Omnipol, A.S. v. Worrell

• Decision Date: 16 October 2019
• Docket Number: Case No. 8:19-cv-794-T-33TGW
• Citation: 421 F.Supp.3d 1321
• Parties: OMNIPOL, A.S. and Elmex Praha, a.S., Plaintiffs, v. Christopher WORRELL, James Brech, Bryan Siedel, Amy Strother, and Kirk Bristol, Defendants.
• Court: U.S. District Court — Middle District of Florida

421 F.Supp.3d 1321

OMNIPOL, A.S. and Elmex Praha, a.S., Plaintiffs,

v.Christopher WORRELL, James Brech, Bryan Siedel, Amy Strother, and Kirk Bristol, Defendants.

Case No. 8:19-cv-794-T-33TGW

United States District Court, M.D. Florida, Tampa Division.

Signed October 16, 2019

Filed October 17, 2019

Maria-Vittoria Carminati, NDH, LLC, Denver, CO, Mario B. Williams, Dallas S. LePierre, NDH LLC, Atlanta, GA, for Plaintiff.

Brian K. Calciano, Brian Calciano P.A., St Petersburg, FL, Christopher John Emden, US Attorney's Office-FLM, Tampa, FL, for Defendants.

ORDER

VIRGINIA M. HERNANDEZ COVINGTON, UNITED STATES DISTRICT JUDGE

This cause comes before the Court pursuant to the Motions to Dismiss the Amended Complaint filed by Defendants Christopher Worrell, James Brech, and the United States on behalf of Defendants Bryan Siedel, Amy Strother, and Kirk Bristol, filed on August 9, 2019, August 23, 2019, and August 30, 2019, respectively. (Doc. ## 76, 86, 91). Plaintiffs Omnipol, a.S. and Elmex Praha, a.S. filed responses in opposition to all of the Motions, and the United States filed a reply. (Doc. ## 87, 95, 98, 102). For the reasons explained below, all of the Motions are granted and Plaintiffs' Amended Complaint is dismissed without leave to amend.

I. Background

On April 3, 2019, Plaintiffs filed their original Complaint against these Defendants and four others: Multinational Defense Services, LCC, Angelo Saitta, Lisa Saitta, and Robert Para, alleging a fraudulent scheme between the officers and employees of Purple Shovel, LLC, and civilian contracting employees at the U.S. Special Operations Command (SOCOM). (Doc. # 1). In their original Complaint, Plaintiffs brought claims for fraud, civil theft, unjust enrichment, state and federal racketeering violations, and attorneys' fees. (Id. ). Worrell, Multinational Defense, Angelo Saitta, and Lisa Saitta moved to dismiss the original Complaint. (Doc. ## 9, 12, 36).

On July 12, 2019, the Court held a hearing on the pending motions to dismiss. (Doc. # 62). The Court denied the motions to the extent they argued that the original Complaint was a shotgun pleading or failed to name an indispensable party, but it granted the motions on the basis that the original Complaint failed to comply with Federal Rule of Civil Procedure 9(b) and failed to state a claim under Federal Rule of Civil Procedure 12(b)(6). (Doc. # 59).

At the hearing, the Court explained that the allegations in the original Complaint failed to state a claim for fraud against the moving Defendants because the original Complaint failed to meet Rule 9(b)'s heightened pleading standard. (Doc. # 79 at 19). The Court further found the Plaintiffs' civil theft allegations to be "speculative" and conclusory." (Id. at 21, 33). As to the unjust enrichment claim against Worrell, the Court explained that the claim "lacks sufficient detail" because it failed to describe certain key dates. (Id. at 46-47). The state and federal racketeering claims were not sufficiently pled because "the Complaint is not specific enough regarding Worrell's involvement in the scheme. [The racketeering counts] lump Christopher Worrell with Benjamin Worrell, Para, and Brech. It's too difficult to determine what Mr. Worrell actually did based on the facts alleged, and not enough specificity is provided regarding the time, place, and manner of the allegedly fraudulent scheme." (Id. at 47-48). As to the racketeering conspiracy claim, the Court found that "there is nothing in the Complaint that establishes a single conversation between the Worrells, Para, Brech, Multinational Defense, and the Saittas." (Id. at 30-31). Finally, the Court dismissed the claim for attorneys' fees because attorneys' fees are typically a remedy and not a stand-alone claim. (Id. at 31-32). The Court did, however, grant Plaintiffs leave to amend. (Doc. # 59).

On July 26, 2019, Plaintiffs filed an Amended Complaint. (Doc. # 70). As in the original Complaint, the Amended Complaint alleges the existence of two interrelated fraudulent schemes. First, Plaintiffs allege a multi-year "fraudulent scheme that targeted and fleeced" SOCOM. (Id. at 2). According to Plaintiffs, Purple Shovel is a company formed by non-party Benjamin Worrell, Christopher Worrell, and Brech that was licensed to engage in international arms transactions and was the "vehicle" for the fraud. (Id. at 2, 8, ¶¶ 5-6, ¶ 21). Purple Shovel has since filed for bankruptcy and is not a party to this action. (Doc. # 7).

Plaintiffs allege that Siedel, Strother, and Bristol, as civilian contracting officers at SOCOM, issued contracts to Purple Shovel to deliver arms and ammunition to SOCOM. (Doc. # 70 at 2, ¶¶ 12-14, ¶¶ 28-30). The supplies provided by Purple Shovel were allegedly "defective" and had "little to no value," but Siedel, Strother, and Bristol nonetheless helped them pass SOCOM inspection in exchange for alleged kickbacks. (Id. at 2, ¶¶ 31-38).

