Posted by chicagomedia.org on August 11, 2009 at 17:23:06:
North, other ex-employees sue Webio founder Hernandez
By: Ann Saphir
Aug. 11, 2009
(Crain's) -- Chicago sports talk personality Mike North is leading a group of former employees of the now-defunct ChicagoSportsWebio.com in suing the Internet-based radio station founder David Hernandez for allegedly failing to pay wages.
Mr. Hernandez, who co-founded Webio with Mr. North in January, last month pleaded not guilty to federal mail fraud charges in a Ponzi scheme that allegedly bilked nearly 300 investors out of $3.5 million. Mr. Hernandez is also the target of a civil lawsuit by the Securities and Exchange Commission, which alleges he illegally used investors' money to fund payroll and pay other bills at the radio startup.
In an Aug. 5 lawsuit filed in Cook County Circuit Court in Chicago, Mr. North and 12 other former Webio employees (including Mr. North's wife Beatrice) say Mr. Hernandez failed to pay all wages due, in some cases issuing checks returned by the bank for "insufficient funds."
Eight of the plaintiffs demanded damages of more than $50,000, and all demand an unspecified amount of wages due.
Several of the plaintiffs, not including the Norths, also alleged breach of contract for terminating their employment without notice. Joining the former employees is Licorice Ltd., which says it owns the domain name for the ChicagoSportsWebio.com site; it is asking the court to block Mr. Hernandez from using the site in the future.
Mr. North was a "partner, executive vice-president and on-air host" of the radio venture, and his compensation included an annual salary of $250,000 and 30% ownership of the radio venture, according to an employment offer letter attached to the complaint. His wife, known as Be-Be, was chief operating officer. Both were fired on June 12, according to the lawsuit.
The Web site went off air a few days later after the FBI's and SEC's investigations of Mr. Hernandez became public.
Mr. North and his wife, along with Mr. Hernandez, are targets of a civil suit by two investors in Mr. Hernandez's scheme. Filed in federal court in Chicago on July 26, the lawsuit alleges that money paid to Webio employees was stolen from investors, and demands its return.