Dallas entrepreneur vs businessman loses lawsuit over ‘fraudulent’ company claims

Businesses are scrambling to figure out how to respond to a lawsuit alleging they were duped by an entrepreneur seeking to set up an office in their city.

A Dallas entrepreneur was recently ordered to repay a $5,000 loan from a Dallas company after a judge found the company was “defrauding” the entrepreneur and he wasn’t told about the loan until after the company had been approved.

The Dallas Observer reports that in a complaint filed on Thursday in U.S. District Court in Dallas, the plaintiff, who has not been named, alleges that a Dallas entrepreneur named Scott Darnell, had contacted him in September 2016 with an application for an LLC that would be used to set-up a Dallas office.

Darnll allegedly promised to provide the money to a business partner.

Darnell claimed in his lawsuit that the company he was seeking to start in Dallas was already set up in Las Vegas and was ready to move into Dallas.

Darts had already paid a loan to Darnes, and the lawsuit alleges that Darnells “did not receive any documentation confirming his loan had been authorized by the city of Dallas.”

The lawsuit alleges the money was supposed to go to a local company that had already set-ups an office there, but the entrepreneur’s business partner never received the paperwork, the Observer reported.

Davenell has since set up a new company in the same city and is suing to get his loan repaid.DART, which owns Dallas-based Darts Global, did not immediately respond to CNNMoney’s request for comment.

The lawsuit filed Thursday accuses Darnel of fraudulently misrepresenting that the Dallas-area company Darts International was ready and waiting to open an office.

The complaint says Darnels office was open for two months in November 2016, but he was “not informed that his company had not received the necessary documents to establish the Dallas office was actually a legitimate business.”

The Dallas Tribune reported on Thursday that the complaint filed by the entrepreneur claims Darnals office in Dallas is being used as a front to conceal his involvement in the DART business.

The company is owned by Darners brother and the founder of Darts, Mark Darnalls.

Dart has also been sued in the past by the United States Securities and Exchange Commission.

In May, the SEC accused the company of failing to disclose a series of illegal practices, including an apparent scheme to pay people to get a business license and illegally pay the salaries of Darnles workers.

Darts Global has been under investigation by the U.s.

Department of Justice for alleged violations of securities laws.