In the suit filed in New Jersey Federal Court, Elias alleges fraud, embezzlement, breach of contract, breach of fiduciary duty and breach of U.S federal securities laws, the media source said on its website Friday.
Citing The Hockey News, the suit alleges Gandler and Diamond's International Sports Advisors Co. (ISA), persuaded Elias to invest money in two restaurants, one in New York and one in Chicago, but the money was actually invested in two limited liability corporations organized by Gandler and Diamond.
It also alleges Elias deposited US$1 million into a chequing account at HVB Bank Czech Republic.
The suit alleges Martin Stioukal, employed by ISA as its manager in the Czech Republic, was authorized to draw cheques on the account and that after two years, Stioukal took nearly $600,000 from the account with no explanation.
"Despite repeated requests for full accounting," said Elias' lawyers in the complaint obtained by The Hockey News, "ISA and Stioukal have refused to account for the missing funds."
The suit also alleges that when Elias was 24 years old, he was advised by Diamond to purchase $30 million in life insurance, with premiums of $2.5 million over five years, as an investment.
The complaint states, "Diamond directed Patrik into the insurance investments either out of incompetence or fraudulently in order to obtain some undisclosed financial gain or other benefit."
According to one media source, Gandler told The Hockey News Friday night that he plans to fight the accusations.
"Elias' lawsuit against me, my partner and my company, is completely without merit," Gandler told The Hockey News in a statement.
"We will contest it vigorously and expect a favourable resolution. It appears this is an attempt to avoid paying fees after years of receiving our services. It is highly unfortunate that Patrik resorts to this kind of conduct."
Elias, who has been represented by agent Alan Walsh since May 2006, concluded his 10th NHL season, all with the Devils, having led the team in scoring with 21 goals and 69 points in 75 games.