}

Friday, March 28, 2014

KEEP YA HEAD UP!!!: Miss Fortune Reveals "Restraining Order" Just Hollow Threat

Although the outspoken rapper and actor Tupac Amaru Shakur (left) has been gone nearly 18 years, the lyrics to his song "Keep Ya Head Up" are ringing in Miss Fortune's ears:

"And it's crazy, it seems it'll never let up, but please... you got to keep your head up."

Well, Pac, Miss Fortune kept her head up!




The "restraining order" threatened by Zia Shlaimoun through Los Angeles attorney Brian Paya apparently evaporated, and Miss Fortune was never served.

But although Paya implied in the restraining order complaint that he was representing Shlaimoun in the Los Angeles county civil action (SC114519) filed on October 17, 2011, Miss Fortune has discovered that's not entirely true.

According to the official case summary, shown below, Paya is described as "former attorney for the defendant" and has been replaced by Los Angeles attorney Todd Lander along the law firm of Clark & Trevithick.

As Ronald Reagan used to say, "Trust, but verify."



Tuesday, March 25, 2014

ARE YOU BEING SERVED? Wires Jolly LLC Successfully Serves Shlaimoun; Ordered To Appear At April 22 "Enforce of Judgment" Hearing

A "proof of service" document filed and made public yesterday (March 24) in United States District Court-Central District of California reveals that Zia Shlaimoun, defendant in a civil case brought by Toronto law firm Wires Jolly LLC, was successfully served on March 21 and ordered to appear at an April 22 hearing.

In July 2011, Shlaimoun and his wife, Oussha, retained Wires Jolly LLC to provide legal representation in connection with litigation pending before the Ontario Superior Court of Justice, entitled Mining Technologies International, Inc. v. Zia Shlaimoun et al.

The plaintiff in the Ontario action, Mining Technologies International, Inc., alleged that Shlaimoun, his wholly owned companies InfinaFund Ltd. and InfinaFund Limited, and other defendants in that action defrauded Mining Technologies out of a $2,000,000 investment made in connection with a “mid-term note” investment.

Wires Jolly respresented the Shlaimouns in the Ontario action from July 21, 2011 through November 2012. The representation and collaboration included complex, international legal proceedings in Canada, California and coordination with UK-based counsel regarding an ex parte Norwich order made in the Queen’s Bench in England.

In November 2012, at the end of Wires Jolly’s representation, the Shlaimouns had accrued a large unpaid balance in legal fees and other costs owed to the firm as outlined in their retainer agreement. Wires Jolly filed a “Notice of Arbitration and Claim” on November 28, 2012 in Toronto to recover the unpaid legal fees.

The Shlaimouns filed a response, and on February 13, 2013 both parties entered into a written agreement regarding a fee arbitration. The agreement stated that the arbitrators’s decision would be binding and without a right of appeal.

On April 22, 2013, the arbitrator issued a written opinion, awarding Wires Jolly $227,504.46 with interest. (The Shlaimouns received a fee discount of nearly $100,000.)


The amount remains unpaid, and Shlaimoun has been ordered by the Central District Court to "appear and furnish information to aid in the enforcement of the money judgment or to answer concerning property or debt."

In addition, Miss Fortune has discovered that Shlaimoun's Malibu home, subject of litigation pending in  Los Angeles Superior Court, was officially added to the default tax roll by the Los Angeles County Treasurer's office.

According to publicly available records, Shlaimoun owes $366,781.92 in back taxes, having defaulted in 2012.

[NOTE: For more background on Shlaimoun, his business relationship with Battle Creek chiropractor Robert Buckhannon, and ongoing litigation, please read my recent posts, Malibu Media Muzzle and Tick Tock.]

Monday, March 24, 2014

WHO'S WATCHING THE WATCHERS? Miss Fortune's Exclusive Report Reveals Per Wickstrom's Best Drug Rehabilitation Failed Its Last Annual Inspection; Best Drug Rehabilitation "Never Investigated" An Employee Complaint Alleging "Inappropriate Relationships" Between "Recipient Rights Officer" and Clients

UNDERSTAFFED & OVERSEXED?

The findings of Best Drug Rehabilitation's most recent annual inspectionconducted on September 25, 2013—and obtained by Miss Fortune from the State of Michigan under the Freedom of Information Act, reveal that the facility was found to be "not in substantial compliance" with the requirements of the code and rules,
specifically "Michigan Administrative Rules for substance abuse programs R325.14101 through R325.14928".


The inspection, conducted at Best Drug Rehabilitation's Manistee, Michigan facility, included participants Jason Burdge, Deputy Executive Director of Best Drug Rehabilitation, Jay Calewarts and Chris VanFleet of the State of Michigan's Department of Licensing and Regulatory Affairs.
 
The report, dated October 7, 2013, revealed that the facility fell short in the required level of full-time counselors and did not investigate a complaint by an employee that BDR's designated (and unidentified) "Recipient Rights Officer" had "inappropriate relationships with clients".

Under Michigan law,  every person who receives alcohol or drug treatment services within the state has certain rights protected by the Administrative Rules for Substance Abuse Programs in Michigan, and in other State and Federal laws.

Some of those rights include:

· the right to confidentiality (privacy)
· the right to be free from abuse and neglect
· the right to services that meet your needs
· the right to be treated with dignity and respect

In addition, the instructions for filing a complaint, as detailed in Best Drug Rehabilitation's "Client Handbook" did not follow Michigan Administrative Rule R 325.14303. The Best Drug Rehabilitation handbook did not provide instructions for the complainant to file a complaint with the coordinating agency if the complainant was not satisfied with the program findings, conclusions,recommended remedial action, etc.

During a conversation with Calewarts and VanFleet, Jason 
Jason Burdge, Deputy Executive Director and the "Recipient Rights
Counselor" for Best Drug Rehabilitation, acknowledged that they did not communicate with the Coordinating Agency.


The Michigan Department of Community Health has 16 regional substance abuse coordinating agencies within the state, and Gaylord-based Northern Michigan Substance Abuse Services serves the northern lower peninsula, including Manistee.

The inspection report states that Best Drug Rehabilitation is required to "communicate directly with the coordinating agency rights consultant when necessary."

And Best Drug Rehabilitation did not comply with the administrative rule that required a client’s personal belongings, including money, be mailed within 24 hours of discharge. 

Instead, Best Drug Rehabilitation's stated policy showed that personal belongings and remaining money would be mailed "within 30 days of discharge".

UNDERSTAFFED

The reports shows that, based on an interview with Deputy Executive Director Burdge and a review of its staff list, Best Drug Rehabilitation had 7 counselors for the September 2013 census of 117 clients. Michigan's Administrative Rule R 325.14901 (2) requires the equivalent of "1 full-time counselor shall be available for every 10 residents".
 

Burdge stated that Best Drug Rehabilitation was "in the process of hiring two additional counselors." 

A minimum of 12 full time counselors should have been available for the 117 clients on the day of the inspection.

OVERSEXED

The inspectors reviewed the staff file of Best Drug Rehabilitation's "Recipient Rights Officer" and discovered that a complaint had been submitted by another employee alleging that the Rights Officer had "inappropriate relationships with clients". 

However, there was no documented evidence within the file that those allegations were ever investigated, and no proof that the Recipient Rights Officer had attended the training specific to recipient rights as required by Michigan Administrative Rule R 325.14304(3)(a)(i). 

The State of Michigan requested a "written response within 30 days as to how the program plans to correct the above comments." 

Miss Fortune will continue to monitor this story, and bring you any new developments.

PER MACHT FREI 

And if you think any of this sounds familiar, you'd be right. 

In a September 16, 2013 post, Miss Fortune revealed the results of an August 8, 2013 substance abuse facility licensing inspection report.

The State of Michigan determined after its June 25, 2013 inspection that A Forever Recovery (AFR) and Best Drug Rehabilitation (BDR) were conducting their own forms of “labor therapy”.  AFR and BDR were both cited for violating the human rights of clients paying upwards of $25,000 for drug rehabilitation by forcing them to clean the facilities—without payment for their labor.

In addition, the report revealed a critical lack of emergency care readiness, no discharge documentation for clients moved between facilities and “co-mingling within the same space with no physical separation whatsoever”, a clear reference to the unlicensed Tranquility Detox.

Friday, March 21, 2014

Thursday, March 20, 2014

TICK TOCK: More From The MTI v Krako Official Court Records

Yesterday, in the post "Malibu Media Muzzle", Miss Fortune told the story of Zia Shlaimoun, his business partner Nikolas Korakianitis and the $2,000,000 "bond transaction" that landed them in an Ontario court. In November 2013, the Superior Court of Ontario determined that the Shlaimoun/Korakianitis "bond transaction" was fraudulent and awarded Mining Technologies $2,000,000 (plus costs and interest).

