By Gustavo Arellano
By R. Scott Moxley
By Alfonso Delgado
By Courtney Hamilton
By Joel Beers
By Peter Maguire
By Charles Lam
By Charles Lam
If he's honest enough, any man who has been in a scrap or two will tell you the truth: He's had his ass kicked. And there are certain men with whom you never want to trifle. If you're lucky, he'll show you the ropes—how to size up a fighter and know when it's better to walk away with your ego and bones intact. It could be his size, or the swagger in his gait. Often, it's the way a man carries himself—a quiet but cocksure demeanor lit by a steely gaze that telegraphs an invitation to blows.
There might be other signs: tattoos, scars, identifies himself as Daniel Diaz.
The 38-year-old Santa Ana man stands taller than 6 feet and carries around 225 pounds. His boyish brown eyes and trim haircut belie a man entering middle age, one whose youthful face is etched with battle wounds from his hard-living ways. Ask, and he'll let you touch the titanium implant below his left eye.
A former Marine who voluntarily submitted his body and mind to the military's grueling interrogation training, Diaz admits he "tuned up" his fair share of enemies when he was a wrestler and kickboxer, as well as when he was a drug runner on the streets. And now, as a businessman in the courtroom. His opponent at one time was the biggest, most controversial clothing brand in the fight game: TapouT.
In his fight against the powerhouse company, Diaz, once a rising star in the action-sports clothing industry, has been bloodied and beaten to the mat. Now unemployed and living in a one-bedroom apartment with his girlfriend, he claims $1,900 per month in unemployment; his last lawyer bill was $16,000. He doesn't wonder why human-resources departments won't call him in for an interview. "It doesn't look good on a résumé," he admits.
He claims TapouT screwed him over by monkey-fucking a contract and putting his own company in a chokehold. On March 28, 2011, Diaz filed a lawsuit in Orange County Superior Court alleging that what began as an agreement to design clothing for TapouT and its distributors ended up with him getting taken to the cleaners. He wants more than $2 million in compensatory damages, in addition to punitive damages, attorney's fees and court costs.
"There were things going on that I wasn't told about," Diaz claims. "Millions of dollars in orders being processed through the company. I was developing, designing gear for TapouT. Over a million dollars in orders I was never told about or paid on."
Yet the man who once stepped in front of gun to try to save a friend, who enlisted in the Marine Corps to avoid getting killed on the streets, who built a business he alleges was stolen out from under him by a bully company admits he's no saint. And if he gets what he says he's due, don't expect him to cut 10 percent to charity.
"I want my fucking money," explains Diaz. "It's not going to be going to an orphanage."
* * *
Diaz grew up on a horse property in Covina. Along with his parents and two younger brothers, he also raised cows. "It sounds good until you get the sheets pulled off you at 5:30 in the morning and are shoveling horseshit before you go to school," he says.
His father worked in an optics-manufacturing plant, while his mother, who later in life earned a master's in human resources and became a vice president for a global company, stayed home and reared three boys. Though Diaz had a fighter's body, he had an artist's heart, and his parents weren't thrilled to see his projects strewn about the house. He struggled with Attention Deficit Disorder and bounced around several high schools; he was suspended frequently and fights were, as he says, "pretty normal."
At Covina's Charter Oak High School, however, Diaz took a freshman-year class that would shape his life. Mr. Chin, an affable instructor, taught graphic arts and became a mentor of sorts to the drifting Diaz. In those days, classes didn't have computers, so Diaz would take a photograph, hand-cut the film with a knife, and build a work station to print out shirts he sold to his friends.
His growing knack for business was rivaled only by his ability to kick a man's ass. And that was during an era in which street gangs were exploding in numbers. "Being in a fight at a party was no big deal " Diaz says. "I've been in some street-cleaning brawls. I've been in a fight where my friend got a Corona bottle to the neck, 65 stitches. Another friend of mine got stabbed at a Circle K. But it kept escalating. Colors had come out, and things changed. Everybody's a gangbanger now. Everybody's a Crip, a Blood, a Rolling 60s. Covina, San Dimas, Glendora, Azusa and Pomona. So we're in there. It's on."
