EFTA01084930.pdf

IN THE CIRCUIT COURT OF THE 17TH JUDICIAL CIRCUIT IN AND FOR BROWARD COUNTY, FLORIDA RAZORBACK FUNDING, LLC, D3 CASE NO.: 09-062943 (19) CAPITAL CLUB, LLC, BFMC INVESTMENT, LW, LINDA VON ALLMEN, as Trustee of the VON ALLMEN DYNASTY TRUST, D&L PARTNERS, LP, DAVID VON ALLMEN. as Trustee of the DAVID VON ALLMEN LIVING TRUST. ANN VON ALLMEN, as Trustee of the ANN VON ALLMEN LIVING TRUST, and DEAN KRETSCHMAR, Plaintiffs, v. SCOTT W. ROTHSTEIN, DAVID BODEN, DEBRA VILLEGAS, ANDREW BARNETT, IRENE STAY. TD BANK, N.A., FRANK SPINOSA, JENNIFER KERSTETTER, ROSANNE CARETSKY, BANYON INCOME FUND. L.P., BANYON USVI, LLC, GEORGE G. LEVIN. FRANK PREVE, MICHAEL SZAFRANSKI, ONYX OPTIONS CONSULTANTS CORPORATION. and BERENFELD SPRITZER SHECHTER SHEER, LLP, Defendants. AMENDED COMPLAINT Plaintiffs, RAZORBACK FUNDING, LLC; D3 CAPITAL CLUB, LLC; BFMC INVESTMENT, LW; LINDA VON ALLMEN as Trustee of the VON ALLMEN DYNASTY TRUST; D&L PARTNERS, LP• DAVID VON ALLMEN, as Trustee of the DAVID VON ALLMEN LIVING TRUST: ANN VON ALLMEN. as Trustee of the ANN VON ALLMEN LIVING TRUST; and DEAN KRETSCHMAR (collectively referred to herein as "Plaintiffs") Page 1 of 289 EFTA01084930  Razorback Funding, LLC, a aL, v. TD Bank N.A., a aL. Case No.: 09-062943 (19) Amended Complaint hereby sue the Defendants, SCOTT W. ROTHSTEIN; DAVID BODEN; DEBRA VILLEGAS; ANDREW BARNETT; IRENE STAY; TD BANK, N.A.; FRANK SPINOSA; JENNIFER KERSTETTER; ROSANNE CARETSKY; BANYON INCOME FUND, L.P.; BANYON USVI, LLC; GEORGE G. LEVIN, FRANK PREVE; MICHAEL SZAFRANSKI; ONYX OPTIONS CONSULTANTS CORPORATION; and BERENFELD SPRITZER SHECHTER SHEER, LLP (collectively referred to herein as "Defendants"), and allege as follows: Plaintiffs' Claims 1. The Plaintiffs sue the Defendants and seek the following: a. Compensatory damages in excess of $100,000,000.00, pre judgment interest, and other amounts to be particularized at trial as a direct and proximate result of Defendants' commission of the following: i. conversion; ii. fraudulent misrepresentation; iii. negligent misrepresentation; iv. negligent supervision; v. breach of fiduciary duty; vi. civil conspiracy; and vii. aiding and abetting fraud, conversion and breach of fiduciary duty; b. punitive damages upon obtaining leave of court; c. taxable costs and attorney's fees; and Palle 2 of 289 EFTA01084931  Razorback Funding, LLC, a aL, v. TD Bank N.A., a aL. Case No.: 09-062943 (19) Amended Complaint d. any such further relief this court deems equiteble—antl—just under the circumstances. Overview 2. This action arises out of a fraudulent scheme orchestrated by Scott W. Rothstein, who bilked investors out of hundreds of millions of dollars. Mr. Rothstein, through the use of his law firm Rothstein Rosenfeldt Adler, P.A. (collectively referred to herein as the "Principal Conspirators" and more fully described, infra), devised an elaborate plan to assign putative plaintiffs' confidential settlements with structured payments to investors at a lump sum discounted rate. In reality, while some of the cases used to induce investor funding were real, all of the confidential settlements were purely fabricated. Indeed, returns to earlier investors were not made via structured payments, but instead were made with the principal obtained from later investors--a classic Ponzi scheme.' 3. However, the Principal Conspirators did not act alone. Defendant, TD BANK, N.A. (hereinafter, "TD Bank"), a subsidiary of Toronto Dominion Bank, was complicit in this scheme, serving as a critical lynchpin "legitimizing" the Principal Conspirators' plot and facilitating crucial inducements to investor action. Specifically, investors were duped by TD Bank employees conspiring with the Principal Conspirators to manipulate TD Bank's trust account statements and deceiving investors with false senses of security predicated on written assurances that settlement funds existed and would only be released directly to them. It is these bank A Ponzi scheme is generally recognized as a fraudulent investment operation that pays returns to separate investors from their own money or from monies paid by subsequent investors, rather than from any actual profit earned. The scheme is named after Charles Ponzi who became notorious for using the technique in early 1920. Page 3 of 289 EFTA01084932  Razorback Funding, LLC, et aL, v. TD Bank N.A., et aL. Case No.: 09-062943 (19) Amended Complaint declarations, tantamount to a guaranty, which gravely impacted investor risk-evaluation analysis and unduly influenced investors to close their deals. 