LIT COMMENTARY

Now He’s Stealin’ Again.

Mario German is a Florida attorney with a checkered past, based upon review by LIT. We found a clear case of closing attorney mortgage loan fraud by Florida attorney Mario D. German which was never reported to the prosecutor or Florida Bar by S.D. Fl.  District United States Judge Kenneth A. Marra.

This type of scheme normally comes with lengthy jail terms, for example, see the case of Phillip Graham Rose, a closing attorney from Raleigh, was sentenced to 42 months and ordered to pay $1.6 million to the victims of the scheme.

A good example and explanation of this type of scheme is detailed by the Eleventh Circuit in US v Hill, a straw buyer mortgage fraud case, which we cite just a small snippet;

“The higher the property value the larger the loan, the larger the loan the higher the sales price, and the higher the sales price the larger the profit. In order to obtain loans for the highest possible property value, and reap the highest possible profit, Hill and his associates made a multitude of misrepresentations to lenders. They lied a lot. They lied about the true buyers, and they lied about the source of the down payments, and they lied about the value of the properties, and they lied about the income and employment of the buyers, and they lied about whether the buyers would occupy the properties, and they lied about whether any other properties owned by the buyers were being leased.”

U.S. v. Hill, 643 F.3d 807, 820 (11th Cir. 2011)

There is no way that Judge Marra was not aware of exactly what Mario German’s role was in this case, as outlined in his detailed order, yet he chose to blank the mortgage fraud.

Fast forward to 2020/21 and there’s two active cases, one now remanded to Florida State Court claiming theft of $202k and the other is in S.D. Fl. Federal Court, wherein German has stolen escrow funds and in the state court case he’s come up with a ‘hacker theory’ as to why those escrow funds vanished. LIT suggests the hacker and fraudster is right in view, namely the thievin’, schemin’ rogue lawyer called Mario German.

The most recent filing is a customer from Texas, who was buying used catalytic converters from suppliers in South America, only to find that his funds which were wired to German’s escrow, the $178k or so would allegedly be finched by German for his own personal use.

These are just the 3 cases we discovered and have reached court. The question remains, are these the only instances of this type of criminal behavior?

Below LIT has provided the most relevant filings for these three Mario German cases in the hopes that the FBI, DOJ, the Florida Bar and the clients attorneys have access to this information and act accordingly.

It’s highly unlikely the federal court in Florida or the judges therein will act appropriately,  as they are known to exclude and hide key evidence from litigants before the court.

The $178k Theft Case

Global Resource, Inc. v. Mario D. German Law Center, P.A. (9:21-cv-80561) District Court, S.D. Florida

ONGOING…

LIF Update: SEP 5, 2021

Judge Cannon decides to slow it down and send out an unnecessary scheduling order  on September 3, with trial date in July 2022. The default judgment(s) should have been entered and the corrupt lawyer(s) reported to the Florida Bar and Prosecutor. That, however, is not what happens in S.D. Fl. Federal Court when it involves lawyers.

LIF Update: AUG 26, 2021

On July 19, (Doc. 35) Global Resource file a response saying they are waiting for all parties to be held liable, including Mario German and his law firm before asking for default judgment.  The deadline for response is 20 July, 2021 has well and truly past and not a peep on the docket, as LIT anticipated. This is a clear case of theft of funds by all parties named by Global Resource and Cannon needs to release the cannonballs. It’s time.

LIF Update: JULY 9, 2021

Judge Cannon issues a training guide on requirements for a default judgment for two of the defendants only (Nexus and Krantz), and which excludes Mario German and his law firm. Deadline for response is 20 July, 2021 and it better be an A Grade reply.

LIF Update: JULY 4, 2021

Judge Cannon denied default judgment while a ‘show cause’ order was pending. That expired on Wednesday, June 28th, 2021.  You would have expected an order on Thursday 29th entering default judgment and reporting the rogue lawyer to task via sanctions and he should be reported to the prosecutor. Instead, nothing. That liberal delay is never applied to civil litigants, it should not apply to a thievin’ lawyer.

LIF Update: May 15, 2021

When you read Mario German’s pro se reply, it just reminds us of LIT’s article and review of the attorney fraud perpetrated in the case at the First Circuit. You can read it here and make your own assumptions, but we can see that German is being evasive and struggling to answer the complaint with general and unavailing denials.

COMPLAINT FOR DAMAGES

COMES NOW Plaintiff Global Resource, Inc., who brings this Complaint against Defendants on the following grounds:

JURISDICTION AND VENUE

1. This Court has diversity jurisdiction over this action pursuant to 28 U.S.C. § 1332. The matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, Plaintiff is a Delaware corporation with its principal place of business in Texas, and Defendants are citizens of Florida, as detailed in paragraphs 3 through 9, herein.

2. Venue is proper in this Court pursuant to 28 U.S.C. § 1391 because all or a substantial part of the events or omissions giving rise to Plaintiff’s claims occurred in Palm Beach County, Florida, in the Southern District of Florida.

THE PARTIES

3. Plaintiff Global Resource, Inc. (hereinafter “Global Resource”) is a Delaware corporation formed in 2004 with its principal place of business in the State of Texas. Global Resource’s sole director and owner is Sean Ramey (hereinafter “Ramey”), an individual who resides in Houston, Texas.

4. Defendant Mario D. German Law Center, P.A. (hereinafter “German Law Center”) is a Florida for-profit corporation formed in 1999 with its principal address at 55 N.W. Fifth Avenue 400, Boca Raton, FL 33432. On information and belief, German Law Center’s sole officer and director is Mario D. German, an individual who resides in Palm Beach County, Florida.

5. Defendant Nexus Capital Management, LLC (hereinafter “Nexus”) is a Florida limited liability company formed on or about August 1, 2013 with its principal address at 1374 Cypress Way, Boca Raton, FL 33486. Nexus’ sole member and manager is Defendant Michael
J. Krantz, an individual who resides in Palm Beach County, Florida.

