UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA
FORT LAUDERDALE DIVISION
GRISEL ALONSO, as Receiver for Elm Tree Investment Advisors, LLC, Elm Tree Investment Fund, LP, Case No. 16-62603-CIV-DIMITROULEAS Elm Tree 'e'Conomy Fund, LP, and Proceeding Ancillary to Elm Tree Motion Opportunity, LP, No. 15-CV-60082-Dimitrouleas/Snow
Plaintiff, v.
JAMES BENVENUTO, an individual, NGU INVESTORS, LLC, a Florida limited liability company; JEAN BENVENUTO, an individual, SURJIT WALIA, an individual, S.W. EQUITIES CORP., a New York corporation, TIMOTHY HARTMANN, an individual, ALEXANDER BUKHSHTABER, an individual, MVS MEDIA GROUP, LLC, a Florida limited liability company, HARRY TAWIL, an individual, EDUARDO DOS SANTOS, an individual, FILOMENA CALABRIA, an individual, JOSE ROFFE, an individual, MIREILLE ROFFE, an individual, SOMESWARI NUKALA, an individual, YAEL TAPIERO, an individual, LAAS W. TURNBULL, an individual, OMRI TINTPULVER, an individual, CONSTANTINO DOS SANTOS, an individual, ARMAND DELMAR, an individual, AHMAD NAQVI, an individual, MERCEDES ELMALEH, an individual, ELIA BLUMIN, an individual, TED GREENWALD, an individual, ALINA TALSKY, an individual, ELVIS PERVAN, an individual, ANGELO ISMIRNIOGLOU, an individual, and JONATHAN VERK, an individual.
Defendants. ________________________________________/
RECEIVER’S MOTION FOR SUMMARY JUDGMENT AS TO SOMESWARI NUKALA
Plaintiff, GRISEL ALONSO, solely in her capacity as the Receiver for Elm Tree
Investment Advisors, LLC (“ETIA”), Elm Tree Investment Fund, LP (“ETIF”), Elm Tree
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'e'Conomy Fund, LP (“ETEF”), Elm Tree Motion Opportunity, LP (“ETMO”), and Etopia, LP
(“Etopia”), pursuant to Fed. R. Civ. P. 56 and Local Rule 56.1, respectfully moves this Court to
enter summary judgment against Defendant Someswari Nukala ("Nukala"), and grant the relief
requested in the Amended Complaint. [D.E. 6].
I. INTRODUCTION
A. The Fraudulent Scheme
On January 15, 2015, the SEC filed its complaint in the for injunctive and other relief (the
“Complaint”) alleging that between no later than November 2013 to January 2015, Defendants
Frederic Elm f/k/a Frederic Elmaleh ("Elm") and ETIA, ETIF, ETEF, and ETMO (collectively,
the "Receivership Entities") engaged in a fraudulent securities "Ponzi" scheme through the offer
and sale of fraudulent investments that raised more than $17 million from more than 50 investors
(the "Fraudulent Scheme").
The SEC alleged that Fred Elm, through the sale of securities in ETIF, ETEF, and ETMO
(collectively, the "Elm Tree Funds"), raised at least $17 million from more than 50 investors.
Elm was the founder and managing director of ETIA and the general partner and manager of the
Elm Tree Funds. The offering documents for the Elm Tree Funds provided that Elm and ETIA
would charge a 2% annual management fee, but would not receive any additional fees unless and
until the Elm Tree Funds made a profit. Elm and ETIA invested only a portion of the investor
funds raised. At no point did Elm or the Elm Tree Funds earn a profit that would have entitled
them to additional fees under the offering documents. Instead, Elm and ETIA used the majority
of the funds to pay back investors in Ponzi-like fashion and for Elm's own personal use.
Elm misappropriated at least $2 million in investor funds to pay for personal items and
expenses such as a home, high-end furnishings, and other personal items such as automobiles,
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jewelry, and daily living expenses. Investors sent their investment funds to Elm by wire transfer
or by mailing a check. Elm initially deposited investor funds into bank accounts held by ETIA,
the Elm Tree Funds, or his own personal bank account. Elm then transferred the money back and
forth between the various accounts and commingled money invested in one of the Elm Tree
Funds with money invested in the others.