4. Moreover, demonstrative of TD Bank's participation or alternatively, evidence of their gross negligence and wanton disregard, is the bank's reckless disregard of numerous "red flags." Irrefutably, TD Bank knew that Rothstein Rosendfeldt Adler, P.A. (hereinafter, "RRA") was moving hundreds of millions of dollars through its 'I'D Bank trust accounts. In fact, in October 2009 alone, almost a half of a billion dollars moved in and out of RRA's Fort Lauderdale based trust accounts--more money than most bank branches would likely see in a decade. Yet, despite the massive amount of funds being moved by one client, TD Bank never sought independent verification of the source of monies, choosing instead to stand idly by. The Ponzi scheme simply could not have gained traction without TD Bank's involvement in sanctioning or, otherwise, willfully failing to authenticate the origin of the enormous amounts of money coming through its doors. 5. Unfortunately, this is not the only pending case which alleges a m Bank affiliate as a complicit actor involved in a Ponzi scheme. On August 29, 2009, TD Bank's parent, Toronto Dominion Bank, was sued for "knowing assistance and/or dishonest assistance" in a Ponzi scheme based upon, inter alia, holding over $20,000,000.00 in fraudulent proceeds and transferring hundreds of millions of dollars through the alleged perpetrator's accounts. See a copy of the Dynasty Furniture Manufacturing, Ltd., et al., v. Toronto Dominion Bank, Statement of Claim attached hereto for reference as Exhibit "A." 6. Based on the allegations set forth herein, Plaintiffs aver that, at all materials times, 'I'D Bank had actual knowledge of its complicit involvement in a highly-organized Ponzi scheme Palle 4 of 289 EFTA01084933  Razorback Funding, LLC, a aL, v. TD Bank N.A., a aL. Case No.: 09-062943 (19) Amended Complaint and/or was recklessly or willfully blind to its role in materially supporting the scheme. TD Bank's acts and/or omissions in assisting, facilitating, and actively participating in the Ponzi scheme, renders TD Bank as a direct and proximate cause of Plaintiffs' losses and, therefore, is liable for the damages Plaintiffs incurred. 7. Furthermore. as alleged in detail infra. the Principal Conspirators' inner-circle of facilitators (Villegas. Boden. Barnett. Stay and Berenfeld) and promoters (Levin, Preve. Banyon Szafranski and Onyx) were essential to the perpetration of this systemic fraud and their actions equally as culpable. Indeed, Rothstein in a November 23, 2009 interview with the Sun-Sentinel stated that "karma has caught up with him, but it will catch up with others too . . . You're in a town full of thieves, and at the end of the day. everyone will see. I'll leave it at that." The Plaintiffs 8. LINDA VON ALLMEN is Trustee of the VON ALLMEN DYNASTY TRUST (hereinafter, "Dynasty Trust"), an irrevocable trust with its principal place of administration in Broward County, Florida. In or around the summer of 2009, the Dynasty Trust invested S2,000,000.00 into the Ponzi scheme through Banyon Income Fund. 9. Plaintiff, D&L PARTNERS, LP (hereinafter, "D&L Partners"), is a Missouri limited partnership with its principal place of business in Broward County, Florida. In or around the summer of 2009, D&L Partners invested approximately $45,000,000.00 into the Ponzi scheme through Banyon Income Fund. Doug Von Allmen is the general partner of D&L Partners. 10. DAVID VON ALLMEN. is Trustee of the DAVID VON ALLMEN LIVING TRUST (hereinafter, "DVA Trust"), a revocable trust with its principal place of administration in Palle 5 of 289 EFTA01084934  Razorback Funding, LLC, a aL, v. TD Bank N.A., a aL. Case No.: 09-062943 (19) Amended Complaint Saint Louis County, Missouri. On or about August 26_2009, the DVA Trust invested $275.000.00 into the Ponzi scheme through Banyon Income Fund. II. ANN VON ALLMEN, is Trustee of the ANN VON ALLMEN LIVING TRUST (hereinafter, "AVA Trust"), a revocable trust with its principal place of administration in Saint Louis County. Missouri. On or about August 28. 2009. the AVA Trust invested $275,000.00 into the Ponzi scheme through Banyon Income Fund. 12. Plaintiff, DEAN KRETSCHMAR (hereinafter, "Kretschmar"), is an individual residing in Broward County, Florida. On or about June 3 2009, Kretschmar invested $8,000,000.00 into the Ponzi scheme through Banyon Income Fund. 13. RAZORBACK FUNDING, LLC, (hereinafter, "Razorback"), is a Delaware limited liability company with its principal place of business in Broward County, Florida. Razorback invested $32,000,000.00 into the Ponzi scheme through Banyon USVI, LLC. Dynasty Trust, D&L Partners and Kretchmar were also major investors in Razorback. 14. Plaintiff, D3 CAPITAL CLUB, LLC (hereinafter, 133"), is a Delaware limited liability company with its principal place of business in Broward County, Florida. D3 invested $13,500,000.00 into the Ponzi scheme. Dynasty Trust, D&L Partners and Kretchmar were major investors in D3 as well. 15. Plaintiff, BFMC INVESTMENT, LLC (hereinafter, "BFMC"), is a Florida limited liability company with its principal place of business in Broward County, Florida On or about October 2009, BFMC invested $2,400,000.00 into the Ponzi scheme. PaRe 6 of 289 EFTA01084935  Razorback Funding, LLC, a aL, v. TD Bank N.A., et aL. Case No.: 09-062943 (I.9) Amended Complaint The Defendants - Principal Conspirators 16. Scott W. Rothstein, Esq. (hereinafter, "Rothstein") is an individual residing in Broward County, Florida and, at all times relevant hereto, was one of Rothstein, Rosenfeldt Adler, P.A.'s founders, its managing partner and CEO. Rothstein is the principal organizer of the Ponzi scheme. 