Global v. Prithvi Info. Sols., Civil Action No. 2:18-cv-01290-WSS

CourtU.S. District Court — Western District of Pennsylvania
Writing for the CourtHon. William S. Stickman IV
PartiesKYKO GLOBAL, INC. et al., Plaintiffs, v. PRITHVI INFORMATION SOLUTIONS LTD. et al., Defendants.
Docket NumberCivil Action No. 2:18-cv-01290-WSS
Decision Date10 March 2020

KYKO GLOBAL, INC. et al., Plaintiffs,
v.
PRITHVI INFORMATION SOLUTIONS LTD. et al., Defendants.

Civil Action No. 2:18-cv-01290-WSS

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA

March 10, 2020


Hon. William S. Stickman IV

MEMORANDUM OPINION

WILLIAM S. STICKMAN IV, District Judge

This controversy arises from allegations of fraud involving coupon-bond funds. In 2016, Plaintiffs Kyko Global, Inc. ("KGI") and Kyko Global GmbH ("KGG") (collectively "Kyko") obtained a civil RICO judgment in the United States District Court for the Western District of Washington for a fraud-factoring scheme committed by entities and employees affiliated with the Prithvi family of businesses. As a result of litigation in Washington State, Kyko serves as the collection agent for Plaintiff Prithvi Solutions, Inc. ("PSI"). There is a criminal indictment pending in that district related to the conduct of Prithvi entities and employees. Plaintiffs seek another civil RICO judgment in this Court against Prithvi entities and employees for an unrelated conspiracy to launder stolen bond funds.

Pending before the Court are two motions to dismiss on jurisdictional grounds. The first was filed by Defendants Prithvi Information Solutions, Ltd. ("PISL"), Prithvi Asia Solutions, Ltd. ("PASL"), SSG Capital Management (Hong Kong), Ltd. ("SSG Hong Kong"), SSG Capital Partners I, L.P. ("SSG Capital Partners"), Madhavi Vuppalapati ("Madhavi"), Wong Ching Him

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a/k/a Edwin Wong ("Him"), Shyam Maheshwari ("Maheshwari"), Ira Syavitri Noor a/k/a Ira Noor Vourloumis ("Noor"), Andreas Vourloumis ("Vourloumis"), and Dinesh Goel ("Goel") (collectively "SSG Defendants"). The second was filed by Defendant Anandhan Jayaraman ("Jayaraman"). SSG Defendants' Motion to Dismiss Pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(2), and 12(b)(6) (ECF No. 25) ("SSG Def.'s Mot. to Dismiss") at p. 1; Motion to Dismiss on Behalf of Defendant Anandhan Jayaraman (ECF No. 103) ("Jayaraman's Mot. to Dismiss") at p. 1.

Three discovery-related motions are intertwined with both motions to dismiss: SSG Defendants' motion to strike Plaintiffs' jurisdictional discovery, Plaintiffs' motion to strike Jayaraman's jurisdictional discovery, and Jayaraman's motion to withdraw admissions. SSG Defendants' Motion to Strike Affidavits (ECF No. 111) ("SSG Def.'s Mot. to Strike Aff.") at pp. 1-4; Plaintiffs' Motion to Strike Defendant Anandhan Jayaraman's Reply Brief in Support of Motion to Dismiss (ECF No. 116) ("Pl.'s Mot. to Strike Jayaraman's Reply") at p. 1; Jayaraman's Motion to Withdraw Admissions (ECF No. 119) ("Jayaraman's Mot. to Withdraw Admissions") at p. 1.

For the reasons set forth in this opinion, Plaintiffs' motion to strike jurisdictional discovery proffered by Jayaraman will be granted and Jayaraman's motion to withdraw admissions will be denied. SSG Defendant's motion to strike Plaintiffs' jurisdictional discovery will be denied. The jurisdictional discovery submitted shows that the Court can exercise subject matter jurisdiction, and personal jurisdiction. This Court is the appropriate venue. As a result, SSG Defendants' and Jayaraman's motions to dismiss will both be denied.