6. Defendant Mario D. German (hereinafter “German”) is an individual who resides in Palm Beach County, Florida. German is the Director of Defendant German Law Center.

7. Defendant Michael J. Krantz (hereinafter “Krantz”) is an individual who resides in Palm Beach County, Florida. Krantz is the sole member, with the title of “Manager”, for Defendant Nexus.

FACTUAL ALLEGATIONS APPLICABLE TO ALL CLAIMS

8. Plaintiff Global Resource is a company engaged in the business of, among other things, purchasing automotive and industrial materials and refining them to extract a variety of residual metal compounds.

9. In connection with these activities, in or around May 2020, Global Resource entered into agreements with three suppliers for catalytic converters, evidenced by purchase orders attached as Exhibits 1-3 hereto. Specifically, those agreements provided the following:

a. Pursuant to a purchase order dated June 25, 2020, Global Resource agreed to order 1,500 kilograms of catalytic converters from a Venezuelan supplier for
$75,000 [Exhibit 1];

b. Pursuant to a purchase order dated July 12, 2020, Global Resource agreed to order 1,000 kilograms of catalytic converters from a Bolivian supplier for
$55,000 [Exhibit 2]; and

c. Pursuant to a purchase order dated July 13, 2020, Global Resource agreed to order 2,060 kilograms of catalytic converters from a Brazilian supplier for
$86,520 [Exhibit 3].1

10. Because the Suppliers were located outside the United States and did not have merchant accounts set up to receive funds directly from Plaintiff’s corporate credit account, Plaintiff and the Suppliers set out to find a solution to facilitate payment.

11. In or around May 2020, one of Plaintiff’s Suppliers referred Plaintiff to Angely Quintero, an agent of Defendant Nexus. Quintero introduced Plaintiff to Nexus, which Quintero represented was a legitimate payment service that could facilitate payments from Plaintiff to the Suppliers.

12. Quintero did not disclose to Plaintiff that Quintero had an arrangement with at least one Supplier to receive a 2.5% commission for referring Plaintiff to Nexus.

13. In or around May 2020, Quintero set up an introductory phone call between Ramey, acting for the Plaintiff, Defendant Krantz, and Joseph J. Camargo, acting as the agent for German Law Center.

14. During that phone call, Krantz and Camargo made the following representations about Nexus and German Law Center, respectively, to Ramey:
a. Nexus was frequently engaged in providing payment services to companies and high net worth individuals who needed to transfer money overseas, including to and from Venezuelan citizens, which could be challenging to an inexperienced layperson;

b. Nexus had a large book of clients who could attest to Nexus’ legitimacy and efficacy as a payment servicer;

c. Nexus frequently, if not exclusively, utilized bank accounts belonging to German Law Center as escrow accounts for facilitating payments between its clientele;

d. German Law Center, whose representative Camargo was on the call, recognized, accepted, and actively participated in this business relationship by offering up its bank accounts for use as escrow accounts and directing funds pursuant to Nexus’ and Nexus’ clients’ instructions; and

e. Nexus and German Law Center were capable of and prepared to provide their services to Plaintiff by acting as transfer agent for the payment of funds from Plaintiff to the Suppliers.

15. Shortly thereafter, the Suppliers each signed an agreement with Nexus, titled “ESCROW / TRUST (Fiducia) AGREEMENT”, whereby Nexus represented that it would facilitate the payments from Plaintiff to the Suppliers, acting as “agent” for the transactions in exchange for a commission of 2.5% of the total payment price on each transaction (hereinafter the “Escrow Agreement(s)”). One of those agreements is attached hereto, unsigned by the supplier. [See Exhibit 4]. Discovery should yield the executed copies of these agreements, which are not in Plaintiff’s possession.
16. In July 2020, Nexus sent a letter to Plaintiff confirming Nexus’ arrangement with the Suppliers (hereinafter the “Confirmatory Letter”). Specifically, Nexus stated:
a. Nexus is retained primarily to provide Consulting, Custody, Paymaster, Escrow Services to facilitate the purchase, sale and delivery of assets to the Clients in the most secure and expeditious manner;

b. To provide the fastest most streamlined to facilitate Purchase and Sales of their assets, Nexus has engaged several Professional Associations (PA) and Law Firms to assist in these operations [sic]; and

c. Nexus is utilizing Attorney IOLTA accounts at principal USA banks to receive the funds for these transactions.

17. The Confirmatory Letter also included a list of five bank accounts at Chase, Bank of America, and Wells Fargo with corresponding Swift Codes, routing numbers, and account numbers. Under the list of bank accounts, Defendant Krantz affixed his signature on behalf of Defendant Nexus accompanied by the statement: “I hereby swear, under penalty of perjury, that the information provided herein is true and correct.” [See Exhibit 5].

18. Nexus represented to Plaintiff that it would “utilize” Defendant German Law Center for the transactions at issue. Notably, one of the Bank of America accounts listed in the Confirmatory Letter with the account number ending in “4048” was German Law Center’s IOLTA (Interest on Lawyers Trust Accounts) account. Id.

19. To fulfill Plaintiff’s obligations to the Suppliers pursuant to the Purchase Orders, and based on Defendants’ representations that they would facilitate Plaintiff’s payments, Plaintiff wired funds intended for disbursement to the Suppliers to German Law Center’s IOLTA account. Plaintiff selected the IOLTA account specifically because, among other things, Plaintiff had a general understanding that lawyer trust accounts were subject to stricter regulation.

20. Plaintiff initiated the following wires to German Law Center’s Bank of America account with the account number ending in “4048”:

21. Plaintiff wired a total of $178,400 to German Law Center. As detailed in the preceding table, the “Memo to Payee” in connection with each wire stated that the funds were intended for payment of a particular Supplier.

22. On July 1, 2020, Defendant Krantz sent an e-mail to Plaintiff instructing Plaintiff to fully execute a form titled “Release of Funds in Escrow” (hereinafter “July 1 Release Agreement”). [See Exhibit 6].