17. Non-party RRA is a Florida professional association with its principal place of business in Broward County, Florida. RRA was used as the front to this elaborate Ponzi scheme, serving as the purported law firm representing putative plaintiffs in connection with their pre-suit, confidential settlements. RRA's trust accounts were allegedly used to receive the putative defendants' settlement funds and used to receive investor payments._Rothstein and RRA are collectively referred to as the "Principal Conspirators". The Defendants - Co-Conspirators TD Bank Defendants 18. TD Bank is a foreign national banking association registered to do business in Florida. 'ID Bank maintains substantial contact with Florida through its multiple branches throughout the state. 'ID Bank was the financial epicenter of the Ponzi scheme. Among other things, TD Bank conspired, induced, and facilitated the Principal Conspirators' deceptive practices, allowing Principal Conspirators to divert hundreds of millions of investor dollars through TD Bank accounts. 19. FRANK SPINOSA (hereinafter, "Spinosa"), is an individual residing in Broward County, Florida and, at all times relevant hereto, was a senior vice-president of operations for 'ID Bank. Spinosa participated in the scheme by, among other things, meeting with investors, verifying PaRe 7 of 289 EFTA01084936  Razorback Funding, LLC, a aL, v. TD Bank N.A., et aL. Case No.: 09-062943 (19) Amended Complaint account statements and providing investors with purported irrevocable "lock letters" securing investor funds. 2O. JENNIFER KERS 1E1 1 hR (hereinafter, "Kerstetter"), is an individual residing in Broward County, Florida and, at all times relevant hereto, was an assistant manager for TD Bank. Kerstetter participated in the scheme by, among other things, meeting with investors, verifying account statements, and providing investors with purported irrevocable "lock letters" securing investor funds. 21. ROSEANNE CARETSKY (hereinafter, "Caretsky"), is an individual residing in Broward County, Florida, and, at all times relevant hereto, was an assistant vice president and branch manager for TD Bank. Caretsky participated in the scheme by, among other things, meeting with investors, verifying account statements, and providing investors with purported irrevocable "lock letters" securing investor funds. RRA Defendants 22. DAVID BODEN (hereinafter, "Boden"), is an individual residing in Fort Lauderdale, Florida and, at all times relevant hereto, was a partner and general counsel for RRA. Boden was Rothstein's "right-hand man" and an essential participant in the scheme by, among other things, recruiting and soliciting investors and drafting documents to induce investors into funding the settlement while having actual and/or constructive knowledge that the investments were part of a Ponzi scheme. 23. DEBRA E. VILLEGAS (hereinafter, "Villegas"), is an individual residing in Broward County, Florida and, at all times relevant hereto, was the chief operating officer at RRA. Villegas, Rothstein's number two at RRA, participated in the scheme by, among other things, PaRe 8 of 289 EFTA01084937  Razorback Funding, LLC,a aL, v. TD Bank N.A., a aL. Case No.: 09-062943 (I.9) Amended Complaint furnishing false bank account statements and wire transfers to investors for the purpose of inducing investor funding despite having actual or constructive knowledge that the investments were a Ponzi scheme. 24. ANDREW BARNETT (hereinafter, "Barnett"), is an individual residing in Broward County, Florida and, at all times relevant hereto, was the Director of Corporate Development for RRA. Barnett, participated in the scheme by, among other things, recruiting, soliciting and inducing investor funding despite having actual or constructive knowledge that the investments were a Ponzi scheme. 25. IRENE STAY (hereinafter, "Stay"), is an individual residing in Broward County, Florida and, at all times relevant hereto, was the chief financial officer of RRA. Stay participated in the scheme by furnishing investors with falsified bank account statements and wire transfer confirmations used to induce investor funding despite having actual or constructive knowledge that the investments were a Ponzi scheme. Banyon Defendants 26. GEORGE G. LEVIN (hereinafter, "Levin"), is an individual residing in Broward County, Florida and, at all times relevant hereto, was the chief executive officer of Banyon USVI, LLC and Banyon Income Fund. Levin who previously owned and operated GGL Industries. Inc. d/b/a Classic Motor Carriages, a company convicted of federal fraud charges. actively participated in the scheme by. among other things. recruiting. inducing and securing investor funding despite having actual or constructive knowledge that the investments were a Ponzi scheme. 