WILSHIRE PALISADES LAW GROUP, P.C. - Class actionsecurities.stanford.edu/filings-documents/1048/PEHCL00... · 2011. 12. 13. · WILSHIRE PALISADES LAW GROUP, P.C. David I Lefkowi%`

WILSHIRE PALISADES LAW GROUP, P.C. David I Lefkowi%`

NBN 127457)

Stephen D Holz 83647) 1 t7 ("knann A yarn Ia Q ,1 t-a A IJJ I /.Ui1 JUIL.- fl CZ Santa Monica CA 90401-1009 Telephone (310) 393-4929 Facsimile (310) 393-5438 Email dl@wplawgroup corn Attorneys for All Plaintiffs

UNITED STATES DISTRICT COU*T [ D R 0 1 (SI LI] LS9t I I i) 1I V.

Case Zl1 1-cv-10284-JFW-PJW Document I Filed 12/13/11 Page 1 of 29 Page ID #:19

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DOUGLAS B. NUROCK; FRANCESCA STONE, MICHAEL K MOEZZI, individually and as Trustee of the MICHAEL K MOEZZI FAMILY TRUST UA 4/16/2003, and NAZANIN MOEZZI, individually and on behalf of all others similarly-situated,

Plaintiffs,

VS.

PELICAN EYES HOLDING COMPANY LLC, a California limited liabifity company; PELICAN RESCUE, LLC, a California limited liability company, ADMINISTRADORA DE HOTELTES DE SAN JUAN DEL SUR, S A INVERSIONES INMOBILIARA DE I SAN JUAN DEL SUR SOCIEDAD ) ANONIMA INVERSIONES TOGO SOCIEDADANO\IMA JAMES K ) HANKLA an indiiduaI MICHAEL ) J. EMLING, an individual; and DOES ,) 1-10.

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Defendants )

Case No.

VIOLATION OF §10(b) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE lOB-S VIOLATION OF SECTION 20(A) OF THE SECURITIES AND EXCHANGE ACT OF 1934 VIOLATION OF §12(a)(2) OF THE SECURITIES ACT OF 1933 VIOLATION OF *25401 OF THE CALIFORNIA CORPORATIONS CODE VIOLATION OF 1,25504.1 OF THE CORPORAIONS CODE DECEIT (Intentional Misrresentation) DECEIT (Concealment) BREACH OF FIDUCIARY DUTY CONSTRUCTIVE FRAUD BREACH OF CONTRACT

CLASS ACTION

I)emand for Jury Trial

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Case :11-cv-10284-JFW-PJW Document I Filed 12/13/11 Page 2 of 29 Page ID #:20

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Plaintiffs allege:

In V

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1. This action arises under 18 U.S.C. §§ 1961, 1962 and 1964. This Court

4 has original jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1337.

2. This Court has supplemental jurisdiction over Plaintiffs' state law claims

6 I under 28 U.S.C. § 1367(a).

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3. Venue is proper in this Court under 18 U.S.C. § 1965 and 28 U.S.C. §

8 1391 because at least one defendant resides, is found, has an agent, or transacts his

9 affairs in the Central District of California. Further, a substantial part of the events

10 or omissions giving rise to the claims pleaded in this Complaint occurred in the

11 Central District of California and at least one defendant may be found in this District.

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EWiIl

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Plaintiffs

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4. Plaintiffs Douglas B. Nurock and Francesca Stone both live in South

15 Lake Tahoe, California. in October 2005, the Nurock Plaintiffs purchased a residence

16 for $269,000 from Pelican Eyes Piedras y Olas Sociedad Anonima ("PEPO"). The

17 residence was called Casa Fantasia, and it is located in Pelican Eyes Resort

18 ("Resort").

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5. Plaintiffs Michael K. Moezzi, individually and as Trustee of the Michael

20 K. Moezzi Family Trust UA 4/16/2003, and Nazanin Moezzi both live in Gainesville,

21 Florida. In early 2006, the Moezzi Plaintiffs purchased a residence for $379,000 from

PEPO. The residence was called Casa Florida, and it is also located in Pelican Eyes

23 It(S]1IáD]I

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Defendants

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6. Defendant Pelican Eyes Holding Company, LLC ("PEHC") is a

26 California limited liability company that has its headquarters in Long Beach,

27 Caliibrnia. PEHC controls the Resort.

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7. U)eieiidaiit lelian Rccuc. I I (' lR(') i i (* if' rnia limited liihilitv

Case 111-cv-10284-JFW-PJW Document I Filed 12/13/11 Page 3 of 29 Page ID #:21

1 company that has its headquarters in Long Beach, California. PRG is the Managing

2 member of PEHC, owning approximately 40% of PEHC. PRG and PEHC are

3 IJ hereinafter collectively referred to as the "Pelican Eyes Companies."

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8. Defendant Administradora de Hoteles de San Juan del Sur, S.A.

5 JtJ:JE company Iformed E IflaNicaragua.

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9. Defendant Inversiones Inmobiliara de San Juan del Sur Sociedad

7 Anonima ("ITS") is a company formed under the laws of Nicaragua.

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10. Defendant Inversiones Togo Sociedad Anonima ("Togo") is a company

9 formed under the laws of Nicaragua.

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11. PEHC, the California limited liability company, owns all of the shares

11 of ADH, uS and Togo. PEHC thus controls those entities.

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12. Defendant James K. Hankla ("Hankla") is the President and Manager of

13 PEHC. Hankla is also one of two Managing Partners of PRG.

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13. Defendant Michael J. Emling ("Emling") is an active member of the

15 State Bar of California. Emling is a Manager of PEHC and is the other Managing

16 member of PRG.

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14. The operation that is the subject of this Complaint involves many

18 participants, but it was controlled by Hankla, with the substantial aid of a cadre of

19 insiders including, among others, Emling (collectively, the "Insiders").

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15. Plaintiffs are unaware of the true names and capacities of the Defendants

21 named herein as DOES 1 through 10, inclusive. Plaintiffs are informed and believe

22 and, upon that basis, allege that each of the Defendants designated as DOES 1

23 through 10 is responsible in some manner for the acts, transactions and occurrences

24 referred to in this Complaint, and that the damages alleged by Plaintiffs in this

25 Complaint were directly and proximately caused by said Defendants conduct.

26 Plaintiffs will ask leave of Court to amend this Complaint to show the true names and

27 capacities of the Defendants designated as DOES 1 through 10 in this Complaint

hen the hu c heen accrtained,


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I'i ( 1 (Ilifi J I

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16. Plaintiffs are informed and believe and, upon that basis, allege that at all

3 relevant times, each of the Defendants was an agent, servant, or employee of one or

4 more of the remaining Defendants, was at all times herein mentioned acting within

5 the course and scope of such actual, apparent or ostensible agency or employment and

6 was acting with the permission, knowledge, consent and/or ratification of the other

7 Defendants.

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9 relevant times, each of the Defendants herein knew of the breaches of duties owed to

10 Plaintiffs that are described in this Complaint, and gave the other Defendants herein,

11 and each of them, substantial assistance or encouragement to engage in the conduct

12 constituting such breaches of duty. Alternatively, Plaintiffs are informed and believe

13 and, upon that basis, allege that at all relevant times, each of the Defendants herein

14 gave substantial assistance to the other Defendants herein in violating the duties they

15 owed to Plaintiffs, and in so doing, also violated their own duties to Plaintiffs.