Shlaimoun, via an email from his attorney, threatened Miss Fortune with a "restraining order" and is purportedly seeking thousands of dollars in legal fees and additional costs. 

Shlaimoun claims that Miss Fortune is a "cyber-bully", simply by revealing what is already in publicly-available court documents.

Today, Miss Fortune puts that $2,000,000 bond transaction into its proper $10,000,000 context. 

Presenting the bond transaction's "tick-tock"—the timelinedirectly from Canadian court documents:

THE FACTS:
THE BOND TRANSACTION AND THE ADVANCE OF THE $2,000,000
 

As of September 2009, Infinafund Limited's public filing showed that it only had a net worth of 156,000 Pounds.

On March 12, 2010 Korakianitis and Shlaimoun executed the Joint Venture Agreement (Joint Venture).

The Joint Venture provided that Infinafund was responsible for:
a) operating the bank account;
b) securing the credit line for the exclusive use of the joint venture;
c) negotiating and managing the trading activities of the Joint Venture;
d) returning the collateral contribution; and
e) reporting trading information on a weekly basis.

In early 2010 MTI was introduced to Korakianitis.

Korakianitis represented he could provide financing assistance to MTI for MTI's business. Korakianitis advised MTI that he had access to $300,000,000 of bonds that could be traded. The bonds were allegedly held in a bank account at NatWest Bank.


May 13, 2010: Shlaimoun emailed Korakianitis advising that his ‘banker’ had ‘dictated’ a ‘letter of undertaking’. Shlaimoun advised that it made more sense for an investor to receive a ‘letter of undertaking’ as the investor would then have an undertaking from the bank to return their money in the "unlikely event that we don’t perform". It is clear that Shlaimoun and Korakianitis were both involved in obtaining or creating paper which would help persuade "investors" that the bond transaction was bona fide.

May 18, 2010: NatWest Bank (through insider Stacey Dawes) sent a letter to Shlaimoun of Infinafund Limited regarding a joint venture between Infinafund Limited and Hybrid Finance Ltd. (another "investor" in the bond transaction who had transferred almost $1,000,000 into Infinafund's NatWest bank account).
Roxlark was registered as a company in Belize on May 20, 2010.

May 21, 2010: NatWest Bank sent a letter to Shlaimoun at Infinafund Limited regarding a joint venture between Infinafund Limited and Holtzman & Associates LLC. (another investor in the bond transaction). On that same day, Holtzman wired $1,000,000 to Infinafund’s NatWest bank account. 


A letter from NatWest Bank to Infinafund describing a joint venture between Infinafund and third company was presented to MTI which described that upon payment or deposit of $2,000,000 USD, the "bonds" could be used for investment trading. Quite understandably, this letter lent credence to the bona fides or existence of this "bond transaction".

Based on what MTI could see, the bond transaction was bona fide and had been the subject of investments of significant amounts by other persons or companies. MTI was interested in participating in the bond transaction provided that it had some assurance that its funds could and would be returned fairly quickly.

May 27, 2010: Dawes at NatWest Bank and Korakianitis discussed the bond transaction with MTI several times. It was confirmed to MTI that the $2,000,000 would be deposited into Infinafund’s bank account at NatWest Bank and that Infinafund had $300,000,000 in bonds on deposit with NatWest Bank which bonds were available for trading provided sufficient monies could be raised to "lease" the bonds for trading. MTI was told that its funds would be returned by June 21, 2010 if the balance of the needed funds for leasing the bonds could not be secured. MTI was also told that its funds would be used exclusively for "joint venture purposes".

May 27, 2010: NatWest Bank wrote to Infinafund confirming that Infinafund had "entered into a joint venture agreement with" MTI. This letter went on to confirm that the MTI $2,000,000 monies would be returned to MTI's bank on June 21, 2010 if the additional "financing support" had not been arranged.

This letter was confirmatory of MTI's understanding of the bond transaction and, given that it came from NatWest Bank, confirmatory of the bona fides of the bond transaction. Unbeknownst to MTI, the documentation from NatWest Bank originated from Stacey Dawes, a defendant who has not defended MTI's claim that the bond transaction was a fraud and against whom default judgment has issued.

Shlaimoun acknowledged that, with respect to the NatWest letter of May 27, 2010, the Infinafund bank account at NatWest Bank was for the “exclusive purpose of the joint venture".

May 27, 2010: MTI directed its bank to transfer $2,000,0000 to Shlaimoun's Infinafund NatWest Bank account.

May 28, 2010: Shlaimoun wrote to Dawes at NatWest Bank advising that MTI's $2,000,000 was to be received that day and was to be deposited into Infinafund's USD account. Shlaimoun admitted, during his cross examination, that he told Dawes at NatWest Bank that "we" had an agreement with MTI and that MTI would be transferring the money into the bank account.

In the same letter, Shlaimoun directed Dawes to transfer monies from that same bank account to cover an outstanding cheque and to cover another Infinafund payment. Clearly, Shlaimoun was aware that MTI’s $2,000,000 was transferred into Infinafund's NatWest bank account on or about May 28, 2010.

There is no evidence that these payments directed by Shlaimoun from the Infinafund’s NatWest bank account were used for “joint venture” purposes or in any way relating to the "bond transaction". The monies appear to be used by Shlaimoun for his own purposes.

Shlaimoun denies that he was aware of or privy to the discussions and representations between MTI and Korakianitis.

However, this is not borne out by the documentary evidence. It is clear from letters that Shlaimoun was aware, before receipt of MTI's monies, that:
a) MTI had agreed to invest in the bond transaction;
b) MTI's $2,000,000 was going into Infinafund's NatWest Bank account;
c) MTI's $2,000,000 were to be used exclusively for the bond transaction, or if the bond transaction did not proceed, the monies were to be returned to MTI by June 21, 2010; and
d) Shlaimoun controlled the payments in and out of Infinafund's NatWest Bank account.

Shlaimoun’s factum describes the bond transaction as follows:

The trades used leased instruments as follows: An investor would "lease" financial instruments from the holder and owner of the instruments upon payment of administration and broker fees and instrument "rent" payments. "Rent" for leased financial instruments may be 1% of the principal amount of the financial instrument per month. The lease of financial instruments provides for delivery of the financial instrument by the owner pursuant to terms of account use. The fee for arranging a lease of financial instruments is payable only if instruments are leased. In the event leased instruments are not provided, arrangement fees are not payable and are returned to the client. The leased financial instrument is available to the client for the period of time provided in the instrument lease. The lease period may be extended by mutual agreement and payment of further lease fees.” Then the bonds would be used for “‘arbitrage trading’, which takes advantage of a price difference between two or more markets and strikes a combination of matching deals that capitalizes on the imbalance, the profit being the difference between the market prices. Trades are undertaken on short notice and investments are left in the markets for only short periods of time.”

According to Shlaimoun, Roxlark "was a corporation which offered gold-backed bonds issued by Transatlantic Trading & Consulting Group". Shlaimoun stated he was "introduced to Roxlark by a company called Lantierst".

The first difficulty with Shlaimoun's version of what occurred is that Roxlark and Lantierst are companies he owns or controls, the evidence having clearly shown that Roxlark and Lantierst are Shlaimoun companies. As such it is Shlaimoun, through these companies, offering this "bond transaction" to investors.

Shlaimoun next states that he "leased" three bonds of $300 Million each on behalf of the Krako corporate defendants. There are numerous difficulties with this statement. First, there is the Joint Venture Agreement between Infinafund and Krako which is inconsistent with Shlaimoun's version of what occurred.

It provides that Korakianitis and Shlaimoun were jointly involved in "private financial programs" where they would share the profits. Shlaimoun has taken the position that his signature on the document is a forgery but provides no proof of this bald assertion. In any event, event Shlaimoun states he was to earn 25% from the monies made from this transaction.

Clearly, Shlaimoun and Korakianitis were jointly involved in getting investors for this bond transaction.

Secondly, Shlaimoun has failed to produce any documents, not a single document, showing that he took instructions from Korakianitis.

Thirdly, it makes little sense that Shlaimoun simply took instructions from Korakianitis since, even Shlaimoun admits that the three $300,000,000 bonds, if they ever existed, were with Shlaimoun's bank, NatWest Bank and therefore, under Shlaimoun's control not Korakianitis' control.

Shlaimoun states Infinafund received the three $300,000,000 bonds, held onto them for one month and returned them to Roxlark.

How Roxlark, a newly incorporated company could obtain $900,000,000 in bonds is not explained by Shlaimoun. Shlaimoun testified that Infinafund paid $9,000,000 for the lease of these bonds.