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TABLE OF CONTENTS

STATEMENT OF FACTS ........................................................................................................... 5

I. Background ........................................................................................................................ 5

II. The Controversy ............................................................................................................. 9

A. The Bond-Circular Offering ............................................................................................. 9
B. Alleged Racketeering Activities ...................................................................................... 10
1. PISL Transfers $35,000,000.00 to PISL's Washington State Account ..................... 13
2. PISL Transfers $35,000,000.00 to PSI's Pittsburgh Account ................................... 13
3. PSI Transfers $8,000,000.00 to Prithvi, LLC's Washington State Account .............. 13
4. PSI Transfers $7,000.000.00 to PISL (Account Unknown) ....................................... 13
5. PSI Transfers $20,400,000.00 to PASL's Hong Kong Account ................................ 14
6. PASL Transfers $4,000,000.00 to SSG Capital Partners' Hong Kong Account ........ 14
7. PASL Transfers $16,400,000.00 to VTC's Singapore Account ................................. 14
8. PISL Transfers $2,500,000.00 to PSI's Pittsburgh Account ...................................... 14
9. PSI's Transfers $2,500,000.00 to PSAL's Hong Kong Account ............................... 14
i. PSI Initially Fails to Transfer $2,500,000.00 ......................................................... 15
ii. PSI Transfers $1,000,000.00 to PSAL's Hong Kong Account ................................ 15
iii. PSI Transfers $1,500,000.00 to PSAL's Hong Kong Account ............................ 15
10. PSAL Transfers $2,500,000.00 to VTC's Account ................................................ 15
11. PSAL Transfers $10,000.00 to VTC's Account ..................................................... 16
12. PASL Withdraws $28,000.00 ................................................................................. 16
C. The Aftermath ................................................................................................................. 16

III. Procedural History ....................................................................................................... 17

A. Civil Litigation in Washington State and Hong Kong ................................................... 17
1. The Unconsolidated Washington Federal District Court Case ................................... 18
2. The Washington Superior Court and Federal Bankruptcy Court Cases ..................... 19
3. The Consolidated Washington Federal District Court Case ....................................... 20
4. The Civil Case in Hong Kong .................................................................................... 21
B. Criminal Litigation in Washington State ....................................................................... 22
C. Litigation in this Forum ................................................................................................. 23

STANDARD OF REVIEW ........................................................................................................ 25

I. Federal Rule 12(b)(1) ....................................................................................................... 25

II. Federal Rule 12(b)(2) ................................................................................................... 26

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III. Federal Rule 12(b)(6) ................................................................................................... 27

ANALYSIS .................................................................................................................................. 28

I. Motions Raising Discovery-Related Issues .................................................................... 29

A. SSG Defendants' Objections to Plaintiffs' Supplemental Discovery ............................. 29
1. Timeliness ................................................................................................................... 30
2. Personal Knowledge ................................................................................................... 30
3. Inconsistency with the Complaint .............................................................................. 31
4. Improper Legal Argument .......................................................................................... 32
B. Jayaraman's Deemed Admissions .................................................................................. 33
1. Presentation of the Merits ........................................................................................... 34
2. Prejudice ..................................................................................................................... 35

II. Subject Matter Jurisdiction ........................................................................................ 36

A. Diversity Jurisdiction ..................................................................................................... 38
B. Federal Question Jurisdiction ........................................................................................ 39
1. Overview of Plaintiffs' RICO Claim .......................................................................... 40
2. Element 1: Existence of a RICO Enterprise Under Rule 12(b)(6) ............................. 41
i. The Boyle Test ......................................................................................................... 42
ii. The Turkette Test ..................................................................................................... 44
3. Element 3: Conduct of a RICO Enterprise Under Rule 12(b)(6) ............................... 46
4. Element 4: Predicate Offenses "Sounding in Fraud" Under Rule 9(b) ...................... 47

III. Personal Jurisdiction .................................................................................................... 53

A. Personal Jurisdiction Under Pennsylvania's Long-Arm Statute ................................... 54
1. Waiver ........................................................................................................................ 55
2. General Jurisdiction .................................................................................................... 57
3. Specific Jurisdiction ................................................................................................... 58
i. The Traditional Minimum Contacts Test ................................................................ 59
a. The Contacts Prong .............................................................................................
...

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