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17 relevant times, each of the Defendants herein was aware that each of the other

18 Defendants, including the DOE Defendants, planned to engage in the wrongful

19 conduct alleged herein and that each of the Defendants herein agreed with the other

20 Defendants to engage in that conduct and intended that the wrongful conduct alleged

21 herein occur.

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IliJ1DD]kIILEIAIiUMi

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19. Plaintiffs seek to recover the damages they sustained as a result of a

24 fraudulent scheme the Defendants conducted. As a result that scheme. Plaintiffs lost

25 real estate worth md lions of dollars, all of which wound up in the hands of Defendant

26 PEHC. Moreover, in the course of the scheme. Plaintiffs were solicited to (and did)

27 invest in securities offerings by PEHC that sought to raise funds to "rescue" the resort

roil) its l'iriancial prohlcriis


1

20. More specifically, PEPO sold a residence called Casa Fantasia to the

2 Nurock Plaintiffs in approximately October 2005. The residence was located in the

3 Resort. A Purchase and Sale Agreement binding under the law of Nicaragua was

4 executed, but that Agreement was never recorded, nor was a deed issued to the

5 Nurock Plaintiffs. Instead, title to the property remained in the hands of PEPO.

6 However, the Nurock Plaintiffs were assured that a deed was shortly forthcoming and

7 would be issued when the process of registering the Resort as a condominium

8 development under Nicaraguan law was completed. The Nurock Plaintiffs took

9 possession of Casa Fantasia and used and enjoyed the residence for several years after

10 they purchased it.

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21. PEPO sold the Moezzi Plaintiffs a residence called Casa Florida in early

12 2006. The residence was located in the Resort. A Purchase and Sale Agreement

13 binding under the law of Nicaragua was executed, but that Agreement was never

14 recorded, nor was a deed issued to the Moezzi Plaintiffs. Instead, title to the property

15 remained in the hands of PEPO. However, the Moezzi Plaintiffs were assured that a

16 deed was shortly forthcoming and would be issued when the process of registering

17 the Resort as a condominium development under Nicaraguan law was completed. The

18 Moezzi Plaintiffs took possession of Casa Florida in late 2007 and used and enjoyed

19 the residence for several years after they purchased it.

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22. The Resort experienced increasing financial difficulties, and PRG's

21 Hankla and Emling were contacted by the Resort's founder Robert Alan "Chris"

22 Berry ("Chris Berry") to seek their assistance in resolving the Resort's financial

23 problems. Hankla and Erni iiig became involved with the Resort in approximately July

24 2009. and about a month later, they and others formed PRG.

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23. The Deft ndants became aware of the fact that deeds to the residences

26 that had been purchased by Plaintiffs had not been recorded or registered, and

27 concocted a schenie to obtain the real estate owned by Plaintiffs and others. The heart

()t the '(.11efne to niake t ecuntles *ttcrin.i to potential n etor. including


1 Plaintiffs, which: (i) acknowledged that Plaintiffs owned their properties, and (ii)

2 reassured them that PRO and PEHC intended to operate the resort and take the

3 necessary steps to obtain and convey marketable title to Plaintiffs' residence to them

4 (since they had already paid for it). In actuality, Defendants, while they were

5 soliciting and selling the securities with these false representations, secretly (from

6 Plaintiffs and the class) planned and conspired to and proceeded to obtain ownership

7 and control of all of the real estate in the Resort, including Plaintiffs' residences and

8 those of other similarly situated persons.

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24. The scheme the Defendants perpetrated to achieve their objective was

10 to claim to have a promissory note ("Note") that nobody has ever seen for a $195,000

11 debt supposedly owed by PEPO to a corporation the Defendants had caused to be

12 formed after they started to "rescue" the Resort. When PEPO defaulted on the

13 supposed Note, Defendants instigated a lawsuit in Nicaragua against PEPO. In the

14 lawsuit, one attorney represented the plaintiff corporation recently formed by the

15 Defendants (the "Plaintiff Corporation"), and another attorney from the same law

16 office represented PEPO - i.e., the party on the other side of the lawsuit! Both

17 attorneys were paid by the same person or entity. PEPO's attorney then caused about

18 $15 million worth of real estate to be transferred to the Plaintiff Corporation

19 noteholder in "satisfaction" of its "$195,000 claim." Included in that real estate were

20 the residences which Plaintiffs had purchased, as well as the residences of other

21 similarly-situated persons. The net result is that Plaintiffs paid for the real estate, and

22 now, accordingly to the Defendant "rescuers," Plaintiffs have nothing, while

23 Defendant PEHC owns all of that real estate through various wholly owned

24 subsidiaries.

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GENERAL ALLEGATIONS

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Background

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25. Pelican Eyes Resort as tounded M22003 and is located in San Juan del

Su r. k' raeuLl . It i a lote I jm peit t pr x I mate l\ 27 acie n I he Paci ic Coat

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I of Nicaragua. It includes two restaurants, three swimming pools, sailboat and spa

operations, landscaped common areas, and over 60 residences. The Resort was

3 initially developed in 2003 by Chris Berry as a place to live, and then expanded into

4 a resort as friends and others also wanted homes in the area.

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Plaintiffs Purchase Their Residences

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26. In 2005. the Nurock Plaintiffs decided to purchase a home in the Resort

7 from PEPO for S269,000. The Nicaraguan law firm of Garcia & Bodan ('G&B")

8 represented PEPO, and provided Plaintiffs with a fully executed Purchase and Sale

9 Agreement for the acquisition of a townhouse in the Resort called Casa Fantasia.

10 Plaintiffs paid PEPO $269,000 in a series of installments, and took possession of the

ii residence in October, 2007.

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27. In 2006, the Moezzi Plaintiffs decided to purchase a home in the Resort

13 I from PEPO for $379,000. G&B also represented PEPO in this transaction and

14 provided the Moezzi Plaintiffs with a fully executed Purchase and Sale Agreement

15 for the acquisition of a townhouse in the Resort called Casa Florida. Plaintiffs paid

16 PEPO $379,000 in a series of installments, and took possession of the residence in

17 November, 2007.

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Defendant Corporations Scheme to Defraud Plaintiffs

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28. On or about August 12, 2009, PRO was formed under the laws of the

20 State of California.

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29. On or about August 28, 2009, ADH was formed under the laws of

22 Nicaragua. Defendant Hankla was one of its shareholders. ADH claims to be the

23 owner of many of the residences in the Resort.

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3(.). On or about August 28, 2009, uS was formed under the laws of

25 Nicaragua. uS claims to be the owner of at least one residence in the Resort, and is

26 the entity through which many of the Resort operations are conducted.

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31. On or about September 17, 2009. Togo was formed under the laws of

2% Niciracua. 'f claims to he the owner of at least one reidcnce in the Rcrt.

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32. On or about September 2, 2009, Defendants made a claim that the () promissory Note (that nobody has ever seen) existed. The due date on the Note was

3 March 1, 2010. The Note reflected that PEPO purportedly owed ADH $195,000. No

4 such debt was in fact owed, and the Note was a fabrication that was part of a scheme

5 Jj to defraud Plaintiffs of their respective interests in Casa Fantasia and in Casa Florida.

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IN On or about October 15, 2009, Chris Berry, the President of PEPO, left

7 Nicaragua.

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34. On or about November 17, 2009 PEHC was formed under the laws of the

9 II State of California,

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35. Plaintiffs are informed and believe, and on that basis allege, that in or

11 about November 25, 2009, PRG, ADH, which was represented by Gladis Maria

12 I Zapata Parades, and Hankla met to plan how, among other things, they would obtain

13 ownership for PEHC of all of the real estate in the Resort. During the course of that

14 meeting, and as part of their plan to achieve the aforementioned result, they provided

15 a judicial power of attorney to attorney Katia Grisell Tijerino Umana ("Umana").