B. Transfers to the Named Defendants
From November 26, 2012 to December 31, 2014, millions of dollars received from
investors in the Elm Tree Funds were deposited in the Receivership Entities' accounts in
connection with the Fraudulent Scheme. Elm commingled the funds received from investors
between and among the accounts for the Receivership Entities and Elm's personal account, and
used the investors' funds to pay third parties, including the named Defendants.
All of the money that Elm and the Receivership Entities wrongfully caused to be
transferred to Defendants was diverted and misappropriated by Elm in furtherance of the
Fraudulent Scheme. Thus, all of the money transferred or paid to Defendants was improperly
diverted assets of one or more of the Elm Tree Funds and thus the Receivership Estate. To allow
Defendants to keep the funds transferred by Elm and the Receivership Entities would be
inequitable and unjust, including to the investors of the Elm Tree Funds.
II. STATEMENT OF MATERIAL FACTS
1. On January 15, 2015, the SEC filed its Complaint alleging that Elm engaged in a
fraudulent securities "Ponzi" scheme through the offer and sale of fraudulent investments (the
“Fraudulent Scheme”). [D.E. 1 in the SEC Action].1
1 This action is ancillary to the SEC Action, which is Case No. 15-CV-60082-Dimitrouleas/Snow.
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2. On March 25, 2015, the Court entered a Consent Judgment as to Fred Elm. [D.E.
56 in SEC Action].
3. On April 11, 2016, the Court entered Final Judgment Setting Disgorgement and
Civil Penalties as to Fred Elm. [D.E. 151 in SEC Action].
4. The Receivership Entities conducted little or no actual business operations as
represented to investors. See Declaration of Dick Haslam, attached as Exhibit A, ¶¶ 3.
5. The purported business operations of the Receivership Entities produced little or
no profits or earnings. Ex. A at ¶ 4.
6. The source of payments to investors was from cash infused by new investors. Ex.
A at ¶ 5.
7. At all relevant times, the Receivership Entities were insolvent. Ex. A at ¶ 6.
8. During the period from July 21, 2014 to October 29, 2014, the Receivership
Entities transferred funds to Nukala, in connection with the Fraudulent Scheme, in the amount of
$136,875.00, as follows:
a. On July 21, 2014, ETIA transferred funds in the amount of $6,750.00 via wire to
Nukala;
b. On September 23, 2014, ETMO transferred funds in the amount of $2,125.00 via
wire to Nukala;
c. On October 9, 2014, ETIF transferred funds in the amount of $88,000.00 via
cashier's check to Nukala; and
d. On October 29, 2014, ETIF transferred funds in the amount of $40,000.00 via
cashier's check to Nukala.
Ex. A at ¶ 8.
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9. On April 4, 2014, Nukala transferred funds in the amount of $79,980.00 via wire
to ETEF. Ex. A at ¶ 9.
10. On July 7, 2014, Nukala transferred funds in the amount of $39,985.00 via wire to
ETMO. Ex. A at ¶ 10.
11. Elm was conducting the Fraudulent Scheme at the time of the foregoing transfers.
Ex. A at ¶ 11.
12. The funds transferred to Nukala from the Receivership Entities were derived from
the Fraudulent Scheme perpetrated upon investors by Elm through his use of the Receivership
Entities. Ex. A at ¶ 12.
13. The Receiver seeks the repayment of $16,910.00 in false profits paid out to
Nukala. Ex. A at ¶ 13.
14. Nukala filed an Answer, which fails to respond to each of the Receiver’s
allegations and does not raise any affirmative defenses. [D.E. 11].
15. The books and records of the Receivership reflect that Nukala did not provide
reasonably equivalent value in exchange for the $16,910.00 in false profits she received to the
detriment of the Receivership Estate.
16. On or about October 6, 2017, the Receiver issued discovery to Nukala regarding
the Fraudulent Scheme, the false profits she was paid, the causes of action asserted in the
Amended Complaint, and her and her family’s relationship with Fred Elm. See Receiver’s
Request for Admissions to Nukala, attached as Exhibit B.
