EFTA01092179.pdf

IN THE CIRCUIT COURT OF THE 17TH JUDICIAL CIRCUIT FOR BROWARD COUNTY, FLIt RAZORBACK FUNDING, LLC, D3 CASE NO.: CAPITAL CLUB, LW, BFMC 0 9 0 6 2 INVESTMENT, LLC, LINDA VON 43 ALLMEN, as Trustee of the VON ALLMEN DYNASTY TRUST, D&L PARTNERS, LP, and DEAN KRETSCHMAR, Plaintiffs, v. A TRUE COPY NOV 20 2009 SCOTT W. ROTHSTEIN, DAVID BODEN, DEBRA VILLEGAS, ANDREW CLEAgtIRCLIT bT COUgT BROWARt.' COUNTy BARNETT, TD BANK, N.A., FRANK SPINOSA, JENNIFER KERS iti 1ER, ROSANNE CARETSKY, and FRANK PREVE, Defendants. 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; and DEAN KRETSCHMAR (collectively referred to herein as "Plaintiffs") hereby sue the Defendants, SCOTT W. ROTHSTEIN; DAVID BODEN; DEBRA VILLEGAS; ANDREW BARNETT; TD BANK, N.A.; FRANK SPINOSA; JENNIFER KERSTETTER; ROSANNE CARETSKY and FRANK PREVE (collectively referred to herein as "Defendants"), and allege as follows: Page 1 of 147 CONRAD & SCHERER. LLP. 633 SOUTH FEDERAL HIGHWAY, FT. LAUDERDALE. FL 33301, TEL. EFTA01092179  Razorback Funding, LLC, et at, v. TD Bank N.A., et al.. Complaint 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 d. any such further relief this court deems equitable and 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. Rothstcin, 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 Page 2 of 147 CONRAD & SCHERER. LLP, 633 SOUTH FEDERAL HIGHWAY, FT. LAUDERDALE. FL 33301, TEL. M/ EFTA01092180  Razorback Funding LLC, et at, v. TI) Bank N.A., et at. Complaint plaintiffs' confidential settlements with structured payments to investors at a lump sum discounted rate. In reality, while some of the cases relied upon 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, "11) 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 conniving 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 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 TD 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 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 147 CONRAD 4 SCHERER. LLP. 633 SOUTH FEDERAL HIGHWAY, FT. LAUDERDALE. FL 33301, TEL. EFTA01092181  Razorback Funding, LLC, et at, v. TD Bank N.A., et aL. Complaint 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 ID 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 TD 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 S20,000,000.00 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, TD Bank had actual knowledge of its complicit involvement in a highly-organized Ponzi scheme 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. Page 4 of 147 CONRAD S SCHERER. LLP, 633 SOUTH FEDERAL HIGHWAY. Ft LAUDERDALE, FL 33301 TEL. 19541 EFTA01092182  Razorback Funding, LLC, et at. v. TD Bank N.A., et at. Complaint The Plaintiffs 7. 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. On or about the summer of 2009, the Dynasty Trust invested $7,000,000.00 into the Ponzi scheme through the Banyon Income Fund. 8. Plaintiff, D&L PARTNERS, LP (hereinafter, "D&I.. Partners"), is a Missouri limited partnership with its principal place of business in Broward County, Florida. On or about 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. 9. Plaintiff, DEAN KRETSCIIMAR (hereinafter, "Krctschmar"), is an individual residing in Broward County, Florida. On or about lune 2009, 1Cretschmar invested $8,000,000.00 into the Ponzi scheme through Banyon Income Fund. 10. 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. 11. Plaintiff, D3 CAPITAL CLUB, LLC (hereinafter, "D3"), 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. Page 5 of 147 CONRAD 6 SCHERER. LLP. 633 SOUTH FEDERAL HIGHWAY. FT. LAUDERDALE. FL 33301, TEL EFTA01092183  Razorback Funding, LLC, et at, v. TD Bank N.R., et at. Complaint 12. 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. The Defendant - Principal Conspirators 13. 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. 14. 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. IS. Rothstein and RRA are collectively referred to as the "Principal Conspirators". The Defendants - Co-Conspirators TD Bank Defendants 16. TD Bank is a foreign national banking association registered to do business in Florida. TD Bank maintains substantial contact with Florida through its multiple branches throughout the state. TD Bank was the financial epicenter of the Ponzi scheme. Among other things, TD Bank conspired, induced, and facilitated the Principal Conspirators' deceptive Page 6 of 147 CONRAD S SCHERER. LLP, 633 SOUTH FEDERAL HIGHWAY. Ft LAUDERDALE, FL 33301. TEL. EFTA01092184  Razorback Funding LLC, et at, v. 7D Bank N.A., et at. Complaint practices, allowing Principal Conspirators to divert hundreds of millions of investor dollars through TD Bank accounts. 17. 