Yet, there is no proof of this payment other than Shlaimoun referring to a number of withdrawals - none of which total to $9,000,000 and the substantial amount of these withdrawals being traced to Shlaimoun’s purchase of his Malibu home.

There is no proof that MTI’s money went to the bond issuer.

There is no proof that the bond issuer transferred the bonds to Infinafund.

There is no proof that Infinafund or its bank, NatWest Bank, received the bonds.

Shlaimoun has not produced any documents to support or verify this alleged complex transaction involving hundreds of millions of dollars of bonds.

Shlaimoun has not produced any documents with respect to the financial or other dealings between Infinafund, Roxlark, Lantierst or the bond owners.

Shlaimoun has not produced any documents from NatWest Bank which shows the existence or receipt of the bonds.

No such documents were produced to MTI pursuant to the Norwich Order.
 

Finally, it makes little sense that a company like Infinafund, with very little assets could provide the necessary security or monies to lease $900,000,000 worth of bonds. Roxlark, having recently been incorporated in Belize, was also not a likely borrower of these amounts of bonds or any other debt instrument.

In his factum, Shlaimoun states the funds Infinafund received from Korakianitis to finance the bond transaction were "always under the control and management of Korakianitis".

Shlaimoun alleges he took instructions from Korakianitis to receive the funds and to disburse funds.

Shlaimoun has not produced any documents which support his alleged dealings with the Krako corporate defendants. There are no documents which support that Korakianitis ever had control of the $900,000,000 bonds or the monies in the NatWest Bank - but Shlaimoun did, by virtue that the monies were in his bank account and the bonds were with Shlaimoun’s banker.

Shlaimoun was the holder of all the money: the investor's money and the bonds. There are no documents which show any directions being given by Korakianitis to Shlaimoun regarding the monies or the bonds.

Mr. Cosandey, a former Examining Magistrate in Switzerland and an expert on fraud investigations describes the “bond transaction” as having numerous aspects consistent with a fraudulent investment scheme. There is no evidence contrary to what Mr. Consandey states. However, the only evidence before this court is that the "bond transaction" is consistent with a fraudulent investment scheme which at a minimum involved Shlaimoun and the Infinafund Defenants.

Shlaimoun states that all the documents needed to prove his allegations are lost or they are on the way here. Even if Shlaimoun’s documents had been lost or destroyed, one would have expected that there would be extensive documentation available from the bond owner, the banks and the various companies regarding the “lease” and rental payments regarding this transaction particularly given its size - $900,000,000. However, there is no evidence at all that the bonds really existed or were transacted as Shlaimoun alleges except Shlaimoun's statement.

The existence of a bona fide bond transaction is dependent on the existence and lease of the $900,000,000 bonds. This becomes critical as Shlaimoun admits that the monies in the Infinafund bank accounts were in his control, were to be used for the "bond transaction" and that the monies were transferred out of the Infinafund NatWest bank account, on his instructions, to Roxlark in furtherance of the bond transaction. Essentially, if the $900,000,000 bonds or bond transaction does not exist, the transaction is a fraud and Shlaimoun and the Infinafund Defendants received MTI's monies and disbursed MTI's monies to Infinafund related companies and Shlaimoun in furtherance of that fraud.

TRANSFER OF FUNDS BY SHLAIMOUN 



The following is an overview of the monies transferred into and out of Infinafund's NatWest Bank account (approximate amounts):


Deposits - May to July 2010:
Unknown Source May 2010 $725K
Holtzman (investor) May 21, 2010 $1M
MTI (investor) May 28, 2010 $2M
Bridgehouse (investor) June 1, 2010 $3.3M
KLR (investor) June 22, 2010 $3.5M
Hybrid (investor) July 14, 2010 $1M
Total Deposits $10.725M

Withdrawals - June 2010 and July 2010:
Infinafund BSI Switzerland July 1, 2010 $5M
Unknown (Infinafund entity) July 14, 2010 $3.1M
Unknown (Infinafund entity) July 21, 2010 $1M
Lantierst June-July 2010 $900K
Infinafund Barclays Bank June-July 2010 $935K
Korakianitis June $300K
Others June $400K
 

Total withdrawals $10.225M

Balance $100K

MTI FUNDS ARE TRANSFERRED TO INFINAFUND 


The MTI funds were deposited into Infinafund's account at NatWest Bank on June 1, 2010 (several days after the deposit was directed by MTI). Shlaimoun instructed NatWest to transfer money from Infinafund’s NatWest bank account (the one with the investor's monies) to cover a cheque written from another Infinafund bank account and transfer $300K to Infinafund’s Barclays bank account to cover another obligation.

June 2, 2010: another investor, Bridgehouse Capital deposited $3.3M into Infinafund’s NatWest bank account.

As can be seen from the above, there were monies from other "investors" in the same Infinafund NatWest Bank account. It is not disputed that the MTI monies were comingled with monies from other "investors".

As of June 2, 2010, Infinafund's NatWest Bank account had a balance of $3,728,825.02.

June 3, 2010: Shlaimoun transferred $320,000 from Infinafund’s NatWest bank account to Infinafund’s account at Barclays Bank.

June 4, 2010: Shlaimoun transferred from the Infinafund NatWest bank account $300K to Athena Korakianitis.

June 9, 2010: Shlaimoun transferred $320,000 from Infinafund’s NatWest bank account to Infinafund’s account at Barclays Bank.

June 15, 2010: Shlaimoun transferred $315,000 from Infinafund’s NatWest bank account to Infinafund’s account at Barclays Bank.

June 16, 2010: NatWest Bank wrote a letter to Infinafund. The re: line is redacted but it shows "XXXXXXXXXXXXX/Krako - Joint Venture". The letter goes on to say that NatWest confirms that "additional financial support has been secured and blocked for the purposes of this joint venture". This letter demonstrates Shlaimoun's significant involvement in the bond transaction and control over the NatWest Bank account. It is not known why or who made the redaction but it is consistent with the Joint Venture Agreement between Shlaimoun and Korakianitis.

June 21, 2010: Shlaimoun transferred $300,000 from Infinafund’s NatWest bank account to Lantierst in Cyprus.

June 21, 2010: MTI demanded the return of its money. These demands continued for a number of days with a variety of reasons being given for the inability to return the funds. Delays continued for months.

June 22, 2010: further monies were received from another "investor" into Infinafund's NatWest bank account in the amounts of $3,299,989.53 from Unicorn Worldwide Holdings, and $3,499,989.46 from KLR 1 LLC.

June 22, 2010: $8,933,025.91 was on Infinafund’s bank account at NatWest.

June 23, 2010: Shlaimoun transferred from Infinafund's NatWest bank account $100,000 to the defendant Williamson's wife.

June 23, 2010: Shlaimoun transferred from Infinafund's NatWest bank account $300,000 to Lantierst.

June 28, 2010: Shlaimoun advised the NatWest Bank that he was transferring the majority of the monies in the Infinafund NatWest Bank account into Infinafund's BSI Bank in Switzerland. A transfer request for $5,000,000 was enclosed.

July 1, 2010: Shlaimoun transferred a further $300,000 from Infinafund's NatWest Bank to Lantierst.

Copies of Infinafund's BSI bank account statements in Switzerland show that Shlaimoun made a transfer of monies from that bank account into a bank account owned by Roxlark. Copies of the bank statements of Roxlark have not been produced.

As can be seen from the above transactions, Shlaimoun controlled the withdrawal of funds from the Infinafund NatWest bank account. In most cases, the monies were transferred to other Shlaimoun's controlled bank accounts except for some money to Williamson's wife and Korakianitis' mother.

As for the unknown Infinafund transfers, what is known it that the money went from Infinafund's NatWest bank account to another Infinafund account, but it is not clear from the documents available to MTI exactly where the money went.

No documents have been produced by Shlaimoun with respect to these other Infinafund accounts. There is nothing in the above transfers consistent with a bona fide bond transaction or payment of any monies to lease $900,000,000 bonds.

SHLAIMOUN BUYS THE MALIBU HOME

On June 30, 2010 Shlaimoun approached a real estate broker with respect to purchasing the Malibu home. It is a 22,000 square foot home on the Pacific ocean.

Shlaimoun included the bank statement from Infinafund's NatWest bank account showing the $8,500,000 as his funds, $830,000 at Barclays Bank as his funds and a further $600,000 "elsewhere".

Shlaimoun advised the broker that "... I am certain that we will reach in excess of $12m within the next 60 days at the current rate of our trading activities." Interestingly, the $8,500,000 was just before Shlaimoun made the large transfer to Infinafund's BSI Bank account.