17. To date, Nukala has failed to respond the Receiver’s request for production,
interrogatories, and request for admissions.
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18. Based on Nukala’s failure to respond to the Receiver’s request for admissions, the
following material facts are deemed admitted by Nukala:
a. On or about July 21, 2014, Nukala received from ETIA a wire transfer for the
sum of $6,750.00;
b. On or about September 23, 2014, Nukala received from ETMO a wire transfers
for the sum of $2,125.00;
c. On or about October 9, 2014, Nukala received from ETIF a cashier’s check for
the sum of $88,000.00;
d. On or about October 29, 2014, Nukala received from ETIF a cashier’s check for
the sum of $40,000.00;
e. On or about April 4, 2014, ETEF received from Nukala a wire transfer for the
sum of $79,980.00;
f. On or about July 7, 2014, ETMO received from Nukala a wire transfer for the
sum of $39,985.00;
g. As such, Nukala received $136,875.00 from the Receivership Entities;
h. Nukala received $16,910.00 more from the Receivership Entities than she paid
the Receivership Entities;
i. Nukala did not provide any services to the Receivership Entities;
j. Nukala benefitted from these transfers;
k. The transfers to Nukala were inherently fraudulent because they were made as
part of Fred Elm’s Fraudulent Scheme;
l. The transfers were made with actual intent to hinder, delay, or defraud creditors
of Fred Elm and the Elm Tree Funds;
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m. Nukala did not provide the Receivership Entities with reasonably equivalent value
in exchange for the transfers;
n. Through the transfers, the Receivership Entities conferred a substantial benefit on
Nukala;
o. Nukala knowingly and voluntarily accepted and retained a benefit in the form of
the transfers; and
p. Other than Nukala’s April 4, 2014 wire transfer to ETEF for the sum of
$79,980.00 and Nukala’s July 7, 2014 wire transfer to ETMO for the sum of
$39,985.00, Nukala did not return any of the transfers to any Receivership Entity
See Ex. B.
III. MEMORANDUM OF LAW
A. Summary Judgment Standard
Summary judgment is appropriate when there is no genuine dispute as to any material
fact, and the evidence establishes that the moving party is entitled to a judgment as a matter of
law. Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986). A factual dispute
is “genuine” if a reasonable jury could return a verdict for the non-movant and “material” if it
would affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248–49
(1986). In deciding a summary judgment motion, the Court must examine the pleadings,
depositions, answers to interrogatories, and admissions on file along with the affidavits and other
evidence in the record. Travelers Indem. Co. of Ill. v. Royal Oak Enter., Inc., 344 F. Supp. 2d
1358, 1364–65 (M.D. Fla. 2004). Once the movant has met its burden of establishing the
nonexistence of a triable issue of fact, the burden shifts to the non-movant to come forward with
sufficient evidence of every element that he or she must prove. Rollins v. TechSouth, 833 F. 2d
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1525, 1528 (11th Cir. 1987). The non-movant may not rely solely upon the pleadings, but must
use affidavits, depositions, and other admissible evidence to demonstrate that there exists a
material fact issues to be tried. Travelers, 344 F .Supp. 2d at 1365.
B. Requests for Admissions and Summary Judgment
Federal Rule of Civil Procedure 36 expressly provides that requests for admissions are
automatically deemed admitted if not answered within thirty (30) days, and that the matters
therein are conclusively established unless the Court permits otherwise on motion of the non-
responding party. U.S. v. 2204 Barbara Lane, 960 F. 2d 126, 129 (11th Cir. 1992) citing to
Rainbolt v. Johnson, 669 F .2d 767, 768 (D.C. Cir. 1981) (reversing district court that failed to
give binding and conclusive effect to unanswered requests for admissions).
Summary judgment based in whole or in part on a defendant’s failure to answer requests
for admissions is appropriate. See 2204 Barbara Lane, 960 F. 2d at 129; J.D. Pharmaceutical
Distrib.’s, Inc. v. Save-On Drugs & Cosmetics Corp., 893 F. 2d 1201, (11th Cir. 1990)
(upholding summary judgment against pro se prisoner based on failure to answer requests for
admissions).