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 TD Bank. Spinosa 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. 18. JENNIFER KERSTETTER (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. 19. 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 20. DAVID BODEN (hereinafter, "Roden"), is an individual residing in Fort Lauderdale, Florida and, at all times relevant hereto, was a partner and general counsel for RRA. Roden 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 Page 7 of 147 CONRAD 6 SCHERER, LLP. 633 SOUTH FEDERAL HIGHWAY, Ft LAUDERDALE, FL 33301 TEL. 1954) EFTA01092185  Razorback Funding, LLC, et al., v. TI.) Bank N.A., et al.. Complaint the settlement while having actual and/or constructive knowledge that the investments were part of a Ponzi scheme. 21. 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, 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. 22. 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. Banyan Defendant 23. 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 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, soliciting, and inducing investor funding despite having actual or constructive knowledge that the investments were a Ponzi scheme. 2 Frank Preve plead guilty to bank embezzlement charges in 1985 and received ten (10) years probation and a $1 0,000.00 fine for falsifying loan documents in connection with a scheme that resulted in lasses exceeding $2,300,000.00. Page 8 of 147 CONRAD 6 SCHERER, LLP, 633 SOUTH FEDERAL HIGHWAY, FT. LAUDERDALE. FL 33301. TEL 19641 EFTA01092186  Razorback Funding, LLC, et aL, v. TD Bank N.A., et at. Complaint The Ponzi Scheme The Rothstein Facade 24. 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. 25. 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. Rothstein lived lavishly and spent prolifically--a critical initial component to set his scheme in motion. 26. 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 27. 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. 28. The scheme was predicated on the Principal Conspirators self-professed pipeline of pre-suit, confidential settlement agreements as the "preeminent sexual harassment and labor employment law finn in the country." Investors were told that the Principal Conspirators had an Page 9 of 147 CONRAD E. SCHERER. LLP. 633 SOUTH FEDERAL HIGHWAY, FT. LAUDERDALE. FL 33301, TEL. EFTA01092187  Razorback Funding, LLC,es at, v. Ti)Bank N.A., ci at. Complaint 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. 29. 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 30. 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 in the range of 20-40% of the settlements' face-value. 31. 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. 32. Rothstein claimed to want nothing from the deal and was only presenting the "opportunity" for the putative plaintiff's benefit and to facilitate recovery of RRA's contingent fcc. Page 10 of 147 CONRAD E. SCHERER. LLP, 633 SOUTH FEDERAL HIGHWAY. FT. LAUDERDALE. FL 33301, TEL. EFTA01092188  Razorback Funding LW, et at, v. TD Bank N.A., et at. Complaint 33. Notwithstanding, Rothstein would often boast that if not for his professional and legal conflicts he would be the one purchasing these assignments. 34. 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. 35. 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. 36. 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 or, he would "authorize" TD Bank to provide copies of account statements and wire transfers prepared and delivered by TD Bank executives Spinosa, Kcrstetter 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. Page 11 of 147 CONRAD 6 SCHERER, LLP. 633 SOUTH FEDERAL HIGHWAY, FT. LAUDERDALE. FL 33301. TEL. EFTA01092189  Razorback Funding LLC, a al, v. TD Bank N.A., et al.. Complaint 37. 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 an essential component which tacitly lent credibility and security to the underlying transaction. 38. Once an investor was interested, the Principal Conspirators, in conjunction with Baden, drafted an agreement for the assignment of the settlement agreement and proceeds. 39. 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. Ponzi Scheme In Action Fabricated Settlements Premised on Real Cases 40. 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. Jeffiey Ecptein, 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 Page 12 of 147 CONRAD E. SCHERER. LLP, 633 SOUTH FEDERAL HIGHWAY, FT. LAUDERDALE. FL 33301, TEL. EFTA01092190  Razorback Funding LLC, et al., v. 772) Bank N.A., et at. Complaint 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. Further, Preve was present for this meeting, despite the fact that he was not involved as an investor or representative in the D3 deal. 41. Additionally, Rothstein used RRA's representation in the Epstein case to pursue issues and evidence unrelated to the underlying litigation, but 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. 