1 Reuben C.

Cahn (SBN 255158)

rcahn@kelleranderle.com
2 Jeremy W. Stamelman (SBN 216097)
jstamelman@kelleranderle.com
3 Anand R. Sambhwani (SBN 317295)
asambhwani@kelleranderle.com
4 KELLER/ANDERLE LLP
18300 Von Karman Avenue, Suite 930
5 Irvine, California 92612
Telephone: (949) 476-8700
6 Facsimile: (949) 476-0900
7 Attorneys for Plaintiff
TEMUJIN LABS INC.
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SUPERIOR COURT OF THE STATE OF CALIFORNIA
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COUNTY OF SANTA CLARA
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TEMUJIN LABS INC., a Delaware Case No.
13 corporation,

14 Plaintiff, COMPLAINT FOR:

15 1. Breach of Contract;
vs.
2. Breach of Implied Covenant of Good
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FRANKLIN FU, an individual, Faith and Fair Dealing.
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Defendant. DEMAND FOR JURY TRIAL
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COMPLAINT
 1 Plaintiff Temujin Labs Inc. (“Temujin” or the “Company”) alleges the following against

2 Defendant Franklin Fu (“Fu”):

3 I. INTRODUCTION

4 1. Temujin a pioneer in the blockchain industry after creating a decentralized financial

5 network for issuing confidential assets and smart contracts. Its proprietary technology achieves

6 “privacy preserving transparency.” In August 2019, Temujin engaged Fu – a veteran in the

7 blockchain world – to advise Temujin on company business, including marketing Temujin’s cutting

8 edge technology to potential investors and key players in the blockchain technology space. Instead

9 of doing his job honestly as expected, Fu took advantage of his position and tried to extort Temujin

10 and have it pay bribes to investment firms.

11 2. In September 2020, Fu demanded Temujin pay his and other investment firms $3

12 million. The money the investment firms would receive would be the “kickbacks” that Fu wanted

13 Temujin to pay to induce them to invest in Temujin. This, of course, is unlawful because it

14 conditions their investment on “under the table” payments that would not be disclosed to other

15 investors. Accordingly, Temujin brings this Complaint against Fu for breach of the express and

16 implied provisions of his advisory agreement.

17 II. THE PARTIES

18 3. Temujin is a Delaware corporation registered with the California Secretary of State

19 and doing business in Santa Clara County under the trade name “Findora.”

20 4. Fu is a former advisor to Temujin who resides in Palo Alto, California. Fu worked

21 with Temujin under an advisory agreement, effective August 5, 2019.

22 III. JURISDICTION AND VENUE

23 5. This Court has jurisdiction over the subject matter of this action, and venue is proper

24 in this Court under Section 395 of the Code of Civil Procedure, because many of the relevant events

25 causing Temujin’s injuries took place in this county, including the breaches and misconduct

26 described in this Complaint. In addition, Temujin and Fu are residents of this county.

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COMPLAINT
 1 IV. FACTUAL ALLEGATIONS

2 A. Temujin and Its Business

3 6. Temujin develops software products that carry the “Findora” brand name. One such

4 product is the Findora Ledger. The Findora Ledger is an online and digital transactional system. Put

5 simply, the Findora Ledger facilitates online transaction processing in a way that is auditable—

6 through a public and decentralized process—but also confidential. Because it is auditable, and yet

7 does not sacrifice user privacy, the Findora Ledger represents a significant advancement in the

8 digital transaction processing space.

9 7. The Findora Ledger relies on blockchain-based technology. The term “blockchain,”

10 in this context, means that transactions are verified in a decentralized manner by market participants

11 who run software that confirms and records the transactions. Blocks of verified transactions are

12 periodically added to a ledger, and hence the term blockchain developed to describe the ledger.

13 B. Fu Entered The Advisory Agreement With Temujin

14 8. Fu is a global management and blockchain expert. He is the founder of several

15 blockchain companies, mobile consumer apps, and other digital media start-ups in the United States

16 and Asia. He has held key executive positions including serving as the managing director of Meuti

17 Global and international investment. In that role, he led a team responsive for operations, global

18 branding, product development, user acquisition, and market share grown. He also served as CEO

19 of HBUS, Inc., a leading global blockchain asset financial service provider. He currently serves as

20 CEO of Math Global (aka Math Wallet) and is the owner of a venture capital and private equity

21 firm, Fenbushi Capital. He has also served as a strategic consultant for various cryptocurrency

22 companies such as WaSu, RenRen, NQ Mobile, Kingsoft and 10jqk.com.cn.

23 9. On August 5, 2019, Temujin and Fu entered into a contract for services under which

24 Fu would serve as an advisor to Temujin and would make himself available to consult on matters

25 relating to Findora’s business of building out a decentralized financial network for issuing

26 confidential assets and smart contracts. Attached as Exhibit A is a copy of the Advisory Agreement

27 that Fu executed.