Shlaimoun also referred to these monies as "his funds" - not investor monies and not monies to be used to "lease" bonds. Lastly, there is no evidence of any trading activities - only investments by parties in the "bond transaction".

In Shlaimoun's bank application for the purchase of the Malibu home, Shlaimoun represented he was the 100% owner of Lantierst, Roxlark and Infinafund. Shlaimoun testified that the money to buy the Malibu home came from Roxlark - the same company which received the monies from the Infinafund NatWest bank account.

This further establishes that Shlaimoun was a principal, if not the only principal, in the bond transaction since elsewhere he stated that Roxlark leased the $900,000,000 bonds. Shlaimoun also received virtually all of the monies which were deposited into Infinafund's NatWest bank account.

The purchase price for the Malibu home was $12,000,000.

MTI RAISES CONCERNS

July 5, 2010: MTI became concerned about its investment in the bond transaction. Shlaimoun sent an email to MTI on July 5, 2010 confirming to MTI he would attempt to stop the transfer of $2,000,0000. This demonstrates Shlaimoun's involvement and control in the MTI's "investment" and bond transaction.

July 6, 2010: Shlaimoun sent another email to MTI attempting to persuade MTI to remain in the investment to "share in any profit generated". Emails were exchanged between MTI and Shlaimoun regarding the "investment". One such email of July 6, 2010 from Shlaimoun to Korakianitis, copied to MTI stated:

As you know we had requested the $2M sent back to MTI last Monday June 28th, but because it was blocked on June 30Th, we could not get the wire released till early this week.

Since then we had a call with Blair and asked him if we could return the funds to our account so that we could finalize our transaction. Because Blair indicated that Bob/MTI would be receptive to this, today we successfully returned these funds to our account so that we can conclude the transaction. In consideration of this, we confirm that it has been agreed that MTI benefit from the transaction.
 

We are making every effort to ensure that the transaction is completed in the next couple of weeks so that we can arrange to return these funds back to MTI.

Once again, thank you for helping work this out.

These words of Shlaimoun are inconsistent with what was actually transpiring in Infinafund’s USD account at NatWest Bank. The monies had or were in the process of being transferred to Infinafund’s BSI Bank account. These words also demonstrate Shlaimoun's primary role in the alleged bond transaction and his direct involvement with and control over the MTI monies.

MTI was persuaded to leave its monies with Shlaimoun. However, MTI now was looking for documentation to verify the trading or investment in the bond transaction. MTI sought a summary of the investments from Shlaimoun. Shlaimoun did not provide the requested summary of the investment.

July 12, 2010: Shlaimoun transferred $3,100,000 from Infinafund’s NatWest bank account to an unknown Infinafund’s account resulting in a balance of approximately $107K in the Infinafund NatWest Bank account.

During cross examination, Shlaimoun later testified that he did not recall to where he transferred this $3,100,000.

July 14, 2010: First American (another investor) transferred $1,000,000 to Infinafund’s NatWest bank account. On July 21, 2010 these monies were transferred by Shlaimoun to another Infinafund bank account - the whereabouts of which is also not disclosed by Shlaimoun.

July 26, 2010: MTI emailed Korakianitis and Shlaimoun, expressing concern over conflicting information as to whether trading of the $900,000,000 bonds had or had not occurred and requesting MTI's $2,000,000 be returned the next day. MTI wanted to speak with Shlaimoun who had been unavailable to discuss the bond transaction.

July 28, 2010: Shlaimoun and Korakianitis confirmed that MTI’s $2,000,000 had been transferred to the ‘lender’. MTI asked Infinafund to provide the name of the ‘trader’, for Infinafund to have their bank confirm their account was blocked pending trade, and for Shlaimoun to arrange a ‘short term bridge’ for the purposes of returning MTI’s $2,000,000.

Shlaimoun did not respond to this email.

July 29, 2010: MTI emailed Shlaimoun and Korakianitis inquiring about the return of MTI’s $2,000,000. Korakianitis emailed MTI and copied Shlaimoun advising that he had spoken with Shlaimoun and that he (Shlaimoun) advised he would provide proof of MTI’s $2,000,000 going to the ‘investor’ and that the “trade is ready and waiting to proceed”.

Shlaimoun did not correct or comment on the statements of Korakianitis to MTI.

There is no evidence that MTI's $2,000,000 was delivered to an "investor" on or about this time or at any other time. There is no evidence that MTI's $2,000,000 was used to "lease" the bonds.

There is no evidence that MTI's $2,000,000 went anywhere than to other Infinafund bank accounts, Shlaimoun companies and eventually, to Shlaimoun.

July 30, 2010: MTI emailed Shlaimoun and Korakianitis inquiring about a conference call to discuss their $2,000,000.

Shlaimoun did not respond to the email.

July 31, 2010: MTI emailed Shlaimoun and Korakianitis stating that Infinafund and MTI were partners and that Infinafund owed a fiduciary duty to keep its partner informed. MTI wanted a response from Infinafund by August 2, 2010.

Shlaimoun did not respond to this email.

August 9, 2010: MTI again emailed Shlaimoun and Korakianitis requesting an update on MTI’s $2,000,000 investment. Numerous emails were exchanged between MTI and Korakianitis/Shlaimoun relating to MTI getting out of the bond transaction and possibly being replaced with another investor.

Shlaimoun became elusive despite being copied on emails.

The return of MTI's monies never materialized.

In order to try to show MTI that the bond transaction had been "financed", on August 15, 2010 Shlaimoun sent MTI a copy of a NatWest Bank statement for June 2010. Shlaimoun pointed to a payment out of the account of $5,000,000 as payment or part payment of the lease of the $900,000,000 bonds.

Shlaimoun did not explain that these monies had already been transferred to another Infinafund bank account with BSI Bank in Switzerland, then to Roxlark and then to purchase his Malibu home.

Despite repeated requests by MTI for information regarding its $2,000,000, very little or nothing was forthcoming from Shlaimoun.

August 18, 2010: a conference call took place with Shlaimoun, Korakianitis, and MTI. Shlaimoun represented to MTI: 


a) from the day of MTI’s deposit, there was $300,000,000 blocked for trading;
b) when MTI asked for its money back, the $300,000,000 was ‘unblocked’, and this caused a problem with the ‘lender’;
c) the money to be blocked for trading was not cash but rather is a bond;
d) the bond was at a number of different banks including Stanley Morgan and LOB bank;
e) some bonds were in Europe, and others in America;
f) he needed to check with the ‘provider’ to determine what information about the bond he was permitted to release;
g) he had direct access to a ‘trader’;
h) he did not know which bank the ‘trader’ would use when he restarted trading;
i) the bonds would be blocked in the jurisdiction they were held in;
j) the identity of the owner of the bonds was confidential;
k) he had an ‘agreement’ with the provider, and would check with the provider to see if he could release a copy of the agreement;
l) he would ask to ‘block’ the bonds again so that they could again be involved in trading;
m) the name of the ‘trader’ was ‘Lionel Preston’ – based out of London;
n) Lionel Preston has his own company and was not with NatWest Bank;
o) Shlaimoun and Korakianitis had the same access to the ‘trader’ Preston.

This conference call was recorded by MTI and was transcribed. It shows Shlaimoun's role as the principal in the bond transaction, including the control of monies in the bond transaction. Virtually every piece of information provided by Shlaimoun is simply not borne out by any documents or any other evidence.

August 23, 2010: Shlaimoun emailed one of the other "investors" and advised “assets are in place, just waiting for the trader to find some paper and get started.”

Again, there is no supporting evidence that this was true.

September 1, 2010: Shlaimoun emailed Korakianitis and advised that “having discussed the matter with my colleagues, I can confirm that our existing agreement remains in full force and that Hybrid and any other clients that you have are covered by our general agreement and no further or supplementary agreement is necessary.”

Shlaimoun was referring to the Joint Venture Agreement between them.

By email dated September 2, 2010 Shlaimoun agreed to produce a "sanitized euroclear bond screen shot" so that he could provide it to Korakianitis to forward to MTI. A copy of the bonds were provided by Shlaimoun on September 15, 2010. Korakianits forwarded the bonds to MTI.

The bonds were for an undisclosed amount from the Banco Central De Venezuela.

There were a number of redactions in the copies of these bonds.

By September 23, 2010, the value of Infinafund's NatWest bank account was reduced to $27,322.86 and is now closed.

Despite this, Shlaimoun kept up the pretense that the bond transaction was still ongoing. For example, on October 4, 2010, Shlaimoun emailed another investor and advised “I signed the blocking agreement on Friday so I am told we should get going this week.”