23. The July 1 Release Agreement, printed on Nexus letterhead and attached to that email, was formatted as a letter to Defendant German Law Center instructing it to release Plaintiff’s previously deposited funds for the benefit of the Suppliers.

24. Specifically, the Release Agreement instructed German Law Center to undertake the following:

You are hereby authorized to release funds sent in or otherwise deposited by me, Mr. Sean Ramey into your IOLTA account in the amount of SEVENTY TWO THOUSAND FIVE HUNDRED and 0/00 US Dollard ($72,500 USD) as provided by this agreement.

MARIO D. GERMAN LAW CENTER P.A. has received the above transfer and is in receipt of your transfer or wire receipt, and is prepared to distribute funds according to this agreement.

MARIO D. GERMAN LAW CENTER P.A. is hereby directed to disburse said funds held in escrow in the following manner; NINTY [sic] SEVEN AND A HALF Percent (97.5%) of gross transfer is to be released as directed solely by Mr. Sean Ramey (the Remitter) without delay and or limitations after the funds have fully cleared and credited into MARIO D. GERMAN LAW CENTER, P.A. Escrow Account. I, Sean Ramey direct these funds are to be distributed to Nexus Capital Management for the benefit of [one of the Suppliers]. The balance of funds held in Escrow by MARIO D. GERMAN LAW CENTER, P.A. is to be retained by Mario D. German Law Center, P.A. as fee for the Escrow and Paymaster services provided.

(all emphasis in original).

25. Additionally, the final paragraph of the Release Agreement contained the following language, titled “Disclosure”:
Once this document is duly executed it is a binding agreement that carries my full authority without any limitations whatsoever, and furthermore once the funds are transferred and or transmitted to the banking instructions as described herein above all liability and or responsibility on the part of MARIO D. GERMAN LAW CENTER, P.A. and/or Mario D. German, Esq. and or their officers is completely released without limitations and with prejudice.

(all emphasis in original).

26. On July 1, Ramey, acting for Plaintiff, executed and returned the July 1 Release Agreement to Krantz. [See Exhibit 7].

27. On July 11, 2020, Ramey executed an identical “Release of Funds in Escrow” form directing German Law Center to release 97.5% of $52,500 Plaintiff previously deposited for the benefit of the second Supplier. [See Exhibit 8].

28. On July 24, 2020, Plaintiff executed an identical “Release of Funds in Escrow” form directing German Law Center to release 97.5% of $37,900 Plaintiff previously deposited for the benefit of the third Supplier. [See Exhibit 9].

29. Defendants did not release the funds as instructed.

30. In reality, Defendants never intended to complete the transactions at issue, and, instead, transferred the money to themselves and/or for their own benefit.

31. None of the Suppliers ever received the funds deposited in German Law Center’s account for their benefit.

32. On August 14 and August 19, Plaintiff contacted Krantz and Camargo via email to inquire as to the status of the funds. Neither Krantz nor Camargo responded to these emails. See Exhibits 10 and 11.

33. On October 27, 2020, Ramey spoke with Camargo––who was, at all times acting for The German Law Center––over the phone. During this call, Camargo, on behalf of German Law Center, agreed to advance $20,000 to one of the Suppliers to facilitate shipment of the goods (which were never delivered to Plaintiff due to lack of payment). In support of this transparent stalling tactic, Defendants fabricated a wire transfer confirmation. [See Exhibit 12].

34. German Law Center never intended to pay this advance, never paid this advance, and in fact made this representation to convince Plaintiff that Defendants had not stolen Plaintiff’s funds or committed a fraud.

35. On December 14, 2020, Plaintiff emailed Krantz and Camargo once again requesting return of the funds. [See Exhibit 13]. Neither Krantz nor Camargo responded.

36. During this time period of August through December 2020, Plaintiff had several phone calls with Camargo acting for The German Law Center, who provided a variety of excuses as to what happened to Plaintiff’s money, including that (a) the money could not immediately be disbursed to the Suppliers due to anti-money laundering regulations governing large transactions with foreign individuals/entities; (b) that the Suppliers provided the wrong account numbers for disbursement; and (c) that the money had been invested in another venture and earning interest.

37. Defendants have avoided Plaintiff, concealed what happened to Plaintiff’s money, and made representations designed to lull Plaintiff into believing nothing had gone wrong so that Plaintiff would not exercise its legal rights or alert the criminal authorities.

38. Defendants fraudulently induced Plaintiff to transfer funds to German Law Center’s IOLTA account so that they could keep Plaintiff’s money for themselves or use the money for their benefit. Indeed, that is precisely what they did.

39. Apparently, Defendants did not limit their scheme to Plaintiff as they have been sued by other victims for similar fraudulent behavior, including by Recycled Paper International, LLC in the case styled Recycled Paper International, LLC v. Mario D. German Law Center, P.A., et al., Case No. 9:20-cv-81888 (S.D. Fla., Amended Complaint filed Oct. 22, 2020).

40. All conditions precedent to bringing this lawsuit have been satisfied or waived.

CLAIM I

CONVERSION AGAINST ALL DEFENDANTS

41. Plaintiff re-alleges and adopts all of the allegations set forth in paragraphs 1 through 40 above.

42. This is an action for conversion against German Law Center, German, Nexus, and Krantz.

43. German Law Center and Nexus, acting through the individuals discussed above, induced Plaintiff to transfer funds to German Law Center’s IOLTA account in connection with an agreement that Defendants would facilitate payments to Plaintiff’s Suppliers.

44. Plaintiff transferred money to German Law Center’s IOLTA account in connection with an agreement that Defendants would facilitate payments to Plaintiff’s Suppliers.

45. Defendants then converted the money by removing it from German Law Center’s IOLTA account and using it for various improper purposes or otherwise retaining it for themselves.

46. At all material times, Plaintiff was the rightful owner of the monies transferred to German Law Center’s IOLTA account.

