$33 million lawsuit filed against Victorville

December 19, 2008 - 3:39 PM

BROOKE EDWARDS Staff Writer

VICTORVILLE • An investment group is suing the city of Victorville for more than $33 million, citing three counts of fraud, breach of contract, unfair competition and more, stemming from an April business trip to Asia.

CMB Infrastructure Investment Group filed its lawsuit in Los Angeles County Court this past week, claiming that Victorville has used an “ongoing and continuing fraudulent scheme” to gain inside information from their company and use it “to improperly and unfairly compete against CMB.”

The firm is seeking damages, plus an injunction to stop Victorville from using contacts and business plans CMB claims were gained.

Victorville’s City Council denied all of the claims filed by CMB, though the city’s official response hasn’t yet been filed with the courts.

The lawsuit stems from the city’s decision to change its plans for securing 200 investors from China and South Korea willing to lend $500,000 each for projects at Southern California Logistics Airport in exchange for green cards under the federal EB-5 program.

CMB coordinated a 10-day investor recruitment trip for City Manager Jon Roberts, then-Mayor Terry Caldwell and Inland Energy’s William Buck Johns, which Caldwell declared a success when he returned.

However the city later decided not to sign an exclusive agreement with CMB and instead pursued federal approval to secure investors on its own, according to Roberts.

The lawsuit states that Victorville violated a memorandum of understanding signed by Caldwell in April, forbidding the city from using any of CMB’s information for a period of two years or from hiring any of CMB’s consultants for their own projects.


The city’s general policy is not to comment on pending litigation, but Caldwell and Councilman Mike Rothschild have said they’re confident that the lawsuit will be settled in the city’s favor.

“I have read the claim and in my opinion the claim is a bunch of nonsense,” Caldwell said when the claim was first filed.

The lawsuit likely would have been filed months earlier, according to an attorney for CMB, if not for a “clerical error” by the city in neglecting to have all named parties deny the claims.

Brooke Edwards may be reached at 955-5358 or at bedwards@VVDailyPress.com.