On October 13, 2010, Shlaimoun emailed Korakianitis advised he was continuing to deal with ‘the provider’. 


On October 14, 2010, Shlaimoun emailed Korakianitis advised that the “’provider’ requires a subsequent installment payment to continue.” These emails are indicative of Shlaimoun's primary role rather than simply taking instructions from Korakianitis.

PURCHASE OF THE MALIBU HOME
 

On July 6, 2010, a Grant Deed was issued granting all interest in the Malibu home to Shlaimoun.

On September 14, 2010 Shlaimoun directed the BSI Bank in Switzerland to transfer $6,200,000 to the United States to complete the purchase of the Malibu home. The monies to purchase the Malibu home came from the same bank account where Shlaimoun had transferred MTI's monies to from Infinafund's NatWest Bank account.

The commingled monies from investors deposited into the Infinafund NatWest bank account were transferred from Infinafund’s NatWest bank account to Infinafund’s BSI Bank in Switzerland, which monies were then transferred into an account in the name of Roxlark at the BSI Bank in Switzerland.

BSI Bank in Switzerland then transferred the money to First California Escrow in California to pay for Shlaimoun's Malibu home.

For some unexplained reason, the deed for the Malibu home was not registered until October 22, 2010, just days after Versailles was incorporated.

Wednesday, March 19, 2014

MALIBU MEDIA MUZZLE: Miss Fortune Tells The Story Of Robert Buckhannon and His Malibu Crony, Zia Shlaimoun

Miss Fortune has discovered a compelling international angle to the unfolding story of Battle Creek chiropractor (and burned bar manager) Robert Buckhannon. 

The story—told here for the first time—moves from Las Vegas to London, from Canada to Malibu, and winds up back here in Michigan. Using publicly-available international court documents, Miss Fortune brings you the exclusive story of Robert Buckhannon’s international business associate, Zia P. Shlaimoun—a story you’ll only read at “Glistening, Quivering Underbelly”.

Robert Buckhannon’s $220,000 Payment to Infinifund

On April 1, 2009, Robert Buckhannon, CEO of Vestium Management Group and managing member of Arcanum Equity Fund (AEF), wired $20,000 out of an AEF account to Infinifund Ltd.

However, less than six weeks before, (on February 24, 2009), Buckhannon had sent an email to the other managing members, Terry Rawstern, Dale St. Jean and Gregory Tindall, telling them that pending investor redemption requests “can be strung out for a bit” while they pursued other investment opportunities.

According to court documents, Buckhannon wired an additional $200,000 to Infinifund on June 30, 2009.

On August 18, 2009, Buckhannon sent a letter to the Funds' investors explaining the Funds lacked the necessary capital to pay investor redemptions. 


However, the very next day, Buckhannon transferred $2.5 million of Arcanum's funds to Shea Mining.

When questioned in November 2009 by the Funds’ controller regarding the existence of an agreement authorizing or explaining the purpose for the disbursements, Buckhannon explained that Infinifund’s sole principal, Zia P. Shlaimoun, was the “cousin of his fiancĂ© Marlena Michaels.” 

But as Miss Fortune revealed in a March 10 post titled "Serial Monogamy in the Cereal City", Buckhannon wasn’t being enitrely truthful— Buckhannon and Michaels had actually married on May 15, 2009.

Buckhannon initially told the controller to classify the $220,000 payments to Infinifund as “expenses related the AEF’s August 2009 investment in Shea Mining & Milling.” However, in March 2010, the controller stated that Buckhannon told him to reclassify the expenses as “legal expenses for AEF”.


When the controller questioned that classification, Buckhannon instructed him to reclassify the Infinifund payments as “investment management expenses”.

But just a few months later, Shlaimoun and his partner Nikolas Korakianitis scored and even bigger payday—from a disputed $2,000,000 “bond transaction”
 

The Case of Mining Technologies International, Inc. v Krako Inc., Krako International Holdings, Infinafund Ltd., Zia Shlaimoun, et al. 

In early 2010, Mining Technologies Inc. (an Ontario manufacturer of drilling tools for the mining, water well and construction industries) was introduced to Nikolas Korakianitis, a business associate of Zia Shlaimoun. Korakianitis claimed that he could provide financing assistance to MTI for MTI's business. Korakianitis advised MTI that he had access to “$300,000,000 of bonds that could be traded”. The bonds were allegedly held in a bank account at the National Westminster Bank in England (NatWest Bank).

According to Canadian court documents, Zia P. Shlaimoun testified that at all material times he “was, and currently is, the sole director, officer and shareholder of the Infinafund defendants”. Shlaimoun is also the "owner" and principal of Versailles Investments LLC, a California corporation that owns his current residence in Malibu, California. 

On May 13, 2010, Shlaimoun emailed Korakianitis advising that his ‘banker’ had ‘dictated’ a ‘letter of undertaking’. Shlaimoun advised that it made more sense for an investor to receive a ‘letter of undertaking’ as the investor would then have an undertaking from the bank to return their money in the "unlikely event that we don’t perform".

The court later determined that it was “clear that Shlaimoun and Korakianitis were both involved in obtaining or creating paper which would help persuade "investors" that the bond transaction was bona fide.”

While Shlaimoun has no formal education or experience in financing, let alone in transactions involving $300 or $900 million dollar bonds, court records show that Shlaimoun stated that from 2009 to 2011, he was in “the business of raising financing”.


But defendant Nikolas Korakianitis (the Krako companies are his family’s corporations) later defended MTI’s court action, claiming he “knew nothing of Shlaimoun’s fraudulent scheme” regarding the bond transaction.

On the other hand, Shlaimoun pointed the finger right back at Korakianitis, alleging that Korakianitis was his client and that he only took instructions from him.

However, the Canadian court documents state that the “evidence is overwhelming and conclusive that both Shlaimoun and Korakianitis were jointly involved in the bond transaction and Shlaimoun played a much more significant role in the bond transaction."


In May 2010, MTI transferred $2,000,000 into Infinafund Ltd.’s bank account at NatWest. Mining Technologies Inc. (MTI) believed it was investing in a short term “bond transaction”. [NOTE: The Canadian court records spell Shlaimoun’s “Infinifund” as “Infinafund”; this story utilizes the Canadian court's spelling.]

Within a few months, MTI began inquiring about the investment and the return of its money. When little or no information was provided to MTI, it began an investigation into the “bond transaction”. At some point, MTI concluded the “bond transaction” was a fraudulent scheme and its money had been taken. 

Court records revealed the existence of a “a written and executed Joint Venture Agreement between Shlaimoun and Korakianitis dated March 12, 2010” that was a general agreement for ‘private financial programs’ in which Krako and Infinafund would share profits (the "Joint Venture Agreement"). The Joint Venture Agreement provided that Infinafund was responsible for operating the bank account, for securing the credit line for the exclusive use of the joint venture and for negotiating and managing the trading activities.

But Shlaimoun denied that he’d even signed the Joint Venture Agreement, suggesting that his signature was “cut and pasted onto the agreement”—but never offered any explanation why Korakianitis would do so while leaving himself significantly implicated in the bond transaction.
 

The Ontario Superior Court of Justice determined in 2010 Shlaimoun and Korakianitis were jointly involved in the bond transaction.

In making its decision, the court determined that it made little sense that Korakianitis was the client from whom Shlaimoun simply took instructions because the alleged $900,000,000 bonds and the “investor” monies were deposited with the NatWest Bank, into a bank account controlled solely by Shlaimoun. 


Shlaimoun's Malibu home
Korakianitis requested payments from Shlaimoun and Shlaimoun made a payment to Korakianitis' family. Not one document exists showing Korakianitis gave instructions to Shlaimoun on any financial matters.

In addition, much of the money from the Infinafund NatWest Bank account was transferred into other Shlaimoun owned or controlled bank accounts. There is no suggestion that Korakianitis had any control over the Infinafund NatWest Bank account or the additional recipient bank account that Shlaimoun controlled. In addition, there were a number of communications from Shlaimoun to MTI dealing with MTI’s “invested” $2,000,000 into Shlaimoun’s Infinafund account at NatWest Bank. The significant and concrete information regarding the bond transaction came from or was sought from Shlaimoun
financing, trading, and the bonds.

The communications confirm that Shlaimoun was a significant, if not the significant person, in MTI's involvement in the bond transaction and the bond transaction itself.
 

In December 2010, MTI began legal proceedings in the United Kingdom (UK), seeking disclosures, including copies of Infinafund’s NatWest bank account documents. A “Norwich order” was granted on December 31, 2010.  (A Norwich order is a pre-action discovery mechanism that compels a third party to provide certain information in its possession.)