47. Plaintiff has demanded the return of his monies, but the money has not been returned.

48. Plaintiff has been deprived of its possession of money in a manner that equates to conversion.

WHEREFORE, Plaintiff demands a judgment against Defendants, jointly and severally, for actual damages in an amount to be determined by the trier of fact, costs of the lawsuit, pre- and post-judgment interest, and such other relief as the trier of fact deems just and appropriate.

CLAIM II

CONSPIRACY TO CONVERT ASSETS AGAINST GERMAN AND KRANTZ

49. Plaintiff re-alleges and adopts all of the allegations set forth in paragraphs 1 through 40 above.

50. In or around May 2020, individual Defendants German and Krantz agreed to a series of unlawful acts that would convert Plaintiff’s money for their own benefit and benefit of others.

51. The underlying tort was conversion of Plaintiff’s money, as alleged in Claim I (which Claim is hereby incorporated, including paragraphs 41 through 48).

52. Each individual defendant had his own role in the conspiracy and performed overt acts in furtherance thereof:

a. Krantz established and managed Nexus to have an entity to enter into “Escrow Agreements” with the Suppliers and to facilitate Plaintiff’s Release Agreements with German Law Center;

b. German established and managed German Law Center and its IOLTA account, in which Plaintiff deposited the converted monies. In addition, German controlled the IOLTA account and unlawfully disbursed Plaintiff’s money from that account for his benefit, and for the benefit of the other Defendants herein.

53. Plaintiff has suffered significant damages in the loss of its money, as set forth herein, through the conversion of its money.

WHEREFORE, Plaintiff demands judgment against German and Krantz, jointly and severally, for actual damages in an amount to be determined by the trier of fact, costs of the lawsuit, pre- and post-judgment interest, and such other relief as the trier of fact deems just and proper.

CLAIM III BREACH OF CONTRACT

54. Plaintiff re-alleges and adopts all of the allegations set forth in paragraphs 1 through 40 above.

55. Plaintiff entered into an oral contract, evidenced by the Releases attached as Exhibits 7-9, for Nexus to process the funds for the benefit of the suppliers. Alternatively, Plaintiff was a third party beneficiary of the Escrow/Trust Agreement entered into between Nexus and the suppliers, an example of which is attached as Exhibit 4.

56. Under the contractual terms, Nexus, through the German Law Center IOLTA account, was required to disburse $70,687.50, $51,187.50, and $36,952.50, which Plaintiff had previously deposited into German Law Center’s IOLTA account, to Plaintiff’s Suppliers.

57. Nexus breached the terms of the agreement to disburse the funds by diverting the funds for its own benefit, and for the benefit of the other Defendants in this lawsuit.

58. Nexus’ conduct constitutes gross negligence or willful misconduct, as set forth herein, because it diverted the funds for the benefit of Defendants rather than disburse Plaintiff’s funds to the respective Suppliers as instructed.

59. Plaintiff has suffered damages as a consequence of Nexus’ material breaches of the contract.

WHEREFORE, Plaintiff prays that this Court enter judgment in its favor and against Nexus for actual damages in an amount to be determined by the trier of fact, costs of the lawsuit, pre- and post- judgment interest, and such other relief as the trier of fact deems just and appropriate.

CLAIM IV

BREACH OF FIDUCIARY DUTY AGAINST GERMAN, GERMAN LAW CENTER, AND NEXUS

60. Plaintiff re-alleges and adopts all of the allegations set forth in paragraphs 1 through 40 above.

61. German Law Center, as account holder for the IOLTA account in which Plaintiff deposited its monies in exchange for payment, was the effective trustee of Plaintiff’s funds and owed a fiduciary duty to Plaintiff.

62. German, as sole member of German Law Center, being a member of the Florida Bar and benefiting from that designation, and otherwise holding himself out as having control over German Law Center’s IOLTA account, was the effective trustee of Plaintiff’s funds and owed a fiduciary duty to Plaintiff.

63. Nexus, as the agent facilitating the transfer through the German Law Center’s IOLTA account to the suppliers of Plaintiff, owed a fiduciary duty to Plaintiff to execute the transfer according to the consent and direction of Plaintiff.

64. Indeed, German, German Law Center, and Nexus, as trustees of the funds transferred by Plaintiff with the obligation to act primarily for the benefit of Plaintiff and the suppliers, were given the trust and special confidence of Plaintiff to execute the funding instructions to the suppliers as agreed.

65. German, German Law Center, and Nexus breached their fiduciary duties by failing to disburse Plaintiff’s money consistent with its instructions and/or failing to return those funds to Plaintiff, resulting in a complete loss of all monies Plaintiff deposited in German’s and German Law Center’s IOLTA account.

66. As a result, Plaintiff has suffered financial damages in the form of the loss of all the funds deposited in German’s and German Law Center’s IOLTA account.

67. German, German Law Center, and Nexus had actual knowledge that failing to disburse Plaintiff’s money in accordance with Plaintiff’s instructions was wrong and that failure to do so would result in Plaintiff losing these funds.

68. Despite that knowledge, German, German Law Center, and Nexus intentionally pursued that course of conduct, which indeed resulted in Plaintiff’s total loss of the funds it deposited in German Law Center’s IOLTA account.

WHEREFORE, Plaintiff prays that this Court enter a judgment in its favor against German, German Law Center and Nexus for actual and punitive damages in an amount to be determined by the trier of fact, costs of the lawsuit, pre- and post-judgment interest, and such other relief as the Court deems just and appropriate.

CLAIM V

FRAUD IN THE INDUCEMENT

69. Plaintiff re-alleges and adopts all of the allegations set forth in paragraphs 1 through 40 above.

70. This action is against all defendants except German.

71. Nexus, directly and through its agent, Krantz, intentionally made false statements or omitted material facts regarding its role as escrow/transfer agent on Plaintiff’s contracts with the Suppliers, as set forth herein.

72. German Law Center, directly and through its agent, Camargo, intentionally made false statements or omitted material facts regarding its intention to hold Plaintiff’s funds in its IOLTA account and disburse Plaintiff’s funds according to Plaintiff’s instructions, as set forth herein.