27. FRANK J. PREVE (hereinafter, "Preve"), is an individual residing in Broward County, Florida and, at all times relevant hereto, was the chief operating officer or agent of Banyon Palle 9 of 289 EFTA01084938  Razorback Funding, LLC, a aL, v. TD Bank N.A., et aL. Case No.: 09-062943 (19) Amended Complaint USVI, LLC and Banyon Income Fund who maintained an office at RRA. Preve, a convicted bank fraud and embezzlement felon2 participated in the scheme by, among other things, recruiting, inducing and securing investor funding despite having actual or constructive knowledge that the investments were a Ponzi scheme. 28. BANYON INCOME FUND. L.P. (hereinafter. "BIM. is a Delaware limited partnership which Levin and Preve operated as a putative investment entity to purchase the Ponzi scheme settlements with investor funds. 29. BANYON USVI. LLC (hereinafter. "Banyon USVI"), is a Delaware limited liability company which Levin and Preve operated as a putative investment entity to purchase the Ponzi scheme settlements with investor funds. Onyx Defendants 30. MICHAEL SZAFRANSKI (hereinafter, "Szafranski"). is an individual residing in Miami-Dade County. Florida and, at all times relevant hereto, was the president of Onyx Options Consultants Corporation and who maintained an office inside RRA. Szafranski was hired as an "independent" third-party on behalf of BIF, Banyon USVI, Razorback and D3 tasked with verifying critical aspects of the purported investment deals. Specifically, Szafranski was the only person authorized to analyze unredacted settlement documents, to confirm the Principal Conspirators' finances through TD Bank and to offer an opinion as to the authenticity of the settlement deals. Szafranski participated in the scheme by. among other things. making material misrepresentations 2 Frank Preve plead guilty to bank embezzlement charges in 1985 and received ten (10) years probation and a $10,000.00 fine for falsifying loan documents in connection with a scheme that resulted in losses exceeding $2,300,000.00. Page 10 of 289 EFTA01084939  Razorback Funding, LLC, a aL, v. TD Bank N.A., a aL. Case No.: 09-062943 091 Amended Complaint false verifications and actively inducing investor funding despite having actual or constructive knowledge that the investments were a Ponzi scheme. 31. ONYX OPTIONS CONSULTANTS CORPORATION d/b/a/ ONYX CAPITAL MANAGEMENT (hereinafter, "Onyx"), is a Florida limited liability company which Szafranski owns and operates as a third-party verifier and putative investment entity employed to facilitate and induce investor funding into the Ponzi scheme. CPA Defendant 32. BERENFELD SPRITZER SHECHTER SHEER, CPA'S LLP (hereinafter, "Berenfeld"). is a Florida limited liability partnership who, at all times relevant hereto, served as the auditing firm for BIF and Banyon USVI and as the accounting firm for RRA. Berenfeld participated in the scheme by, among other things conspiring, inducing, and facilitating the Principal Conspirators' deceptive practices. by providing audited financial statements which purported to authenticate hundreds of millions of dollars of false receivables, allowing Principal Conspirators to perpetrate a fraud. Page 11 of 289 EFTA01084940  Razorback Funding, LLC, et aL, v. TD Bank N.A., et aL. Case No.: 09-062943 (19) Amended Complaint The Ponzi Scheme The Rothstein Facade 33. From humble beginnings in 2003, Rothstein built RRA into one of the fastest growing Florida-based law firms. Under Rothstein's stewardship, RRA grew from seven attorneys to over seventy and amassed over two hundred and fifty in staff. Along with its dramatic growth in size, RRA rapidly emerged as a legal, political and philanthropic powerhouse. 34. Not surprisingly, Rothstein amassed an enormous portfolio of assets including more than sixteen real estate properties, twenty-five cars, an eighty-seven foot yacht, and various interests in a myriad of businesses ranging from watches to restaurants to vodka. See a list of Rothstein's assets seized by the federal government along with estimates of their value attached hereto as Exhibit "A-1." 35. Rothstein lived lavishly and spent prolifically--critical components necessary to set his scheme in motion. 