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Thursday, May 17, 2018

OUSSHA SHLAIMOUN'S $677,735.62 CIVIL FRAUD JUDGMENT: Queen Of The “Krypt” Hid Assets, Aided Husband Zia Shlaimoun's “Fraudulent Transfer” Of Money From Malibu Home Sale


Oussha Shlaimoun, who publicly presents herself, in a self-published book “Pure Cure: A Whole Family Guide To Wellness”, as a naturopathic practitioner, is really just another con—like her husband (and partner in crime) Zia Shlaimoun.
And while Oussha's actively involved in the apparently bogus Shlaimoun family's cryptocurrency mining scheme (KryptMiner), she was recently slapped with a $677,735.62 civil fraud judgment for her role in the fraudulent transfer transfer of proceeds of a multi-million dollar Malibu home sale from husband Zia Shlaimoun's Versailles Investments LLC to a bank account controlled by (wait for it!) Oussha Shlaimoun. 

It's a sleazy tale, one that unspooled over two years in the Superior Court of California's Santa Monica courthouse, ending at the front door of a 20,000 square foot, $12 million dollar Malibu home once described in a 2012 SF Curbed post as a “huge, less-than-tasteful Malibu mansion”.
But the story really began in London, England with (what else?) a multi-million dollar Investment swindle.


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 was also the “owner” and principal of Versailles Investments LLC, a California corporation that owned the 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 showed 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, Canadian court documents stated 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. 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 the 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 oceanfront Malibu, California home (shown below) he’d purchased in December 2010, along with interests in various luxury automobiles, his interest in the California company, Versailles Investments LLC, and other corporate interests. 

In early 2010, Hybrid Finance, Ltd. 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 trading 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.)

According to documents filed in California Superior Court, Hybrid believed that on or about June 1, 2010, the account held approximately $8,000,000. Hybrid believed 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 “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 its original complaint that its funds were misappropriated by Zia Shlaimoun for his personal use. 

Ultimately, Hybrid determined that none of the representations made by Shlaimoun detailed 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 was the subject of a lawsuit filed by Hybrid in Los Angeles Superior Court, Hybrid v. Shlaimoun, et. al. Case No. BC523540.)  

The Hybrid complaint alleged 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 alleged 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”.) 

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 alleged 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 alleged a second: the transfer of the proceeds of the Malibu home sale from Zia Shlaimoun/Versailles Investments LLC to Oussha Shlaimoun. 

On February 16, 2018, Hybrid Finance was awarded $550,000 in compensatory damages and $127,735.62 in pre- and post-judgment interest against Oussha Shlaimoun. 

As of today, Oussha Shlaimoun has not paid a cent to Hybrid.

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