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Appell, United Fiber & Data sue Live band members and felon who is former CEO

Liz Evans Scolforo
York Dispatch
United Fiber and Data CEO Bill Hynes (second from left) poses with Live band members (from left) Chad Taylor, Chad Gracey and Patrick Dahlheimer, who are founders of the company.

The son of the late York philanthropist Louis Appell Jr., along with United Fiber & Data, have sued members of the rock band Live, two of its Think Loud companies and Bill Hynes, a felon who had been CEO of the company.

The lawsuit, filed Tuesday in York County Court, claims Hynes siphoned millions of dollars from United Fiber & Data LLC (UFD), using the company as his "personal piggy bank" to fund a lavish lifestyle he couldn't otherwise afford.

"This unlawful pattern of misconduct included the outright theft of Company funds, fraud, and persistent self-dealing," the lawsuit states. "As but one example, Hynes unlawfully transferred to one of his personal entities millions of dollars that had come into the Company from the Commonwealth. That money belonged to the Company, and the company was legally obligated to immediately turn these funds over to Appell to repay him for a loan that he had made to the Company."

The suit alleges Hynes repeatedly lied, and continues to do so, to cover up the theft.

"Hynes' unlawful pattern of misconduct also involved his causing the Company to enter into various transactions that had absolutely no legitimate business purpose, especially given that the Company was a startup with very little cash," the lawsuit states. "All of these illegitimate actions were intended to result in a material benefit to Hynes or his co-conspirators."

Hynes sent The York Dispatch the following statement Wednesday afternoon:

"As anticipated, the Defendant's counterclaim is a convenient narrative but lacks factual merit. They schemed to manifest further public scrutiny of my reputation through threats, intimidation, and bully tactics. I could either submit to their demands or step into the spotlight they intended to cast. I feel an obligation to protect myself and my fellow shareholders through the public transparency provided by our legal system. The alternative, behind closed doors, felt 100% like a conspiracy to derail everything we built."

Live accusations: The lawsuit alleges that Live member Chad Taylor is one of those co-conspirators, and he is a named defendant. Also named as defendants are Think Loud Investments, Think Loud Development, BKS Capital and Yrk LLC — companies in which Hynes, Taylor and Live members Chad Gracey and Patrick Dahlheimer are involved. All the companies are based at Think Loud's 210 York St. headquarters, which is also the home mailing address of Hynes and Taylor.

Taylor responded to a request for comment in an email Wednesday morning: "Sad, but anticipated. We forecasted this behavior in the Complaint we filed here and then in Lehigh County, and will defend vigorously against these specious counterclaims."

Bill Hynes leaves the York County Judicial Center after a pretrial conference Monday, June 29, 2020. He faces charges that include stalking, burglary, forgery and tampering with public records. Bill Kalina photo

The three Live members, through one of their Think Loud companies, have sued Louis Appell III, alleging he is trying to wrest control of UFD from them.

They initially filed their lawsuit Friday in York County Court, then withdrew it and filed it Monday in Lehigh County Court. Read more about it here:

More:Think Loud sues York philanthropist's son over control of fiber optic company

UFD was created in 2012 to bring high-speed internet to Pennsylvania's southcentral counties. Since that time, it has laid about 400 miles of fiber optic cable from Manhattan to Ashburn, Virginia, according to the lawsuit.

Tens of millions: The lawsuit filed Tuesday by Appell III and UFD states that the full extent of losses isn't yet known, but that it's clear the amount is in the tens of millions of dollars.

"Indeed, Defendants owe in excess of $20 million pursuant to various promissory notes held by Plaintiffs which Defendants have failed to pay," it states.

According to the lawsuit, BKS Capital — which holds a board seat at UFD — is controlled by Hynes and recently "purported to name Hynes to one of three seats on the (UFD) Company board."

The lawsuit claims that allowing Hynes to serve on the UFD board would "permit Hynes to continue to pursue his scheme of draining Company assets" and notes that Hynes is currently facing trial on criminal charges in which the alleged victim is his former employee and ex-girlfriend. Read more about the criminal case here: 

More:Bill Hynes resigns as CEO of York's United Fiber & Data; more details on criminal charges

The lawsuit states that Appell Jr. provided the defendants with a $5 million line of credit to renovate Think Loud's 210 York St. headquarters, to be repaid immediately after the defendants received a $5 million Redevelopment Assistance Capital Program grant for the renovations. Hynes has said the renovations were expected to cost $16.8 million.