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36. On or about December 8, 2009, the Pelican Homeowners LLC ("PH")

17 was formed. That entity was an Ohio limited liability company and was to operate as

18 a voice for the homeowners in the Resort.

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37. On or about December 11, 2009, and at the request of Richard B. Garrett,

20 the Secretary and a Manager of PEHC, the Nurock Plaintiffs sent a check for $500.00

21 ii : to be used for attorneys' fees to investigate what was occurring with the Resort.

22 ' The Nurock Plaintiffs also sent a check for $500.00zn, : same purpose.

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38. On or about December 22, 2009. the first private placement

24 memorandum ("First st PP\l ) was isud by PEHC controlled by Hankla and Emling

25 (among others). Among other things, it stated the following:

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(a) That PEL-IC was working with PEPO Unit owners to implement

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a restructuring plan;

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(b) Fhat the Ee'rt included i\1\ fle pd'. :itel 'ne/ i'ideii1ial

[S.][,J

Case i1 1-cv-10284-JFW-PJW Document I Filed 12/13/11 Page 9 of 29 Page ID #:27

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Units;

(c) That PEHC anticipated acquiring, all of PEPO's assets through a

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structured transaction by January 20 10; and

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(d) That Unit owners will be would be required to participate in a ten

year rental plan and in exchange for their participation, Unit

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owners would receive a deed to their individual Units. (Emphasis

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added to all).

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39. On or about January 19, 2010, and under and pursuant to the First PPM,

9 the Nurock Plaintiffs sent a check for $20,000 to purchase 20 units of PEHC, and

10 thereafter completed the purchase of those units.

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40. On or about January 22, 2010, Defendant Hankla, acting on behalf of at

12 least PRO and PEHC, sent an email to residence owners, including Plaintiffs, in

13 which he stated, among other things, that:

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(a) "At the end of the day, one of two things is going to happen. You

15 are going to get a home with a deed, or you are going to get your

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money back. If I had to bet, I would bet that you are going to get

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a home with a deed." The email was signed "J. Kirk Hankla,

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Managing Member, Pelican Rescue Group."

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(b) 1 think it is time to put a drop dead date on homeowner

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participation because it is the right thing to do for those who have

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invested and to whom [now owe a fiduciary duty."

4 1. On about January 5, 20 10, and under and pursuant to the First PPM. the

23 Moezzi Plaintiffs purchased 50 units in PEHC for $50,000.

42. On or about March 22. 2010, Umana, acting as the judicial representative

25 of ADH, filed an action in Nicaragua in which ADH alleged that PEPO had defaulted

on the supposed prow i ssory Note. and sought to recover the sum due under that Note.

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43. Chris Ben Was not given notice of the action flied by [.Jmana against

P FF0.

(.)

Case 21 I -cv-1 0284-JFW-PJW Document I Filed 12/13/11 Page 10 of 29 Page ID #:28

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44. Prior to the filing of the action by ADH against PEPO on the Note,

2 PEPO's attorneys, G&B, appointed attorney Roger Perez Aguilar ("Aguilar") to act

3 for PEPO. At the time Aguilar was appointed, he was working in the same law office

4 II as Umana, counsel for Plaintiff ADH.

45. On or about April 9, 2010, Aguilar appeared in the action and

participated in a "Mediation Procedure" for ADH's claim against PEPO. Aguilar

7 announced that PEPO did not have the money to pay off the $195,000 Note, and

8 instead transferred to ADH all of PEPO's remaining real estate assets as well as

9 Plaintiffs' real estate. This transfer was purportedly in satisfaction of the $195,000

10 Note.

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46. The property that Aguilar transferred included millions of dollars worth

12 of real estate, some of which had been bought and paid for by various United States

13 residents, including Plaintiffs and members of the plaintiff classes.

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47. PEHC paid the attorneys for both ADH and PEPO for their participation

15 in this activity.

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48. On or about April 22, 2010, the Nurock Plaintiffs sent a check for

17 $20,000.00 to the Pelican Loan Company ("PLC") to purchase 20 shares of its stock.

18 This check was sent because the operators claimed they desperately needed money to

19 help with the "crushing" legacy debt, in order to provide Plaintiffs with a deed to their

20 property.

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Defendants Disclose That PEHC Owned the Property Which they Had

Represented in the First PPM Was Owned by The Plaintiffs and The Class

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49. On or about February 21, 2011, despite the statements in the First PPM.

24 and in the Development Agreement, Hankla announced at a meeting that all real estate

25 in the Resort was now owned by PEHC. and that no one who had paid money to

26 PEPO to purchase residences in the Resort owned any of those residences.

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50. On or about March 15. 2011, Defendants issued a second private

25 placeuieiit iiie;w randti in ("Second 1 3 p%1"), \ iiu her f'act', PE F l( ' aerted III t hat

EIIJ

Case 2111 -cv-1 0284-JFW-PJW Document I Filed 12/13/11 Page 11 of 29 Page ID #:29

1 PPM the following:

(a) The Resort was acquired by PRG through a combination of foreclosures

and purchases;

(b) The interest of PRG in the Resort had now been transferred to PEHC;

(c) Titles were never granted to putative purchasers of individual units,

except in a few cases;

(d) The classes of PEPO stakeholders, consisting of persons who invested

in units built or un-built, or who loaned money, were left without

recourse;

(e) That as a result of the foregoing, PEHC owned Casa Fantasia and Casa

Florida; and

(d) That if a stakeholder like Plaintiffs here did not subscribe to the offering,

it was likely that the residence of the stakeholder would be sold to a third

party by PEHC.

51. On or about July 15, 2011, one of PEHC 'S attorneys, Fernando Medina

admitted in a newspaper interview that the $195,000 Note was fabricated and was

created as part of a scheme to obtain ownership of the residences in the Resort.

52. On or about July 22, 2011, Hankla also admitted in a email that the Note

was fabricated and that ADH had not lent PEPO $195,000.

CLASS ACTION ALLEGATIONS

53. Plaintiffs bring this action on behalf of a class of all members of the

general public who had purchased real estate located in Phase H of the Resort, and

who thereafter purchased any of the securities offered in the First PPM but before

issuance of the Second PPM.

54. Class action procedures here are superior to other available methods for

the fair and efficient adjudication of this controversy. Since the damages suffered by

each individual class nicinber are relatively small and the controversy involves LW

intcrfhttional coi1piruc\ IJ1C Cxpef1C and burden of indi idual lit iation fiiakc it 1.

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Case 2ç11 -cv-1 0284-JFW-PJW Document I Filed 12/13/11 Page 12 of 29 Page ID #:30

1 II impossible for class members individually to seek redress for the wrongful conduct

alleged. The disposition of each person's claims in a class action will provide

3 substantial benefits to both the parties and the Court. The names and addresses of

4 II class members are readily obtainable from Defendants' files. There is a well-defined

5 community of interest in the questions of law and fact involved in this matter.