73. Defendants Nexus and German Law Center, and their representatives, knew that the representations were false and intended for Plaintiff to rely on those false representations in wiring its money to German Law Center’s IOLTA account to enrich themselves.

74. Plaintiff reasonably relied on those false representations to its detriment.

Specifically, the representations and omissions caused Plaintiff to wire $178,400 to German Law Center’s IOLTA account as set forth herein, and to delay seeking enforcement of its rights while it was being led on by the ongoing fraud.

75. As a result of the false statements, material omissions, and fraudulent conduct by Defendants, Plaintiff suffered financial damages in the form of loss of the monies deposited in German Law Center’s IOLTA account.

WHEREFORE, Plaintiff prays that this Court enter judgment in its favor against all Defendants except German, awarding compensatory and punitive damages, costs of the lawsuit, and such other relief as the Court deems just and appropriate.

CLAIM VI

NEGLIGENT MISREPRESENTATION

76. Plaintiff re-alleges and adopts all of the allegations set forth in paragraphs 1 through 40 above.

77. This action is against all defendants except German.

78. Nexus, directly and through its agent, Krantz, intentionally made false statements or omitted material facts regarding its role as escrow/transfer agent on Plaintiff’s contracts with the Suppliers, as set forth herein.

79. German Law Center, directly and through its agent, Camargo, intentionally made false statements or omitted material facts regarding its intention to hold Plaintiff’s funds in its IOLTA account and disburse Plaintiff’s funds according to Plaintiff’s instructions, as set forth herein.

80. Defendants, except German, should have known that the statements made to Plaintiff were false, and would lead to Plaintiff’s reliance thereon.

81. Defendants, except German, intended for Plaintiff to rely on the false representations that, among other things, Plaintiff’s money that it deposited in German Law Center’s IOLTA account would be disbursed to the Suppliers consistent Plaintiff’s instructions.

82. Plaintiff reasonably and justifiably relied on the false statements to Plaintiff’s detriment, including, but not limited to, wiring $178,400 to German Law Center’s IOLTA account and delaying enforcement of its rights based on the false statements.

83. Defendants’ conduct, except German, constituted gross negligence as their conduct was so reckless or wanting in care, as set forth herein, that it constituted a conscious disregard for the rights of Plaintiff. Among other things, Defendants knew they intended to misappropriate Plaintiff’s money once it was deposited into German Law Center’s IOLTA account.

84. As a direct and proximate result of this conduct, Plaintiff suffered financial damages in the form of loss of the funds wired to German Law Center’s IOLTA account.
WHEREFORE, Plaintiff prays that this Court enter judgment in its favor against Defendants except German, awarding compensatory and punitive damages in an amount to be determined at trial, costs of the lawsuit, and such other relief as the Court deems just and appropriate.

CLAIM VII

UNJUST ENRICHMENT AGAINST ALL DEFENDANTS

85. Plaintiff re-alleges and adopts all of the allegations set forth in paragraphs 1 through 40 above.

86. Plaintiff conferred a benefit on all Defendants by transferring Plaintiff’s money to German Law Center’s IOLTA account, which was used to benefit all Defendants by retaining all of the funds for themselves or used for their benefits.

87. Defendants voluntarily accepted and retained the benefits conferred.

88. Defendants’ acceptance and retention of the benefits under these circumstances (of theft and/or conversion, as set forth in Count I, which is incorporated herein) makes it inequitable for Defendants to retain such benefits without returning the amount wired into German Law Center’s IOLTA account to Plaintiff.

89. Defendants have been unjustly enriched by Plaintiff’s transfer of money to German Law Center’s IOLTA account, that was kept by, and used for, Defendants’ benefit.

WHEREFORE, Plaintiff prays that this Court enter judgment in favor against all Defendants for actual damages in an amount to be determined by the trier of fact, costs of the lawsuit, pre-and post-judgment interest, and such other relief as the Court deems just and appropriate.

Respectfully submitted this 16th day of March, 2021.

WEINBERG WHEELER HUDGINS GUNN & DIAL, LLC

/s/Aaron M. Cohn
Aaron M. Cohn, Esq.
Florida Bar No.: 95552
Weinberg Wheeler Hudgins Gunn & Dial, LLC
3350 Virginia Street, Ste. 500
Miami, FL 33133
T: (305) 455-9500
F: (305) 455-9501
E-mail: acohn@wwhgd.com
malvarez@wwhgd.com
dmallqui@wwhgd.com
Counsel for Plaintiff

SILVER LAW GROUP

/s/ Scott L. Silver
Scott L. Silver
Fla. Bar No. 095631 Ryan Schwamm
Fla. Bar No. 1019116
11780 W. Sample Road Coral Springs,
Florida 33065
T: (954) 755-4799
F: (954) 755-4684
E-mail: ssilver@silverlaw.com
rshwamm@silverlaw.com
rfeinberg@silverlaw.com
Counsel for Plaintiff

The $200k Theft Case

Recycled Paper International, LLC v. JPMorgan Chase Bank, N.A. (9:20-cv-81888) District Court, S.D. Florida

REMANDED TO FLORIDA STATE COURT, DEC 2020

ORDER GRANTING MOTION TO REMAND

THIS CAUSE is before the Court on Plaintiff’s Motion to Remand [DE 20] (“Motion”). The Court has considered the Motion, Defendant JP Morgan Chase Bank

N.A.’s (“Chase”) Response [DE 27], Plaintiff’s Reply [DE 35], and the record in this case and is otherwise advised in the premises.

I.            BACKGROUND

The facts of this case are not in dispute. On or about June 12, 2020, Canacha, Inc. (“Canacha”), who is not a party to this action, attempted to transfer $202,221.96 to Plaintiff’s Chase bank account. But a hacker accessed Plaintiff’s email containing the account details and manipulated it to instruct Canacha to transfer the funds to Huatai USA, LLC, at a Chase account number that is not owned by either Plaintiff or Huatai USA, LLC. Canacha followed the instructions in the hacked email, and Chase processed the transaction on June 15, 2020. Plaintiff has yet to recover any of the fraudulently transferred funds.

