US pizza giant Little Caesars sues for $2.5 million over failed Australian operation

US pizza giant Little Caesars is suing people behind the failed Australian operation - including an alleged bitcoin fraudster and his wife - for $2.5 million.

• Pizza chain’s biggest investor charged over cryptocurrency scam

US pizza giant Little Caesars is suing the directors and major investors behind the failed Australian operation for $2.5 million.

And the liquidator of the local chain says there is “no question” the corporate regulator should investigate its demise.

The Saturday Telegraph can reveal two Little Caesars subsidiaries have filed a US District Court complaint in Michigan “seeking damages for breaches of personal guarantees given by defendants” including former directors of the NSW-based operation Ernest and George Omar Koury, along with their wives Sandra and Gina.

Ernest and Sandra Koury during their time in Sydney.

The claim by America’s third-largest pizza company also targets investors including Colorado’s Matthew Goettsche, who was charged with fraud in December over an alleged billion-dollar bitcoin fraud, plus his wife Danielle and Utah man Gavin Dickson, who came to Australia last year in a bid to salvage the 14-store chain.

According to the complaint, the defendants signed a franchise agreement in August 2018 to pay royalties of at least four per cent of sales – plus buy sauce, dough and cheese from the US operation. The agreement said the Australian business would be in default if it became insolvent or closed.

Omar and Gina Koury are also defending a damages claim by Little Caesars.

It is alleged that from June last year, royalties and ingredients invoices were not paid. The amount now claimed is $1.1 million. A further $1.4 million for future royalties is sought.

All defendants deny the allegations or say they are untrue.

However, Ernest and Sandra Koury also say the “plaintiffs’ claims may be barred in whole or in-part for fraud and/or unfair competition, as (the) plaintiffs intentionally concerted with Bitwealth Holdings” to cut them out of the franchise agreement and business relationship with US Little Caesars.

Matthew Goettsche was the “managing member” of Bitwealth, which tipped $14 million into the Australian franchise in 2018-19 only for it to sink into administration in October last year owing $8.5 million.

Matthew and Danielle Goettsche.

The franchise is now being liquidated by Jirsch Sutherland partner Andrew Spring who told The Telegraph “there’s no question in my mind that there needs to be some further scrutiny” by the Australian Securities and Investments Commission.

Mr Spring said he was preparing a confidential report to ASIC under section 533 of the Corporations Act setting out alleged legal breaches by directors.

He said while he could not discuss details of the s533 report, his concerns included that funds came from the US “from various parties” then went back to the US.

Mr Spring said the potential “problem” for ASIC was Ernest Koury had left Australia.

Mr Koury is living in California, according to documents filed in the Michigan case. Little Caesars did not respond to requests for comment on the allegations made by him and his wife.

Citing fears of a COVID-19 outbreak, Matthew Goettsche has unsuccessfully sought to be released from a New Jersey jail while he awaits a trial on charges of conspiracy to engage in wire fraud over an alleged “cryptocurrency mining pool” scam that netted $1.1 billion.

Originally published as US pizza giant Little Caesars sues for $2.5 million over failed Australian operation