6

55. The factual and legal questions common to the class predominate over

7 1 individual factual or legal questions, including, without limitation, whether

8 Defendants engaged in wrongful conduct when they promised in the First PPM that

9 purchasers of residences would receive deeds to their residences and then secretly

10 pursued the acquisition of title to residences in the Resort for their own benefit though

11 I the use of at least one fabricated promissory note.

12

56. Plaintiffs assert claims that are typical of the entire class, and will fairly

13 I and adequately represent and protect the interests of the class in that Plaintiffs have

14 no interest antagonistic to those of the other members of the Class. Class counsel is

15 competent and experienced in the prosecution of class action litigation.

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57. In the prosecution of this action, expenses will be incurred for attorney

17 fees and costs. Such attorney fees and costs are necessary and will inure to the benefit

18 of the members of the class.

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20

I I ISI MI S] 1 tI DI RI DI

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(Violation of Section 10(b) of the Securities and Exchange Act of 1934

22

rrT i rn rtii i•ii

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58. Plaintiffs incorporate by reference the allegations contained in

25 Paragraphs 1 through 57 of this Complaint.

26

59. Defendants participated in a plan, scheme and course of conduct which

27 was intended to and did deceive Plaintiffs, enabled Defendants to sell a fraudulent

in\ct1nent 1 Plaintiffs. and L'UUC(l tlicni W I uznhtieaflt kill(k In tttithcraticc l

Ip


1 this unlawful scheme, plan and course of conduct, Defendants: (a) employed devices,

schemes, and artifices to defraud; (b) made untrue statements of material fact and/or

3 II omitted to state material facts necessary to make the statements not misleading; and

4 11(c) engaged in acts and practices, and a course of business which operated as a fraud

5 and deceit upon the Plaintiffs in the purchase of their investment, in violation of

6 Section 10(b) of the Exchange Act and Rule lOb-S At least some of that conduct is

7 described in Paragraphs 25 to 59 of this Complaint. Defendant PEHC and its wholly

8 owned affiliates ADH, uS, and TOGO are being sued as primary participants in the

9 wrongful and illegal conduct charged herein, and Defendant PRG, as well as the

10 Individuals, are being sued as Control Persons.

11

60. Defendants, individually and in concert, directly and indirectly, by the

12 use of means or instrumentalities of interstate commerce and/or of the mails, engaged

13 and participated in a continuous course of conduct to misrepresent and conceal

14 material facts pertaining to the investment which Plaintiffs purchased from

15 Defendants At least some of that conduct is described in Paragraphs 25 to 59 of this

16 Complaint.

17

61. The Defendants employed devices, schemes and artifices to defraud, and

18 engaged in acts practices and a course of conduct as alleged herein, in an effort to

19 assure Plaintiffs that, among other things:

20

(a) Plaintiffs' title to their residences in the Resort was assured;

21

(b) Defendants were working to obtain marketable title to Plaintiffs'

2')

residences;

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(c) Defendants would cause marketable title to Plaintiffs' residences

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to be transferred to Plaintiffs;

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(d) That a purchase of the securities offered in the First PPM (the

26

"Investment") would assist in the achievement of Defendants'

27

l.ronhises to transfer marketable title of their residences to

P1,11111111",

13

Case 2J1 1-cv-10284-JFW-PJW Document I Filed 12/13/11 Page 14 of 29 Page ID #:32

1 As a part of their course of conduct, Defendants made, or participated in making of,

untrue statements of material facts and omitting to state material facts necessary in

3 order to make the statements made about the Investment in the light of the

4 circumstances under which they were made, not misleading, as set forth more

5 particularly above, and engaged in transactions, practices and a course of business

6 which operated as a fraud and deceit upon Plaintiffs.

7

62. The Defendants had actual knowledge of the misrepresentations and

8 omissions of material facts set forth herein, or acted with deliberate disregard for the

9 truth, in that it failed to ascertain and to disclose such facts. Defendants' material

10 misrepresentations and/or omissions were done knowingly or deliberately and for the

11 purpose and effect of concealing the truth about their scheme to obtain legal title to

12 Plaintiffs' residences and the Investment from Plaintiffs. If Defendants did not have

13 actual knowledge of the misrepresentations and omissions alleged, they were

14 deliberate in failing to obtain such knowledge, by deliberately refraining from taking

15 those steps necessary to discover whether those statements were false or misleading.

16

63. In reliance on the false and misleading statements made by Defendants,

17 Plaintiffs purchased the Investment.

18

64. At the time of the misrepresentations and omissions, Plaintiffs were

19 ignorant of their falsity and believed them to be true. Had Plaintiffs known the truth

20 regarding the nature of Defendants scheme and the Investment, which was not

21 disclosed to them, they would not have purchased the Investment. 11 11

23 Exchange Act, and Rule lOb-S promulgated thereunder.

24

66. As a direct and proximate result of Defendant's wrongful conduct,

25 Plaintiffs suffered damages in connection with their purchase of the Investment.

26

27

IrJ


1

i EI)P TsJ w k I I] 1

(Violation of Section 20(a) of the Securities and Exchange Act of 1934

3 On Behalf of The Plaintiff Class Against PRG And The Insider Defendants)

4


5 Paragraphs 1 through 66 of this Complaint

6

68. The Securities Exchange Act of 1934 provides that controlling persons

7 are jointly and severally liable with violators under their control, stating:

8

"Every person who, directly or indirectly, controls any person liable

9 under any provision of this chapter or of any rule or regulation

10

thereunder shall also be liable jointly and severally with and to the same

ii extent as such controlled person to any person to whom such controlled

12 person is liable, unless the controlling person acted in good faith and

13

did not directly or indirectly induce the act or acts constituting the

14 violation or cause of action" 15 U S C Sec 78t(a)

69, PRG and the Insiders possessed, directly or indirectly, the actual power

to direct or cause the direction of the management and policies of PEHC. The Insiders

17 have control person liability here because they controlled PEHC and PRG.

18

70. In reliance on the false and misleading statements made by Defendants,

19 Plaintiffs purchased the Investment.

20

71. At the time of the misrepresentations and omissions, Plaintiffs were

21 ignorant of their falsity and believed them to be true. Had Plaintiffs known the truth

22 regarding the nature of Defendants scheme and the Investment, which was not

23 disclosed to them, they would not have purchased the Investment.

24

72 By virtLIC of the foregoing, Defendants have violated Section 20 of the

25 Exchange Act.

26

73. As a direct and proximate result of Defendants wrongful conduct.

27 Plaintiffs suffered damages in connection with their purchase of the investment.

In


1

THIRD CLAIM FOR RELIEF

2

(Violation of Section 12(a)(2) of the Securities Act of 1933

3

On Behalf of The Plaintiff Class Against All Defendants)

4


5 Paragraphs I through 73 of this Complaint.

6

75. Section 12(a)(2) of the 1933 Act provides that:

7

(a) Any person who. offers or sells a security... [by use of interstate

8

commerce or the mails] by . . . means of a prospectus or oral

9

communication, which includes an untrue statement of a material fact or

10

omits to state a material fact necessary in order to make the statements,

11

in the light of the circumstances under which they were made, not

12

misleading (the purchaser not knowing of such untruth or omission), and

13

who shall not sustain the burden of proof that he did not know, and in

14

the exercise of reasonable care could not have known, of such untruth or

15

omission, shall be liable, subject to subsection (b) of this section, to the

16

person purchasing such security from him, who may sue either at law or

17

in equity in any court of competent jurisdiction, to recover the

18

consideration paid for such security with interest thereon, less the

19

amount of any income received thereon, upon the tender of such

20

security, or for damages if he no longer owns the security.

