Shark Tank Star Daymond John Files Lawsuit Over Alleged Multi-Million Dollar PPE Fraud
Shark Tank celebrity and FUBU founder Daymond John has launched a legal battle against two entrepreneurs he claims defrauded him of at least tens of millions of dollars in commissions from personal protective equipment (PPE) sales during the early days of the Covid-19 pandemic. According to exclusive court documents obtained by The Independent, John alleges that trusted partners Lisa Kornman Avila and Rashmi Budhram absconded with his rightful earnings after he brought them into what he describes as a "once-in-a-lifetime" business opportunity.
The Lucrative PPE Deals That Sparked the Dispute
The controversy centers around contracts John's company, The Shark Group, secured to supply critical PPE to multiple state governments in spring 2020. As healthcare systems nationwide faced severe shortages, John leveraged his extensive network to arrange deals with the California Department of General Services, the New York State Department of Health and Mental Hygiene, and the State of Michigan. The agreements covered essential items including N95 masks, protective goggles, and isolation gowns that were in desperately short supply.
According to the complaint filed April 3 in New York County Supreme Court, Kornman and Budhram's company Buko LLC had the manufacturing contacts to actually obtain the equipment. On one transaction alone involving California, Buko allegedly generated approximately $150 million in revenue, with John's agreed-upon referral fee amounting to roughly $30 million. The complaint details how John had established Buko as an "in-house partner/preferred partner" since 2014, allowing them to use his name and Shark brand in marketing materials while he received commissions for client referrals.
From Partnership to Alleged Betrayal
The business relationship began to unravel shortly after the initial California purchase was completed in spring 2020. John's legal filing contends that Kornman and Budhram, who had workspace in Shark's New York City office and had previously appeared on television with John, began ignoring his communications and withholding payments. Despite John's crucial role in securing multiple orders worth hundreds of millions of dollars from various government entities, the complaint states that "to date, defendants have refused to pay any money to Shark."
The legal documents reveal the specific timeline of the alleged fraud. On March 20, 2020, Shark's head of sales contacted a California procurement official assigned by Governor Gavin Newsom to obtain PPE. John positioned himself as someone who could source masks, gloves, gowns, face shields, hand sanitizer and other critical equipment. Buko would handle the actual procurement while paying Shark 20 percent of total revenue and one-third of net profits as commission.
Major Contracts and Missing Payments
In April 2020, California signed a letter of intent to purchase up to $2.825 billion in PPE from Shark, with an initial purchase order for $233.9 million worth of masks, gowns and goggles. When that transaction encountered sourcing and financing issues, the parties pivoted to isolation gowns. On April 17, 2020, California ordered 20 million Level 2 isolation gowns at $8.95 each, followed ten days later by an order for another 100 million gowns.
Buko received two substantial payments totaling approximately $146.4 million for these transactions, according to the complaint. The document further alleges that John's connections also led to PPE deals with Michigan, New York, Texas, Emory University, the Geo Group, H-E-B, and the State of Florida. However, beginning in early May 2020, just two months into the partnership, Kornman and Budhram allegedly stopped returning Shark's calls and emails.
Legal Claims and Corporate Restructuring Allegations
The complaint makes serious allegations about how Kornman and Budhram may have attempted to conceal funds. It claims they reorganized and restructured Buko under various names, including 5 Time Zones LLC, in what John's legal team describes as an effort to hide "at least tens of millions of dollars" from John while making themselves and their company "judgment-proof."
John and The Shark Group are now seeking a money judgment and punitive damages to be determined by a jury, plus interest, attorneys' fees, and court costs. High-profile employment lawyer Matthew Blit, representing John and his company, declined to comment on the record about the case, stating that "our complaint speaks for itself." Kornman and Budhram did not respond to requests for comment from The Independent.
Buko LLC has approximately three weeks to formally respond to the allegations in court. The case highlights how the desperate scramble for PPE during the pandemic's early days created both extraordinary business opportunities and significant potential for partnership disputes and alleged financial misconduct.
