Civil Lawsuit Charges Candidate Allen with Active Deceit, Concealment, Fraud

Stephen Downing

Lawsuit says couple paid “$128,038 for a going concern and received an insolvent company in exchange.”


A lawsuit filed in the Los Angeles Superior Court on Oct. 2 against City Council District 2 candidate Cindy Allen alleges fraudulent inducement and breach of contract in the sale of her business, Agency ETA.

The buyers, Ivana and Dominic Cummins, said they were damaged, having paid a purchase price of $128,038.40, for what was described as a “going concern” and in the end received an insolvent company with undisclosed debt and questionable governmental loans, including engineered loan applications designed to conceal actual salary expenses.

The lawsuit further alleges that Allen misrepresented the value and liabilities of ETA, failed and refused to provide audited and unaudited financial statements and that the City Council candidate intentionally concealed and omitted debts and obligations of the agency, including $22,615.37 in undisclosed vendor invoices.

SBA Loan Concealed from Buyers

According to the court documents, the buyers – and Allen – knew the business was not in a healthy state and needed a SBA loan to survive

The court filing alleges that Allen concealed from the buyers that ETA had received a $29,000 SBA Economic Injury Disaster Loan (SBA EIDL), knowing that governmental regulations forbid a second loan and that the buyers of Agency ETA were depending upon making that kind of   loan to insure survival of the business.

The documents indicate that not only could the new buyer not get more from the SBA EIDL program but also they were not told that they would owe the government for all the money Allen took from the undisclosed loan that is not eventually forgiven by the federal government.  

Fraudulent Manipulation of PPP Loan

The court documents also detailed that prior to the sale ETA employees took agreed upon pay-cuts so ETA could avail itself of the benefits the Paycheck Protection Program (PPP) – the $521 billion forgivable loan program designed to bridge small businesses though the pandemic.

The pay cut agreements included $25,002 for VP Adam Carrillo (annual salary $99,998.50) and $19,002 for ETA Creative Director Jan Montoya (annual salary $75,998) – both of whom, according to the lawsuit – advised the ETA buyers that the salary cuts were agreed to be temporary with a promise and an expectation that their original salaries would be reinstated after the PPP Loan was forgiven.

The salary cuts equate to undisclosed totals of $44,004. Nowhere in the documents does it indicate the draw or salary taken by Allen.

Furniture, Equipment Missing

The couple also alleged that after close of the sale $67,848.22 worth of company equipment went missing including camera gear, computer equipment, iPhones and a $1,000 drone camera. 

ETA Stock Sale

The sale of ETA was arranged as a stock sale, not a sale of all business assets. It is dated July 20, 2020.

Exhibits in the court documents indicate there are 1,500 shares in the company and Cindy Allen owned all.

The Stock Purchase Agreement does not include disclosures of debt and it requires Allen to turn over all ETA financials.

ETA’s only acknowledged debt was the “SBA loans not to exceed $86,933.84 on the closing date and company credit card debt not to exceed $41,104.56 on the closing date.” The new owners would assume this debt.

Does Conflict of Interest Remain?

Allegedly Cindy Allen sold her interest in ETA Agency to avoid a conflict of interest if elected to the City Council. However, the purchase agreement includes a provision that Allen will receive, 10% of all ETA net revenue for the next 36 months, paid monthly.

The plaintiffs asked for “Compensatory damages in an amount to be proven at trial; interest on said sum at the legal rate; punitive damages; an award of attorneys’ fees pursuant to the agreement and law; an award of the costs of suit; and any such further relief as is just and equitable herein.”

Beachcomber Questions

On the early afternoon of Oct. 6 the Beachcomber asked the City Council candidate for comment on the lawsuit and posed the following questions:

  1. We note in the lawsuit that the sale agreement allows you to keep 10% of net revenue for the next 36 months.  If elected how did you plan to divest yourself in order to avoid a conflict of interest?
  2. We also note that your son, David, who draws an annual salary of $97,000, was not asked to take a pay cut. Is David still employed by ETA?
  3. Did you or any member of your family retain shares in ETA following the sale?
  4. Was your sale of the Long Beach Post done on the basis of a share sale rather than an outright sale of the corporation? And if so, do you and/or Robert Garcia continue to own shares in the LB Post?

Ms. Allen did not respond to the questions by the Beachcomber’s deadline.


Stephen Downing is a resident of Long Beach and a retired LAPD deputy chief of police.

Greg Buhl, a Long Beach attorney, writer and research analyst, contributed to this story.



This criminal is going to fit right in, if she wins. I guess lying, and deceiving is a prerequisite to joining the city of LB administrators, just like the LBPD chief, city manager, and city attorney and the city council SMH.. this city is starting to look more and more like a banana republic. SMH. good article,,

This is yet another case that illustrates how far we’ve fallen as a culture. The level of criminality that exists in all areas of government has reached a critical mass. I wonder what it will take for us to return from this level of blatant government crime? Will Ms. Allen’s become the new paradigm for elected officials? Steal until caught then lie and obfuscate until a bigger crime takes away the spotlight?

It should matter to people that Cindy Allen is an ex-Long Beach Police Officer and her husband Randy Allen is currently a Long Beach Police Commander. These are two people who understand the legal system intimately and know the difference between right and wrong and the different kinds of fraud, whether it be campaign fraud or contract fraud. EVERYONE at the top of Long Beach Government knows she's crooked. That's why it speaks volumes that Mayor Garcia and other Councilmen endorse her. If that's what Long Beach voters want, she'll fit right in. It would be too bad though, because Long Beach voters deserve better.

Civil pleadings can say anything without consequence. I think Cindy Allen will be an asset to the City and the 2nd District. God bless the brave men and women of the Long Beach Police Department.

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