Lawyers for Francis filed a lawsuit in Los Angeles County Superior Court on Tuesday (01Sep09) claiming three "high-level employees" from his company hatched a plan to abstract money through a new business called WMR Marketing, created without Francis' knowledge in 2002.
Francis alleges the men "misused their positions" to approve deals with WMR so they could funnel funds from his Girls Gone Wild empire to the new company.
The documents also claim his company's former Chief Financial Officer, Michael Barrett, began contacting the Internal Revenue Service (IRS) and "falsely accusing (Francis) of criminal tax evasion, hoping that the IRS would prosecute and incarcerate Francis - thereby removing the possibility that Francis could catch the ongoing fraud and theft by Barrett and his cohorts."
Francis is suing all three of his former employees and WMR Marketing for unspecified damages, according to TMZ.com.
Francis was previously indicted on a tax evasion charge in Reno, Nevada in 2007 for allegedly claiming $20 million (£13 million) in false deductions.