36. With RRA's tireless marketing efforts and meteoric rise into prominence, Rothstein quickly made forays into preeminent social circles, rubbing elbows with high net- worth individuals and political luminaries, the perfect breeding grounds to lure wealthy investors. His plot was up and running. The Plan 37. Rothstein seized upon his new found stature to entice investors into what would eventually become a Ponzi scheme using his budding employment and labor practice at RRA as his conduit. Page 12 of 289 EFTA01084941  Razorback Funding, LLC, et aL, v. TD Bank N.A., et aL. Case No.: 09-062943 (19) Amended Complaint 38. The scheme was predicated on the Principal Conspirators self-professed pipeline of pm-suit, confidential settlement agreements as the "preeminent sexual harassment and labor employment law firm in the country." Investors were told that the Principal Conspirators had an extensive in-house private investigative team, including former F.B.I. and C.I.A. agents, whose singular task was to obtain compromising evidence against high-profile putative defendants. Rothstein's story was that the evidence and surveillance acquired, often supporting civil causes of action ranging from sexual harassment to mass tort cover-ups to whistle-blower claims, was presented to the putative defendant who was then offered an opportunity to avoid litigation and the negative publicity associated therewith by agreeing to resolve the matter voluntarily by and through a confidential settlement with the putative plaintiff. 39. Once the putative defendant agreed, the confidential settlement always included two main ingredients: (1) that structured payments to a putative plaintiff be made over time, generally a three to nine month time period; and (2) that the putative defendant would fund the entire settlement up front to be held in RRA's TD Bank trust account and disbursed to the putative plaintiff in accordance with the terms of the confidential settlement agreement. The Pitch 40. Rothstein informed investors that the putative plaintiffs did not want to wait for the structured monthly payouts and would agree to assign their rights to the structured payout for a lump-sum payment typically at a discount in the range of 20-40% of the settlements' face- value. _Rothstein always had a plethora of plausible explanations as to why a putative plaintiff wanted their money now and simply could not wait for the structured monthly payments. Page 13 of 289 EFTA01084942  Razorback Funding, LLC,et aL, v. TD Bank N.A., et aL. Case No.: 09-062943 (19) Amended Complaint 41. Rothstein claimed to want nothing from the deal and was only presenting the "opportunity" for a putative plaintiff's benefit and to facilitate recovery of RRA's contingent fee. Notwithstanding, Rothstein would often boast that if not for his professional and legal conflicts he would be the one purchasing these assignments. 42. As a means to induce investor action, Rothstein would show investors the purported settlement agreement in an attempt to substantiate the deal; however, because the settlements were pre-suit and confidential, the names of the putative plaintiffs and putative defendants were redacted. 43. Additionally, the Principal Conspirators would provide: (1) confirmation of RRA's trust account balance at TD Bank evidencing the putative defendants fully funded settlement proceeds; (2) a "lock letter", drafted and executed by a TD Bank executive, irrevocably confirming that the respective settlement proceeds in RRA's trust account could only be paid directly to the investor's designated account which, in most cases, was an account at TD Bank; and (3) opportunities for an independent third-party verifier to authenticate the underlying settlement, assignment and funding of settlement proceeds. 44. Notably, Rothstein was hyper-vigilant regarding access to RRA accounts under the guise of confidentiality. In fact, potential investors could only access TD Bank account information in one of two ways. Either Rothstein would invite the investor to his office to view the online balance provided by himself or Stay3 or, he would "authorize" TD Bank to provide copies of account statements and wire transfers prepared and delivered by TD Bank executives See Exhibit "W" infra, which is an October 6 2009 on-line screen shot of RRA's TD Bank accounts accessed (logged in) by Irene Shannon which is Irene Stay's maiden name. ("Welcome. Irene Shannon! You last logged in on Tuesday, October 06.2009 4:37 PM.") Page 14 of 289 EFTA01084943  Razorback Funding, LLC, a aL, v. TD Bank N.A., a aL. Case No.: 09-062943 (19) Amended Complaint Spinosa, Kerstetter and Caretsky. On numerous occasions, TD Bank vice-president Spinosa, assistant manager Kerstetter, and assistant vice president Caretsky, physically handed the trust account statement to Rothstein in the immediate presence of an investor. 45. As the final piece to persuade an investment, Rothstein would offer to personally guaranty the transaction. This personal guaranty, secured by the significant assets (as discussed, supra), was a vital component which tacitly lent credibility and security to the transaction. 