Plaintiff initiated this action in the Circuit Court of the Fifteenth Judicial Circuit in and for Palm Beach County, Florida, on September 4, 2020, naming Chase as the sole defendant and asserting a single claim of a violation of Florida Statute § 670.207.¹ Chase timely removed the action to federal court on October 9, 2020, under diversity jurisdiction.

Plaintiff filed its First Amended Complaint on October 22, 2020, this time also asserting claims of civil theft, conversion, and negligence against Mario D. German Law Center, P.A. (“German”), a Florida professional corporation and the alleged recipient of the transferred funds.

On the same day, Plaintiff moved to remand the case to state court, arguing that the joinder of German destroyed diversity.

I.            LEGAL STANDARD

Provided the requirements of original jurisdiction are satisfied, a defendant may remove a case from state court to federal court. 28 U.S.C. § 1441(a). The case must be remanded back to state court, however, “[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction.” Id. § 1447(c). Rule

15(a) of the Federal Rules of Civil Procedure allows plaintiffs to amend a complaint once as a matter of right as long as no answer has been filed, and in all other circumstances with leave of court. Fed. R. Civ. Proc. 15(a)(1). The Rule specifies that leave to amend should be freely given “when justice so requires.” Fed. R. Civ. Proc.

15(a)(2). However, “a district court must scrutinize more closely an amended pleading that would name a new nondiverse defendant in a removed case because justice requires that the district court also balance the defendant’s interests in maintaining the federal forum.”  Dever v. Family Dollar Stores of Georgia, LLC, 755 F. App’x 866, 868 (11th Circuit 2018).

In determining whether to permit a plaintiff to join a nondiverse defendant after removal, a district court should consider the following factors:

(1) the extent to which the purpose of the amendment is to defeat federal jurisdiction,

(2) whether the plaintiff has been dilatory in asking for amendment,

(3) whether the plaintiff will be significantly injured if amendment is not allowed, and

(4) any other factors bearing on the equities. Id.

I.             DISCUSSION

Plaintiff asserts that this balancing of equities weighs in its favor and the action should be remanded to state court.

Chase takes the opposite position, arguing that the Court should deny German’s joinder and retain jurisdiction over this action.

Applying the Dever factors, the Court finds that the joinder should be permitted and the case should be remanded to state court.

First, the Court finds that Plaintiff did not amend the Complaint for the purpose of destroying diversity. The undisputed facts show that Plaintiff was pursuing its civil theft claim against German even before it filed suit against Chase. Any party asserting a civil theft claim under Florida law is required by statute to send a written demand to the opposing party and then wait 30 days before filing suit. Fla Stat. § 772.11. Accordingly, Plaintiff delivered a demand letter to German on September 2, 2020, two days before it initiated this action against Chase. And while it is true that Plaintiff might have either waited for the expiration of the cure period before initiating this action or asserted its other two claims against German in the initial Complaint, the fact that Plaintiff did not do either of those things does not show that the joinder of German now is a mere ploy to destroy diversity. In fact, Plaintiff asserts, and Chase does not refute, that Plaintiff informed Chase of its intention to join German before Chase removed the matter.

The Court therefore concludes that the first factor weighs in favor of remand.

The Court also finds that Plaintiff has not been dilatory in amending the Complaint. Plaintiff sent the demand letter to German on September 2, 2020, and the cure period ended on October 3, 2020. Plaintiff moved to amend the Complaint on October 12, 2020, and filed the First Amended Complaint on October 22, 2020.² Only one week elapsed after the cure period ended before Plaintiff sought leave to amend the Complaint, and only two additional weeks elapsed before Plaintiff filed the First Amended Complaint. These are not unreasonable delays. The second factor therefore also weighs in favor of remand.

Next, the Court finds that Plaintiff would be prejudiced if the case were not remanded. Plaintiff has already taken steps to recover damages from German, so this is not one of those cases where it seems unlikely that a plaintiff would seriously pursue its claims against a nondiverse defendant.

And given that Plaintiff may potentially recover treble damages against German, but not against Chase, this is also not a case where a plaintiff can be fully satisfied by the diverse defendant alone.

To require Plaintiff to maintain two separate actions in two separate courts would not only put additional strain upon Plaintiff’s resources, but it would undermine the exercise of judicial economy.

The third factor therefore also weighs in favor of remand.

Finally, the Court finds that other factors bearing on the equities also support granting Plaintiff’s Motion. First, the case is still in the early stages of litigation, so remanding it would cause no unreasonable delay.

And second, Plaintiff stated in its Reply that it intends to assert a civil theft claim against an additional defendant: a Florida resident who is allegedly responsible for the hacked email and whose identity Plaintiff has just learned.³

And although Chase argues that the pendency of its yet-unripe Motion to Dismiss supports denying the Motion, the Court disagrees.

In the first instance, Chase’s argument relies upon accepting that the Motion to Dismiss is likely to succeed, and it would be inappropriate for the Court to prematurely evaluate the merits of the Motion to Dismiss. But also, Plaintiff has stated its intention of asserting an additional negligence claim against Chase based on newly-discovered information. The pendency of the Motion to Dismiss is therefore irrelevant to this proceeding.

The Court concludes that the Dever factors weigh strongly in favor of remanding this case to state court.

I.            CONCLUSION 

It is thereupon ORDERED AND ADJUDGED as follows:

1. Plaintiff’s Motion to Remand [DE 20] is GRANTED.
2. The case is hereby REMANDED to the Fifteenth Judicial Circuit in and for Palm Beach County.
3. The Clerk of Court is hereby directed to forward a certified copy of this Order to the Clerk of the Fifteenth Judicial Circuit in and for Palm Beach County, Florida, re Case 50-2020-CA-009558-AF.
4. The Clerk of Court is directed to CLOSE the case and DENY all other pending motions as MOOT.

