CNBC's 'The Profit' at the center of $30-million fraud claim

Marcus Lemonis in 2013 at a NBCUniversal press tour discussing the CNBC show “The Profit.”

(Chris Haston / CNBC via Getty Images)

May 6, 2022 Updated 3:08 PM PT

In 2015, Dean and Keith Lyden’s Allentown, Pa., design company was featured on the CNBC show “The Profit,” a popular, eight-season-long show about struggling businesses that swap a stake in the company for cash and the guidance of presenter and entrepreneur Marcus Lemonis.

Seven years later the company, Precise Graphix, is in bankruptcy and its trustee is pinning the blame for its misfortune on NBC and Lemonis.

A trustee for the estate is suing NBCUniversal, the production company Machete and the retailer Camping World, which is partly owned by Lemonis, on allegations including fraud and breach of contract.

Instead of helping the business, the show caused its demise, according to a lawsuit filed in Los Angeles County Superior Court this week that is seeking at least $30 million in damages.

“NBCUniversal and, subsequently Machete, created a mob-style scam that disparaged, denigrated, and falsely portrayed the businesses they promised to help, like Precise Graphix,” Lynn E. Feldman, the Chapter 7 trustee, said in the lawsuit.

Representatives for Machete and NBC did not respond to requests for comment. A spokeswoman for CNBC declined to comment.

Lemonis said that the claims are baseless.

“I will not continue to allow people to create their own narrative based on a false reality,” Lemonis said in a statement. “I work hard for and respect money and take any attempt to unethically extract it from me very seriously.”

The 222-page complaint details a complex story of the family-run business, which did not turn out as expected.

The case joins a string of complaints involving the reality TV show “The Profit,” NBC and its star frontman.

The law firm acting for the Precise Graphix trustee is representing three other companies in lawsuits against the network after their involvement with the show.

“These people come from small towns in America. These are good, hardworking people,” said Gerard Fox, a Los Angeles attorney who is representing the estate of Precise Graphix, in an interview. “[‘The Profit’] is designed to give the viewer the idea that the business owners are idiots and NBC, Machete and Lemonis are guiding them to a great result. And that’s not true.”

Fox’s company is representing Colorado-based Tumbleweed Tiny House in a lawsuit filed in November alleging fraud by NBC and Lemonis; Illinois-based Desherlia Marina Management, which sued NBC and Lemonis among others for defamation earlier this year; and New York-based fashion company Gooberry Corp., which sued the parties for fraud last year in New York State Court after a previous lawsuit in federal court was dismissed.

Lemonis has launched lawsuits of his own against the businesses that have sued him. In October, Lemonis’ Freedomroads company sued Steve Weissman, the owner and chief executive of Tumbleweed Tiny House, claiming it was owed $3 million.

“I am a trusting person to a fault,” Lemonis said. “But if you lie or you steal or you cheat or you do things unethically, I’m going to hold your feet to the fire.”

Fox, who also represents Weissman, said the lawsuit is “based on fraudulently induced debt and that he destroyed his company.”

Brothers Keith and Dean Lyden started Precise Graphix in 2004. The business — manufacturing interior decor for retailers, restaurants and commercial buildings — turned a profit almost every year, according to the complaint.

The brothers had been looking to expand the business but needed a capital injection and a partner to help diversify its customer base and help with operations. Before its involvement with the show, the company generated $4 million in revenue a year with about 30 employees, the lawsuit said.

Dean Lyden was a fan of “The Profit.” After watching the one-hour episodes, he and his brother thought Lemonis could help them grow their business.

But once they got involved in 2015, NBC and Lemonis reneged on their promise to act in the best interests of the company, the lawsuit states.

NBC used producers and Lemonis to create chaos and divide the business owners and overburden the company with debt, which led to its demise, the trustee alleges.

Lemonis received one-third of the company’s shares and control of its decisions without making a $270,000 initial investment in Precise Graphix, the complaint said. The funding was tied to the redesign and remodel of two Camping World locations in three weeks, the lawsuit states. Lemonis is chairman and chief executive of RV retailer Camping World Holdings, in which he holds a more than 40% stake.

The company allegedly had to complete projects at a loss, most of which were for entities Lemonis controlled. In 2021 the debt-burdened company filed for bankruptcy owing $6 million after Lemonis did not sign a credit line renewal.

Additionally, the trustee alleges, during filming, the crew told the owners they were “boring” and pushed staff for details about the relationship between the brothers, who were portrayed as incompetent.

“NBCUniversal and Machete’s actions lead to irreparable damage beyond the multitude of litigation and competition between the brothers,” the trustee said in the complaint. “The brothers no longer speak, even at family gatherings.”

Dean Lyden said he was unaware of the suit until after it had been filed.

“I don’t put it all on the show,” he said Wednesday. “There’s issues in any family business and there were when we grew, and with that stress, other things amplified things. I can’t put the falling out on the show.”

Before Precise Graphix went into bankruptcy, Keith Lyden obtained full control of the company from Lemonis, who had bought his brother’s stake in 2019.

Lemonis sued Keith Lyden last year for breach of contract. Fox said that Lemonis’ suit against his client was “an extorted settlement agreement that violates several contract rules.”

“After going through what we have been through and hearing about what other small business owners who have been on ‘The Profit’ have been through, I regret ever agreeing to be a part of the show,” said Keith Lyden in a statement. “CNBC and Marcus Lemonis have taken away everything I have worked towards for myself and my family over the past 18 years. He has taken away the livelihood of all the people Precise Graphix employed.”

Times researcher Scott Wilson contributed to this report.