21 15 U.S.C.A. § 771 (West).

76. As alleged above, Defendants offered and sold securities to the Plaintiff

23 Class by means of an offering memorandum which included misrepresentations and

24 OII11SSIOflS of iriaterial facts.

25

77. Defendants' fraudulent cherne. misrepresentations and omissions caused

26 Plaintiffs to invest and to lose their investments and their homes.

27

Case 2g1 I -cv-1 0284-JFW-PJW Document I Filed 12/13/11 Page 17 of 29 Page ID #:35

1

FOURTH CLAIM FOR RELIEF

(Violation of Corporations Code §25401 By The Plaintiff Class

3

Against PEHC)

4



6

79. Section 25501 of the California Corporations Code provides in substance

7 that any person who violates Corporations Code § 25401 shall be liable to the person

8 who purchases a security from him or sells a security to him, who may sue either for

9 rescission or for damages (if the plaintiff or the defendant, as the case may be, no

10 longer owns the security). Section 25401 makes it unlawful "for any person to offer

11 or sell a security" by means of untrue statements or omissions of material facts, where

12 I the seller was aware or was negligent in failing to be aware that its representations

13 were misleading.

14

80. Defendants recommended and sold the Investment to Plaintiffs based

15 upon misrepresentations and omission of material fact, including those alleged above,

16 and particularly in Paragraphs 25-59 of this Complaint, and actively and knowingly

17 participated in the fraudulent scheme alleged above. As such, they violated Section

18 25401. The Defendants made the false and misleading statements without exercising

19 reasonable care to determine the truth or falsity of the statements.

20

81. As a proximate and foreseeable result, Plaintiffs have suffered damages,

21 in an amount to be proven at trial.

23

FIFTH CLAIM FOR RELIEF

24

(Violation of Corporations Code §25504.1 By The Plaintiff Class

25

Against All Defendants Except PRG and PEHC)

26


27 Paragraphs I through 80 of this Complaint.

83 Sect i n 2504. 1 t the ( )rporat iofl s Code pr idc hat an pern h

1. Case 21 I -cv-1 0284-JFW-PJW Document I Filed 12/13/11 Page 18 of 29 Page ID #:36

1 JJ "materially assists" in a violation of section 25401 of that Code, with intent to induce

2 a person to rely on a knowing misrepresentation or omission, is jointly and severally

3 liable with any other person liable for a violation of section 25401 of that Code.

4

84. The Insider Defendants, by the conduct alleged above, materially assisted

5 PEHC in selling the Investment to Plaintiffs by false and misleading statements,

6 including those alleged above, and particularly in Paragraphs 25 to 59 of this

7 Complaint. When they did so, they intended to induce Plaintiffs to rely on

8 representations known to be false or misleading.

9

85. As a proximate and foreseeable result, Plaintiffs have suffered damages,

10 including loss of much of their retirement funds, and other compensatory and

11 I consequential damages, in an amount to be proven at trial.

12

13

SIXTH CLAIM FOR RELIEF

14

(Deceit By Intentional Misrepresentation

15

Against Defendant PEHC By The Plaintiff Class)

16



18

87. Defendant PEHC made the representations of fact set forth above,

19 including in Paragraphs 38 and 40 of this Complaint.

20

84. The representations specified above, including in Paragraphs 38 and 40

21 of this Complaint, were false.

22

85. Defendants, and each of them, knew that the representations set forth

23 above, including in Paragraphs 38 and 40 of this Complaint, were false when they

24 made them.

25

6. Defendants. and each of theni, intended that at least Plaintiffs rely on the

26 representations set forth above, including those identified in Paragraphs 38 and 4() of

27 this Complaint, in considering whether to purchase the Envestnient.

87. Plai iii I f'f in fact. re I icd up n the re tat i ns f Defendant ' that arc


li identified above, including in Paragraphs 38 and 40 of this Complaint, and purchased

the Investment. Plaintiff's reliance upon the representations identified above,

including in Paragraphs 38 and 40 of this Complaint, was reasonable.

88. Plaintiffs were harmed as a direct and proximate result of their reliance

on the false representations set forth above, including those identified in Paragraphs

38 and 40 of this Complaint, and each of such representations because they purchased

the Investment. If Defendants had disclosed that they never intended to provide

legally marketable title to Casa Fantasia or to Casa Florida, Plaintiffs would not have

purchased the Investment.

89. The conduct described herein constitutes "oppression, fraud or malice"

I as those terms are defined in Civil Code §3294, and Plaintiffs are therefore entitled

to punitive damages in an amount according to proof. Plaintiffs are informed and

believe, and based upon such information and belief, allege that:

(a) The conduct described herein constituting oppression, fraud or

malice was committed by one or more officers, directors, or managing agents of

Defendant PEHC who acted on behalf of Defendant PEHC; or

(b) The conduct described herein constituting oppression, fraud or

malice was authorized by one or more officers, directors, or managing agents of

Defendant PEHC; or

(c) One or more officers, directors, or managing agents of Defendant

PEHC knew of the conduct constituting malice, oppression, or fraud and adopted or

approved that conduct after it occurred.

SEVENTH CLAIM FOR RELIEF

(Deceit By Concealment Against Defendants Hankla and PEHC

By The Plaintiff Class)


ParazrapIis I through ) ol thk Complaint.

1

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

23

24

25

26

27

19


1

91. Defendant Hankla was in a fiduciary relationship with Plaintiffs, and so

II admitted in his January 22, 2010 email to them and other homeowners in the Resort,

3

HEM

4

(a) Intentionally failed to disclose important facts to Plaintiffs.

5 Specifically, Defendants failed to disclose their intent to obtain ownership of all of

the Resort including Plaintiffs' residences, and failed to disclose that they had created

7 a fabricated promissory note that they planned to use as a vehicle to obtain such

8 ownership through the use of a fraudulent foreclosure;

9

(b) Disclosed some facts to Plaintiffs but intentionally failed to

10 disclose other important facts, making the disclosures they did make deceptive.

11 Specifically, Defendants stated that while they planned to use foreclosure to obtain

12 ownership of real estate in the Resort, they failed to disclose that such real estate

13 included Plaintiffs' residences;

14

(c) Intentionally failed to disclose important facts that were known

15 only to them which Plaintiffs could not have discovered. Specifically, Defendants

16 failed to disclose that while they were assuring residence owners that they planned to

17 obtain and convey title to the residences purchased by Plaintiffs, and would respect

18 the ownership rights of unit owners like Plaintiffs, they planned and were in the

19 process of carrying out a scheme to wipe out Plaintiffs' ownership interests through

20 the use of a fraudulent foreclosure scheme;

21

(e) Actively concealed important facts from Plaintiffs. Specifically,

22 Defendants concealed that they planned to and were carrying out a scheme t*

23 eliminate Plaintiffs as owners of Casa Fantasia and Casa Florida. respectively.

24

93. Plaintiffs did not know of the concealed facts set forth above, including

25 those identified in Paragraph 92 of this Complaint.

26

94. Defendants intended to deceive Plaintiffs by concealing facts. including

27 those identified in Paragraph 92 of this Complaint.

95 Pla lit 1 IL t'as mah k tel ied ii [)et'c'ndant' deecf)t i( )fi (lCL'Fi bed uh

ME

Case 2 1111 -cv-1 0284-JFW-PJW Document I Filed 12/13/11 Page 21 of 29 Page ID #:39

1 including in Paragraph 92 of this Complaint.

