Rapper Dr Dre and producer Iovine billed as scam artists in lawsuit

Rapper Dr Dre and record producer Jimmy Iovine are being vilified as scam artists in a lawsuit that alleges the duo duped one of their former partners in Beat Electronics before selling the trendy headphone maker to Apple for US$3 billion last year.

The complaint filed on Tuesday in San Mateo Superior Court accuses Dre and Iovine of double crossing Noel Lee, the founder of video and audio cable maker Monster.

Lee once held a 5 per cent stake in Beats as part of a partnership between the headphone maker and Monster that ended in 2012. The lawsuit alleges Dre and Iovine orchestrated a "sham" deal with smartphone maker HTC in 2011 that led to the termination of the Monster alliance.

The suit alleges the shady manoeuvring prompted Lee to pare his stake in Beats to 1.25 per cent before selling his remaining holdings for US$5.5 million in the autumn of 2013 after being assured by Beats executives that there were no plans to sell the company for at least several years. Beats announced its sale to Apple in May, opening the door for Dre and Iovine to become executives at the iPhone and iPad maker. Had he held on to his 1.25 percent stake, Lee would have received more than US$30 million in the Apple deal. His original 5 percent stake would have been worth roughly US$150 million.

Both Dre, whose real name is Andre Young, and Iovine, a longtime recording industry executive, reaped the biggest jackpots in the Apple deal, though the precise size of their windfalls hasn't been disclosed.

Lee's lawsuit says Dre and Iovine each owned 15 per cent stakes in the early stages of the Beats partnership.