Randall v. Offplan Millionaire AG
| Decision Date | 21 April 2020 |
| Docket Number | Case No: 6:17-cv-2103-Orl-31EJK |
| Parties | NICHOLAS J. RANDALL and FAN FENG, Plaintiffs, v. OFFPLAN MILLIONAIRE AG, CAPINVEST LLC, and CARL DHIR, Defendants. |
| Court | U.S. District Court — Middle District of Florida |
This cause comes before the Court on Plaintiffs' Motions for Default Judgment ("the Motions"). (Docs. 110, 111, 112.) Plaintiffs seek entry of default judgment against Defendants Offplan Millionaire AG, Capinvest LLC, and Carl Dhir after they failed to respond to the Complaint. After reviewing the Motions and the Declarations of Plaintiff Randall (Docs. 110-1, 111-1, 112-1) submitted in support of same, I respectfully recommend that the Motions be granted in part and denied in part as to Offplan Millionaire AG and Capinvest LLC, and denied as to Carl Dhir.
On April 4, 2018, Plaintiffs, Nicholas J. Randall and Fan Feng, filed an Amended Complaint1 ("Complaint") against eight Defendants for racketeering. (Doc. 17.) Plaintiffs alleged that the Defendants conspired to participate in an enterprise for the common purpose of engaging in racketeering activity, specifically wire and mail fraud, in the conveyance and maintenance ofreal property located in the United States, with the majority of the properties located in Orange County, Florida. (Id., ¶¶ 243-311.) Specifically, the Amended Complaint alleged four claims: (1) violation of the Racketeer Influenced Corrupt Organizations Act, 18 U.S.C. §§ 1961-1968 ("RICO") (Count I); (2) violation of the Florida RICO Act, Fla. Stat. § 895.03(2)-(3) (Count II); (3) conspiracy to commit violations of the RICO Act, 18 U.S.C. § 1962(d) (Count III); and (4) conspiracy to commit violations of the Florida RICO Act, Fla. Stat. § 895.03(4) (Count IV). (Doc. 17.)
Six of the defendants subsequently defaulted, and one was never served. Joachim Oliver Nedela, a German citizen residing in Switzerland, was the only Defendant to appear in the action, but the Court dismissed him for lack of personal jurisdiction. (Doc. 100.) Thereafter, Plaintiffs voluntarily dismissed Lucretia Doran (Doc. 106), Daniel J. Doran (Doc. 107), Crescent Real Estate Management, Inc. (Doc. 108), and Stephen Jordan-Quayle a/k/a Stephen Jordan (Doc. 109) from the case without prejudice. Plaintiffs filed the present Motions for default judgment against the only remaining Defendants: Offplan Millionaire AG d/b/a Prime Asset Investments Ltd. ("Prime Asset") (Doc. 110), Capinvest LLC ("Capinvest") (Doc. 111), and Carl Dhir a/k/a Carl Dear ("Dhir") (Doc. 112). The Motions are each accompanied by the supporting Declaration of Plaintiff Randall (Docs. 110-1, 111-1, 112-1.) No responses have been filed and the time to do so has expired.
Plaintiff Randall is a businessman residing in the United Kingdom. (Doc. 17, ¶¶ 6, 25.) Randall's business is in purchasing, restoring, and selling distressed residential properties in the United Kingdom and Asia. (Id. ¶ 25.) Plaintiff Feng resides in China and was Randall's colleague, agent, and designee in connection with the real estate and management transactions at issue. (Id. ¶7.) Defendant, Prime Asset, is a Swiss corporation that represented itself to Randall as a business that advised and assisted individuals with real estate investing. (Id. ¶¶ 8, 9). Prime Asset stated it had two U.S. offices, one in Orlando and one in Chicago. (Id. ¶ 10.) Capinvest shared the same address as Prime Asset's "USA Midwest Office," and the managing member of Capinvest was Prime Asset. (Id.) Carl Dhir, a resident of Spain, was an "investment strategist" for Prime Asset and worked at its headquarters in Switzerland. (Id. ¶ 14.) At issue here are 56 properties Randall purchased through Prime Asset and/or Capinvest (the "Subject Properties"). (Id. ¶ 20.)
Beginning in November or December 2012, Randall began seeking to invest in foreclosed and distressed U.S. realty. (Id. ¶ 27, 28.) Lacking expertise in U.S. customs and procedures with property, Randall sought out an agent to help him acquire the properties. (Id.) Randall learned of Prime Asset through an internet advertisement. (Id.) Prime Asset touted itself as an experienced property sourcing company for multinational investors like Randall. (Id. ¶¶ 29, 30.) After a period of due diligence, Randall filled out a contact form on Prime Asset's website. (Id. ¶ 33, 34.) Within a few days, Stephen Jordan-Quayle a/k/a Stephen Jordan ("Jordan"), who worked for Prime Asset, had a conversation with Randall about the services Prime Asset could provide. (Id. ¶ 35.)