The escalating violence prompted a move after high school from the San Gabriel Valley to Big Bear. After "a season," he came back down the hill and immediately picked up where he left off—chasing tail and fighting whoever wanted some. In the winter of 1993, Diaz—who rolled with white boys, blacks and Mexicans—showed up at a party in Covina and commenced to knocking the hell out of a man, putting him on his ass .
But that wasn't the end of the fight. At a park afterward, the man showed up with five other guys, one of whom carried a .25 caliber automatic pistol. The man Diaz beat up pointed him out, and his buddy raised the gun and pointed it at his chest. "My friend walked in front of me, and he puts his hands up and says, 'What the fuck you gonna do with that? You ain't gonna shoot nobody,'" Diaz says. "And the dude unloaded the clip."
His homeboy took four shots. Though his friend survived, Diaz, once unflappable in the face of street violence, was shaken and immediately looked for a way out. He joined the Marine Corps.
He was all-in as a Marine. Meritoriously promoted out of boot camp, he earned the rank of E4 Corporal in 18 months. His military occupation specialty was avionics and electronics. When he got the chance, Diaz didn't hesitate to train as a helicopter gunner; he was also a guinea pig in the military's Survival Evasion Resistance and Escape School  school in Maine, where, among other techniques used to mold a hard-ass Marine, he says, he was stuck in boxes for long periods of time and made to survive in the snow without food and water to test his character and see if his spirit would break. It didn't.
He was honorably discharged from the Marine Corps in 1997. But his return to Orange County included a seamless return to the street game. "There was some drug running," he admits.
Diaz claims he ran loads of pot through John Wayne Airport in the years before 9/11 and, in his free time, provided his own muscle when it came to collecting debts. He didn't think twice about knocking on a man's door and beating the shit out of him if he failed to fork over the cash. "I never killed anybody, but I put a few in the hospital," he recalls.
In 1999, he was arrested and convicted for possession of 8 pounds of weed, $55,000 in cash, four bulletproof vests and 65 rounds of .50 caliber ammunition. He received three years of probation, and the court confiscated his Jeep Grand Cherokee. He later served 45 days in jail for a probation violation. Diaz also admits to getting popped for driving under the influence.
In trying to put his life back on the rails, he worked for manufacturers in the surfing industry and dabbled in mixed-martial-arts-style clothing design. In 2001, he and his younger brother started Hitman Fight Gear, a company lauded for a broader appeal than its competitor, TapouT. Years later, a deal with the enemy would kill his once-burgeoning brand, as TapouT, according to Diaz's lawsuit, would pimp his shirts and leave his brand broken and his bank account bleeding.
But prior to the awful end, his business blossomed, and Diaz, whose shirt designs and fight gear were hailed as innovative and durable, saw his products sold in stores such as No Fear, next to the likes of Metal Mulisha and Travis Barker's Famous Stars and Straps. "My success in there bothered [TapouT]," Diaz says. "I'm pound for pound kicking their ass."
Still, Diaz says he faced a problem of scale; he couldn't afford to give stores enough clothing on credit to replace the merchandise that sold out. But as he continued to design his Hitman gear, as well as perform design services for other clothing brands, he eventually stumbled onto what he thought was a business opportunity that would get his name in stores all over the world and make him rich in the process.
* * *
Diaz sits in a dark booth inside the Fling, a crusty dive on Tustin Avenue in Santa Ana. He doesn't drink anymore and tries to ignore a couple of middle-aged white guys with beer bellies who sit at the bar, listening to Hank Williams Jr. on the jukebox and watching the Summer Olympics. They occasionally turn to look at Diaz, whose just-try-me glare and rising voice is a startling reminder that you can take the boy out of the fight game, but you can't take the fight out of the boy.
