticket purchasers, leaving at least
i,w / /.o > 4, /o clue in xeiuuds lo consumers.
17.

On June 28, 2016, the Attorney General served each Defendant with a demand

letter pursuant to G.L. c. 93A, 4, outlining the facts supporting the Attorney General's claims
under the Massachusetts Consumer Protection Act, against each Defendant.

COUNT I -VIOLATIONS OF G.L. c. 93 A. $ 2


18.

The allegations contained in the foregoing paragraphs are incorporated and

realleged herein by reference.


19.

BGP is a "person" as it is defined in G.L. c. 93 A, 1.

20.

Casey is a "person" as it is defined in G.L. c. 93A, 1. Casey directly managed

and oversaw the finances and daily operations of BGP including the unlawful conduct described
in this Complaint.
21.

BGP and Casey promoted the Race to consumers as a major INDYCAR event.

They did so and took deposits knowing that FEMA's change to the flood plain required revision
to the Race's route or a Certificate^oTNon-Applicability or other approval from the Boston
Conservation Commission that would allow the Race to go forward.
22.

BGP and Casey took deposits from consumers, by way of advance ticket sales,

knowing that BGP was not solvent, that BGP had outstanding debts to its vendors, INDYCAR
and the MCCA. They knew that BGP needed additional cash for continuing pre-Race
operations, in addition to these outstanding obligations.
23.

BGP and Casey should have cancelled the Race prior to offering advance sales for

tickets or, having opened sales, held the deposits from ticket purchasers in trust until they found
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other means to become solvent and obtain all necessary permits. Under no circumstances should
BGP and Casey have drawn down on those deposits for other uses, until the Race was certain to
go forward and tickets were issued.
24.

BGP and Casey knew or should have known that their unfair and deceptive

practices would cause substantial injury or otherwise harm the consumers who paid money for
the Race tickets. Casey knew by the time advance ticket sales began on March 11, 2016 that
BGP had not secured all the necessary approvals and that BGP owed money to vendors. He
knew that BGP would have to pay the balance due on contracts with INDYCAR and the MCCA,
as well as costs that the venture continued to accrue in preparation for the Race. Despite
knowing BGP had these outstanding financial obligations, Casey allowed BGP to write checks to
himself and to make direct payments to third parties that appear to be of a personal nature.
PRAYER FOR RELIEF
WHEREFORE, the Commonwealth of Massachusetts requests that this Court enter the
following relief:
1. Issue a Temporary Restraining Order and Preliminary Injunction enjoining Casey from
transferring, selling, encumbering or otherwise disposing of an}' assets he has now or
may obtain in the future, in order to satisfy the restitution sought in the Complaint;
2. Issue a Temporary Restraining Order and Preliminary Injunction enjoining Casey from
destroying evidence that may be required at trial;
3. Permanently enjoin Casey from transferring, selling, encumbering or otherwise
disposing of any assets he has now or may obtain in the future, in order to satisfy the
restitution sought in the Complaint;
4. Permanently enjoin Casey from destroying evidence that may be required at trial;

5. Order the Defendants to pa}' a $5,000 civil oenalty for each violation of G.L. c. 93A;
6. Order the Defendants to pay attorneys' fees and costs; and
7. Grant such other relief for the Cormrionwealth as the court deems just and proper.

The Commonwealth reserves the right to seek additional relief or orders, including relief
available prior to the commencement of trial, should the public interest so demand.

COMMONWEALTH OF MASSACHUSETiS
MAURA HEALEY, ATTORNEY GENERAL

By;

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Matthew Q. Berge (BBO #5603L9)y


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Assistant Attorneys General
One Ashburton Place
Boston, MA 02108
617-727-2200
matthew.berge@state.ma.us
dan.krockmalnic@state.ma.us
Date; July 7, 2016

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