Thereafter, Jordan and Randall entered into a sourcing agent relationship where Prime Asset would source U.S. properties, for a fee, and would then use Capinvest to bid on the properties. (Id. ¶ 36.) Randall decided to move forward on a single transaction to evaluate Prime Asset's services. (Id. ¶ 37.) On January 13, 2013, either Jordan or another Prime Asset employee, Elena Vachova, sent Randall a "Sourcing Agreement" and an invoice for an initial "Advance Source Fee" for Randall's first property, which Randall executed and paid by wire transfer to Prime Asset's bank account in Switzerland. (Id. ¶ 42.)
According to Plaintiffs, the fraud began immediately. In April 2013, Prime Asset recommended a single-family home for purchase in Detroit, Michigan, that was on the market for $62,000. (Id. ¶ 44.) Randall paid this amount in full by wire to Prime Asset's Swiss bank account. (Id. ¶ 44.) Subsequently, Dhir advised Randall regarding deeding of the property, and ultimately, Randall instructed Prime Asset to transfer title of the property to Feng. (Id. ¶ 47.) Unbeknownst to Plaintiffs, Capinvest had previously purchased the subject property for only $33,000 on April 2, 2013, and did not record the deed publicly until May 21, 2013, after Randall had purchased the property for $62,000. (Id. ¶ 50.) This repeated pattern of selling Randall properties Capinvest already owned continued over the course of several years with numerous properties. Prime Asset and Capinvest also failed to properly transfer title to Randall or Feng for 47 of the Subject Properties. (Id. ¶ 77.)
Moreover, sometime prior to Randall's first property purchase, Jordan advised Randall not to hire an independent attorney because it would be a waste of money to hire someone to review purchases of foreclosed property, a process that Jordan represented as having a standard procedure. (Id. ¶¶ 61-62.) In April 2013, Jordan introduced Randall to Dan Doran, a "specialized real estate attorney" who had worked with Prime Asset on a number of occasions. (Id. ¶ 62.) However, Dan Doran failed to mention to Randall that he was disbarred in New York in 2001 for tax fraud and was not licensed to practice law in any jurisdiction. (Id. ¶¶ 64, 65.) Without knowing this, Randall agreed to hire Dan Doran to handle the legal aspects of all his transactions with Prime Asset. (Id. ¶¶ 69.)
Randall also engaged Dan Doran's wife, Lucretia Doran, to manage his properties pursuant to a Management Agreement. (Id. ¶¶ 78-86.) However, Jordan, Dan Doran, Lucretia Doran, and Crescent Real Estate Management, Inc. ("Crescent") repeatedly misled Randall about Crescent'slack of compliance with its obligations under the Management Agreement in an attempt to cover up its breaches while continuing to get more fees and to divert more of Randall's funds to themselves. (Id. ¶ 87.) For example, Dan Doran would tell Randall that Crescent needed money for refurbishment expenses, homeowners' association dues, and property taxes for the Subject Properties. (Id. ¶ 88.) Randall would then wire money to Crescent to take care of these expenses, but Crescent made no such payments. (Id. ¶ 89.) Crescent also maintained an Income Account for deposits for the Subject Properties, such as rental income. (Id. ¶ 90.) However, despite reporting that Randall's Income Account had a positive balance, Crescent never turned over any money to Randall or Feng.
In October 2013, the fraud moved to Florida. (Id. ¶ 131.) Jordan and Dan Doran told Randall about a multi-unit condominium development called Blossom Park, located in Orlando, Florida. (Id.) While Jordan and Dan Doran represented Blossom Park to be a high-yield investment, they failed to disclose to Randall that the property was a haven for drug use, guns, prostitution, and crime. (Id. ¶¶ 132-134.) Dan Doran recommended two units to Randall at the purchase price of $40,000 each. (Id. ¶¶ 138, 141.) Randall agreed to purchase the two units, directing Prime Asset to arrange for Capinvest to buy the properties. (Id. ¶¶ 139, 141.)
Unbeknownst to Randall, Capinvest had previously purchased the two units for $18,000 and $16,000. (Id. ¶¶ 140, 141.) Based on Jordan's and Dan Doran's recommendations, Randall went on to purchase another 27 properties at the Blossom Park condominium through December 2014. (Id. ¶¶ 144, 156.) However, none of the units were ever publicly conveyed to Randall or Feng; to date, Capinvest remains the owner of public record for those units. (Id. ¶ 160.)
Jordan made additional misrepresentations to Randall regarding another batch of condominiums, Magnolia Court, also located in Orlando. Based on these representations, Randalldirected Prime Asset to purchase six units. (Id. ¶¶169-171.) Once again, Defendants engaged in misrepresentations of price, property condition, payment of taxes, and rental incomes produced. (Id. ¶ 177.)
Near the end of 2014, Randall became concerned that Crescent was not providing him complete and accurate information regarding the management of his properties. (Id. ¶ 181.) To that end, Randall and Feng went to Orlando to tour Randall's properties. (Id. ¶ 184.) After touring Blossom Park, it was obvious the units were in poor condition and unoccupied. (Id. ¶¶ 186, 188.) In March 2015, Randall decided he would not make any more investments with Prime...
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