DONE AND ORDERED in Chambers at Fort Lauderdale, Florida, on this 16th day of December, 2020.

James I Cohn
United States District Judge

Copy Provided:

Magistrate Judge William Matthewman
all counsel of record

The Mortgage Fraud Case

Federal Deposit Insurance Corporation v. Mario D. German Law Center, P.A. (9:12-cv-81298) District Court, S.D. Florida

SETTLED 2 JUNE 2014 – DESPITE CLEAR MORTGAGE FRAUD BY LAWYER AS PER MARRA’s OWN ORDER

OPINION AND ORDER

This cause is before the Court upon Defendant Mario D. German Law Center, P.A.’s Motion to Sever Plaintiff’s Claims (DE 28). The Motion is fully briefed and ripe for review. The Court has carefully considered the Motion and is otherwise fully advised in the premises.

I. Background

On December 3, 2012, Plaintiff Federal Deposit Insurance Corporation (“FDIC”) brought this three count complaint against Defendant Mario D. German Law Center, P.A. (“Defendant”) for breach of contract (count one), breach of fiduciary duty (count two) and negligent misrepresentation (count three). The Complaint alleges the following:

AmTrust Bank (“AmTrust”) was a federally chartered savings bank with its principal place of business in Cleveland, Ohio. (Compl. ¶ 1, DE 1.)

On December 4, 2009, AmTrust was closed by the Office of Thrift Supervision and the FDIC was appointed Receiver.

(Compl. ¶ 2.)

LIT: FRAUD 1 – PROPERTY LOAN $220K for PROPERTY SOLD FOR $88K IN 2014

On or about February 10, 2009, AmTrust funded a purchase money loan in the sum of $220,000 to borrower Olivia Rudolfo (“Rudolfo”) for the purchase of property located at 1914 Alamanda Way, Riviera Beach, Florida. (Compl. ¶ 7.) Rudolfo purchased the property from Sonoma Bay, Inc. for $275,000, financed in part by the Rudolfo loan. (Compl. ¶ 8.) AmTrust required Rudolfo to pay no less than $55,928 as a cash-to-close down payment. (Compl. ¶ 9.)

Rudolfo defaulted on the loan without making a single payment.

(Compl. ¶ 10.)

Defendant was the closing agent on this loan and agreed to abide by AmTrust’s closing instructions. (Compl. ¶ 11.) Defendant certified that it closed the loan in compliance with all the conditions in those instructions. (Compl. ¶ 13.) Despite explicit instructions, Defendant closed the Rudolfo loan and disbursed funds in a matter inconsistent with the HUD-1 Settlement Statement. (Compl. ¶ 18.)

Defendant disbursed $115,500 in proceeds obtained from AmTrust loan proceeds to TLC Marketing Directors, Inc.* (“TLC”), even though the purchase contract for the transaction does not list any disbursements to TLC, TLC does not hold any lien against the property, and the disbursement is not standard in mortgage lending transactions. (Compl. ¶ 20.)

*LIT could only locate a 2008 entity named TLC Marketing Directors Incorporated, ownership by Keith Davis and Maria Davis of Jacksonville, Fl.

Defendant did not contact AmTrust to inform it of the disbursement to TLC prior to closing the Transaction, and instead closed the transaction without authorization from AmTrust to make this disbursement. (Compl. ¶ 21.)

Upon information and belief, Defendant did not collect $55,928 from Rudolfo; instead, TLC paid Rudolfo’s required cash-to-close down payment. (Compl. ¶ 22.)

Defendant did not contact AmTrust to inform it that Rudolfo did not pay his down payment. (Compl. ¶ 23.)

Thus, the true purchase price for the Rudolfo property was only $219,072 which caused AmTrust to fund a loan in excess of the true purchase price of the Rudolfo property. (Compl. ¶ 25.)

Had AmTrust known the true facts, AmTrust would not have funded the loan.

(Compl. ¶ 26.)

LIT: FRAUD 2 – PROPERTY LOAN $228,750 for PROPERTY LAST SOLD FOR $52,500 in 2011

On or about April 7, 2009, AmTrust funded a purchase money mortgage loan in the sum of $228,750 to Luis Jimenez for the purchase of property located at 1925 Alamanda Way, West Palm Beach, Florida 33404. (Compl. ¶ 27.)

Jimenez purchased the property from Sonoma for $305,000, financed in part by the Jimenez loan. (Compl. ¶ 28.)

AmTrust required Jimenez to pay no less than $81,436 as a cash-to-close down payment. (Compl. ¶ 29.)

Jimenez defaulted on the loan without making a single payment.

(Compl. ¶ 30.)

Defendant agreed to serve as closing agent in connection with this loan and agreed to abide by AmTrust’s closing instructions. (Compl. ¶ ¶ 31; 33.) Defendant closed the loan and disbursed funds in a manner inconsistent with the HUD-1 Settlement Statement. (Compl. ¶ 38.)

Defendant disbursed $144,265 in proceeds obtained from AmTrust’s loan proceeds to TLC, despite the fact that, upon information and belief, the purchase contract for the transaction did not list any disbursements to TLC, TLC did not hold any lien against the property and this disbursement was not standard in mortgage lending transactions. (Compl. ¶ 40.)

Defendant did not contact AmTrust to inform it of the disbursement to TLC prior to closing the transaction and instead closed the transaction without authorization from AmTrust to make the disbursement. (Compl. ¶ 41.)

Upon information and belief, Defendant did not collect $81,436 from Jimenez; instead, TLC paid the cash-to-close down payment. (Compl. ¶ 42.)

Defendant did not contact AmTrust to inform it that Jimenez did not pay his down payment. (Compl. ¶ 43.)

After accounting for Jimenez’ failure to pay his down payment, the true purchase price for the property was only $223,564. (Compl. ¶ 44.)

Defendant’s action caused AmTrust to fund a loan in excess of the true purchase price of the property. (Compl. ¶ 45.)