He struggles to keep his voice low as he recounts a litany of grievances he has been nursing as though they were a fine scotch whose angry, burning flavor has only grown stronger over the years. It all started, he says, in 2005, when Diaz entered into a contract with Russell Lin and a company called Roxwell. Diaz would take a 10 percent commission on anything they made for TapouT.
Diaz thought he was on the fast track to fortune, but his problems started quickly. Initially, he says, TapouT allowed him to work out of his Huntington Beach office to spare him the commute to the company's headquarters in Grand Terrace, near Riverside, but then it ordered him to break the lease and slog into the Inland Empire every day.
Diaz waited out his lease, paid to store his inventory in Orange County and made the commute to the 909, where he discovered he wouldn't have an office for the first three months. As the company began to bleed money and staff, Diaz says, he was moved into a small office with another employee and eventually got a corner office vacated by a formerly high-ranking salesman.
Things got more problematic the following year, when TapouT brought in Marc Kreiner, a former disco-era music producer who, more than 30 years ago, had gone from serving ice cream at Baskin-Robbins to amassing a fortune by making records for booty-shaking groups such as Chic and Sister Sledge. According to Diaz, the decision to bring in Kreiner marked the beginning of the end for TapouT as it was.
It's clear that Kreiner brought a troubled history to the company. In a March 24, 1980, feature in People magazine, Kreiner was described as a 26-year-old "personally unpretentious, wide-eyed ingenue whose biggest talent is his self-confidence." At the time, Kreiner's business reaped a reported $30 million per year, and he lived in a $4.5 million LA beach home once owned by Marion Davies, longtime mistress of William Randolph Hearst. His lifestyle included models and actresses, as well as parties with the likes of Wilt Chamberlain, Dudley Moore and Rod Stewart. In 1987, he pleaded guilty on racketeering charges involving the hiring of a couple of alleged mobsters to beat up two former business associates over a buyout deal for his Highrise Entertainment Corp., a recording label.
Kreiner wasted no time moving in on TapouT's fortunes, Diaz recalls, quickly becoming a managing member. By the end of his run in TapouT, Diaz and other former insiders say Kreiner was known as the "fat disco fuck."
According to Diaz, in late 2007, TapouT, led by Kreiner and co-founder Dan "Punkass" Caldwell, offered to buy Hitman, promising to expand the brand name and give $1.25 million to Diaz, as well as an employment agreement, if he agreed to give up his contract with Roxwell. In fact, Diaz says, Kreiner told him that by the time TapouT was done building up the Hitman brand, it would be worth $100 million and that "11 percent of $100 million was $11 million."
The deal was made through a company called Fight Industries, of which Kreiner was president, says Diaz, who saw his employment with Fight Industries as a way to maintain some control over how Hitman would be marketed and developed. He estimates that after the sale of Hitman, Roxwell sold more than $10 million in TapouT apparel, and he lost at least $1 million by being duped into giving up his contract right to 10 percent commission in the sale of TapouT gear through Roxwell.
Those close to sales operations at the former Grand Terrace headquarters of TapouT say Hitman was only marginally pushed. "We were so pressured to push sales that Hitman became secondary because TapouT was the hotter brand," says Mike Siregar, a former sales manager for TapouT. Siregar, a Huntington Beach resident and mixed-martial-arts (MMA) fan since before the fights were on pay-per-view (he has known fellow Orange County natives Tito Ortiz and Tank Abbott for years), worked for TapouT for about three years before leaving in 2010.
A keen salesman with deep experience in apparel marketing, he was convinced by Howard Bass, an action-sports-apparel veteran, to join the company. Siregar had sold the popular Silver Star brand in No Fear stores, a brand that Bass had a key hand in building. One trip to the TapouT offices was enough for Siregar to come aboard. During his time there, he put 180,000 miles on his white Cadillac Escalade, driving from Huntington Beach to the company's Grand Terrace headquarters.