42. Conspicuously Preve, who maintained an office at RRA despite being a Banyon Income Fund, LP employee, attended the aforementioned meeting despite his lack of involvement as an investor or representative. Page 13 of 147 CONRAD S. SCHERER. LLP. 633 SOUTH FEDERAL HIGHWAY, Ft LAUDERDALE. FL 33301. TEL. EFTA01092191  Razorback Funding, LLC, et al., v. 7D Bank N.A., ex al.. Complaint 43. 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. Plaintiffs' Investments: I. Banyon Income Fund 44. Banyon Income Fund, LP (hereinafter, 131F"), was formed in May 2009, and served as an original feeder fund for the Principal Conspirators structured settlement deals. 45. According to offering materials, 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 plaintiffs 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." 46. 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. Page 14 of 147 CONRAD E. SCHERER, LLP 633 SOUTH FEDERAL HIGHWAY. FT. LAUDERDALE. FL 33301. TEL. EFTA01092192  Razorback Funding, LLC, et at, v. 17) Bank N.A., et at. Complaint 47. All or substantially all of BIF's assets were funneled into the Principal Conspirators scheme. 48. In the spring of 2009, Barry Bekkedam from Ballamor Capital Management, LLC (hereinafter, "Ballamor)3 and promoter of BIF, met Doug Von Allmen (D&L Partners) to discuss D&L Partners participation in 131F. 49. During that discussion, Mr. Von Allmon learned that BIF was started by George Levin, a professed mentor and confidant of Rothstein, and that the settlements BIF was purchasing were through an exclusive arrangement negotiated between Rothstein and Levin on behalf of BIF. 50. Mr. Von Allmen was told by Mr. Bckkcdam that Mr. Levin was personally worth in excess of $400,000,000.00 and would personally guarantee the settlements. 5I. Additionally, Mr. Bckkedam told Mr. Von Allmen that the settlements were already fully-funded in the attorneys' trust accounts, that a "Big Four" auditing firm would verify them quarterly, and that Ballamor had continuous unfettered access to the trust account balances and would be responsible for monitoring same. 52. 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 BIF. 53. Mr. Von Allmon (through D&L Partners) brought his wife Linda Von Allmen (through Dynasty Trust) into the investment while, approximately one month later, his step-son, Dean Kretschmar (collectively referred to herein as "Banyon Investors") was brought into the investment deal by Barry Bekkedam. 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 Page 15 of 147 CONRAD 6. SCHERER. LLP. 633 SOUTH FEDERAL HIGHWAY. FT. LAUDERDALE. FL 33301, TEL EFTA01092193  Razorback Funding, LLC, es aL, v. TD Bank N.A., et aL. Complaint 54. Prior to investing, each Banyon Investor received a "Confidential Offering Memorandum" dated April 30, 2009 which described the terms and conditions of the purported deals in greater detail. See Composite Exhibit "I)." 55. Significantly, the Confidential Offering Memorandum provided that the receipt of the wire transfer from the putative defendant into RBA's trust account would be verified by an independent third party. Id. 56. Furthermore, the Banyon Investors were assured that a representative of the limited partners of BIF would have online access to banking records for each deposit account and all system records related to the purchased settlements and could verify purchase settlement trust accounts and deposits by putative defendants. Id. 57. Michael Szafranski, president of Onyx Capital Management, acted as an independent verifier for the Banyan Investors and B1F. Prior to and during the course of his investigation, Mr. Szafranski obtained the following information which demonstrated TD Bank's involvement: a. October 29, 2008 letter signed by Caretsky, assistant branch manager with Commerce Bank' enclosing three trust account statements for RRA: (1) account number 6860291258 containing $166,922,339.00; (2) account number 6860423489 containing $40,125,685.44; and (3) account number 6860420923 containing $348,229,463.21. All three trust account statements for RRA are attached hereto and incorporated herein as Composite Exhibit "E." b. March 20, 2009 letter signed by Kerstetter an assistant manager for TD Bank Commerce Bank was a predecessor in interest to TD Bank as a result of TD Bank's $7 billion purchase of Commerce Bank in March 2008. Page 16 of 147 CONRAD E. SCHERER. LLP. 633 SOUTH FEDERAL HIGHWAY, Ft LAUDERDALE, FL 33301, TEL. EFTA01092194  Razorback