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Thursday, April 9, 2015

FLY ME TO SHLAIMOUN: International Con Man Zia Schlaimoun Finally Coughs Up!

Zia Shlaimoun
International associate of Battle Creek's "crooked chiropractor" (and federally-indicted hedge fund fraudster) Robert Buckhannon pays $4.5+ million to settle civil fraud litigation

A little over a year ago, Miss Fortune discovered a compelling international angle to the still-unfolding story of Battle Creek's crooked chiropractor (and burned bar manager) Robert Buckhannon.

The story—told exclusively on this blog—moved from Las Vegas to London, from Canada to Malibu, and wound up back here in Michigan. 


Using exclusive court documents, Miss Fortune brought you the exclusive story of Robert Buckhannon’s international business associate, Zia P. Shlaimoun.

Before we get to the end of this story, a bit of context:
 
On April 1, 2009, Robert Buckhannon, then CEO of Vestium Management Group and a managing member of Arcanum Equity Fund (AEF), wired $20,000 out of an AEF account to Infinifund Ltd. 

Strange, especially when you learn that less than six weeks before, (on February 24, 2009), Buckhannon had sent an email to the other AEF 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, 2014 post titled "Serial Monogamy in the Cereal City", Buckhannon wasn’t being entirely 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”. 


Now that we've established that, here's the story of Zia Shlaimoun and Sudbury, Ontario-based Mining Technologies Inc. (MTI).

WHITE COLLARED! 

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). 

On May 27, 2010, MTI transferred $2.0 million (USD) into Infinafund Limited’s bank account at a bank in England. MTI made its investment on the belief that it was a short-term bond transaction. Later, when MTI inquired about the investment, no information was received from Infinafund’s principal Zia Shlaimoun or his partner in the scheme, Nikolas Korakianitis.

According to Canadian court documents introduced during the civil trial, 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.”


At the heart of MTI’s claim was that the corporation gave $2,000,000 to Zia Shlaimoun and Nikolas Korakianitis for investment in a "bond transaction". The bond transaction was non-existent, was a fraudulent scheme and Shlaimoun and his partners took the money for their own purposes. 

On May 19, 2011 MTI filed a 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 Infinafund's NatWest bank account.

Chez Zia
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 his 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 (above) he’d purchased in December 2010, interests in various luxury automobiles, his interest in the California company, Versailles Investments LLC, and other corporate interests.


In September 2011 MTI discovered that Shlaimoun had moved to Malibu, California.

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


The commingled cash from investors (reportedly nearly $11.5 million) 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 strange reason, the deed for the Malibu home was not registered until October 22, 2010, just days after Versailles Investments, LLC was incorporated by Shlaimoun in California. Shlaimoun is also the "owner" and principal of Versailles Investments LLC, a corporation which owns the Malibu home at the heart of this case.


And my head is spinning!

On May 19, 2011, MTI's law firm, Investigation Counsel, brought an action in Ontario on behalf of MTI alleging fraud, conversion, misrepresentation, conspiracy, breach of trust, breach of fiduciary duty, unjust enrichment, negligence and breach of contract against Krako Inc., Krako International Services Inc., Krake International Holdings Inc., Nikolas Korakianitis, Infinafund Limited, Infinafund Ltd., Infinafund AG, Infinafund Holdings AG, Zia Shlaimoun, Stacey Dawes, Aelite Financial Services LLC, Bunny Williamson, Lantierst Ltd., Frontier Horizon Inc., and "Doe Defendants" for the loss of MTI’s $2.0 million dollars. 

But the action was not served. 

Rather than watch Shlaimoun and company spend down assets defending a criminal action, an ex parte motion for pre-trial relief asset freezing and tracing was sought.

On May 27, 2011, Justice O’Connor of the Ontario Superior Court of Justice granted an ex parte order in the form of a Mareva Injunction having world wide effect restraining the Defendants from dissipating their assets. Justice O’Connor also issued ancillary asset reporting and tracing (Norwich) relief. 

After this order was issued and served, the defendants retained counsel, interim orders were made continuing the Mareva injunction, and monthly motions were heard for the following two years until an interlocutory order was made that the Mareva injunction would remain in place until trial. 

Simultaneously, MTI’s funds were traced through Switzerland, Belize and into the United States, and an action was commenced in California against a company that Zia Shlaimoun controlled operating as Versailles Investments Limited. MTI obtained orders effectively freezing the assets of Versailles Investments Limited in California pending trial.

On February 22, 2012, Justice Lemon of the Ontario Superior Court of Justice determined that Ontario had jurisdiction over Infinafund in England and Shlaimoun in California and dismissed their motion to stay the action based on lack of jurisdiction. 

On April 29, 2013, Justice Ricchetti of the Ontario Superior Court of Justice granted partial summary judgment against Infinafund and Shlaimoun for fraud, conversion, and breach of fiduciary duty. 

The partial summary judgment was for MTI’s $2.0 million, a liquidated amount, costs and interest. The issues of special and punitive damages, as well as actions against the other defendants, were left for another day. 

Prior to this motion, MTI obtained default judgment against Stacey Dawes, the banker in England, who facilitated the fraud for Shlaimoun, and against Frontier Horizon Inc., who facilitated the fraud for Shlaimoun in California. 

An appeal by Shlaimoun of Justice Ricchetti’s judgment in fraud never took place as the Court of Appeal issued an order for security for costs against Shlaimoun prior to allowing him to perfect his appeal.

The appeal of Justice Lemmon’s decision was dismissed. 

Prior to this motion, the English Courts dismissed a motion by Infinafund and Shlaimoun to set aside the tracing (Norwich) orders. Of note was that the English banks froze the Infinafund and Shlaimoun accounts based on a Mareva by Letter. Meanwhile in California, MTI continued to pursue discovery of Shlaimoun and his company Versailles Investments Limited. 

On November 25, 2013, Zia Shlaimoun paid MTI the $2.0 million judgment issued by Justice Ricchetti as well as an additional $2.5 million for MTI’s worldwide investigative and litigation costs. 

This settlement was made on the eve of MTI’s trial in California against Shlaimoun’s company Versailles Investment Limited. MTI intended to have its Ontario judgment relied upon by the Courts in California. For Shlaimoun, the risk of other investors coming forward with actions, the prejudicial judicial findings in Ontario, England and California resulted in the "pressure point" necessary for him to transfer back to MTI his ill gotten gains.

On August 12, 2014, Shlaimoun paid MTI an undisclosed amount, satisfying an April 23, 2014 judgment on behalf of his company Versailles Investment Limited—and settling the California case.

In a news release regarding the MTI case, attorney Norman Groot states: This case demonstrates that if a fraud victim has the resolve to pursue a fraudster, resolve which includes the passage of time and the cost of investigation and litigation, recoveries for serious frauds are possible. This case also demonstrates that effective investigation and litigation are often required to bring the pressure to persuade someone bent on living off illicit gains that it is in their best interest to return the money under dispute.

And that's how it's done, folks! 

If you'd like to read how Shlaimoun's California attorney threatened Miss Fortune with a "restraining order", click here.

Here's a preview:

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. 


I'm still waiting...





1 comment:

  1. Why threaten? If his client can break the law; why does he think the slime of his behavior should not be exposed? If you do not want it public - simple - do not do it.

    ReplyDelete