Cybersecurity Firm Files Fraud Suit Against Sellers of an IT Services Company

IT and cybersecurity firm ReachOut is suing former RedGear principals Luciano Aguayo and Armando Gonzalez over “misconduct” following its October purchase of the IT services company, said a fraud complaint (docket 1:24-cv-03408) in U.S. District Court for Eastern Illinois in Chicago. The plaintiff seeks compensation for past frauds and to stop Aguayo’s “ongoing misappropriation” of ReachOut funds, it said.

ReachOut acquired 100% of the membership interests of El Paso-based RedGear from Aguayo and Gonzalez in the form of cash and a promissory note with a 60-month repayment term, alleged the complaint. Terms included that Aguayo would work as ReachOut's director of business and growth after the deal closed and would owe fiduciary duties as a company agent and employee, it said.

After the deal closed, ReachOut learned of Aguayo's “troubling misconduct,” including misappropriation of corporate resources, funds and “opportunities,” the complaint said. He is “wrongfully directing” a ReachOut employee to perform work that benefits Aguayo’s company and is diverting ReachOut funds to pay lease payments to his business, book first-class airfare and purchase other “extravagant expenses contrary to ReachOut’s policies and principles,” it said.

In addition, Aguayo misrepresents himself with ReachOut clients that he still owns the business “and conceals that an acquisition occurred,” the complaint alleged. An employee who mentioned this fraud was “treated so badly" that the staffer "left the company,” it said.

Since Aguayo became an employee, Mokena, Illinois-based ReachOut learned many representations and warranties he made in the purchase agreement as an inducement to the transaction “were false,” the complaint said. Aguayo did not disclose or pay commission allegedly owed to an employee, failed to disclose that he had not paid Texas state franchise taxes “and failed to disclose that a company vehicle worth more than $50,000 was 'missing’ while nonetheless asking ReachOut to continue to pay for it,” it said.

Aguayo’s “self-dealing and deliberate misrepresentations” reduced RedGear’s earnings “below represented levels, rendering the purchase price paid significantly greater than the actual financial performance justified,” the complaint said. His breach of fiduciary duties have also deprived ReachOut of a fundamental benefit of its bargain. Aguayo’s fraud “induced ReachOut to make a cash payment and enter into a promissory note it never would have entered into had it known the truth about Aguayo and RedGear,” it said.

Aguayo falsely claimed ReachOut was late in making a payment under the promissory note, saying the entire amount should be accelerated “and thus avoid further expected contractual reductions in the amount owed,” the complaint said. But no payment was required, it said. “ReachOut properly exercised its set-off rights pursuant to the transaction documents because, as a result of his fraud, the amount owed under the Note has been materially reduced and should be eliminated altogether,” it said.

ReachOut alleges common law fraud, fraudulent inducement, tortious interference with prospective business relations, breach of fiduciary duty, conversion of a 2022 Toyota 4Runner and conversion of consulting client proceeds against Aguayo. Against both defendants, the plaintiff seeks declaratory judgment on the promissory note. ReachOut requests disgorgement of any monies Aguayo misappropriated from ReachOut, including all sums made using ReachOut employees or resources; a declaration that ReachOut isn’t in default under the note, and one that the note isn’t due immediately; plus attorneys’ fees and costs.