Ex-Lifetoken CTO Demanding 6-Figure Sum for Return of Company Assets: Complaint
The former chief technology officer of Lifetoken Software abruptly resigned March 1 and is holding the company “hostage, seeking to extort hundreds of thousands of dollars” from the firm before he returns its property, Lifetoken's complaint alleged Friday (docket 1:24-cv-02587) in U.S. District Court for Southern New York in Manhattan. Lifetoken claims violations of the Defend Trade Secrets, Computer Fraud & Abuse and Stored Communications Acts.
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Dana Love has refused to return company assets and computer systems in violation of the employee proprietary information and inventions agreement he signed when joining Lifetoken in January 2022, the complaint said. Love chose to use his home computer, home network and personal laptop for corporate purposes as CTO. In that position he had sole access to passwords and other security tools necessary to access all of Lifetoken’s servers, software and electronic systems and accounts, said the complaint. He “controlled on a daily basis” all the company's intellectual property, computer systems and electronic accounts, it said.
Love “resigned abruptly” from Lifetoken March 1 and sent email to investors and other individuals he had met while employed “as a fiduciary” by Lifetoken, saying it was his last day and that the company's payroll stopped effective at the end of February, said the complaint. “Lifetoken’s payroll had not stopped the previous day,” it said.
Under terms of the employee agreement, all Lifetoken-related materials on Love’s computer from his two-year tenure are company property, but he has refused to return or provide access after repeated requests and demands from Lifetoken CEO Jeff Dyment, the complaint said. Love has indicated he “may do so once he is paid hundreds of thousands of dollars,” it said. He has withheld all of Lifetoken’s assets and is "demanding an extortion payment for its return," it said.
Dyment requested and demanded that Love return all the company’s property and immediately stop operating, accessing and possessing any of its computer systems and data, the complaint said. The computer systems, programs and digital data “are necessary for the company to operate and seek financing and customers,” it said.
Love has also continued to access, and refused to provide access to or return, the company’s proprietary Dyme computer systems, the complaint said. Love was paid to develop Dyme and was given access to Dyme computer systems as a fiduciary of the company, it said.
In addition to violations of federal laws, Lifetoken brings claims of conversion, breach of fiduciary duty and contract, defamation and tortious interference with prospective business opportunities. Lifetoken demands a jury trial for all claims and seeks an award of actual, punitive and treble damages, temporary and permanent injunctive relief, pre-judgment interest, and all attorneys’ fees and costs.