On May 19, 2011 MTI filed a its lawsuit in Canada, alleging fraud, conversion, misrepresentation, conspiracy, breach of trust, breach of fiduciary duty, unjust enrichment, negligence and breach of contract.

Defendants included Zia Shlaimoun, his wife Oussha Arda Shlaimoun, the Infinafund defendants and other “Infinafund” companies and various other parties to the losses arising from MTI's deposit on May 27, 2010 of $2,000,000 into Infina Fund's NatWest bank account.
 

On May 27, 2011 Justice O’Connor issued a Norwich Pharmecal Order, a Mareva Order and an Asset disclosure Order (“O’Connor Orders”). The O’Connor Orders required Shlaimoun to provide a sworn statement of his worldwide assets within 7 days. (Shlaimoun’s assets were “frozen” by the Mareva injunction.)

On July 17, 2011, Shlaimoun served MTI with a sworn asset statement in accordance with the O'Connor Orders to report his worldwide assets.

In this affidavit, Shlaimoun stated that he resided in London, England, and that his worldwide assets included nominal sums in a Barclays Bank account in London, a residence with a small amount of equity in London, and shares of nominal value in the Infinafund Companies.

Shlaimoun submitted that he had "no significant assets with any substantial value".

But Shlaimoun failed to disclose the Malibu, California home he’d purchased in December 2010, interests in various luxury automobiles, his interest in the California company, Versailles Investments LLC, and other corporate interests.

While Shlaimoun stated that he did not include property in California because he understood that California did not recognize foreign Mareva Orders, it is significant to note that the Shlaimoun’s affidavit purported to describe "the nature, value and location of their assets worldwide, whether in their own name or not and whether solely or jointly owned" as required by the O'Connor Orders.

There was no reference in the document to Shlaimoun’s non-disclosure of his California assets.

On July 21, 2011 the O’Connor Orders were continued and, given the intention of Shlaimoun to set aside the O'Connor Orders, the court permitted Shlaimoun access to $50,000 from the frozen assets for living and legal expenses.

On August 26, 2011, Shlaimoun and the Infinafund defendants moved to set aside the O’Connor Orders. MTI sought to extend the O’Connor Orders.

On September 6, 2011 the O’Connor Orders were continued. The Shlaimoun and Infinafund defendants' motion was adjourned to November 7, 2011.

Again, given the proposed motion to set aside the O'Connor Orders, the Ontario Superior Court permitted Shlaimoun access to a further $100,000 (for a total of $150,000) from the frozen assets for living and legal expenses.

But MTI defended the motion to set aside the O'Connor Orders.

One of the documents produced was an affidavit from Peter Cosandey, a lawyer in Switzerland, setting out documents required to be produced by Shlaimoun's Infinafund BSI Bank in Switzerland which would permit a tracing of the funds received from NatWest Bank's Infinafund bank accounts.

Court records show Shlaimoun provided no documents.

In September 2011 MTI discovered that Shlaimoun had moved to Malibu, California. MTI discovered that Shlaimoun had entered into an agreement to purchase a large oceanfront home on July 6, 2010. This was one of the more significant assets not disclosed in Shlaimoun's sworn asset statement.

MTI discovered Shlaimoun's failure to disclose all of his worldwide assets.

The $12,000,000 Malibu Home 


Shlaimoun’s home, described in a 2012 SF Curbed post as a “huge, less-than-tasteful Malibu mansion”, is a sprawling, 20,000-square-foot personal palace. With sweeping views of the ocean, broad expanses of featureless tile and tacky '90s architecture, the house holds 11 bedrooms and 12 bathrooms, while the sizable 5.33-acre lot includes "horse stables with riding area, tennis court, a grand infinity edged pool with pool house, large fruit orchard, rose garden and space for a vineyard”.

 

Court records show Shlaimoun “carefully avoided disclosing assets which may be held by other corporate entities which he owns or controls”.

For example, there is no information at all regarding the financial affairs of Roxlark or Lantierst.

Roxlark International Ltd. is an offshore corporation registered in Belize. In his court documents, Shlaimoun stated he was “introduced to Roxlark” by a company called Lantierst.

However, Shlaimoun delivered, on the closing of the Malibu home, a letter on Roxlark letterhead signed by Shlaimoun "for and on behalf of Roxlark".

Shlaimoun also transferred $6,200,000 from Roxlark's bank account for the purchase of the Malibu home.

Shlaimoun prepared a “personal wealth statement” in April 2011 for Deutsche Bank in connection with a mortgage for his Malibu home in which he disclosed he was the 100% owner of Roxlark.

Although requested by the court, Shlaimoun has never provided documents with respect to transfers of monies to Roxlark by the Infinafund defendants. Shlaimoun does not deny in any of the voluminous materials that he is not the principal of Roxlark.

He simply does not admit it.

Yet, Shlaimoun attempts to distance himself on the basis he was "introduced" to Roxlark. Canadian court records reveal there was not a single document in the mountain of paper produced in the case which even hints that Shlaimoun and Roxlark are third parties or independent of each other. But there are numerous documents which clearly state, and those which imply, that Shlaimoun is the principal and "controlling mind" of Roxlark.

In November 2011, upon MTI bringing motions for documentation from Belize relating to Roxlark, Roxlark was abruptly deregistered as a company.

When confronted with a payment of $6,200,000 from Roxlark to Shlaimoun (for the purchase of the Malibu home), Shlaimoun stated it was a payment for a patent of his but did not produce one single document consistent with or confirming such a patent transfer or transaction.

The court decided that there was no question Roxlark was controlled by Shlaimoun.

Lantierst was yet another Shlaimoun corporation. Attached to the same personal wealth statement of April 2011 for Deutsche Bank for the Malibu home financing, Shlaimoun described himself as the “100% beneficial owner of Lantierst”.

Shlaimoun had been asked by the court for information regarding Lantierst but has failed to provide any credible information regarding Lantierst or the transfer of funds to it from the Infinafund defendants.

Again, Shlaimoun did not deny that he was the principal or “controlling mind” of Lantierst.

He simply did not admit it.

There is not a single document that suggests that Shlaimoun and Lantierst are third parties to each other.

In addition, there was nothing produced regarding the ownership or assets of the other Infinafund companies.

MTI has included information in the motion materials regarding luxury vehicles and other corporations it alleged that Shlaimoun owned or controlled.

Shlaimoun has not seen fit to deal with these allegations other than a bald denial that he has any assets or income, yet he continues to live in a 22,000 square foot home overlooking the Pacific Ocean in Malibu.
 

The Case

In the fall of 2011, Shlaimoun and the Infinafund defendants filed a “Statement of Defence” in this action. The Statement of Defence challenged the jurisdiction of the Ontario courts and submitting that Ontario was not the forum conveniens for this proceeding. The Statement of Claim contained no defence to the merits of MTI's claim. There was no denial of any factual allegations in the Statement of Claim.

Once Ontario's jurisdiction for this proceeding was determined, MTI brought a motion for partial summary judgment—and the crazy train left the station. The action spawned additional motions and cross motions.

Shortly after the Court of Appeal dismissed Shlaimoun and the Infinafund defendant's challenge to Ontario's jurisdiction, Shlaimoun and the Infinafund Defendants submitted a draft “Amended Statement of Defence” dated January 14, 2013.

The Amended Statement of Defence stated:
a) Shlaimoun and the Infinafund Defendants admitted that MTI deposited $2,000,000 USD into Shlaimoun's Infinafund’s NatWest Bank account in England; 

b) Shlaimoun admitted that the Infinafund’s bank accounts were controlled by him; 
 c) Shlaimoun and the Infinafund defendants stated that they did not participate in the bond transaction except to arrange for the funding;
d) Shlaimoun and the Infinafund defendants stated that the entire "bond transaction" was undertaken and controlled by Korakianitis; and
e) Shlaimoun and the Infinafund defendants denied that they ultimately received any of MTI's monies.

On November 25, 2013, MTI's motion for summary judgment against Shlaimoun and the Infinafund defendants for $2,000,000 (USD) was granted, together with pre-judgment, post judgment interest and costs.


As set out above, the court determined that Shlaimoun was personally and actively involved as a principal in the fraud and the misappropriation of MTI's monies. 


Shlaimoun was the beneficiary of the unjust enrichment, and the court concluded that Shlaimoun's use of the Infinafund corporations for fraudulent purposes for his direct financial benefit would be sufficient for this court to pierce the corporate veil and make Shlaimoun, the controlling mind of the Infinafund corporations, liable for the amount of MTI's loss of $2,000,000

And yesterday, on March 18, 2014 , MTI attorney Norman Groot confirmed to Miss Fortune in an email that his firm “filed an extensive motion record with the Ontario Superior Court of Justice in Brampton returnable April 1st. The motion record contains the judgment issued by the Brampton Court against Shlaimoun for $2M, plus interest and costs. The motion record also contains other relevant documents related to the judgment. We are seeking further relief against Shlaimoun on April 1st.”