46. Once an investor was interested, the Principal Conspirators, in conjunction with Boden, drafted an agreement for the assignment of the settlement agreement and proceeds. 47. Upon execution of the assignment, the investor would wire transfer to RRA's trust account the lump sum payment for immediate disbursement to the putative plaintiff. Thereafter, RRA was obligated to make payment from the funds previously verified and held in RRA's trust account at TD Bank directly to the investor's lock letter trust account at TD Bank in strict accordance with the terms of the purported settlement agreement. Page 15 of 289 EFTA01084944  Razorback Funding, LLC, et aL, v. TD Bank N.A., et aL. Case No.: 09-062943 (l9) Amended Complaint Ponzi Scheme In Action Fabricated Settlements Premised on Real Cases 48. In certain instances, the purported settlements, albeit fraudulent, were based on actual cases being handled by RRA. For example, one of the settlements involved herein was based upon facts surrounding Jeffrey Epstein, the infamous billionaire financier. In fact, RRA did have inside information due to its representation of one of Epstein's alleged victims in a civil case styled Jane Doe v. Jeffrey Esptein, pending in the Southern District of Florida. Representatives of D3 were offered "the opportunity" to invest in a pre-suit $30,000,000.00, court settlement against Epstein arising from the same set of operative facts as the Jane Doe case, but involving a different underage female plaintiff. See e-mail dated October 6, 2009 referencing Epstein which is attached hereto and incorporate herein as Exhibit "B." To augment his concocted story Rothstein invited D3 to his office to view the thirteen banker's boxes of actual case files in Jane Doe in order to demonstrate that the claims against Epstein were legitimate and that the evidence against Epstein was real. In particular, Rothstein claimed that his investigative team discovered that there were high-profile witnesses onboard Epstein's private jet where some of the alleged sexual assaults took place and showed D3 copies of a flight log purportedly containing names of celebrities, dignitaries and international figures. Because of these potentially explosive facts, putative defendant Epstein had allegedly offered $200,000,000.00 for settlement of the claims held by various young women who were his victims. Adding fuel to the fire, the investigative team representative privately told a D3 representative that they found three additional claimants which Rothstein did not yet know about. Page 16 of 289 EFTA01084945  Razorback Funding, LLC, a aL, v. TD Bank N.A., a aL. Case No.: 09-062943 091 Amended Complaint Further, Preve was present for this meeting, despite the fact that he was not involved as an investor or representative in the D3 deal. 49. Additionally, Rothstein used RRA's representation in the Epstein case to pursue issues and evidence unrelated to the underlying litigation but which was potentially beneficial to lure investors into the Ponzi scheme. For instance, RRA relentlessly pursued flight data and passenger manifests regarding flights Epstein took with other famous individuals knowing full well that no under age women were on board and no illicit activities took place. RRA also inappropriately attempted to take the depositions of these celebrities in a deliberate effort to bolster Rothstein's lies. 50. Conspicuously, and contrary to Banyon's allegations's, Preve and Szafranski shared an office at RRA one floor down from Rothstein providing them access to Rothstein to assist in the furtherance of the Ponzi scheme. This fact helps explain why Preve attended the aforementioned D3 meeting despite his lack of involvement as an investor or representative. 51. Another actual case which Rothstein attempted to use as a false predicate for his scheme was a mass tort case against Chiquita Brands International. In this instance, Rothstein claimed to be representing plaintiffs in 450 wrongful death cases on the verge of settling for $2,000,000.00 each. Rothstein told investors to begin raising funds in order to purchase this settlement. See e-mail dated October 14, 2009 referencing Chiquita which is attached hereto and incorporated herein as Exhibit "C." While the cases against Chiquita are real, Rothstein did not represent any of the plaintiffs and the cases remain pending. In a November 23. 2009. "Confidential Update From Banyon". Levin erroneously alleges that *The allegation that Mr. Preve had an office at the Rothstein law firm, or that he may have helped the Rothstein firm to mislead potential investors is a total lie. Period." Page 17 of 289 EFTA01084946  Razorback Funding, LLC, et aL, v. TD Bank N.A., et Case No.: 09-062943 (19) Amended Complaint Plaintiffs' Investments: I. Banyon Income Fund 52. BIF was formed in May 2009, and served as an original feeder fund for the Principal Conspirators settlement deals. 