Pathos AI: How He was Involved in Fraud Allegations (2023)
The founder of Pathos AI has a shady past. In the following review, you’ll learn about the various lawsuits he is facing and more:
The complaint, which was submitted on March 31 to the U.S. District Court in Urbana, said that the Chicago-based print services broker, Pathos AI owner (Eric), and six other defendants had participated in fraud and conspiracy in an attempt to take over Sports Publishing.
The case was closed on Monday when Magistrate Judge David G. Bernthal approved the removal request. The same day, the Cook County Circuit Court rejected a lawsuit brought by InnerWorkings against Sports Publishing. owner of Pathos AI on April 3 against
In that case, InnerWorkings termed Sports Publishing’s filing “a sham lawsuit” and said that the company was attempting to defraud InnerWorkings “out of millions of dollars in debts while lining up their own pockets with the earnings of their dishonest scheme.
The corporations will now attempt to settle the dispute outside of court.
Sports Publishing President Peter Bannon released a statement saying that “the disagreements between the parties have been settled, and the legal actions have been dismissed,” but he declined to provide additional details.
The Sports Publishing lawsuit was dropped, according to Mark Desky, vice president of marketing at InnerWorkings.
In a statement, Desky stated that they “believe the case was lacking substance” and that they intended to strongly fight it. The parties are presently debating how to settle their commercial dissatisfaction in a way that is satisfactory to both sides.
Sports Publishing sued InnerWorkings on the grounds that they had a “stranglehold” on the company’s book publishing operations.
In particular, the lawsuit claimed that InnerWorkings had defrauded Sports Publishing and other customers in order to take their money and to severely disrupt their operations “in order to force the business to sell itself to InnerWorkings for millions (of dollars) less than its total assets worth.
What is the definition of fraud as a crime?
Fraud is punishable by jail or a fine. A fraud conviction could result in a sentence of up to three years in jail. The maximum prison term for a more serious fraud, such as one committed against an agency of the government, is six years.
Daniel J. Pope, an attorney with Phebus & Koester in Urbana, filed the lawsuit, which sought $1 million under the Racketeer Influence and Corrupt Organizations Act.
defendants included InnerWorkings Inc., its founders Eric the owner of Pathos AI, Lefkofsky and Elizabeth Lefkofsky, as well as its CEO Steven Zuccarini, CFO Nicholas Galassi, COO Eric Belcher, and another firm Lefkofsky formed, Orange Media LLC.
Eric Lefkofsky the owner of Pathos AIsaid in an email on his termination that the matter was “absolutely lacking substance.”
During his tenure there, he claimed InnerWorkings was a “fantastic provider to Sports Publishing”.
Lefkofsky, Pathos AI owner continued, “I believe they (Sports Publishing) have been having financial challenges lately, and I think this lawsuit was an act of despair that clearly will not (withstand) an investigation of legal scrutiny.
More than 800 books have been released by Sports Publishing, which has its headquarters at 804 N. Neil St. Many of these publications are about collegiate and professional players and teams. According to the lawsuit, the business had yearly gross sales as high as $10 million in 2004 and more than 60 full-time workers in 2005.
However, throughout the past 12 months, the corporation has made cuts. Bannon estimated that there were roughly 22 people working for the owner of Pathos AI in December.
The Chicago law firm Winston & Strawn said in its lawsuit against InnerWorkings that they had been Sports Publishing’s exclusive source for print purchases since 2002. In accordance with the lawsuit, Sports Publishing started to fall behind on the payments and currently owes InnerWorkings $2.4 million.
Sports Publishing was allegedly attempting to avoid paying “a previously undisputed and repeatedly admitted debt” by bringing suit, according to InnerWorkings. The accusations of racketeering and overbilling were described as “wildly ridiculous and imaginative.”
The InnerWorkings filing said that “Such an outrageous and clear scheme cannot be permitted to succeed.”