FLY ME TO SHLAIMOUN: What's Next?

In an "order to appear" filed on February 12, 2014, in California's Central District, Zia Shlaimoun was personally ordered to appear in front of the Honorable Paul L. Abrams on April 22nd at 10:00am.

Shlaimoun was ordered to appear to "furnish information to aid in enforcement of a money judgment against you".

The plaintiff is Wires Jolley, the Toronto law firm that represented Shlaimoun in the MTI case.

After successfully arbitrating their fee down to $227,503 (plus interest) from $326,000, Shlaimoun still hasn't paid his lawyers.

Monday, March 17, 2014

COMING TOMORROW: Who Is Zia Shlaimoun...And Who Really Paid For His Malibu Home?

California attorney threatens Miss Fortune with a "restraining order" for bringing you the story of Zia Shlaimoun.

Read the story here tomorrow!
 
Guess who lives in this 30553 Morning View Drive, Malibu, California home?

Don't have a clue? Here's one: his cousin is married to Robert "crooked chiropractor" Buckhannon.

Miss Fortune has the exclusive story of Zia Shlaimoun and the case against him--Mining Technologies International, Inc. v. Krako, Inc.--currently making its way through the Ontario Court of Justice.

But Mr. Shlaimoun prefers that you not know what court documents have revealed about his alleged involvement in a $2,000,000 bond transaction, declared in a November 25, 2013 court filing (and I quote directly from publicly-available Canadian court documents) to be "a fraudulent scheme by Shlaimoun and the Infinafund Defendants and possibly other defendants to defraud companies of their money. A trial is not necessary."

This morning, Miss Fortune received an email from California attorney Bahrain Bryan Paya threatening legal action. Here's an excerpt:


It is our understanding and believe you write a blog on ‘www.blogspot.com’ under the pseudo name of “Miss Fortune” entitled “Glistening, Quivering, Underbelly” and that on March 17, 2014 you posted a blog entitled “COMING TOMORROW: Who Is Zia Shlaimoun...And Who Really Paid For His Malibu Home?”

Take note that unless you confirm by return of email to this law firm that you will take down or otherwise refrain from publication of any kind, your March 17, 2014 post; and that any further publication concerning our client, we will on March 19, 2014 at 8.30am file an application for a restraining order against you before the Santa Monica Court. Service of such order will be by local sheriff or officer of the court and failure to comply with said order will be punishable by fine and/or custodial sentence.  

Kindly note that if we are forced to file a restraining order against you, we will be seeking such legal fees and other costs as the court shall permit against you.

Miss Fortune will bring you the story of Zia Shlaimoun tomorrow!

CHANGING THE PLANET: The True Story of The Fitness Model, Her Muscled-Up Juicehead Husband, The Crooked Chiropractor...and $1.25 Million Dollars

Lea Denee Damante
In January 2009, Robert Buckhannon's Arcanum Equity Fund wired $1,000,000 to a corporation owned by a sleazy Las Vegas character named David Damante. And even though Damante is now in a federal prison serving 41 months for wire fraud, that suspicious $1,000,000 transaction seemed to have slipped below the radar. Miss Fortune examines the case of 'The Fitness Model, her Muscled-Up Juicehead Husband and the Crooked Chiropractor.

 
On January 23, 2009, David Damante rolled out of bed and padded down the hall of the Henderson, Nevada rental home he shared with his "fitness model" wife Lea Denee. It would turn out to be a great day—a million dollar day, in fact. 

That million dollars would come in the form of a wire transfer from Robert Buckhannon’s Arcanum hedge fund. The money has mysteriously "disappeared", and it appears that the "crooked chiropractor" just walked away from his "investment".

Or did he?

DAVE AND LEA

David R. Damante
Damante and his then-wife (they've since divorced) formed a home-based business they modestly called “Changing The Planet LLC” on October 10, 2008. Damante named himself the corporation’s President and Chief Executive Officer. Damante was also the Chief Financial Officer of another Nevada corporation, Sinymante Enterprises LLC (formed on September 25, 2007). 

On ActiveRain, a real estate networking site, Damante's profile page (listed under the name "ifundumm") claimed that he worked as a "Real Estate Mortgage Broker" with Mayflower Mortgage in Las Vegas.

Mayflower was run by Derrick Presley but neither Presley nor his company were licensed as mortgage brokers or mortgage loan originators.

And neither was Damante. 

But that didn't stop "ifundumm" from proclaiming (in broken English, apparently):

Our areas of expertise and knowledge are embedded in high end financing including: High rise condos, Casino's, Commerical buildings, Raw land and construction to perm loans as well.. We have fallout contacts with Turnburry Towers, Trump International, and many loft devolpments. I am also great at retrieving financing for harder to qualify people, and or LLC's.. Our srevice is never overlooked as well as the Disconcerning Buyer will tell you," Without the loan,There is no home"! As we are a Banker and a Broker we have many resources to finding what the client needs as their expectations!

Oy!


Damante’s partners in Sinymante included Sean Sinykin (left), a California realtor and mortgage broker with a petty theft background and California insurance agent (and future Equity Investment Management and Trading Inc. Ponzi king) William Sassman.




Roughly six months before Damante formed Changing the Planet, Sinykin and Damante had convinced a Henderson realtor, Douglas Johnson, to invest $1,000,000 in a "gold mine deal".

Court records reveal that Damante told Johnson that if he invested the $1,000,000 towards Sinymante’s purchase of an $80 billion dollar gold mine, Damante and Sinymante would reimburse Johnson his million dollars—and kick in an additional $1,000,000 and then cut Johnson in for a percentage of the mining claim.


Damante assured Johnson that he would use his $1,000,000 to form “corporate bonds and other financing instruments” for the mine purchase.

In early August 2008, Damante greased the skids for the Johnson deal by arranging a meeting with a prominent businessman described in court documents only as “SR”.  Damante claimed that SR was a Sinymante partner, although that was just part of the con. 

On August 14, 2008, Johnson delivered $1,000,000 by interstate wire transfers and a cashier’s check to a Sinymante account controlled by Damante.

Later that day, Damante used nearly $250,000 of Johnson’s money to buy himself a 2006 Ferrari F430 F1.  Four days later, on August 18, 2008, Damante plunked down $113,000 to buy another car—a brand new 2009 Mercedes Benz SL550. Damante continued to make cash withdrawals from the Sinymante account, using approximately $88,000 of additional money from Johnson’s investment.

And on August 15, 2008, Damante finally cut his partner, Sean Sinykin, in.

Damante wired nearly $500,000 to Sinykin, who did not use the money to finance the purchase of an $80 billion dollar gold mine.

Court documents reveal that Sean Sinykin used Johnson’s $500,000 for his own personal uses and uses unrelated to the purported gold mine.

In mid-November 2008, Damante allayed Johnson’s suspicions about his “investment”, telling Johnson that he’d used Johnson’s funds for payment of “securities lawyers’ fees, to register the asset, and to pay expenses related to the investment.”
 

Johnson apparently bought the explanation, and Damante moved into another con, one he called “Changing The Planet”.

(The account with Johnson’s investment, controlled by Damante, was finally closed on November 12, 2009—with $202.09 remaining.)



CHANGING THE PLANET...ONE MILLION DOLLARS AT A TIME

Damante used Changing the Planet to market fraudulent high-yield investments he called “'medium term notes'' through a private placement program.

On January 23, 2009, Robert Buckhannon’s Arcanum Equity Fund wired $1,000,000 of investor money from its Las Vegas Wachovia bank account to a Wells Fargo account controlled by Dave Damante’s Changing The Planet LLC.

And, except for a “personal property” declaration on AEF’s April 9, 2010 bankruptcy claiming a “$1,250,000 Changing The Planet Note”, that’s where the money trail ended.

Or did it?


A couple months later, flush with cash plucked from the pockets of Robert Buckhannon's investors, Damante convinced two Japanese investors, identified in court documents as T. Kokuban and K. Hurota, to invest $2,000,000 in  “medium term notes” through Changing The Planet’s “private placement program”. Damante claimed that his proprietary (and non-existent) trading program would yield a return of 25 percent per month over 40 trading weeks.


On March 17, 2009, Damante and Kokuban executed a “Collateral Asset Supply Agreement” establishing Changing The Planet’s obligations and return on Kokuban’s investment. On April 1, 2009, Kokuban and Hurota wired a $2,000,000 United States Treasury Bill from a bank account in New York to Changing The Planet’s Wells Fargo account in Las Vegas—the same account Buckhannon wired $1,000,000 to less than three months before.