28 10. Fu’s primary (but not exclusive) task was “investor relations” which was to use his

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COMPLAINT
 1 experience and connections in the blockchain industry to market Temujin’s proprietary “privacy-

2 preserving transparency” technology to potential investors as well as other important actors in the

3 blockchain industry. Fu would also consult with Temujin’s management regarding strategy to

4 further Temujin’s technology and how that technology could be used by institutions to replace

5 current infrastructure or deploy it in the cloud, all of which would be interoperable with the public

6 Temujin network. Fu was required to make himself available by telephone, mail, or in person. He

7 was also required to attend meetings using reasonable efforts. Fu also agreed that his work for

8 Temujin does not conflict with any other commitment he may have and that if any future conflict

9 were to arise, he would promptly notify Temujin. He also agreed to not directly or indirectly solicit

10 away any employees or consultants of the Company for his personal benefit or any other person.

11 Temujin and Fu agreed that California law would govern the Advisory Agreement.

12 11. In addition to these express duties, Fu was obligated to comply with a duty of good

13 faith and fair dealing in his performance under the Advisory Agreement. Specifically, he was to

14 refrain from doing anything that would impair Temujin’s right to receive the benefits of the

15 Advisory Agreement. He was required to employ reasonable efforts to achieve the material

16 purposes for which the parties entered into the Advisory Agreement, that is, to further Temujin’s

17 mission to build out a decentralized “privacy-preserving transparency” technology. Fu was also

18 obliged to not use his position and the knowledge he gained in an attempt to extort money from

19 Temujin or otherwise try to “shake down” Temujin.

20 12. Between August 2019 and September 2020, Fu was supposed to be providing the

21 agreed-upon services under the Advisory Agreement. Instead of doing his job, Fu focused his

22 energy on devising unlawful schemes to enrich his and other firms at Temujin’s expense.

23 C. Fu Attempted to Extort Temujin and Have It Pay Bribes To Investment Firms.

24 13. In September 2020, Fu contacted Temujin and demanded that Temujin and its co-

25 founder, Lily Chao, pay him $3 million in the form of Findora’s cryptocurrency. Fu’s request was

26 two-fold: (1) a portion of the money would be paid to his company, Fenbushi Capital (i.e., the

27 extortion scheme); and (2) the remainder of the funds would be paid to principals of two investment

28 funds, Dragonfly Capital and Hashkey Capital (i.e., the bribery scheme) in order to have these firms

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COMPLAINT
 1 invest in Findora and its upcoming token sale.

2 14. Fu’s demand was shocking. It was an attempt by Fu to obtain an “under-the-table”

3 benefit for himself that the Advisory Agreement did not provide to him while embroiling Temujin

4 in potentially criminal conduct. Fu’s demand was also an admission of his failure to provide the

5 services contracted for under that Agreement: locating and persuading investors—through lawful

6 means—to invest in Findora and its tokens. And it was an attempt by Fu to enrich certain

7 investors—to the detriment of Findora and the public—by conditioning any investment by them not

8 on the benefit of lawfully participating in that investment, but rather, on secretive, kick-back

9 payments those investors would receive in addition to the opportunity to invest in Findora and its

10 tokens. This was not a one-off attempt. Fu repeatedly requested that Temujin make these payments

11 to him purportedly to bribe the above-referenced individuals and companies.

12 15. Fu’s attempts to extort Temujin and bribe investment funds was a breach of his

13 express obligations under the Advisory Agreement and his implied duty of good faith and fair

14 dealing.

15 16. Fu’s bribery scheme was a breach of the Advisory Agreement because one of his

16 obligations under that contract was to provide honest “investor relations” services to Temujin. Fu’s

17 obligation was to market lawfully to third-party investors the benefits of Temujin’s technology. But

18 Fu did not satisfy that obligation. Instead, he resorted to attempts to bribe third-party investors by

19 agreeing to provide secretive, kick-back payments to them for their participation in any Findora

20 investment. The bribery scheme was clearly not what Temujin contracted for under the Advisory

21 Agreement, and Fu, therefore, breached the contract. Fu’s breach deprived Temujin of the services

22 it contracted for which, if properly and lawfully performed, would increase the value of the

23 Company and its tokens.

24 17. Fu’s extortion scheme was also a breach of the Advisory Agreement because his

25 compensation was set by that contract and did not include demanding additional amounts in order

26 to secure his performance.

27 18. Fu’s bribery and extortion schemes also breached his implied duty of good faith and

28 fair dealing under the Advisory Agreement. He did use objectively reasonable efforts in his work

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COMPLAINT
 1 for Temujin because attempts to bribe and extort were obviously not within the scope of the

2 Agreement or permitted by law.

3 19. Chao unequivocally refused Fu’s attempts to extort and bribe. Because Temujin

4 refused Fu’s attempted shakedown, Fu left the Company in or around October 2020.

5 FIRST CAUSE OF ACTION

6 (Breach of Contract Against Fu)

7 20. Temujin repeats and re-alleges paragraphs 1 through 19, inclusive, as though fully

8 stated herein.

9 21. As alleged above, Fu and Temujin entered the Advisory Agreement on or around

10 August 5, 2019.

11 22. The Advisory Agreement is valid and enforceable under California law.

12 23. Temujin substantially performed under the Advisory Agreement.