Second, Plaintiffs allege that Purple Shovel became ineligible to receive further SOCOM contracts. (Id. at 2-3, ¶¶ 39-46). So Defendants began bringing unwitting subcontractors, such as Omnipol and Elmex, into the scheme because these subcontractors were capable of delivering supplies that met SOCOM's quality standards. (Id. at 3, ¶¶ 47-50). As part of this scheme, Plaintiffs allege that, on June 7, 2016, Siedel, Strother, and Bristol issued a "partial SOCOM contract" to Purple Shovel for 7,500 AK-47 assault rifles. (Id. at ¶¶ 51-53). Pursuant to that contract (the "SOCOM Contract"), SOCOM would pay Purple Shovel $2,984,250. (Id. ).

On May 3, 2017, "Benjamin Worrell, as CEO of Purple Shovel, notified [Elmex] by email that they were hired as the subcontractor" on the SOCOM Contract, and Elmex then selected Omnipol as the supplier on the contract. (Id. at ¶¶ 54-55). Both Elmex and Omnipol are companies registered in the Czech Republic. (Id. at ¶¶ 10-11).

On June 26, 2017, Benjamin Worrell sent Plaintiffs a Cooperation Agreement between Plaintiffs and Purple Shovel "memorializing their agreement under the awarded subcontract." (Id. at ¶ 56). The Cooperation Agreement provided that Purple Shovel would pay Elmex via wire transfer within 10 days of Purple Shovel receiving payment from SOCOM. (Id. at ¶ 61). According to Plaintiffs, Benjamin Worrell signed the Cooperation Agreement on behalf of Purple Shovel. (Id. ).

On July 20, 2017, SOCOM accepted delivery of the weapons. (Id. at ¶ 57). On July 27, 2017, Elmex invoiced Purple Shovel for the total amount due under the Cooperation Agreement, $2,984,250. (Id. at ¶ 58). Plaintiffs allege that Benjamin Worrell, as CEO of Purple Shovel, "agreed by mail, email, and telephone to pay Plaintiffs the $2,984,250 provided to Purple Shovel from SOCOM," and that Benjamin Worrell also provided to Plaintiffs an "End Use Certificate from SOCOM, verifying that this subcontract was pursuant to a SOCOM contract and that payment would be made by SOCOM." (Id. at ¶¶ 59-60). According to Plaintiffs, "[o]nce SOCOM paid Purple Shovel for the weapons, Defendants diverted the subcontract proceeds to an unnamed co-conspirator," who then disbursed the funds among all Defendants.¹ (Id. at ¶¶ 62, 72, 77-79, 93(e)).

Based on these allegations, Plaintiffs bring claims for fraud (Count I), civil theft (Count II), unjust enrichment (Count III), state racketeering violations (Count IV), violations of the federal Racketeer Influenced and Corrupt Organizations Act (RICO) (Count V), RICO conspiracy (Count VI), and attorneys' fees (Count VII).² (Id. at 17-29).

On August 30, 2019, the United States filed three Notices of Substitution, stating that the United States was to be substituted for Defendants Siedel, Strother, and Bristol pursuant to the Westfall Act, 28 U.S.C. § 2679, on Counts I through IV and VII. (Doc. ## 88-90). The United States attached to each Notice a certification from the United States Attorney for the Middle District of Florida stating that Siedel, Strother, and Bristol were acting within the course and scope of their federal employment at the time of the alleged incidents giving rise to the Amended Complaint. (Doc. ## 88-1, 89-1, 90-1).

Christopher Worrell and Brech (the Purple Shovel Defendants) each filed a Motion to Dismiss the Amended Complaint or, In the Alternative, For More Definite Statement, to which Plaintiffs responded. (Doc. ## 76, 86, 87, 95). The United States, on behalf of Siedel, Strother, and Bristol (the Federal Defendants) filed one consolidated Motion to Dismiss the Amended Complaint. (Doc. # 91). Plaintiffs responded, and the United States replied. (Doc. ## 98, 102). The Motions are now ripe for review.

II. Legal Standard

For allegations of fraud, a plaintiff must "state with particularity the circumstances constituting fraud[.]" Fed. R. Civ. P. 9(b). "The particularity rule serves an important purpose in fraud actions by alerting defendants to the precise misconduct with which they are charged and protecting defendants against spurious charges of immoral and fraudulent behavior." United States ex rel. Atkins v. McInteer, 470 F.3d 1350, 1359 (11th Cir. 2006) (internal quotation marks omitted).

Under Rule 9(b), plaintiffs must allege (1) precisely what statements were made in what documents or what oral misrepresentations were made; (2) the time, place, and person responsible for the statement; (3) the content of such statements and the manner in which these statements misled the plaintiff; and (4) what the defendants gained by the alleged fraud. Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1371, 1380–81 (11th Cir. 1997). In other words, to satisfy Rule 9(b), a plaintiff must establish the who, what, when, where, and how of the fraud. Mizarro v. Home Depot, Inc., 544 F.3d 1230, 1237 (11th Cir. 2008). In cases involving multiple defendants, a complaint alleging fraud must "reasonably notify the defendants of their purported role in the scheme" and "inform each defendant of the nature of his alleged participation in the...