STEINBERG FILES SUIT IN U.S. COURT SPORTS AGENT CLAIMS CONSPIRACY.

Byline: Beth Barrett Staff Writer

Sports super-agent Leigh Steinberg upped the ante in his legal battle against former partner David Dunn, accusing him of conspiring to steal his clients and preparing a blackmail scheme, a federal lawsuit filed Monday asserts.

The federal action, which comes on top of countersuits in state court, claims Dunn and his company, Athletes First, and others engaged in a pattern of racketeering activities, including extortion, fraud and receipt of stolen goods as part of a plot to discredit Steinberg and take 40 of his professional athletes.

It asks federal Judge Ronald S.W. Lew to grant a preliminary injunction to stop Dunn and his company from representing those athletes, and seeks as yet unspecified damages, among other claims.

Andrew Kim, the attorney for Athletes First, said he had not received Steinberg's court filing but reiterated that none of the company's sports agents or employees has engaged in any wrongdoing.

``Absolutely not,'' said Kim, who is with the firm Alschuler Grossman Stein & Kahan. ``There has been no wrongdoing under any legal measure by any sports agent or employee associated with Athletes First. Their conduct has been entirely above board. What SMD (Steinberg's company, Steinberg Moorad & Dunn) fears is competition.''

Steinberg filed the federal complaint after a top Dunn lieutenant, Brian Murphy, testified recently about the business rupture, and after new documents called into question earlier declarations by former Steinberg employees who had said they all left the firm independently after finding Steinberg's business practices intolerable, the court documents say.

Steinberg said in a statement Monday that the new information directly contradicts Dunn's and other employees' assertions, published by the Daily News and other media last month, that they acted within their rights and in good faith both in leaving the company and in signing up former Steinberg clients.

``I am dismayed that my former employees apparently plotted to blackmail my sports agency, its parent company and me,'' Steinberg said. ``This new evidence directly contradicts the substance of their sworn declarations attacking my integrity and that of my agency.

``Moreover, it is now clear the declarations filed by David Dunn, Brian Murphy and Joby Branion and distributed to the news media were specifically designed to destroy my reputation in order to steal my clients and make themselves rich.''

Steinberg alleges in court papers that Dunn and the others acted with premeditation, with Murphy writing up a game plan weeks before they left that outlined how they would steal SMD's entire football business.

The file, hidden in a computer folder bearing the name of Murphy's wife, listed salary information, key files, incriminating evidence against Steinberg, Rolodex files and other items that were to be taken.

The memo says, ``He cannot win. The simple fact that over 40 of his clients - including (New England Patriot quarterback Drew) Bledsoe - are leaving him will destroy his reputation.''

The memo went on to say, according to court papers, that Steinberg - who the ``Jerry Maguire'' movie character was patterned after - could not stand public scrutiny of his heavy drinking habits, rocky marriage and turbulent career.

``This is probably the most important thing to know about Leigh - he cannot let this go public. Instead he will have to negotiate a quick settlement with us.''

Dunn, Murphy and Branion could not be reached for comment Monday.

In earlier court papers, the former employees claimed to have taken no trade secrets.

Steinberg, instead of remaining silent, filed for injunctive relief June 7 in Superior Court, prompting Dunn and the other employees to file their declarations. The federal lawsuit filed Monday replaces all of the state claims, except those against Murphy and Branion.

``We felt we had to up the ante,'' said Deanna Allen, spokeswoman for Assante Corp., the Canadian firm that bought Steinberg Moorad & Dunn in 1999. ``They took their shot and tried to destroy a man's reputation.

``They said they all woke up and decided to take the moral high ground and go elsewhere. The information we now have shows that's completely inaccurate. They had to-do plans and a game plan to steal from the company in advance of their departure,'' she said.

Allen said the former employees simply misjudged that Steinberg ``wasn't going to call their bluff.''