Damante made three payments of $125,000 each to Kokuban and Hurota, but failed to make any additional payments due consistent with the  “Collateral Asset Supply Agreement”.


But Damante did not place the money into an investment, nor did he use the money as collateral for an investment. Instead, on April 9, 2009, Damante transferred the $2,000,000 (minus fees) to another Wells Fargo Changing the Planet account. After routing the $2,000,000 through several bank accounts, the defendant eventually sent $750,000 to his wife’s personal Bank of America account, and $125,000 to a Changing the Planet Bank of America account.

In addition, the Damante made $344,995.64 in payments to buy cars, and another $44,635.67 to buy a boat. The defendant made a $375,000 payment to middle-man described in court documents as "DO", who helped broker the deal for the purposes of making payments to K.H. under the written agreement. The defendant also made a $25,000 payment to his mother, $165,000 in charitable donations, and withdrew $30,000 in cash from one of his accounts.
 

David Damante was finally arrested in Scottsdale, Arizona on February 23, 2011, and charged with wire fraud and aiding and abetting.

The indictment alleged that Damante “fraudulently obtained $1 million from one victim and $2 million from two other victims through false representations that the funds would be invested and that the victims would receive substantial profits on their investments.”

Funny, no mention of the $1,000,000 Damante received from Robert Buckhannon’s Arcanum Equity Fund. Wonder why the "crooked chiropractor" didn't even show up in Damante's indictment? And why was that loss ever mentioned during any of Buckhannon's SEC negotiations?

Because Damante resided in Arizona, he was supervised by the United States Probation Office in the District of Arizona. In early October 2011, Pretrial Services for the District of Nevada was informed that Mr. Damante obtained two new financial obligations -- he attempted to purchase a car and was conditionally approved for a $3 million home loan -- without prior approval from Pretrial Services.

An Arizona detective conducted research regarding the home loan. According to the detective, the alleged creator of the pre-approval letter for the home mortgage indicated that she had never met Mr. Damante, and upon reviewing the document, stated that it was a fraudulently created document.

On October 14, 2011, Damante was arrested for violating of Pretrial Services release conditions, and made his initial appearance on that date before Magistrate Judge Burns. Magistrate Judge Burns released Mr. Damante on amended conditions of release. The amended terms of release included all previously imposed conditions of release as set by the District of Nevada as well as an additional term:
 

Defendant shall not enter into any financial accounts to include bank accounts, money market accounts, stock accounts, credit union accounts, and credit card accounts, and shall also not enter into any financial obligations to include secure transactions, purchase agreements, any financial applications in excess of $1,500, with the exclusion of appropriate legal defense expenditures, without prior notification and approval of Pretrial Services.

But Damante didn't stop.

On October 27, 2011, Damante requested permission from Pretrial Services to attend his father-in-law's funeral. Before granting the request, Pretrial Services requested specific information about Mr. Damante's travel plans. It learned that Mr. Damante would travel to California from October 28, 2011-November 1, 2011 and would stay at the home of Dr. Scott Zawaba, a friend of his. Dr. Zawaba verified Damante’s plan to stay with him during this time period.
Pretrial Services advised Damante that he must return to the District of Arizona no later than 3:30 PM on Wednesday, November 2, 2011, and that he must check-in in person with Pretrial Services at that date and time.

However, on November 2, 2011, Pretrial Services contacted Dr. Zawaba and was informed that Mr. Damante did not stay at his residence while he was in California, nor had he heard from Mr. Damante "since last week." Pretrial Services then contacted Damante’s wife, Lea Denee Damante, who informed Pretrial Services that Damante stayed with her and her mother in Applegate, California all week. Ms. Damante informed Pretrial Services that her husband was on his way back to the District of Arizona.

However, later that day Mr. Damante contacted Pretrial Services and informed that he was in Los Angeles with only $6 in his pocket, and therefore could not make it back to Arizona by 3:30 PM. He then requested that he be allowed to relocate to Laguna Niguel, California for employment purposes.

Pretrial Services requested that Mr. Damante provide the contact information of the friend he planned to live with in California and information regarding his potential employer for verification purposes. However, Damante failed to provide this information to Pretrial Services, so his request for modification of pretrial release was not immediately granted.

On November 2, 2011, Damante appeared telephonically before Magistrate Judge Foley on a Hearing on Defendant's Motion to Modify Conditions of Release. Judge Foley denied Defendant's request. At a November 21, 2011, hearing on Defendant's Motion to Modify Conditions of Release, Judge Foley added several conditions to Mr. Damante's release conditions.

But Damante still didn’t stop conning.

On January 9, 2012, Mr. Damante contacted his supervising officer in the Central District of California and requested permission to obtain a loan for $160,000 "against one of my Ferraris," which had been seized by the government. The request was denied on January 10, 2012. On January 11, 2012, Mr. Damante contacted his supervising officer and indicated that he would like to purchase a home in Newport Beach for $5 million.

He requested permission to obtain this new financial obligation. On January 18, 2012, Mr. Damante's supervision officer contacted him and advised him that his requests to obtain a loan on his seized Ferrari and/or to purchase a home in Newport Beach were both denied. Pretrial Services informed Mr. Damante that his requests were denied because he failed to provide the Office with verification and documentation regarding the financial transactions.

On January 25, 2012, Mr. Damante contacted his supervising officer in California to request permission to open a bank account at US Bank in order to obtain a $2 million loan. When the supervising officer requested the name and contact information of Mr. Damante's friend at US Bank whom would provide him the loan, Mr. Damante became agitated and refused to provide the information. Pretrial Services denied Mr. Damante's loan request. Mr. Damante later requested permission to obtain a $2.5 million loan through Deutsche Bank. 


Because of Mr. Damante's several requests to obtain large financial obligations, on February 9, 2012, the Court amended the terms of Mr. Damante's pretrial release, determining that Damante enter into financial transactions in his own true lawful name and must gain approval from the Court, and not Pretrial Services, before entering into any financial obligation over $1,500.

On May 24, 2012, a FBI agent informed Pretrial Services that it had been contacted by a man named Mike Krasowki, Mr. Damante's friend. Krasowski indicated that Damante was in the process of purchasing a home at 33 Vista Montemar, Laguna Niguel for $1.5 million. On June 1, 2012, Mr. Damante's supervising officer in California instructed Mr. Damante to report to Pretrial Services by 4:00 PM to sign the required documents for Pretrial Services to obtain the relevant escrow information, which Mr. Damante had not provided to Pretrial Services. Mr. Damante did not report to the office as instructed.

On June 1, 2012, Pretrial Services submitted a Violation Memorandum to Magistrate Judge Foley and a warrant for Defendant's arrest was issued. Mr. Damante was taken into custody and made an initial appearance on June 8, 2012.

He was subsequently released on an Appearance Bond of $50,000. Magistrate Judge Foley added a further term of release: Defendant must sign a release of financial information form.

On June 13, 2012, Mr. Damante appeared before Magistrate Judge Hoffman for the Initial Appearance on the Revocation of Pretrial Release.

Damante was ordered released on the same conditions as previously imposed pending the Revocation Hearing.

Damante was also ordered to appear before Magistrate Judge Foley on the Revocation Hearing on July 11, 2012. However, Damante failed to appear. A bench warrant was then issued for his arrest.

According to Mr. Damante's supervising officer in California, Mr. Damante traveled to Las Vegas, Nevada on Friday July 13, 2012, and self-surrendered to the United States Magistrate Judge on the outstanding warrant. Mr. Damante then appeared before Magistrate Judge Hoffman on July 16, 2012, and was ordered detained pending the Revocation Hearing before Magistrate Judge Foley.

On July 23, 2012, Foley revoked Damante’s pretrial release and ordered him taken into custody, where he remained until he accepted a plea deal on November 11, 2012. Damante pleaded guilty to two counts of wire fraud.


On February 19, 2014, Damante was sentenced to 41 months in federal prison.

He’s asked that he serve his time in Arizona. (And people in hell want ice water!)



WHAT HAPPENED TO THE MILLION DOLLARS ROBERT BUCKHANNON WIRED TO DAMANTE?

It appears that the money just went into Damante's account, and didn't play a role in his federal trial.

However, could Damante have withdrawn the cash, transferred it to another account, or used the cash to start an off-the-books business with Buckhannon?

Yes, each one is possible...and the only ones who know aren't talking.

And what about Lea Denee?

She was not charged in the case, and divorced Damante and moved back to California.  Miss Fortune thinks Miss Lea looks strong enough to take care of herself, thank you very much!