Funding, LLC, et at, v. TD Bank N.A., et at. Complaint enclosing three trust account statement for RRA: (I) account number 6860699146 showing a balance of $104,211,711.22; (2) account number 6860420923 showing a balance of $368,333,133.20; and (3) account number 6860291258 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 6860423489 showing a balance of $61,117,111; (2) RRA trust account statement for account number 6860755104 showing a balance of S80,978,935.31; (3) RRA trust account statement for account number 6860699146 showing a balance of $136,122,322.87; (4) RRA trust account statement for account number 6860291258 showing a balance of $198,644,311.13; and (5) RRA trust account statement for account number 6860420923 showing a balance of $483,668,999.39. All five trust account 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 "H"; 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"; Page 17 of 147 CONRAD & SCHERER, LLP. 633 SOUTH FEDERAL HIGHWAY. FT, LAUDERDALE, FL 33301, TEL EFTA01092195  Razorback Funding, LLC, et al., v. TD Bank N.A., et aL. Complaint 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 RRA trust account statement for account number 6861077193 showing a balance of $14,286,000.00, a copy of which is attached hereto and incorporated herein as Composite Exhibit "M"; and j. July 17, 2009 TD Bank wire transfer to RRA trust account ending x-0923 in the amount of $22,348,221.00 and purporting to be a funded settlement, a copy of which is attached hereto and incorporated herein as Exhibit "N"; 58. In reliance on the foregoing, the Banyon Investors collectively invested $60,000,000.00 into BIF and into the Ponzi scheme. 2. Razorback Funding, LLC 59. Razorback was formed September 24, 2009 for purposes of investing in two RRA settlements: (1) a $40,600,000.00 structured settlement, payable in four equal monthly installments, offered in exchange for a lump sum payment of $23,200,000.00; and (2) a $26,100,000.00 structured settlement, payable in three equal monthly installments, offered in exchange for a lump sum payment of $17,400,000.00. See Confidential Settlement Agreements and Releases which are attached hereto and incorporated herein as Composite Exhibit "O." Page 18 of 147 CONRAD E. SCHERER. LLP. 633 SOUTH FEDERAL HIGHWAY. FT. LAUDERDALE. FL 33301, TEL EFTA01092196  Razorback Funding, LLC, et at. v. TI..) Bank N.A., et at. Complaint 60. In particular, the deal was structured so Razorback would fund $32,000,000.00 towards the purchase of these settlements by means of a loan to Banyon USVI, LLC. Banyon USVI in turn would contribute $8,600,000.00 to purchase the settlement proceeds from the Principal Conspirators. See Acknowledgement of Assignment/Purchase of Settlement Proceeds and Sale and Transfer Agreements which is attached hereto and incorporated herein as Composite Exhibit "P." 61. On or about September 18, 2009, as part of its due diligence, Razorback obtained a copy of a TD Bank "lock letter" signed by Spinosa used in a prior deal. See September 18, 2009 lock letter from TD Bank which is attached hereto and incorporated herein as Exhibit "Q." The lock letter indicates that TD Bank had been irrevocably instructed to pay the fund identified in a particular RRA trust account only to the investor's bank account. 62. On October 1, 2009, Mike Szafranski, who was utilized as the independent reviewer for Razorback, met with Rothstein to review and verify all of the documents supporting the Razorback deal. In that meeting, Mr. Szafranski witnessed Rothstein sign on to the TD Bank on- line banking website and verified that all of the wire transfers for the underlying Razorback settlement deals had been received by RRA and were held in AAA's trust account ending in x-1356. A copy of the October 1, 2009 email from Mike Szafranski verifying the above-referenced account is attached hereto and incorporated herein as Exhibit "It" 63. Mr. Szafranski also verified that a "lock letter" had been received by Spinosa as Regional Vice President of TD Bank dated October 1, 2009 stating the following: Pursuant to your written instructions to us of September 30, 2009, please be advised that all funds contained in the above referenced account shall only be distributed upon your or Stuart Rosenfeldt's instruction and shall only be distributed Page 19 of 147 CONRAD & SCHERER. LLP, 633 SOUTH FEDERAL HIGHWAY, FT. LAUDERDALE. FL 33301, TEL. EFTA01092197  Razorback Funding, LLC, et at, v. MBank N.A., el at. Complaint to Banyon USVI (Del), LLV, do Razorback Funding, LLC, Debt & Equity Re-Payment Account: TD Bank, NA, 319 Glen Head Road, Old Brookville, NY, ABA: 026013673, Account # 4244986191. Your letter is understood not to convey ownership