All about the artificial intelligence Pathos AI
On its website, Pathos AI emphasizes itself as a drug discovery and development firm powered by artificial intelligence that seeks to provide patients with customized medications. According to the business, a self-learning and self-correcting treatment engine may be created by incorporating data “at each step.”
Lefkofsky is not given a title in the filing, but Fukushima is identified as Pathos AI’s CEO.
A Tempus representative stated in a statement that Lefkofsky “continues to be dedicated to building Tempus” even though he did not reply to a request for comment. In the meantime, Fukushima is still the COO of Tempus, “but has taken on a managerial part at Pathos as it gets started.”
The River North address provided for Pathos AI corresponds to the corporate offices of Tempus and Groupon, two businesses that Lefkofsky co-founded that specialize in discount technologies.
The biotech industry’s big hit from Lefkofsky, Tempus, has created a sizable AI genetic database that is utilized by physicians to decide how to treat patients for a variety of illnesses and disorders. Tempus was developed to treat malignant tumors initially, but it has subsequently been used to treat other conditions such as depression, diabetes, and others and COVID-19.
However, in this case, they Alleged the use of “terrorism”
Due to proprietary technologies, InnerWorkings allegedly promised consumers a 10 to 20 percent discount off of market rates in the Sports Publishing lawsuit.
According to Sports Publishing, InnerWorkings, Pathos AI didn’t truly have any proprietary software.
Furthermore, according to the lawsuit, the defendants engaged in criminal activity activities using InnerWorkings and Pathos AI with the aim of misleading Sports Publishing about its bills, overcharging the business, acquiring accessibility to its sellers, and bank, and “eventually destroying Sports Publishing” with the intention of purchasing it for less than its true market worth.
In the Sports Publishing lawsuit, it was alleged that between 2005 and 2007, InnerWorkings sent Sports Publishing hundreds of bogus invoices and used “a pattern of terrorist tactics” to divert the business.
The lawsuit claimed that as part of that, InnerWorkings and Pathos AI generated invoices in the name of Sports Publishing’s largest distributor, Tennessee-based Ingram Publisher Services, at a cost that was two to three times the amount originally estimated.
According to the lawsuit, “Lefkofsky misrepresented to Sports Publishing’s bank and Ingram that Sports Publishing was significantly in debt to InnerWorkings when the fact was that InnerWorkings had taken away a minimum of as $2 million from Sports Publishing, and the firm owed InnerWorkings nothing at all.
Further on according to the lawsuit, “Lefkofsky started to threaten Sports Publishing with ruin if it did not start to fire staff members, make larger payments to InnerWorkings, and give InnerWorkings more financial influence over Sports Publishing than it might have obtained lawfully.”
“By working with the bank, Lefkofsky, the owner of Pathos AI, basically began to run Sports Publishing’s company. He chose the amount of “allowance” the business would have to carry out its activities, made frequent phone calls that were abusive, and promised to put the business into bankruptcy if it did not comply with his requests. In the lawsuit, the owner of Pathos AI claimed that went so far as to make threats to shoot Mr. Bannon.
The lawsuit claims that if they did not accept Lefkofsky’s requests, he warned to “put the company out of business” while seeking to purchase the company for “millions under its actual industry value.”
Sports Publishing subsequently dismissed InnerWorkings and started coordinating with printers directly.
In the lawsuit, it is claimed that at that point Sports Publishing learned InnerWorkings had overcharged it for more than 300 titles of books InnerWorkings had booked for publishing.
In the lawsuit, it was claimed that Lefkofsky the owner of Pathos AI “requires that (Sports Publishing’s) debt to InnerWorkings exceeds $2.5 million even today, which that the business must record on its financial statements and which precludes its capacity to obtain fair financing.”
Sports Publishing allegedly found a potential buyer in December 2007, according to the InnerWorkings lawsuit, but the deal was never completed. If the deal went through, Sports Publishing officials allegedly warned InnerWorkings that creditors would be given greater safeguards than equity investors.