53. According to the offering materials provided by Levin and Preve BIF's stated investment goal was to purchase: discount settlements and related periodic revenue stream from individual plaintiffs who have settled their labor and employment related lawsuits or claims, and who would otherwise receive their settlement amounts over a period of time. The purchased settlements are secured by the full settlement amounts which will have been deposited in a trust account established by the plaintiff's attorney for the benefit of the plaintiff prior to purchase by Banyon Income Fund, LP. These settlements are released to Banyon Income Fund, LP over time to liquidate the purchased settlement. See Confidential Offering Memorandum dated April 30, 2009, a copy of which is attached hereto and incorporated herein as Composite Exhibit "D." 54. Not coincidentally, BIF's investment strategy is identical to the purported investment vehicle offered by the Principal Conspirators at the center of the Ponzi scheme. 55. In fact, the Confidential Offering Memorandum avers that "folnce a structure of formal documentation was put in place and a relationship established with Rothstein. the General Partner was able to achieve a large ramp up in business volume . . . [which.' have stabilized at Approximately $60.000.000 - $75,000,000 in funded business per month," and that the "fflunding for these activities has come from credit facilities with institutional hedge fund lenders as well as the personal capital of Mr. Levin." Id. Page 18 of 289 EFTA01084947  Razorback Funding, LLC, et aL, v. TD Bank N.A., et aL. Case No.: 09-062943 (19) Amended Complaint 56. Significantly. Banyon's Confidential Offering Memorandum relies heavily upon an audited financial statement prepared by Berenfeld which purportedly details Banyon's staggerin growth and astounding returns verifying . inter dia, that: a. Levin, by and through Banyon affiliated companies, was doing as much as $75,000,000.00 in business a month with Rothstein• b. Through March 2009, Banyon affiliated companies purchased over $1.1 billion dollars worth of legal settlements from Rothstein for a cost of $657,000,000.00: c. By the end of March 2009, the Banyon affiliated companies had realized over $531,000,000.00 million in returns: and d. Banyon affiliated companies listed receivables in excess of $559,000,000.00 from pending settlements investments. See id 57. BIF's Confidential Offering Memorandum provided investors a window into the Principal Conspirators' house of cards, as the hedge fund was just one of the investment consortiums feeding the Ponzi scheme's voracious appetite. 58. All or substantially all of BIF's assets were funneled into the Principal Conspirators' scheme which served as rocket fuel blasting the obscure investment vehicle to dizzying heights. Page 19 of 289 EFTA01084948  Razorback Funding, LLC, a aL, v. TD Bank N.A., a aL. Case No.: 09-062943 (19) Amended Complaint 59. In the spring of 2009, Barry Bekkedam from Ballamor Capital Management, LLC (hereinafter, "Ballamor")5 and promoter of ELF, met Doug Von Allmen (D&L Partners) to discuss D&L Partners' participation in ELF. 60. During that discussion, Mr. Von Allmen learned that ELF was started by Levin, a professed mentor and confidant of Rothstein, and that the settlements ELF was purchasing were through an exclusive arrangement negotiated between Rothstein and Levin on behalf of BIF. 61. Mr. Von Allmen was told by Mr. Bekkedam that Levin was personally worth in excess of $400,000,000.00 and would personally guarantee the settlements. 62. Additionally, Mr. Bekkedam told Mr. Von Allmen that the settlements were already fully-funded in the attorneys' trust accounts, that a "Big Four's auditing firm would verify them quarterly, and that Ballamor had continuous unfettered access to the trust account balances and would oversee Banyon's hiring of an independent verifier to monitor and confirm the settlement transaction. 63. Finally, Mr. Von Allmen was told by Mr. Bekkedam that it would take two signatures to move the money, one of which would be someone from BM. 64. In reliance on these purported security and verification procedures, on or about May 4. 2009. Mr. Von Allmen (through D&L Partners) and his wife Linda Von Allmen (through Dynasty Trust) first wired ELF funds: approximately one month later, his son and daughter-in-law David and Ann Von Allmen (through the DVA Trust and AVA Trust) and his step-son, Dean s Ballamor Capital Management, LLC is an S.E.C. registered investment advisor specializing in managing investments on behalf of high and ultra-high net worth individuals 6 As it turns out, the - Big Four" accounting firm referenced was Berenfeld. Page 20 of 289 EFTA01084949  Razorback Funding, LLC, a aL, v. TD Bank N.A., a aL. Case No.: 09-062943 (l9) Amended Complaint Kretsclunar (collectively referred to herein as "Banyon Investors") also funded investments as directed by Ballamor and Mr. Bekkedam. 