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Monday, December 12, 2016

INTERNATIONAL FRAUDSTER ZIA SHLAIMOUN BEGINS ANOTHER SEVEN-FIGURE CIVIL FRAUD TRIAL TODAY: In Related 2014 Case, California Resident Shlaimoun Slapped With $4.75 Million Civil Fraud Judgment

“Plaintiff is informed and believes and thereon alleges that Shlaimoun fraudulently transferred $7,000,000 of his ill-gotten funds to Versailles for the purchase of the Malibu property.” 
April 27, 2016 
Complaint For Fraudulent Transfer
Case No. SC125768

On March 17, 2014, I published a story asking this question: “Who is Zia Shlaimoun, and who really paid for his house?”


A civil fraud trial beginning today in a Los Angeles County courtroom may help provide the answer.

At the time of my question in March 2014, Shlaimoun was still living in a Malibu, California home located at 30553 Morning View Drive. 

The 20,000 square foot mansion (shown at left), with 11 bedrooms and 10 bathrooms, was described by one California real estate reporter as a “gilded monstrosity”. 

Shlaimoun and his wife, Oussha, lived in the home with their two children.

Shlaimoun, introduced to readers of this blog through my coverage of Battle Creek's “crooked chiropractor” Robert Buckhannon, was an associate of Buckhannon's during his days as the head of two now-defunct Bradenton, Florida-based hedge funds, Arcanum Equity Fund LLC and Vestium Equity Fund LLC. (Buckhannon was arrested on October 1, 2014 in Las Vegas, and was charged along with Terry Rawstern of Aberdeen, S. D. in a federal criminal indictment with one count of conspiracy to commit wire fraud and one count of wire fraud. If convicted, Buckhannon and Rawstern could face up to 30 years on the conspiracy charge and up to an additional 20 years in prison on the wire fraud charge. That trial is expected to begin in mid-April 2017.)

Buckhannon married Shlaimoun's cousin, Marlena Michaels, on May 15, 2009 in Las Vegas, Nevada. Buckhannon's federal hedge fund fraud indictment alleges he diverted $60,000 of investor money to buy Michaels an engagement ring.

Over the last two years, Buckhannon and Shlaimoun have launched a clinical testing laboratory scheme, GoldStar Laboratories LLC, with locations in five states, including Michigan, Ohio and Missouri. (However, the company's website, goldstarlab.com, has been disabled.)

On August 22, 2016, Buckhannon and Shlaimoun submitted declarations on behalf of an alleged California-based Goldstar Laboratories LLC/Advanced Biomedical, Inc. seven-figure testing lab acquisition. 

An attorney representing Advanced Biomedical, Inc. filed evidentiary objections on August 31, 2016 to the Shlaimoun/Buckhannon declarations, extensively detailing doubts on the duo and the credibility of their declarations. 

 “Zia Shlaimoun and Robert Buckhannon submitted declarations for an alleged Goldstar Laboratories, LLC that Debtor filed evidentiary objections to and arguments on why Court should not find these declarants and the content of their declarations credible.” 

The formidable San Diego attorney representing Hybrid Finance, Ltd. in this action against Shlaimoun, Michael Jason Lee, specializes in major fraud cases, including those involving asset preservation and recovery.

Miss Fortune has the exclusive story of Zia Shlaimoun and the newest seven-figure civil fraud case against him—brought by Hybrid Finance, Ltd.—debuting today in the Superior Court of California in Los Angeles County. 

Mr. Shlaimoun prefers that you not know what court documents have alleged about his involvement in a $1,000,000 bond transaction, declared in an April 28, 2016 court filing to be a “fraudulent transfer” by “Shlaimoun and his affiliates” who “orchestrated a fraud whereby they collectively acted in concert to defraud Hybrid of $1,000,000.” 

People in hell want ice water.

THE CASE

In early 2010, Hybrid was introduced to Zia Shlaimoun through an intermediary, Nik Korakianitis. Shlaimoun proposed a leveraged investment opportunity to Hybrid. Shlaimoun represented that Hybrid would receive exclusive access to $100,000,000 for investment tradings to generate returns for Hybrid’s benefit. 

