Rainbow CCTV sues former management
COSTA MESA, Calif.--After roughly 18 months of investigation, Rainbow CCTV has filed suit against one of its stockholders and a number of former executives. In late April, International Space Optics, which does business as Rainbow CCTV, requested $1.95 million in damages from stockholder Donald Hamasaki, former general manager Paul Hamasaki, former director of sales and marketing Scott Hamasaki, former accountant Joni Hamasaki, and Leslie Hamasaki, president of Sun Utility Network.
The suit alleges conspiracy to falsify, manipulate and exploit Rainbow's financial records to their own advantage, and further alleges breach of fiduciary duty by Donald Hamasaki and embezzlement by Scott and Joni Hamasaki.
Robert Fox, currently Rainbow general manager, said "we made the decision to file the lawsuit pretty much when I took over the company [in January 2006], but you have to have evidence to file a lawsuit. So then we started going through the process of doing an audit."
He said, "our financial records were a mess, so we had to sort that all out. The computer system was basically inadequate, then we had boxes and boxes of paper to go through. Then we have to run a company at the same time."
Fox was very businesslike about the lawsuit, and said he wasn't about to speculate regarding a possible motivation for a stockholder and his family to embezzle from his own company. "I can't really say it was malicious or anything like that," said Fox.
The business continues to go forward, as well, and Fox said Rainbow was continuing to partner with new dealers globally, including Europe, South America and Mexico. "Business has been pretty good," said Fox. "It has its ups and downs, but overall it's been pretty good. The business has actually had to be very strong to be able to survive this type of thing and keep going."