96 Plaintiffs were harmed by Defendants' deception, including that

3 described in Paragraph 92 of this Complaint, because they purchased the Investment.

4

97 Defendants' concealment of the facts set forth above, including those

J described in Paragraph 92 of this Complaint, was a substantial factor in causing

6 II Plaintiffs harm.

7


8 as those terms are defined in Civil Code §3294, and Plaintiffs are therefore entitled

9 to punitive damages in an amount according to proof. Plaintiffs are further informed

10 and believe, and based upon such information and belief, allege that:

ii

(a) The conduct described herein constituting oppression, fraud or malice

12 was committed by one or more officers, directors, or managing agents of Defendant

13 I PEHC who acted on behalf of Defendant PEHC; or

14

(b) The conduct described herein constituting oppression, fraud or malice

15 was authorized by one or more officers, directors, or managing agents of Defendant

16

17

(c) One or more officers, directors, or managing agents of Defendant

PEHC knew of the conduct constituting malice, oppression, or fraud and adopted or

approved that conduct after it occurred.

20

21

e : isi i ii .i a i 011) 1 *

23

L rnnrit

24

99. Plaintiff incorporate by reference the allegations contained in


26

100. By virtue of his position. conduct and representations in connection with

27 the Resort, and b\' his own admission, Hankla owed a fiduciary duty to Plaintiffs.

101. Bv tli. conduct i ihd tho . HICILK1111LI in Paiaciaph 25 59 oi this

21


1 Complaint, Hankla breached his fiduciary duty to Plaintiffs.

102. Hankla's breach of fiduciary duty was a substantial factor in causing

3 II Plaintiffs harm.

4


5 JJ by Hankla as those terms are defined in Civil Code §3294, and Plaintiffs are therefore

6 J entitled to punitive damages in an amount according to proof.

7

8

NINTH CLAIM FOR RELIEF

9

(Constructive Fraud Against Hankla By The Plaintiff Class)

10


ii Paragraphs 1 through 103 of this Complaint.

12

105. By virtue of his position, conduct and representations in connection with

13 the Resort, and by his own admission, Hankla owed a fiduciary duty to Plaintiffs.

14

106. By the conduct described above, including in Paragraphs 25-59 of this

15 Complaint, Hankla breached his legal and equitable duties to Plaintiffs.

16

107. Hankla's breach of his legal and equitable duties to Plaintiffs was a

17 substantial factor in causing Plaintiffs harm.

18


19 by Hankla as those terms are defined in Civil Code §3294, and Plaintiffs are therefore

20 entitled to punitive damages in an amount according to proof.

21

TENTH CLAIM FOR RELIEF

23

(Breach of Contract Against PEHC By The Plaintiff Class)

24



26

110. The First PPM constituted an agreement between PEHC and the Plaintiff

27 Class that PEHC would act with good fiith and fair dealing with its investors,

incIudin the Flaintift jud the PlaintiftC!ass. This &blication ot uood laitli IIILludCd.

WN

Case 2 1111 -cv-1 0284-JFW-PJW Document I Filed 12/13/11 Page 23 of 29 Page ID #:41

1 among other things, PEHC's honoring of its commitment to investors, including

Plaintiffs and the Plaintiff Class, to secure and protect the home ownership of the

3 Plaintiffs and the Class.

4

ill. PEHC breached the agreement by undertaking the scheme described

5 above to deprive Plaintiffs and the Class of their home ownership, as opposed to

6 securing and protecting it.

7

112. Plaintiffs performed all covenants and conditions of the agreement which

8 they were required to perform.

9

113. As a result of PEHC' s breach, Plaintiffs suffered damages in the amount

10 of their Investments and the loss of their properties.

ii

12

PRAYER FOR RELIEF

13

WHEREFORE, Plaintiffs, on behalf of all others similarly-situated, pray for

14 judgment and relief on all causes of action as follows:

15

1. An Order Certifying the Plaintiff Class;

16

2. Compensatory and consequential damages, in an amount to be proven at

17 trial;

18

3. Rescission and/or recessionary damages, where allowed by law;

19

3. Attorneys fees as permitted by law;

20

4. Costs of this suit;

21

5. Pre-judgment and post-judgment interest; and

6. Such other and further relief as the Court may deem necessary or

23 MMEMM

24

25

26

133: David ELeikowiti

Attorneys t r \1i P1 a I nil t N

Case 2.I11 -cv-1 0284-JFW-PJW Document I Filed 12/13/11 Page 24 of 29 Page ID #:42

1 DEMAND FOR JURY TRIAL

2 Plaintiffs hereby demand a trial by jury.

3

4 DATED: December /5 , 2011

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

WILSHIRE PALISADES LAW GROUP, P.C.

By: , '/J David I. Leflowitz

Attorneys for All Plaintiffs

El

Case 2:1 1-cv-10284-JFW-PJW Document I Filed 12/13/11 Page 25 of 29 Page ID #:43

NOTICE OF ASSIGNMENT TO UNITED STATES MAGISTRATE JUDGE FOR DISCOVERY

This case has been assigned to District Judge John F. Walter and the assigned discovery Magistrate Judge is Patrick J. Walsh.

The case number on all documents filed with the Court should read as follows:

Pursuant to General Order 05-07 of the United States District Court for the Central District of California, the Magistrate Judge has been designated to hear discovery related motions.

All discovery related motions should be noticed on the calendar of the Magistrate Judge

A copy of this notice must be sevec1 with the summons and complaint on all defendants (if a removal action is fi/ec a copy of this notice must he served on all p/ai-itffs).

Sut;s€quont documents nust ho flJe at the foIiov.n; iocaton:

[X] Western Division [J Southern Division [J Eastern Division 312 N. Spring St., Rm. G-8 411 West Fourth St., Rm. 1-053 3470 Twelfth St., Rm. 134 Los Angeles. CA 90012 Santa Ana, CA 92701-4516 Riverside, CA 92501

CV-18 (Ci 06) NOT cr or ASSIGNMENT TO UNITED STATES MAGiST RAT E JUDGE FOR DISCOVERY

Case 2:1 1-cv-10284-JFW-PJW Document I Filed 12/13/11 Page 26 of 29 Page ID :44

Co

CD

WILSHIRE PALISADES LAW GROUP, P.C. David 1. Lefkowitz (SBN 127457) Stephen D. Holz (SBN 83647) 1337 Ocean Avenue, Suite A Santa Monica, CA 90401-1009 Tel: (310) 393-4929 Fax: (310) 393-5438 Attorneys for All Plaintiffs

DOUGLAS B. NUROCK; FRANCESCA STONE: MICHAEL K. CASE NUMBER MOEZZ1, individually and as Trustee of the MICHAEL K. MOEZZI FAMILY TRUST UA 4/1612003; and NAZANIN MOEZZI, individually and on behalf of all others similarly-situated,

PLAINTIFF(S)

V.

PELICAN EYES HOLDING COMPANY, LLC; PELICAN RESCUE, LLC; ADMJNISTRADORA DE HOTELES DE SAN JUAN DEL SUR, S.A.; INVERSIONES INMOBILIARA DE SAN JUAN DEL SUR SOCIEDAD ANONIMA; IN VERSIONES TOGO SOCIEDAD ANONIMA; JAMES K. HANKLA; MICHAEL J. EMLING; AND DOES 1-10 DEFENDANT(S).