of the account or access to the account to any other party, but rather is meant to irrevocably restrict conveyances as follows: conveyances shall only be made from the account referenced above to the Banyon USVI account. See October 1, 2009 letter which is attached hereto and incorporated herein as Exhibit "S." 64. Spinosa e-mailed the "lock letter" to Rothstein earlier that day with a message stating that at Rothstein's "request and instructions, this account [RRA's trust account] has been irrevocably locked as to destination of all disbursements [which was Razorback's account, also at TD Bank]. The letter confirming same is attached. Please do not deposit any funds into this account that are not soley (sic) to be directed to the entity set forth in the irrevocable instruction." A copy of the October 1, 2009 email from Spinosa is attached hereto and incorporated herein as Exhibit "T." 65. Also on October 1, 2009, Razorback received copies of two wire transfers from Preve, a Banyon USVI representative, demonstrating that a total of $66,700,000.00 (the full settlement funding being purchased) had been received by RRA in its trust account with TD Bank. A copy of the October 1, 2009 wire transfers is attached hereto and incorporated herein as Composite Exhibit "U." 66. On the same day, Preve forwarded Razorback an email from Rothstein providing: (1) confirmation of Preve's purported $8,000,000.00 wire into RRA's trust account; and (2) that no disbursement on the deal would be made until he received the $32,000,000.00 from Page 20 of 147 CONRAD 6. SCHERER. LLP, 633 SOUTH FEOERAL HIGHWAY, FT. LAUDERDALE. FL 33301. TEL. EFTA01092198  Razorback Funding, LLC, et at, v. TD Bank N.A., et at. Complaint Razorback. A copy of the October 1, 2009 email from Rothstein is attached hereto and incorporated herein as Exhibit "V." 67. On October 3, 2009, Razorback attempted to contact Spinosa to verify the details of the lock letter. The Razorback representative was unable to reach Spinosa but did receive confirmation from Spinosa's assistant that she prepared the lock letter and that Spinosa signed it. 68. On October 7, 2009, Razorback received an email from Preve which contained an on-line screen shot of an RRA trust account at TD Bank indicating a balance of S66,700,000.00. A copy of the on-line screen shot of the TD Bank account is attached hereto and incorporated herein as Exhibit "W." 69. Finally, on October 22, 2009, Mr. Szafranski met again with Rothstein and verified that all of the putative plaintiffs in the Razorback deals received their disbursements by reviewing TD Bank's on-line banking wcbsite. A copy of Mr. Szafranski October 22, 2009 confirming email is attached hereto and incorporated herein as Exhibit "X." 70. In reliance on the foregoing, Razorback transferred the sum of $32,000,000.00 to RRA's trust account. 3. D3 Capital Club, LLC 71. D3 was formed October 4, 2009 for purposes of investing in a $30,000,000.00 RRA structured settlement, payable in six equal monthly installments of $5,000,000.00, offered in exchange for $18,000,000.00. See Confidential Settlement Agreements and Releases which is attached hereto and incorporated herein as Composite Exhibit "Y." Page 21 of 147 CONRAD & SCHERER. LLP. 633 SOUTH FE0ERAL HIGHWAY, FT. LAUDERDALE. FL 33301, TEL EFTA01092199  Razorback Funding, LLC, et at, v. 77i Bank N.A., et at. Complaint 72. A D3 representative, who was also a representative of Razorback's management team, had knowledge of and relied upon the contacts and representations made by TD Bank in connection with the Razorback transaction. 73. On or about October 15, 2009, as part of its due diligence, D3 obtained a copy of a ID Bank "lock letter" signed by Spinosa stating the following: Pursuant to your written instructions to us of October 14, 2009, please be advised that all funds contained in the above referenced account shall only be distributed upon your or Stuart Rosenfeldt's instruction and shall only be distributed to D3 Capital Club, LLC, 2833 NE 35th Coup, Fort Lauderdale, FL, 33308, TD Bank NA, Account # 4245728568. Your letter is understood not to convey ownership of the account or access to the account to any other party, but rather is meant to irrevocably restrict conveyances as follows: conveyances shall only be made from the account referenced above to the TD bank account # 4245728568 belonging to D3 Capital Club, LLC. See October 15, 2009 lock letter attached hereto and incorporated herein as Exhibit "Z." 74. On October 15, 2009, Spinosa signed another letter enclosing a copy of RRA's trust account hank statement showing a balance in excess of $30,000,000.00. See October 15, 2009 letter attached hereto and incorporated herei