Had AmTrust known the true facts, AmTrust would not have funded the loan.

(Compl. ¶ 46.)

LIT: FRAUD 3 – PROPERTY LOAN $108K for PROPERTY SOLD FOR $82.5K IN 2014

On or about March 2, 2009, AmTrust funded a purchase money mortgage loan in the sum of $108,000 to borrower Jose Silva for the purchase of property located at 1926 Hibiscus Lane, Riviera Beach, Florida, 33404. (Compl. ¶ 47.)

Silva purchased the property from Sonoma for $240,000, financed in part by the loan. (Compl. ¶ 48.)

AmTrust required Silva to pay no less than $66,430 as a cash-to-close down payment. (Compl. ¶ 49.)

Silva defaulted on the loan after making only one payment.

(Compl. ¶ 50.)

Defendant agreed to serve as the closing agent in connection with the closing of the loan and agreed to abide by AmTrust’s closing instructions. (Compl. ¶ 51.) Despite the instructions, Defendant closed the loan and disbursed funds in a manner inconsistent with the HUD-1 Settlement Statement. (Compl. ¶ 58.)

Silva was to contribute $66,430 towards the purchase of the property. (Compl. ¶ 59.)

Defendant distributed $103,200 in proceeds obtained from AmTrust’s loan proceeds to TLC despite the fact that, upon information and belief, the purchase contract for the transaction did not list any disbursements to TLC, TLC did not hold any lien against the property and this disbursement was not standard in mortgage lending agreements. (Compl. ¶ 60.)

Defendant did not contact AmTrust to inform it of the disbursement to TLC prior to closing the transaction and instead closed the transaction without authorization from AmTrust to make the disbursement. (Compl. ¶ 61.)

Upon information and belief, Defendant did not collect $66,430; instead, TLC paid the required cash-to-close down payment. (Compl. ¶ 62.)

After accounting for Silva’s failure to pay his down payment, the true purchase price was only $173,570. (Compl. ¶ 64.)

Defendant’s actions caused AmTrust to fund a loan in excess of the true purchase price of the property and had AmTrust know the true facts, AmTrust would not have funded the loan.

(Compl. ¶ ¶ 65-66.)

Defendant moves to sever Plaintiff’s claims, stating that these are three separate and distinct unrelated real estate transactions, with different agreements, documents, prices, transfers of money and damages.

Defendant states that it is not enough that the claims share the same closing agent for mortgage loans issued by the same lender.

In response, Plaintiff notes that the Complaint alleges similar conduct by Defendant, violation of the same contract language and involvement of the same third party, TLC.

II. Discussion

Defendant moves for severance pursuant to Rule 21 of the Federal Rules of Civil Procedure.

The Rule states, in part, “[t]he court may [ ] sever any claim against a party.” Fed. R. Civ. P. 21. “Among the factors to be considered by the court in exercising its discretion under Rule 21 are whether the claims arise from the same transaction or occurrence, whether they present some common question of law or fact, whether severance would facilitate settlement or
judicial economy, and the relative prejudice to each side if the claim is severed.” Hartley v. Clark, No. 3:09cv559/RV/EMT, 2010 WL 1187880, at * 4 (N.D. Fla. Feb. 12, 2010)

(citing Disparte v. Corporate Executive Bd., 223 F.R.D. 7, 12 (D.D.C. 2004) (severance of plaintiffs’ claims turns on considerations of whether claims arise from same transaction or occurrence, whether claims present some common question of law or fact, whether settlement of claims or judicial economy would be facilitated, whether prejudice would be avoided if severance were granted, and whether different witnesses and documentary proof are required for the separate claims);

In re High Fructose Corn Syrup Antitrust Litigation, 293 F. Supp. 2d 854, 862 (C.D.Ill.2003) (same);

Wausau Business Ins. Co. v. Turner Const. Co., 204 F.R.D. 248, 250(S.D.N.Y.2001) (same)).

Rule 42 of the Federal Rule of Civil Procedure provides: “For convenience, to avoid prejudice, or to expedite or economize, the court may order a separate trial of one or more separate issues, claims, crossclaims, counterclaims, or third-party claims. When ordering a separate trial, the court must preserve any federal right to a jury trial.” Fed. R. Civ. P. 42(b).

At this stage in the proceedings, the Court concludes that the motion to sever should be denied. With respect to discovery and mediation, there is no basis to sever the case.

Based on the allegations, the claims substantially involve the same pattern of conduct, the same legal issues and the same witnesses.

Any differences highlighted by Defendant will not impact discovery or mediation enough to require severance.

With respect to Defendant’s concern that it will be limited in the scope and quantity of interrogatories (Mot. at 4), Defendant may move the Court for permission to craft discovery in an appropriate manner for this case.

Equally unpersuasive is Defendant’s contention that “due to the overlapping allegations asserted in the Plaintiff’s three causes of action, [Defendant] is prejudiced from identifying the documents, communications and witnesses specifically attributed to each transaction, and to prepare a proper defense to each claim.” (Mot. at 5.)

To the extent Defendant feels the Complaint did not provide him an adequate basis to respond to it, the proper course of action was
to file a motion for a more definite statement. See Fed. R. Civ. P. 12(e); Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514 (2002) (“If a pleading ‘fails to specify the allegations in a manner that provides sufficient notice’ or does not contain enough information to allow a responsive pleading to be framed, the proper motion to be filed is a motion for a more definite statement.”).

Finally, the Court will deny without prejudice the application to sever the trial. Once the case has been better developed, the Court can determine whether convenience, avoidance of prejudice, or judicial economy requires severance of the trial.

IV. Conclusion

Accordingly, it is hereby ORDERED AND ADJUDGED that Defendant Mario D. German Law Center, P.A.’s Motion to Sever Plaintiff’s Claims (DE 28) is DENIED.

DONE AND ORDERED in Chambers at West Palm Beach, Palm Beach County, Florida, this 5th day of September, 2013.

KENNETH A. MARRA
United States District Judge