SUMMONS

TO: DEFENDANT(S): PELICAN EYES HOLDING COMPANY, LLC; PELICAN RESCUE, LLC; JAMES K. HANKLA; MICHAEL J. EMLING; AND DOES 1-10

A lawsuit has been filed against you.

Within 21 days after service of this summons on you (not counting the day you received it), you must serve on the plaintiff an answer to the attached Cdcomplaint 0 amended complaint o counterclaim 0 cross-claim or a motion under Rule 12 of the Federal Rules of Civil Procedure. The answer or motion must be served on the plaintiffs attorney, David I. Letkowitz . whose address is 1337 Ocean Avenue, Suite A., Santa Monica, CA 90401-1009 . If you fail to do so,

judgment by default will be entered against you for the relief demanded in the complaint. You also must file your answer or motion with the court.

DEC 1 Clerk, U.S. District Court

k By:

Deputy C1e1k

(Seal of the (ourl)

fl 'se 60 (Ici}s f the defendant is the (nited Stales or a I nited States agenc). or is an officer or t'mpiovee rf the I niledSia/es •l1/oued a') days 1w

is 12(a)(3j/

CV-01A (10/11 SUMMONS

Case'2:1 1-cv-10284-JFW-PJW Document I Filed 12/13/11 Page 27 of 29 Page ID #45

WILSHIRE PALISADES LAW GROUP, P.C. David I. Lefkowitz (SBN 127457) Stephen D. Holz (SBN 83647)

1337 Ocean .•\venue, Suite A Santa Monica, CA 90401-1009

2e1: (310) 303-4929 Fax: (310) 393-5438 Attorneys for All Plaintiffs

DOUGLAS B. NUROCK; FRANCISCA SfO\[: MICHAEL K. CASE NL\IBI K

CD MOEZZI, individually and as Trustee of the MICh[ALL K. MOEZZI FAMILY TRUST UA 4/16/2003; and NAZANIN MOEZZI, individually and on behalf of all others similarly-situated,

PLAINTIFF(S)

V.

PELICAN EYES HOLDING COMPANY, LLC; PELICAN RESCUE, LLC; ADMINISTRADORA DE HOTELES DE SAN JUAN DEL SUR, 5.A.; INVERSIONES INMOBILIARA DE SAN JUAN DEL SUR SOCIEDAD ANONIMA; INVERSIONES TOGO SOCIEDAD ANONIMA; JAMES K. HANKLA; MICHAEL J. I\II.IN(i: AND DOES 1-10 DL!! NDANT(S).

1ThUkN%1

TO: DEFENDANT(S): ADMINISTRADORA DE HOTELES DE SAN JUAN DEL SUR, S.A.; INVERSIONES INMOBILIARA DE SAN JUAN DEL SUR SOCIEDAD ANONIMA; INVERSIONES TOGO SOCIEDAD ANONIMA

A lawsuit has been filed against you.

Within 60 days after service of this summons on you (not counting the day you received it), you must serve on the plaintiff an answer to the attached Wcomplaint 0 __ amended complaint o counterclaim LI cross-claim or a motion under Rule 12 of the Federal Rules of Civil Procedure. The answer or motion must be served on the plaintiffs attorney, David I. Lefkowitz , whose address is 1337 Ocean Avenue, Suite A., Santa Monica, CA 90401-1009 . If you fail to do so,

judgment by default will be entered against you for the relief demanded in the complaint. You also must file your answer or motion with the court.

DEC 1 Clerk, U.S. District Court

romm

By: Deput'C4k

..il

Icii . ii I/k 1"'00c/ill I i/ic' ( Il/ICc / .. Ic II c .c c, / / IiI / lc/Ic'.' /cliC I. ill' !.\ 1 111 "1 il ic I c /li/i/cR CC icc / .1. ,i .• I/u ci

(cli c/cll h R1 f ]2R0(3.c/,

CV-0IA (10/I1 SI \I\1O\S

Case 2:1 1-cv-10284-JFW-PJW Document I Filed 12/13/11 Page 28 ofg,J: 46 t

UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA o#

CIVIL COVER SHEET

I (a) PLAINTIFFS (Check box if you are representing yourself 0) Douglas B. Nurock; Francesca Stone; Michael K. Moezzi, individually and as Trustee of the Michael K Moezzi Family Trust UA 4/16/2003; and Nazanin Moezzi, individually and on behalf of all others similarly-situtated

DEFENDANTS Pelican Eyes Holding Company, LLC; Pelican Rescue, LLC; Administradora de Hoteles de San Juan Del Sur, S.A.; Inversiones Inrnobiliara de San Juan Del Stir Sociedad Anonima; Inversiones Togo Sociedad Anonima, James K. Haalda Michael J. Emling and DOES 1-10

(b) Attorneys (Firm Name, Address and Telephone Number, If you are representing Attorneys (If Known) yourself, provide same.)

Wilshire Palisades Law Group, PC.; David I. Lefkowitz (SBN 127457); Stephen D. Holz (SBN 83647); 1337 Ocean Avenue, Suite A, Santa Monica, CA 90401-1009; Tel: (310)393-4929

IL BASIS OF JURISDICTION (Place an X in one box only.) HL CITIZENSHIP OF PRINCIPAL PARTIES - For Diversity Cases Only (Place an X in one box for plaintiff and one for defendant.)

0 1 U.S. Government Plaintiff

Federal Question (U.S. PTF DEF PTF DEF Government Not a Party) Citizen of This State 01 01 Incorporated or Principal Place 04 04

of Business in this State

0 2 U.S. Government Defendant 04 Diversity (Indicate Citizenship Citizen of Another State 02 02 Incorporated and Principal Place 05 05 of Parties in Item HI) of Business in Another State

Citizen or Subject of a Foreign Country 03 03 Foreign Nation 06 06

IV. ORIGIN (Place an X in one box only,)

Original 0 2 Removed from 03 Remanded from 04 Reinstated or 0 S Transferred from another district (specify): 0 6 Multi- 0 7 Appeal to District Proceeding State Court Appellate Court Reopened District Judge from

Litigation Magistrate Judge

V. REQUESTED IN COMPLAINT: JURY DEMAND: 110e. 0 No (Check 'Yes' only if demanded in complaint)

CLASS ACTION under F.R.C.P. 23: iYes 0 No "MONEY DEMANDED IN COMPLAINT: S To Be Determined at Trial

VL CAUSE OF ACTION (Cite the U.S. Civil Statute under which you are filing and write a brief statement of cause. Do not cite jurisdictional statutes unless diversity.) Fraud in the sale of Securities (private placement) by California Entity in Violation of Section 10(b) of the Securities and Exchange Act of 1934 and rule lOB-S

VU. NATURE OF SUIT (Place an X In one box only.)

