$50M lottery winner Randall Rush sues Alberta company over investment
Statement of claim says he was 'induced' to invest in mobile-phone developer
Randall Rush had dreams of helping those in need after winning a $50-million lottery. But a year later, the Lamont, Alta., man is suing an Alberta company after investing nearly 10 per cent of his winnings.
In a statement of claim filed this month, Rush says a few weeks after he collected his winnings he was approached by Jeremy Crawford, an Edmonton resident, to invest in a yet-to-be developed mobile phone application by Crawford's company, Kult Labs.
On its website, Kult Labs says it focuses "on strategy, design, and development as we passionately pursue the bleeding, hair-splitting, cutting-edge innovation of web, mobile apps and intelligence software development."
The lawsuit claims Rush invested more than $4.6 million over a five- month period in Kult Labs.
Rush claims he was "induced" by representations made "fraudulently, deliberately, or recklessly, having no regard to their truth or accuracy."
Kult Labs has not yet filed a statement of defence. None of the allegations in the statement of claim has been proven in court.
In the lawsuit, Rush says he was told the company was poised to be a multibillion-dollar business and within a year of the launch of its mobile phone application, monthly revenues would reach $95 million.
The document states the company made false claims "for the purpose that Rush would rely and act upon them."
Failed to register assets
It also accuses the company of failing to register assets used as collateral for his investment including an Audi R8 luxury sedan, a modest Sherwood Park home, a large residence and an office building in Arizona.
On his personal website, TheJerCraw.com, Crawford says he got his start in sales at City Ford in St. Albert. Crawford also says he was "the founding publisher of Edmonton Style Magazine, Calgary Living Magazine, Alberta Oil Magazine and Toronto Elite Magazine" and "was also the Director of Publication Development and Associate Publisher of Privilege Magazine in Toronto."
Rush's life changed dramatically in February 2015 when took a trip to a grocery store to buy food for his cat Conway Kitty, and discovered he had the winning lottery ticket.
A self-described "car nut," Rush told reporters at the time he planned to purchase a 1965 Chevrolet Corvette. But as someone who had once nearly become homeless, he said, he would also direct part of his winnings to charity.
"This a tremendous amount of money and I'm looking at this as a gift from God, and it is a responsibility," he said, describing plans to set up a trust fund and feed homeless and hungry kids with the interest on his winnings. "That is what I'm dedicating the rest of my life to."
But the lawsuit says that in April 2015 Rush also began investing in Kult Labs.
Invested in mobile phone application
Initially, he spent $150,000 to pay computer programmers developing Kult's mobile phone application.
The lawsuit alleges that a few weeks later Crawford asked for an additional $2.5 million in exchange for five per cent of several Kult corporations.
It is alleged that a month after that, Crawford requested another $2 million, which would double Rush's shares. Rush says he paid in four, $500,000 monthly installments, but he alleges he was never provided with proof of his 10 per cent share in Kult Labs.
The lawsuit asks for more than $4.6 million in damages.
If you have any information about this story, please send an email in confidence to andrea.huncar@cbc.ca