A Yale Graduate Leaves a Trail of Ventures and Debts

In many ways, Joshua Bryce Newman fits the part of the young, successful entrepreneur.

A 35-year-old Yale graduate, Mr. Newman began investing in Internet start-ups during his junior year. After college, he ran an independent movie production company in New York and helped found two popular CrossFit gyms in Manhattan. His website cites several news articles that describe him as “a Silicon Valley pro” and “an Internet elder statesman,” and as being “sharp and supremely confident.”

But some of the nearly two dozen people who have either invested with Mr. Newman or lent him money over the last decade paint a less favorable picture. In lawsuits that have been filed against Mr. Newman or companies he controls, investors say that he has a history of bouncing checks, unpaid debts and misrepresented intentions.

While the total amount in dispute appears to be relatively small — roughly a few million dollars — the way Mr. Newman has managed to raise money easily from sophisticated businessmen, many with a track record of investing in Internet start-ups, is a vivid reminder of how the right connections and a strong sales pitch can seduce investors, even after the financial crisis.

The investors include a co-founder of a social messaging site that was acquired by Google and a founder of an online apparel company. They were typically introduced to Mr. Newman at a Yale event, in a casual meeting at the Sundance Film Festival in Utah or on the recommendation of someone in the close-knit community of so-called angel investors in technology start-ups.

Several investors, some of whom declined to speak on the record because of continuing litigation, said they had been reassured by Mr. Newman’s background and by favorable media coverage, including several articles in The New York Times. Due diligence can be an afterthought for investors in start-ups and independent movies, businesses in which failure is not uncommon. And indeed few said they had looked into Mr. Newman’s past by checking court records or lien filings before investing in his projects.

“Two people I know vouched for him and said, “He is a friend of ours and is cool,’ ” said Richard Webb, an angel investor and marketing consultant who lives in New York and has invested in technology start-ups including Circa, Foursquare and Percolate.

Mr. Webb lent $250,000 to Mr. Newman in 2010, and won a court-ordered judgment against him the following year when the loan was not repaid.

“He would do a lunch with me and try to make it all good,” Mr. Webb said. “He came up with a couple of thousand dollars in 2012, and then he disappeared.”

While lenders and investors describe a pattern of such behavior, Mr. Newman’s string of bad debts may simply be a reflection of poor business skills.

For his part, Mr. Newman said in an interview that he understood that his investors were upset, but he said that he had made a good-faith effort to repay some of them. He declined to comment further on the record, except to say that he was working on a plan to reimburse investors to whom he owed money.

“The sane thing would have been for me to bankrupt myself,” Mr. Newman said. “For seven years, I’ve tried to make everyone whole. It’s the morally right thing to do.”

On Monday, Mr. Newman made a $50,000 payment to Joshua A. Adler, a real estate investor who lent $100,000 in November to Outlier Capital, a small venture capital firm that Mr. Newman controls. In March, Mr. Adler, a Yale alumnus, sued Mr. Newman and Outlier in Delaware state court, claiming that Mr. Newman had defaulted on the loan and refused a request to repay it.

“Mr. Adler recently received a payment on behalf of Mr. Newman,” said John G. Harris, Mr. Adler’s lawyer. “That payment reduces, but does not satisfy, the amount in controversy.”

“The suit goes on,” he added.

Several investors said they were concerned that Mr. Newman was continuing to raise money for new ventures, including one that supposedly has an equity investment in the National Pro Grid League, a new association of teams that compete in various feats of strength in the United States.

In September, a lawyer for the eight-team league, which had its inaugural season last year, sent a cease-and-desist notice to Mr. Newman telling him to stop telling prospective investors that he was raising money for the league, according to documents reviewed by The Times. The documents also show that Mr. Newman told investors that he intended to raise an initial $5 million for the new sports league.

James Kean, chief executive of the National Pro Grid League, said that Mr. Newman was “not affiliated” with the league in any way.