0 51 Motions to Vacate Sentence Habeas Corpus

3530 General 3535 Death Penalty

540 Mandamus/ Other

2550 Civil Rights 3 555 Prison Condition

.F,ALTY-k.:. 3610 Agriculture 3620 Other Food &

Drug 3625 Drug Related

Seizure of Property 21 USC 881

1630 Liquor Laws 1640 R.R.&Truck 650 Airline Regs

1660 Occupational Safety /Health

69(1 Other

0400 State Reapportionment 0410 Antitrust 0430 Banks and Banking 0450 Commerce/ICC

Rates/etc. 0460 Deportation 0470 Racketeer Influenced

and Corrupt Organizations

0480 Consumer Credit 0490 Cable/Sat TV 0) lO Selective Service W850 Securities/Cornmodities/

Exchange 0875 Customer Challenge 12

USC 34 I 0 0890 Other Statutory Actions o 891 Agricultural Act 0 892 Economic Stabilization

Act o 893 Environmental Matters 0 894 Energy Allocation Act 0 895 Freedom of Info. Act 0900 Appeal of Fee Determi-

nation Under Equal Access to Justice

0950 Constitutionality of State Statutes

IllO Insurance 1120 Marine 130 Miller Act 140 Negotiable Instrument ISO Recovery of

Overpayment & Enforcement of Judgment

151 Medicare Act 152 Recovery of Defaulted

Student Loan (Excl. Veterans)

153 Recovery of Overpayment of Veteran's Benefits

160 Stockholders' Suits 190 Other Contract 195 Contract Product

Liability 196 Franchise

210 Land Condemnation 220 Foreclosure 230 Rent Lease & Ejectment 240 Torts to Land 245 Tort Product Liability 290 All Other Real Property

PERSONAL PROPERTY

370 Other Fraud 371 Truth in Lending 380 Other Personal

Property Damage 385 Property Damage

Product Liability

422 Appeal 28 USC 158

423 Withdrawal 28 USC 157

1441 Voting 442 Employment 443 Housing/Acco-

mmodations 444 Welfare 445 American with

Disabilities - Employment

446 American with Disabilities - Other

440 Other Civil Rights

0710 Fair Labor Standards Act

0720 Labor/Mgmt. Relations

0730 Labor/Mgmt Reporting & Disclosure Act

0740 Railway Labor Act 0790 Other Labor

Litigation 3 791 EmpI. Ret. Inc.

Security Act

820 Copyrights 830 Patent 840 Trademark

861 HIA(l395If) 862 Black Lung (923) 863 DIWC/DIWW

(405(g)) 864 SSIDTitle XVI 865 R,SI (405(g))

870 Taxes (U.S. Plaintiff or Defendant)

871 IRS-Third Party 26 USC 7609

PERSONAL INJURY 1310 Airplane 1315 Airplane Product

Liability 320 Assault, Libel &

Slander 1330 Fed. Employers'

Liability 340 Marine 345 Marine Product

Liability 350 Motor Vehicle 355 Motor Vehicle

Product Liability 360 Other Personal

Injury 362 Personal Injury-

Mod Malpractice 365 Personal Injury-

Product Liability 368 Asbestos Personal

Injury Product

0 462 Naturalization Application

3463 Habeas Corpus- Alien Detainee

3465 Other Immigration Actions

fl ' 4 i

FOR OFFICE USE ONLY: Case Number

AFTER COMPLETING THE FRONT SIDE OF FORM CV-7I, COMPLETE THE INFORMATION REQUESTED BELOW,

CV-71 (05108) CIVIL COVER SHEET Page I of 2

Case 2:1 1-cv-10284-JFW-PJW Document I Filed 12/13/11 Page 29 of 29 Page ID #:47

UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA CIVIL COVER SHEET

VIH(a), IDENTICAL CASES: Has this action been previously filed in this court and dismissed, remanded or closed? l"No 0 Yes If yes, list case number(s):

VIII(b), RELATED CASES: Have any cases been previously filed in this court that are related to the present case? 14No 0 Yes If yes, list case number(s):

Civil cases are deemed related If a previously tiled case and the present case: (Check all boxes that apply) 0 A. Arise from the same or closely related transactions, happenings, or events; or

OB. Call for deic ml: Flat: cm of the same or substantially related or similar questions of law and fact; or DC. For other reasons ss ould entail substantial duplication of labor if heard by different judges; or

00. Involve the same patent, trademark or copyright, and one of the factors identified above in a, b or c also is present

IX. VENUE: (When completing the following information, use an additional sheet if necessary.)

(a) List the County in this District; California County outside of this District; State if other than California; or Foreign Country, in which EACH named plaintiff resides.

County in this District: * California County outside of this District; State, if other than California, or Foreign Country

Michael K. Moezzi, individually and as trustee of the Michael K. Moezzi Family Trust UA 4/16/2003 (Florida); Nazanin Moezzi (Florida)

(b) List the County in this District; California County outside of this District; State if other than California, or Foreign Country, in which EACH named defendant resides. 0 Check here if the government, its agencies or employees is a named defendant. If this box is checked, go to item (c).

County in this District: California County outside of this District; State, if other than California; or Foreign Country

Pelican Eyes Holding Company, LLC (Los Angeles County); Pelican Administradora de Hoteles de San Juan Del Sur, S.A. (Nicaragua); Inversiones Rescue, LLC, (Los Angeles County); James K. Hanida (Los Angeles Inmobiliara de San Juan Del Sur Sociedad Anonima (Nicaragua); Inversiones County): Michael J. Emlinc (Los Angeles County) Togo Sociedad Anonima (Nicaragua):

(c) List the County in this District; California County outside of this District; State if other than California; or Foreign Country, in which EACH claim arose. Note: In land condemnation cases, use the location of the tract of land involved.

County in this District: * California County outside of this District; State, if other than California, or Foreign Country

/ /

)

* Los Angeles, Orange, San Bernardino, Riverside, Ventura, Santa Barbara, or San Luis Obispo Counties

)C. SIGNATURE OF ATTORNEY (OR PRO PER): Date December 13, 2011

Notice to Counsel/Parties: The CV-71 (JS44) Civil Cover Sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law. This form, approved by the Judicial Conference of the United States in September 1974, is required pursuant to Local Rule 3-I is not filed but is used by the Clerk of the Court for the purpose of statistics, venue and initiating the civil docket sheet (For more detailed instructions, see separate instructions sheet)

Key to Statistical codes relating to Social Security Cases:

Nature of Suit Code Abbreviation Substantive Statement ofCause of Action

861 lILA All claims for health insurance beneflts (Medicare) under Title IS, Part A, of the Social Security Act; as amended. Also, include claims hs hospitals. skilled nursing facilities. etc , for certification ca pens (dens of sendees under the program (42 L S.C. 1935FF(h))

862

BL

All claims for "Black Lung" bcneflts under? we 4. Part H. of the Federal Coal Slise (leads ccci ?aC:s Act oi I 959. (tO (.1 SC 923'

863

DIWC

All claims filed he insured sorkets foe l:cabilir nsurancc benefits under Title 2 of the Social Security Act, as amended, plus a,!l cla:rns flied for cn:Ies lesceance ?er,efl:s based on disah:lit (42 t, S C 405(g .))

863 D;ww All claims flied td widows or dsesee irlsuecr,ce ?CIie,CS 'aced on disah:i:ts under Tale 1 the Sectal Security

Act, as amerdec f 42 L S C 45

864

SSID

All cialens toe supplemental sr'eiir:: coo' roe p.is:ere r':s:'ascd .:s,r. ,nsah:ias iid eridee 7 iris l , cb5 5:'7:7fl Security Act, as :lmencec

865

RSI "ow -- it (olc i'.i

CV-7 1 (05/08) CIVIL COVER SHE F- F Page 2 of 2

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WILSHIRE PALISADES LAW GROUP, P.C. - Class actionsecurities.stanford.edu/filings-documents/1048/PEHCL00... · 2011. 12. 13. · WILSHIRE PALISADES LAW GROUP, P.C. David I Lefkowi%`