65. Prior to investing, each Banyon Investor received a 'The aforementioned Confidential Offering Memorandum describing the terms and conditions of the investment structure in greater detail. See Composite Exhibit "1)." 66. Significantly, the Confidential Offering Memorandum provided that a receipt of the putative defendant's wire transfer of the full settlement proceeds into RRA's trust account would be verified by an independent third party (see Szafranski, infra). Id. 67. Additionally, the Banyon Investors were assured that in cooperation with TD Bank executives (which turned out to be Spinosa, Kerstetter and Caretsky), that BIF's third-party verifier would have online access to banking records for each deposit account and admission into all records related to the purchased settlements and settlement trust accounts. Id. 68. Furthermore, the Memorandum states that while "Ballamor will receive no compensation for its participation or investment recommendation . . . George Levin has an greement in principle with Ballamor and its principal, Barry R. Bekkedam, with respect to an equity investment in Ballamor by Mr. Levin and a loan to Mr. Beklcedam, the final terms of which have not been determined."' Id. 69. Szafranski, president of Onyx Capital Management, acted as an the designated independent, third-party verifier for the Banyon Investors and BIF. Prior to and during the course of 7 In fact we now know that Ballamor and Mr. Bekkedam received $5.000.000.00 from Levin for their involvement in this Ponzi scheme along with a $18,000,000.00 investment through Ballamor into Nova Bank. a Pennsylvania bank. Page 21 of 289 EFTA01084950  Razorback Funding, LLC,a aL, v. TD Bank N.A., a aL. Case No.: 09-062943 (19) Amended Complaint his investigation, Szafranski obtained the following information demonstrative of TD Bank's involvement: a. October 29, 2008 letter signed by Caretsky, assistant branch manager with Commerce Banks enclosing three trust account statements for RRA: (1) account number containing $166,922,339.00; (2) account number containing $40,125,685.44; and (3) account number containing $348,229,463.21. All three trust account statements for RRA are attached hereto and incorporated herein as Composite Exhibit b. March 20, 2009 letter signed by Kerstetter an assistant manager for TD Bank enclosing three trust account statement for RRA: (1) account number showing a balance of $104,211,711.22; (2) account number showing a balance of $368,333,133.20; and (3) account number showing a balance of $110,331,563.13. All three account statements referenced are attached hereto and incorporated herein as Composite Exhibit "F." c. April 17, 2009 letter signed by Caretsky as a TD Bank Assistant Vice President, enclosing RRA trust account statement for: (1) account number showing a balance of $61,117,111; (2) RRA trust account statement for account number 6860755104 showing a balance of $80,978,935.31; (3) RRA trust account statement for account number showing a balance of $136,122,322.87; (4) RRA trust account statement for account number showing a balance of $198,644,311.13; and (5) RRA trust account statement for account number showing a balance of $483,668,999.39. All five trust account 8 Commerce Bank was a predecessor in interest to TD Bank as a result of T-D-Benkls-33-7-1411ion-perehtie ef--GOOIMe+Ge-Bankria-March 2008 purchase. Page 22 of 289 EFTA01084951  Razorback Funding, LLC, a aL, v. TD Bank N.A., a aL. Case No.: 09-062943 (19) Amended Complaint statements referenced are attached hereto and incorporated herein as Composite Exhibit "G." d. June 22, 2009 Commerce Bank wire transfer to RRA trust account ending x- 0923 in the amount of $1,957,500.00 and purporting to be a funded settlement, a copy of which is attached hereto and incorporated herein as Exhibit "If'; e. June 22, 2009 Commerce Bank wire transfer to RRA trust account ending x- 0923 in the amount of $2,680,000.00 and purporting to be a funded settlement , a copy of which is attached hereto and incorporated herein as Exhibit "I"; f. June 22, 2009 Commerce Bank wire transfer to RRA trust account ending x- 0923 in the amount of $695,000.00 and purporting to be a funded settlement, a copy of which is attached hereto and incorporated herein as Exhibit "J"; g. June 30, 2009 Commerce Bank wire transfer to RRA trust account ending x- 0923 in the amount of $2,208,000.00 and purporting to be a funded settlement , a copy of which is attached hereto and incorporated herein as Exhibit "K"; h. July 1, 2009 Commerce Bank wire transfer to RRA trust account ending x- 0923 in the amount of $6,072,000.00 and purporting to be a funded settlement , a copy of which is attached hereto and incorporated herein as Exhibit "L"; i. July 13, 2009 letter signed by Kerstetter from TD Bank enclosing