Think Loud Development in York City, Tuesday, Sept. 22, 2020. Dawn J. Sagert photo

$5 million state grant: In 2014, then-Gov. Tom Corbett awarded Think Loud Development the up-to $5 million grant, not knowing then-CEO Hynes is a felon. After being told of Hynes' felony record, a spokesperson for Corbett said it wouldn't affect the grant, which had already been issued, The York Dispatch reported in 2014.

After Think Loud received the state grant, Hynes moved the entire amount received — about $3.4 million — to an account belonging to him and his colleagues, the lawsuit alleges.

"This was accomplished by breaking the RACP money into four smaller pieces and then transferring them via three transfers for $1,000,000 each and a fourth transfer for the remaining $388,027.00," the lawsuit alleges. "By transferring no more than $1,000,000 in any one transfer, Hynes was able to avoid additional approvals by the bank that would be required for transfers larger than $1,000,000.

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'Blatant act of theft': "This was a straightforward and blatant act of theft by Hynes," the lawsuit states, and one he allegedly never disclosed to the Appell family. Louis Appell Jr. died in 2016.

"Appell (III) did not discover that the grant money had in fact been received by UFD … (until) after Hynes resigned as CEO, left the Board, and the Company began investigating transactions Hynes carried out between UFD and Hynes-controlled entities," according to the lawsuit.

"Appell has not been repaid a single dollar under the RACP Note … and Appell has been the victim of a multimillion dollar illegal scam," the lawsuit states.

The lawsuit also alleges that Hynes "dipped into UFD funds" to promote his racing career "and in an effort to advance his purported celebrity status."

Hynes is involved in Stadium Super Trucks racing and used at least $275,000 in UFD money to produce commercials about his racing, the lawsuit alleges, and also submitted doctored invoices to hide his theft.

Think Loud CEO Bill Hynes

Andretti sponsorships: In 2013, before UFD had even begun significant construction on its fiber optic line, Hynes and Tayler entered into two sponsorship agreements with Andretti Autosport that cost UFD $11 million a year, according to the lawsuit.

Hynes is friends with Michael Andretti and is "an avid racing fan," the suit states.

"Ultimately, over $15.6 million of UFD capital was paid out in Andretti-related expenses, including advertising and sponsorships, 'UFD Girls' (essentially, racing cheerleaders sponsored by UFD), private plane travel, dining and entertainment, and charitable contributions," the lawsuit alleges.

Hynes and Taylor "kept the true scope of the Andretti sponsorship hidden from the Appell family … for many years," according to the lawsuit.

The lawsuit claims the Andretti sponsorship fees paid by UFD were exorbitant and that in 2015 the sponsorship agreements were terminated after a settlement with Andretti was reached.

As part of the settlement, UFD was required to pay $9 million to Andretti, according to the lawsuit.

Allentown loan: The lawsuit alleges Hynes and all three Live members, through Think Loud Investments, obtained a $5 million renovation loan for a property they own in Allentown in 2013 and that Hynes made UFD guarantor of that loan.

Hynes, Taylor, Gracey and Dahlheimer took $800,000 "as a purported fee," then defaulted on the loan, which UFD continues to pay on monthly, the lawsuit states.

The lawsuit accuses Hynes of using UFD money to increase his own celebrity profile, including by appearing on "Celebrity Apprentice" and donating $30,000 of what he said was his personal money to Geraldo Rivera's charity. In fact, the money came from UFD, the lawsuit states.

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'Longstanding pattern': Hynes used UFD money to hire a company called Social Czars to manage his online reputation after local newspapers began reporting on a protection from abuse order against him and his subsequent related criminal charges, the lawsuit alleges.

He stepped down as a UFD board member after the allegations against him came to light, but his is now trying to reappoint himself to the board through, according to the lawsuit, which states that him returning to the board could put a stop to UFD's investigation into Hynes' "longstanding pattern of illegal conduct, including conversion, fraud, breach of duty, and self-dealing, with UFD as one of his primary targets."

The lawsuit is seeking compensatory damages and interest, punitive damages, attorney fees and a declaration that Hynes cannot be reappointed to UFD's three-person board.

— Reach senior crime reporter Liz Evans Scolforo at or on Twitter at @LizScolforoYD.

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