Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Fs&S Holdings, LLC; Cobcom Investors, LLC; Patriot Park Associates, LLC v. Nicholas Skultety; Investor Resource Management

March 28, 2011

FS&S HOLDINGS, LLC; COBCOM INVESTORS, LLC; PATRIOT PARK ASSOCIATES, LLC,
PLAINTIFFS,
v.
NICHOLAS SKULTETY; INVESTOR RESOURCE MANAGEMENT, INC.; AMERICAN PARAMOUNT, INC.;
CESAR NUNEZ; JOHN DOES 1 THROUGH 10, AND ABC GROUPS 1 THROUGH 10, DEFENDANTS.



The opinion of the court was delivered by: Walls, Senior District Judge

NOT FOR PUBLICATION

OPINION & ORDER

Plaintiffs FS&S Holdings, LLC, Cobcom Investors, LLC and Patriot Park Associates, LLC move under Federal Rule of Civil Procedure 55(b)(2) for default judgment against defendants Nicholas Skultety, American Paramount, Inc., Investor Resource Management, Inc. and Cesar Nunez. These defendants have failed to appear or file opposition to this motion. Pursuant to Federal Rule of Civil Procedure 78, the motion is decided without oral argument. Because the Court does not have personal jurisdiction over any of the defendants, the motion is denied.

NOT FOR PUBLICATION

FACTUAL AND PROCEDURAL BACKGROUND

According to the complaint, the defendants in this case "employed a sophisticated and devious scheme and artifice to successfully defraud the Plaintiffs of more than $1.4 million." Compl. ¶ 16. The plaintiffs allege that the fraudulent scheme "utilized false and fictitious documentation and employed a web of lies and deceptions." Compl. ¶ 16. To accomplish this alleged fraud, the defendants employed what the plaintiffs describe as a "proof of funds" scheme. Compl. ¶ 17.

The plaintiffs are three South Carolina-based companies owned by two real estate developers, Harold P. Tuttle and Gregory Parsons. Compl. ¶¶ 1-3, 18-20. The three plaintiffs were involved with the purchase and plan to develop Cobblestone Village, a 27-acre parcel of commercial property in Goose Creek, South Carolina. Compl. ¶¶ 18-20.

Sometime around 2008, the plaintiffs sought approximately $25 million in financing to fund development of Cobblestone Village. But, as a result of the economic downturn, were unable to get financing from banks or other conventional sources. Compl. ¶ 21. So, they turned to non-conventional sources. Their quest for funding is the subject of this lawsuit.

First, the plaintiffs sought help from the Lambert Clark Group LLC, an Illinois-based company. Two individuals associated with Lambert Clark, Kevin Reed, who resides in Illinois, and James Chatham II, who resides in Texas, allegedly told the plaintiffs that Lambert Clark could, through an elaborate transaction, obtain the funds the plaintiffs sought in exchange for a $250,000 fee. The plaintiffs paid this fee, but never received the loan they were promised. Compl. ¶¶ 23-30.

When this did not work, Chatham and Reed suggested an even more elaborate financing scheme for obtaining loans. Compl. ¶¶ 29-35. A $1 million fee was to be paid to a private lender in return for that lender posting a $133 million "proof of funds"*fn1 to the bank account of a Lambert Clark affiliate, LCG Global Assets Limited, a Texas-based entity. Compl. ¶¶ 10, 32-33. This proof of funds would allow Lambert Clark to establish a trading relationship with European banks in order to buy securities and resell them in the United States at a significant profit. Compl. ¶ 34. Lambert Clark would then use the profits to lend $30 million to the plaintiffs. Compl. ¶ 34.

According to the complaint, Chatham and Reed persuaded the plaintiffs to deposit the $1 million fee in "an escrow account with an escrow agent of their choosing." Compl. ¶ 35. The plaintiffs "selected an escrow agent in New York City, and in fact advanced the $1 million fee, which was deposited and held in escrow in a New Jersey bank." Compl. ¶ 35.

The $133 million proof of funds was to be issued by defendant Nicholas Skultety and his corporation American Paramount, Inc. (also named as a defendant). Skultety resides in California, where American Paramount is based. Compl. ¶¶ 4,6, 37. At a meeting in Skultety's Los Angeles office, he allegedly told the plaintiffs that he could easily assemble $133 million from relatives and business associates in exchange for a $1 million fee. Compl. ¶¶ 38-39.

The plaintiffs and Skultety, Chatham and Reed signed contracts which described this transaction. The plaintiffs then paid Skultety the $1 million fee. Compl. ¶ 41. According to the complaint, Skultety's banker, defendant Cesar Nunez, a Wells Fargo employee residing in California, emailed the plaintiffs what appeared to be official Wells Fargo documents confirming that $133 million had been deposited in LCG's account. Compl. ¶ 13, 42-44. Although the plaintiffs fulfilled their end of the deal, the $30 million loan from Lambert Clark never materialized.

When the plaintiffs complained to Skultety, he ultimately promised to loan them $21 million directly in exchange for an additional fee of $131,000, which the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.