Root Insurance suing former exec for $9.4M over ESPN & Barstool Sports campaigns that didn’t exist

Like so many companies in recent months, Columbus-based Root Insurance laid off around 20% of their staff in November. One person who was part of those layoffs was Brinson Caleb “B.C.” Silver, their Chief Marketing Officer. That move may have had something to do with the discovery of a “brazen and sophisticated scheme” by Silver to send $9.4 million to a marketing agency that he owned for ESPN and Barstool Sports marketing campaigns that didn’t exist.

In January, Carrie Ghose of Columbus Business First reported that Root had opened an investigation into a former employee and that they had notified the U.S. Department of Justice as well as federal and state securities regulators. Last week, Ghose reported on the shocking details as Root officially sued Silver over the purported scheme.

Root’s investigation uncovered that a marketing agency hired by Silver would transfer its invoice payments to a company that he himself had a controlling interest in, aptly named Collateral Damage LLC.

Per the lawsuit, right after he was hired in November 2021, Silver hired Quantasy and Associates LLC despite the fact that Root’s management team was “not impressed” by their presentation. The marketing exec then signed two agreements with Quantasy for $15,9 million, $9.4 million of which was immediately redirected to Collateral Damage, who submitted an invoice that said they would “implement a sports marketing program integrating athletes and sports organizations…for Root Insurance in support of national awareness with an additional regional two-state focus in Colorado and Oklahoma.”

“The CMA contains an “Estimated Budget” by partner purporting to divide the $9.1 million into three categories: “ESPN” ($2,222,222), “Barstool Sports” ($4,370,629) and “iHeart” ($2,507,142),” reads the lawsuit. “Upon information and belief, no work was done or contemplated with these entities on Root’s behalf.”

Root’s lawsuit notes that other executives were not aware that Collateral Damage even existed and the company never received any services from the agency.

Root actually seemed to first become aware that something was wrong in July 2022, when an internal audit noted a suspiciously high marketing budget. Around that time, Silver sent Quantasy CEO Will Campbell WhatsApp messages that contained the internal findings of that investigation, which did not uncover anything they were doing, with a note that read “we literally are good. I just need for you to trust me and hold the line.”

Campbell is also a defendant in the suit, though he and the agency have denied “any complicity” and claims that they “reasonably relied on Silver’s authority as a senior officer of Root, and they were unaware that Silver was engaged in alleged deceit and self-dealing,” according to a statement.

As for what happened to that $9.4 million, the suit notes that around the same time that Silver was sending “frantic” messages to Quantasy to transfer the money to Collateral Damage, Eclipse Home Design LLC, which Silver also owned, was purchasing three luxury Florida homes for a little over $10 million.

“Upon information and belief, Silver’s real estate purchases were funded, at least in part, by the money Quantasy wired to Collateral Damage,” reads the complaint.

Root’s lawsuit is seeking unnamed damages and preliminary orders that bar the defendants from making any financial moves with the homes that Silver purchased. Root has also asked that both defendants be barred from “disposing of their assets” except in normal transactions while the case is pending.

[Columbus Business First, Coverager]