"I was impressed right off the bat," Siregar says. "I didn't know how big the operation was. I've never been a part of anything like that before, where it grew in such a short period of time. The offices were ridiculous. It was like 'Pimp My Office.' We had flat-screens in the hallway, marble floors and chandeliers. It was like a palace, if you will. Spare no expense."
TapouT grew from a clothing company whose goods were sold out of the back of car trunks in the 1990s to a reported $200 million annual business in 2009. But its designs remained relatively simple compared to Hitman, which was a cool brand with an edge to it, Siregar says. While TapouT was mainly worn by fighters and wannabes, Hitman appealed to a broader base of MMA fans who weren't necessarily into trading blows themselves, he says.
The dress code at work allowed for the wearing of either brand, but Kreiner, who became president and chairman of the company, wasn't thrilled when more and more employees started wearing Hitman, Siregar says. It came to a head as Kreiner brought fighters to the TapouT office only to have them see so many of Diaz's shirts sported by the workers. "He banned everybody from wearing Hitman on days that business suitors announced they were visiting the offices," Siregar says.
Diaz has always suspected that sales representatives were discouraged from selling his label. But, Siregar says, that wasn't the case. However, a red flag was raised once when he inquired about the sales reports. "Speaking on behalf of sales, we had quotas; we had to hit certain numbers," Siregar says. "I was told Hitman numbers don't count for overall sales numbers. That was kinda weird."
Friends with Lewis, Caldwell and third founding member Tim "SkySkrape" Katz, Siregar says, he's not talking shit; he's talking experience. TapouT was a tight-knit, family-like environment and a great place to work, he says. There were always rumors of bad dealings going on in the company, but he had no direct knowledge of them, and for every bad story told, he could easily share a positive experience. Siregar kept his focus on putting products in stores and monitoring distribution. "We all knew we were sitting on a gold mine," he says. "We all wanted to keep our jobs and do [our] best."
Diaz alleges that Kreiner routinely caused Fight Industries vendors to give him lavish gifts, including a new Mercedes and Rolex watches, in exchange for contracts at costs well more than market rates. According to Diaz, Kreiner ensured that Fight Industries and TapouT paid inflated prices to vendors for items such as T-shirts; it might pay the vendor hundreds of thousands of dollars as a "kickback." Diaz says he was killed, financially, as the alleged kickback schemes were designed to line Kreiner's pockets at the expense of TapouT and Fight Industries.
According to Diaz's lawsuit, Kreiner also developed phony invoices for TapouT and Hitman gear, which, he says, he used to misappropriate money borrowed from Private Equity Management Group, which was run by Orange County financier Danny Pang, who died in 2009 of an apparent suicide while facing charges of defrauding investors out of hundreds of millions of dollars.
Aaron Crecy, a friend and business associate of MMA legend Dan Henderson, put a deal together with TapouT for the fighter's signature shirt. Crecy said when a printer produces "a lot more shirts than you get paid for, it makes you wonder." Now a senior-level marketing consultant, Crecy claims that over the course of a 12-month deal, he saw just one three-month statement from TapouT. "I have no idea of the veracity of any of the reports they gave us," he says.
Diaz says Kreiner also devised, engineered and engaged in customs fraud in order to appropriate millions of dollars from TapouT and Hitman for his own personal use. Allegedly, Kreiner paid exorbitant sums to friends and associates of his for services purportedly rendered to Fight Industries and TapouT, and then received kickbacks, including hundreds of thousands of dollars on "design services" for his personal office and Caldwell's office at TapouT, as well as kickbacks from business associates after forking over more than $1.8 million in "consulting fees" and "bonuses."
Caldwell knew of Kreiner's alleged schemes, Diaz claims, including skimming cash and inventory from TapouT and Fight Industries after "warehouse sales" at the companies' locations and that Caldwell took a cut from the thefts.
When Diaz protested Kreiner's actions, he claims, he was promptly told not to interfere or he would be fired. Still, Diaz alleges, he was fired without cause in October 2010 and told he couldn't be paid for outstanding business expenses because Fight Industries didn't have the money and would "go under" if the company paid him. He says he's also owed wages and accrued vacation and sick days.