13 24. Under the Advisory Agreement with Temujin, Fu was required to provide honest

14 “investor relations” consulting services to the Company including marketing Temujin’s currency

15 and underlying technology to the market.

16 25. Fu breached the Advisory Agreement by failing to provide—in an appropriate and

17 lawful manner—the services covered by that agreement. Fu’s obligation was to market lawfully to

18 third-party investors the benefits of Temujin’s technology. But Fu did not satisfy that obligation.

19 Instead, he resorted to attempts to bribe third-party investors into investing in Temujin’s tokens

20 and/or agreeing with them that Temujin must provide secretive, kick-back payments to them in order

21 for their participation in any Findora investment. The bribery scheme was clearly not what Temujin

22 contracted for under the Advisory Agreement, and Fu, therefore, breached the contract. Fu’s breach

23 deprived Temujin of the services it contracted for which, if properly and lawfully performed, would

24 increase the value of the Company and its tokens.

25 26. Fu’s extortion scheme was also a breach of the Advisory Agreement because his

26 compensation was set by that contract and did not include demanding additional amounts in order

27 to secure his performance.

28 27. Temujin was harmed by Fu’s breach because Temujin lost more than a year during

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COMPLAINT
 1 which time it could and would have used other agents to secure third-party investors through honest

2 means instead of what Fu proposed, which was to bribe them. The harm Temujin has suffered is

3 ongoing, as the Company attempts to make up the time lost, during which Fu should have been

4 working as agreed-upon, instead of focusing his energy on illegal bribery schemes. Because Fu’s

5 work should have been aimed at enhancing Temujin’s good will, his breach of contract caused

6 Temujin harm by failing to realize that objective, and potentially having the reverse effect, through

7 Fu’s interactions with potential investors and the resulting bribery proposals.

8 28. As a proximate result of Fu’s breach, Temujin has been damaged in an amount to be

9 determined at trial.

10 SECOND CAUSE OF ACTION

11 (Breach of the Implied Covenant of Good Faith and Fair Dealing Against Fu)

12 29. Temujin repeats and re-alleges paragraphs 1 through 19, inclusive, as though fully

13 stated herein.

14 30. As alleged above, Fu and Temujin entered the Advisory Agreement on or around

15 August 5, 2019.

16 31. The Advisory Agreement is valid and enforceable under California law.

17 32. Temujin substantially performed under the Advisory Agreement.

18 33. Under the Advisory Agreement with Temujin, Fu owed Temujin a duty of good faith

19 and fair dealing. Implicit within the Advisory Agreement were obligations to (i) refrain from doing

20 anything that would impair Temujin’s right to receive the benefits of the Advisory Agreement; (ii)

21 act objectively reasonable in performing the material purpose of the Advisory Agreement which

22 was to further Temujin’s mission to build out a decentralized “privacy-preserving transparency”

23 technology; and (iii) not use his advisor role and knowledge gained from it to try to extort money

24 from Temujin or approach potential investors and/or agree with them about bribery schemes.

25 34. Fu breached the Advisory Agreement’s duty of good faith and fair dealing through

26 his bribery and extortion schemes. Fu did not act objectively reasonable in his work for Temujin

27 because attempts to bribe and extort were obviously not under the scope of the Agreement or

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COMPLAINT
 1 35. Temujin was harmed by Fu’s breach of his duty of good faith and fair dealing because

2 Temujin lost more than a year during which time it could and would have used other agents to secure

3 third-party investors through honest means instead of what Fu proposed, which was to bribe them.

4 The harm Temujin has suffered is ongoing, as the Company attempts to make up the time lost,

5 during which Fu should have been working as agreed-upon, instead of focusing his energy on illegal

6 bribery schemes. Because Fu’s work was to be aimed at enhancing Temujin’s good will, his breach

7 caused Temujin harm by failing to realize that objective, and potentially having the reverse effect,

8 through Fu’s interactions with potential investors and the resulting bribery proposals.

9 36. As a proximate result of Fu’s breach, Temujin has been damaged in an amount to be

10 determined at trial.

11 PRAYER FOR RELIEF

12 WHEREFORE, Temujin prays for relief and judgment against Fu, as follows:

13 1. For general, special, compensatory, consequential and other damages suffered by

14 Temujin according to proof at trial;

15 2. For Temujin’s costs of suit and reasonable attorneys’ fees;

16 3. For pre-judgment and post-judgment interest at the maximum allowable rate on any

17 amounts awarded; and

18 4. For any other and further relief as the Court deems just and proper.

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20 Dated: December 23, 2020 KELLER/ANDERLE LLP

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22 By: __________________________________
Reuben C. Cahn
23 Attorneys for Plaintiff
Temujin Labs Inc.
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COMPLAINT
 1 DEMAND FOR JURY TRIAL

2 Temujin Labs Inc. demands a jury trial on all triable issues.

3 Dated: December 23, 2020 KELLER/ANDERLE LLP

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5 By: __________________________________
Reuben C. Cahn
6 Attorneys for Plaintiff
Temujin Labs Inc.
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COMPLAINT