The trail of litigation against Mr. Newman began with Cyan Pictures, an independent movie production company he founded in Manhattan in 2002. The company, which Mr. Newman started a year after graduating from Yale, bet much of its success on “Keeper of the Pinstripes,” a low-budget baseball movie based on a novel about the Yankees.

The movie was never made, though the rights to the project are still held by Samarian Productions.

By 2010, the financial problems at Cyan had begun to mount, court records show. It is not clear if Mr. Newman ever raised the $9 million that he had said would be needed to begin making the film. But his struggles to get the film produced prompted him to take out short-term loans — many of which he later defaulted on, court records show.

A few of the investors in Cyan have been paid back in full. Steven Voichick, a Georgia businessman, received nearly $500,000 in November 2014 after a court ordered Mr. Newman to pay in 2010. In late 2014, Mr. Newman also paid an old $350,000 debt to Nic Radkowsky, a Brooklyn artist who had provided a bridge loan to Cyan.

Raised in Silicon Valley, Mr. Newman graduated from Palo Alto High School in 1997, just as the first Internet start-up boom was taking hold. At Yale, Mr. Newman majored in cognitive science, a field that combines elements of computer science, neuroscience and psychology. By his junior year, Mr. Newman has said, he was a managing partner in the Silicon Ivy Venture Fund, which provided seed money to start-ups backed by college students.

The Wall Street Journal featured him in an April 2000 article about dorm-room venture capitalists. A number of other business publications, including Forbes, also wrote profiles of Mr. Newman.

Cyan was his first big endeavor. The firm produced and distributed a handful of small movies that were made on shoestring budgets, like “Coming Down the Mountain,” released in 2003.

But Mr. Newman’s big bet was the Yankees film, and he went to several Sundance film festivals to find prospective investors. The project floundered, however, as a dispute arose over whether the Yankees would cooperate. Cyan closed in 2011.

Investors, former employees of the company and the Screen Actors Guild, now called SAG-Aftra, all filed lawsuits against Cyan and Mr. Newman. In all, creditors and investors obtained judgments or filed claims totaling about $2 million.

The vice president for finance at Cyan was Alexander Chatfield Burns, who after the movie production company closed went on to establish a private equity firm, Southport Lane Management, that is now being scrutinized by insurance examiners. The Wall Street Journal recently reported that the firm transferred millions of dollars of insurance assets into potentially risky investments. It appears that Mr. Newman and Mr. Burns have not worked together since Cyan shuttered its operation.

Even as Cyan was trying to establish itself in the movie world, Mr. Newman was looking to reinvent himself. He entered a business partnership with three others in 2004 to open CrossFit NYC, a gym that focuses on extreme strength and conditioning programs used by police academies and military training units. Over the decade, Mr. Newman has appeared in three articles in The Times discussing the popularity of such training methods.

Still, the Cyan debts never went away.

Michael Stolper, a lawyer for seven people who put a combined $1.2 million into a CrossFit NYC investment vehicle, said that his clients’ money never went toward its intended purpose of expanding the business. Mr. Stolper said his investors, who intend to file a suit, are investigating whether Mr. Newman used the money to pay off some of his older debts.

Last summer, Mr. Newman’s partners, after learning that he had been accused of misleading investors, dismissed him from the company.

“Josh was fully divested of his interest in the company for cause,” Hari Singh, one of his former CrossFit NYC partners, said in an email. “Josh has no ownership, management or employee relationship with CrossFit NYC.”

Undeterred, Mr. Newman began raising money for a new fitness training company called Northstar CrossFit. He also began raising money for a venture called National Pro Fitness League Holdings, which he said had an equity stake in the National Pro Grid League, the upstart competitive fitness league.

Both these enterprises have drawn questions. Most of the people Mr. Newman hired for Northstar quit over concerns about his business practices, said Caroline Johnston Polisi, a lawyer for one of them. The National Pro Grid League says that it has had nothing to do with Mr. Newman for a year.

On Monday, the league sent a second cease-and-desist notice to Mr. Newman.