To secure access to the $100,000,000, Hybrid would be required to pay interest during the period of trading at the annual rate of 12%, or 1% per month. 

Following the deposit of the initial $1,000,000 interest payment by Hybrid, Shlaimoun would secure access to the $100,000,000, and investment and trading would then commence. 

It was expected that the trading period would begin within a matter of weeks of Hybrid’s initial deposit. 

Shlaimoun assured Hybrid that the $100,000,000 would be held in a trading account and that he, (Shlaimoun), would manage the trading of the $100,000,000 for the benefit of Hybrid. 

Shlaimoun was to receive a fee for the management of the funds during the trading period. Hybrid’s initial $1,000,000 deposit was to be maintained on deposit with the banking institution, undisturbed.

Based on the representations of Shlaimoun regarding the terms of the investment, and at his direction, on or about May 15, 2010, Hybrid transferred $960,000 to an account held by Infina Fund (a British private limited company incorporated by Shlaimoun on September 21, 2007) at National Westminster Bank Plc (“NatWest”), held at its Chelmsford branch in England. 

Hybrid alleges that Shlaimoun was the sole owner of Infina Fund at the time and had full control over the account. 

At all times, Shlaimoun was the sole signatory to the account. Shlaimoun credited $40,000 toward Hybrid’s $1,000,000 deposit based on expenses and other monies previously laid out by Hybrid’s partners at Shlaimoun’s special instance and request in connection with the investment.

Hybrid was one of numerous investors with Shlaimoun in the transaction, with each investor depositing funds to the account for access to, as represented by Shlaimoun, trading bonds in the hundreds of millions.

(According to Canadian court documents filed during Shlaimoun's MTI case, which resulted in the $4.75 million judgment filed April 23, 2014 in California's Superior Court, between May-July 2010, Shlaimoun was alleged to have received total deposits of  nearly $11.0 million from at least six investors.)

Hybrid believes that on or about June 1, 2010, the account held approximately $8,000,000. Hybrid believes that through a series of transactions, all of the monies were transferred by Shlaimoun and into various accounts throughout the world. 

Based upon the representations of Shlaimoun and his affiliates, Hybrid (in detrimental reliance upon such representations) was induced to transfer $960,000 to Infina Fund. Without Zia Shlaimoun’s representations, Hybrid would not have transferred the money and would not have suffered the loss of $1,000,000.

Following Hybrid’s initial deposit, Shlaimoun never secured access to the $100,000,000 trading account fund, and the trading period never commenced. 

Instead, Hybrid alleged in it complaint that its funds were misappropriated by Zia Shlaimoun for his personal use. None of the representations made by Shlaimoun that are set forth above were true. 

Shlaimoun was aware of the falsity of these statements at the time they were made. Hybrid’s funds were not used to make an interest payment or effectuate a trade. Instead, Hybrid’s funds were misappropriated and absconded by Shlaimoun and his affiliates for their own personal use. 

The monies were instead held at NatWest bank until such time that Shlaimoun and his affiliates could deplete and transfer the monies deposited by Hybrid and other unwitting fraud victims. 

Following the May 2010 remittance, Shlaimoun and his affiliates made repeated fraudulent statements to Hybrid to prevent Hybrid from filing suit to seek reimbursement of its funds. (The underlying fraud committed by Shlaimoun and his affiliates is the subject of a lawsuit filed by Hybrid in Los Angeles Superior Court, Hybrid v. Shlaimoun, et. al. Case No. BC523540.)  

MALIBU-BOO: SHLAIMOUN'S FRAUDULENT TRANSFER OF FUNDS AND/OR AN INTEREST IN THE MALIBU PROPERTY AT 30553 MORNING VIEW DRIVE

The Hybrid complaint alleges that on or about July 6, 2010, Shlaimoun purchased a $12,000,000 property located at 30553 Morning View Drive in Malibu, California. 

Although Shlaimoun purchased the Malibu property in the name of Versailles Investments LLC, Versailles was not formed until October 20, 2010, 10 days later. The sale was recorded on October 22, 2010. 

The July 6, 2010 date of the purchase of the Malibu property was made after the majority of the funds held in the account were completely depleted by Shlaimoun. 

