Colorado Entrepreneur Sues his Former Equity Investor, IPI Partners, Alleging its Founders and Affiliates Stole his Lucrative Amazon Data Center Developments in “Mafia-Like Scheme”

Denver, Colorado – Even though real estate developer Brian Watson was in big business for more than 20 years, building a national company, he could not foresee the insatiable greed that drove an equity investment firm to betray him, tamper with witnesses, bribe, pressure and conspire with Watson’s former employees, causing him to lose nearly all his life’s work, according to a new federal lawsuit (Case No. 1:24-cv-02848) filed this week.

Watson and his company Northstar Commercial Partners have been under siege for almost five years, after a series of lies about Watson’s business practices triggered a federal investigation, a civil suit, an FBI raid of Watson’s Denver home, and loss of his 40 employees, according to the complaint filed in the United States District Court for the District of Colorado. The nearly five-year Department of Justice investigation allegedly instigated by the Defendants did not lead to criminal charges against Watson, and the lawsuit states the DOJ confirmed no charges are coming. Now, Watson is fighting back, suing the entities and people the lawsuit claims stole Watson’s business and livelihood, while destroying his name and reputation.

“The last four years have been devastating to my 24-year-old company Northstar Commercial Partners, to my family, and to me. We have lost almost everything, including friendships and relationships that we held dear. It has been heartbreaking to witness how greed can make people do things to destroy others, just for making more money and profit for themselves”, said Watson. “As someone who grew up in a small, rural town on the Western Slope of Colorado, I realize now that I was swimming in shark infested waters, and they thought nothing about tearing apart a Colorado entrepreneur and business owner for their own gain.”

The lawsuit filed by Brant Kuehn of Greenspoon Marder LLP, alleges that IPI Partners, along with founders Matthew A’Hearn and Luke Gilpin and in-house legal counsel Nitin Sathe, engaged in a well-planned racketeering conspiracy to steal Watson’s successful Amazon/AWS data center development business.

The story begins in 2000 when Watson founded Northstar Commercial Partners. Over the course of two decades, Watson diligently built Northstar into a formidable player in the commercial real estate sector, focusing on innovative projects and strategic partnerships. By 2017, Northstar was a large, experienced, nationwide company perfectly positioned for growth. Data centers were in big demand and Amazon needed them. Northstar had the chops to develop, own, and manage them. The two companies were introduced. But that was just the first step. A contract like that goes through a multi-layered, competitive process.

According to the complaint, after the initial introductions and several meetings, Watson and Northstar got a chance to bid for Amazon’s AWS business, a highly regulated process, with leadership and many executives from both companies negotiating and reviewing the terms many times over.

The lawsuit states Amazon chose Northstar over as many as five other sophisticated developers because Northstar had the most competitive bid. The project was large, and Watson always brought in equity investors for Northstar’s ventures, so he was introduced to IPI, a relatively new fund with $1.5 billion of capital from several billionaire investors like Mark Zuckerberg’s private wealth management firm, ICONIQ based in San Franciso, CA, and Iron Point Partners, headquartered in Washington, D.C.

After doing all their due diligence, Northstar and IPI started working on the Amazon data center projects together, Northstar providing the opportunity, all the real estate knowledge and track-record earned over two decades, and IPI, providing most of the money.

Northstar built two data centers at first. The lawsuit says Amazon/AWS was happy with how everything was going and proceeded with seven more. These projects were not only lucrative, but also positioned Northstar as a key player in the rapidly expanding data center market, which is critical for running the internet.

According to the lawsuit, IPI, seeing the massive revenue potential beyond the $500 million of deals it already did with Northstar, wanted the Amazon business all to itself. The complaint outlines six different strategies IPI used to attempt to cut Watson and Northstar out of the deals, including offering to buy Watson out for $20 million, a fraction of what he considered his interests in the data centers was worth.

The complaint alleges that IPI did not have a working relationship with Amazon, and that Watson and Northstar identified, developed and earned the opportunity.

Watson was introduced to Amazon by a paid referral partner, the lawsuit states, a common practice where people earn money by using their contacts to connect companies and business owners. If those introductions yield a successful partnership, the referral partner gets a percentage of the deal, according to the complaint.

In fact, IPI met Watson and Northstar through the very same arrangement, with the help of a referral partner who was paid for the lucrative connection, the suit says.

According to the complaint, IPI turned this commonly used practice against Watson by pressuring a Northstar employee to provide false and misleading testimony to federal prosecutors, describing Watson’s payments to his referral partner in the projects as a bribe to an Amazon employee.

The complaint highlights recorded statements made this year by a former Northstar employee, who allegedly was pressured by IPI to falsely implicate Watson in a kickback scheme, as part of IPI’s plan to take over Mr. Watson’s and Northstar’s data center business. Among other statements, the complaint quotes the witness as admitting the following:

“Now, if somebody put me on the stand and said, ‘Did somebody want to pay you x millions of dollars to come work for them and to take over this Amazon relationship if x, and y, and z happened,’ I would say ‘yes and here’s how it happened.’”

According to the complaint, IPI instigated the now-dropped DOJ investigation and used it as the reason to terminate the joint venture with Northstar, cutting Watson out of Amazon deals he had not only originated, but successfully built, owned, and managed.

The lawsuit accuses IPI of engaging in racketeering, fraud, defamation, and other forms of misconduct, all aimed at seizing control of Northstar’s Amazon relationship and contracts and usurping its position in the data center development industry. The lawsuit asserts claims for violations of RICO, the Colorado Organized Crime Control Act, civil conspiracy, malicious prosecution, defamation and other business torts. It seeks compensatory damages, treble damages under RICO and COCCA, punitive damages, attorneys’ fees and costs. The lawsuit states that IPI replaced Northstar in a planned scheme to “cut out the middleman” with another listed defendant it owns, Stack Infrastructure, headquartered in Denver.

Watson is seeking over $2 billion in damages, a figure that reflects not only the financial losses incurred, but also the reputational harm and emotional distress he has endured. Certain of the claims asserted also provide for treble damages, which could make this the largest lawsuit in Colorado history.

“I am unsure if I will ever be able to rebuild my companies, but I do look forward to holding people accountable for the destruction they caused”, said Watson. “After what we have experienced, I hope that justice finally prevails, and that a small entrepreneur can prevail against billionaire titans. It is a true David and Goliath story, and we have chosen our stones wisely.”

CASE INFORMATION

The United States District Court For The District of Colorado
BRIAN WATSON, W.D.C. HOLDINGS, LLC D/B/A Northstar Commercial Partners, NORTHSTAR COMMERCIAL PARTNERS MANAGEMENT, LLC, and NSIPI ADMINISTRATIVE MANAGER, LLC, v. IPI PARTNERS, LLC, IPI DATA CENTER PARTNERS FUND I-A, LP, IPI DATA CENTER PARTNERS FUND I-B, LP, STACK INFRASTRUCTURE, INC., ICONIQ CAPITAL, LLC, IRON POINT PARTNERS, LLC, MATTHEW A’HEARN, LUKE GILPIN, and NITIN SATHE.
Case No. 1:24-cv-02848
Download Watson v. IPI Partners, et al (PDF)