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And he told The Associated Press that Bush's family defrauded his clients out of $300,000 over 1½ years using "the carrot" of Bush's future football career as an enticement."[The rent] was to be paid back with the profits from the business," Watkins said. Michaels also paid $28,000 to settle to pay off debts held by Bush's parents, the attorney said. LaMar Griffin, Bush's stepfather, said he needed to clear up the debt "to help him 'focus' on the enterprise," Watkins said. New Era Sports also paid for Bush's parents travel and lodging to attend their son's away games. A source close to Bush told ESPN's Joe Schad that while the family had at first agreed to pay rent on the San Diego home, they quickly realized there was no way they could afford to. After falling behind on payments, the family claim, however, that they were repeatedly told not to worry, that they would not be evicted. "Originally there was a rental agreement, but they never paid a dime," Watkins told the Times. "It was always, 'Don't worry, we'll pay you -- you can take it out of our profits."' Bush, however, did not sign with Michaels' firm, New Era Sports & Entertainment LLC, which Watkins said the running back's stepfather helped found. Relations with the family deteriorated and Watkins sent the player's parents an eviction notice on April 3, a copy of which he showed the Union-Tribune. Bush's parents, LaMar and Denise Griffin, moved out of the house last week. Bush has said his parents left because they found another place to live. Watkins said he plans to file a $3.2 million fraud lawsuit against Bush's parents and possibly Bush. The sum includes $300,000 in money that Michaels claims he and another investor, a documented gang member named Lloyd Lake, put into the business, plus punitive damages. Bush chose to turn pro after his junior season with USC. But he will not be the No. 1 pick in Saturday's NFL draft, after the Houston Texans decided on North Carolina State defensive end Mario Williams instead. The NFLPA claims in a disciplinary complaint written Thursday that Watkins, an attorney allegedly representing agent David Caravantes and New Era Sports, engaged in unlawful conduct by demanding payment in at least three letters. But Caravantes told The Associated Press on Friday that he is unaware of the investigation, adding: "I have had no involvement with Reggie Bush. The truth will come out." David Cornwell, the Bush family attorney, did not immediately return phone calls from The Associated Press late Thursday. NFL spokesman Greg Aiello said in a statement Friday, "Based on the information presented by Reggie Bush's attorney, our office has advised the attorney to consider referring these matters to law enforcement authorities." Bush has denied knowledge of any deal with Michaels and has promised that details would emerge later that would explain the family's living situation. "I'm confident and I know what the truth is," he said Thursday at a pre-NFL draft appearance in New York. "I know for a fact that everything is fine and this is all blown out of proportion and there's more to the story than is being told right now." The NCAA is investigating whether the living arrangement violated rules prohibiting student-athletes and their families from receiving extra benefits from agents or their representatives. Pac-10 commissioner Tom Hansen said earlier this week that a Pac-10 investigation could start soon, but gave no specific time frame. USC could forfeit its 2005 Pac-10 football title if Bush is ruled ineligible, he said. Any violation could also put Bush in a precarious position with the organization that awards the Heisman Trophy; the award ballot states that the winner must be in compliance with NCAA rules. Heisman officials have said they will wait until the Pac-10 investigation is complete before deciding if any action needs to be taken. USC coach Pete Carroll, reached late Thursday night, said: "I don't know the details of it, so I have no comment about it." According to Watkins, the scenario began when Griffin approached Lake during the player's sophomore season in the fall of 2004 with a proposal to form a sports management business. Watkins described Lake -- a documented gang member from El Cajon who is now serving time in prison for a probation violation -- as a longtime friend of the Bush family. Griffin and Lake teamed up with Michaels to form New Era, he said. Michaels was a close associate of Lake's, according to a 2002 FBI affidavit filed in support of arrest warrants for Lake and other accused San Diego gang members. At one point, San Diego-based sports agent Caravantes joined the team, with the plan being that New Era would market Bush and Caravantes would represent him. Caravantes said late Thursday night that Watkins does not work for him. Caravantes also said he had no knowledge of any threats made against the Bush family, including eviction from the home. Caravantes denied being employed by New Era Sports and said he had no knowledge of a complaint filed with the NFLPA. Because Michaels is a member of the Sycuan Indian tribe, the group approached the tribal council in search of more investments. The tribe declined to join the venture, said Adam Day, Sycuan's assistant tribal manager. Around then, Watkins told the Times, the Griffins started asking for money. "They had some financial problems and couldn't focus on building the business," he said. The falling out between Michaels and Bush's family began when the player hired another marketing representative -- Mike Ornstein -- and another agent -- Joel Segal. The Associated Press contributed to this report.