According to Hybrid's allegations, Shlaimoun used $7,000,000 of his own ill-gotten funds to finance the purchase of the Malibu property that he eventually transferred to Versailles Investments LLC. Hybrid alleges that the $1,000,000 it deposited into the account was used towards the purchase of the Malibu property, not the investment program.

Shlaimoun, the 99.9% manager of Versailles and the person who signed all documents on behalf of Versailles with regard to the purchase of the Malibu property, was alleged to be the sole person in control of Versailles. 

After the purchase of the Malibu property, and its transfer to Versailles, Shlaimoun invested additional ill-gotten funds to upgrade the Malibu property. (An August 13, 2012 feature in the Wall Street Journal later describes the home as having undergone “about $1 million in renovations”.) 


Somewhere in heaven, Liberace is weeping...really!

In April of 2014, Versailles sold the Malibu property to a third party for $15,000,000. 

The proceeds from the sale of the Malibu property were received into the attorney client trust account of the Catanzarite Law Corporation (“CLCL”) — counsel for Shlaimoun and Versailles. Hybrid has filed suit against Versailles as a fraudulent transferee in the matter of Hybrid Finance, Ltd. V. Versailles Investments, LLC, Los Angeles Superior Court, Case SC123286 (the “Versailles Litigation”). The Versailles Litigation is still pending before the Los Angeles Superior Court. 

Hybrid alleges that Shlaimoun and/or Versailles transferred portions of the proceeds from the sale for the Malibu property to Shlaimoun’s wife, Ms. Oussha Shlaimoun. 

Hybrid was unaware that portions of the proceeds were transferred to Ms. Shlaimoun and could not have independently discovered this fact. 

Indeed, it was not until Shlaimoun stated that monies were transferred to his wife when he appeared for a deposition in the Versailles litigation in October 2015 that Hybrid became aware of this fact. 

During a break at the deposition, Shlaimoun stated to counsel for Hybrid that certain proceeds from the sale of the Malibu property were paid to Ms. Shlaimoun. 

Shlaimoun further claimed that sale proceeds from CLC’s trust account were transferred directly to Ms. Shlaimoun.

In addition to the first cause of action, a fraudulent transfer of $1,000,000 from Hybrid to Shlaimoun, the company alleges a second: the transfer of the proceeds of the Malibu home sale from Zia Shlaimoun/Versailles Investments LLC to Oussha Shlaimoun.

Hybrid Finance is seeking the following: compensatory damages of $1,000,000; pre- and post-judgment interest; avoidance of the transfer of proceeds to Ms. Oussha Shlaimoun; an injunction against further disposition of the funds transferred to Ms. Shlaimoun and any other relief the circumstances may require.  

MY LAWYER IS SUING ME FOR UNPAID FEES, AND OTHER SORDID TALES

On March 17, 2014, I received an email from Bahram Brian Paya, a California attorney retained by Zia Shlaimoun. Paya informed me that unless I removed the offending post, he would seek a restraining order against me. In addition, if Paya was successful, he'd seek legal fees and costs from me on behalf of his client.

The restraining order was denied by a judge, and I never heard from Paya or Shlaimoun again.

And, as I revealed in the post I called Zia Shlaimoun's A Deadbeat, Shlaimoun has a habit of not paying his bills.

After a recent search of Los Angeles area court records, I discovered that attorney Paya recently became a member of the “I’ve been stiffed by Zia Shlaimoun” club.

In a case settled on April 4, 2016, Shlaimoun was ordered to pay Brian Paya $100,000 in outstanding legal fees.

Another California law firm, Buchalter Nemer, successfully obtained a $23,748.73 judgment against Shlaimoun on July 23, 2015 for unpaid legal fees.

On May 5, 2014, Shlaimoun's Versailles Investments LLC was hit with another judgment for unpaid legal fees, and ordered to pay attorney Howard Crosner $250,000. 

Back on July 8, 2013, the United States District Court for the Central District of California confirmed a $227,504.46 judgment awarded to Canadian law firm Wires Jolly against Zia and Oussha Shlaimoun. The $326,000 unpaid legal fees were reduced by arbitration.

Shlaimoun's current attorney is Redwood City, California-based Geroge Eshoo.

Et tu, Eshoo?



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