Frances O'Meara, an attorney for TapouT, says she doesn't want to try the case in the press. "Either the court system or the jury will decide," she says. "But I remind everybody that there is a stipulation and confidentiality order in the case."
* * *
Diaz leans back in his booth inside the Fling. "It's tough in the clothing industry," he says. According to his lawsuit, Kreiner depleted Fight Industries and TapouT of their assets, refused to reimburse Diaz for his business expenses, and joined with Caldwell in looking to sell the companies' assets to Authentic Brands Group in exchange for the payment of some of the debt they stacked up through their alleged schemes, plus future cash payments, pending the resolution of remaining creditor claims.
Authentic Brands Group discovered Kreiner's alleged illegal conduct and knew that an asset sale would strip TapouT and Fight Industries of their assets while leaving creditors with nothing to recover against, Diaz claims, adding that he believes Authentic Brands Group used that information as leverage in negotiating with Kreiner, driving down the price to be paid for the assets.
All parties were mum on the price, but a letter of intent obtained by the Weekly shows TapouT getting rid of its assets for $12.5 million. "A company purported to do $200 million retail in 2009, [Authentic Brands Group is] able to buy it for $12 million?" Diaz says. "If you have any $200 million companies for sale for $12 million, let me know because I can put together deals to pick those up all day." (Attorneys for Authentic Brands Group could not be reached for comment.)
Diaz says that during negotiations, Authentic Brands Group tried to shut him up regarding Kreiner's alleged illegal activity through a new employment agreement with a newly formed company, ABG TapouT. When Diaz refused, he alleges, Authentic Brands Group told him it would "go around" him and complete the sale. In doing so, he claims, Kreiner and Authentic Brands Group allocated zero value to Fight Industries assets, essentially making it a gift to the buyer. Meanwhile, Authentic Brands Group is selling Hitman products through the likes of K-Mart.
"They flushed it down the toilet," Diaz says. "They put it in K-Mart, which is where you put brands at the end. They put it out to pasture. It's a natural cycle that I'm not going to speak out against. But it was far too soon. The horse was still a good horse; it could still win races. You didn't need to make it a plow horse."
* * *
Sitting at the dining table in his cramped apartment, Diaz wears a camouflage tank top, black athletic shorts and flip-flops. He's golden brown, and it's 100 degrees outside. The man raised on a horse property is surrounded by pets: the Maltese Chi Tzu mix named Charm, Dolly Parton the Maine Coon cat, Hippo the hamster, Bandit the striped gecko. Peaches the parrot lands on his left shoulder.
"After the Love Is Gone" by Earth, Wind and Fire plays on the radio as Diaz talks about his frustrations. He points to the green sofa that rests underneath photographs of him and his girlfriend. "The couch gets the shit beat out of it because I can't break anything anymore," he says. "My couch is scared right now. It knows as soon as you leave, it's getting its ass beat. I don't even have a punching bag anymore."
He opens a laptop computer and clicks on a file titled "Your [sic] Fucked." The screen fills with a series of invoices that, he says, shows various amounts of money for which TapouT owes him a percentage.
The dollar amounts for shirt orders fill one row: $16,000; $28,000; $33,000; $101,000. The numbers continue to scroll down the screen. It's all money he has yet to collect a commission on, Diaz says.
The names of famous fighters fill another row: Chuck Liddell, Keith Jardine, Rampage Jackson.
Peaches jumps to Diaz's other shoulder, leaving a little white feather stuck to the back of his neck. With a look of bewilderment in one eye and a raging glare in the other, Diaz lifts an open hand near the computer screen. He shakes his head in disgust.
"Imagine being me, bro."
 Diaz only put the man "on his ass" once, not three times.
 The name of the school was originally misreported.
This article appeared in print as "Tapped OuT: Daniel Diaz used to spill blood. Now he spills beans on the legendary MMA label."