C. The Receiver’s Causes of Action
Count I of the Amended Complaint states a cause of action against Nukala for fraudulent
transfer pursuant to Fla. Stat. 726.105. Relief may be granted under this section where a transfer
is made by a debtor with actual intent to hinder, delay, or defraud any creditor of the debtor. See
Fla. Stat. 726.105(1)(a). Relief may also be granted under this section where a transfer is made
by a debtor without receiving reasonably equivalent value in exchange, and where either (a) the
debtor was engaged or was about to engage in a business or a transaction for which the
remaining assets of the debtor were unreasonably small in relation to the business or transaction,
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or (b) the debtor intended to incur, or believed or reasonably should have believed that he or she
would incur, debts beyond his or her ability to pay as they became due. See Fla. Stat.
726.105(1)(b). Based on the Statement of Facts listed above, the Declaration of Dick Haslam,2
Nukala’s admissions, and relevant case law,3 the requirements of Fla. Stat. 726.105 are met and
there are no issues of material fact with respect to either of the two grounds for relief that were
asserted. The Receiver is entitled to summary judgment on Count I.
Count II of the Amended Complaint states a cause of action against Nukala for fraudulent
transfer pursuant to Fla. Stat. 726.106. Relief may be granted under this section where a transfer
is made without receiving a reasonably equivalent value in exchange, and the debtor was
insolvent at that time or the debtor became insolvent as a result of the transfer or obligation. See
Fla. Stat. 726.106(1). Based on the Statement of Facts listed above, the Declaration of Dick
Haslam, Nukala’s admissions, and relevant case law,4 the requirements of Fla. Stat. 726.106(1)
are met and there are no issues of material fact remaining. The Receiver is entitled to summary
judgment on Count II.
2 It is routine and accepted for declarations of financial analysts to be used in Receivership clawback cases as evidence in support of motions for summary judgment. See Wiand v. Morgan, 919 F. Supp. 2d 1342, 1357-58 (M.D. Fla. 2013); Wiand v. Cloud, 919 F. Supp. 2d 1319, 1332-33 (M.D. Fla. 2013).
3 See Perkins v. Haines, 661 F. 3d 623, 626-27 (11th Cir. 2011) (finding that existence of actual intent to defraud and lack of reasonably equivalent value are presumed for transfers related to Ponzi schemes); Donell v. Kowell, 533 F. 3d 762, 770-71 (9th Cir. 2008) (finding that transfers made pursuant to a Ponzi scheme generally establish that the scheme operator was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction, or intended to incur, or believed or reasonably should have believed that he would incur, debts beyond his ability to pay as they became due).
4 See In re Pearlman, 472 B.R. 115, (M.D. Fla. 2012) (finding that because the Ponzi scheme was already underway at the time of certain transfers, the debtors were by definition presumed insolvent and that a defendant's good faith in accepting repayment is irrelevant).
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Count III of the Amended Complaint states a cause of action against Nukala for unjust
enrichment. The essential elements of a claim for unjust enrichment are: (i) a benefit conferred
upon a defendant by the plaintiff; (ii) the defendant's appreciation of the benefit; and (iii) the
defendant's acceptance and retention of the benefit under circumstances that make it inequitable
for him to retain it without paying the value thereof. Vega v. T-Mobile USA, Inc, 564 F. 3d 1256,
1274 (11th Cir. 2009). Each of these elements is satisfied, with no question of material fact,
based on the Statement of Facts listed above, the Declaration of Dick Haslam, Nukala’s
admissions, and relevant case law.5
WHEREFORE, Plaintiff, GRISEL ALONSO, respectfully requests this Honorable
Court enter an Order: (i) granting summary judgment in favor of the Receiver on liability on all
counts of the Amended Complaint against Nukala; and (ii) granting such other and further relief
as the Court deems just and proper.
Respectfully submitted,
BROAD AND CASSEL LLP Attorneys for Receiver One Biscayne Tower, 21st Floor 2 S. Biscayne Boulevard Miami, FL 33131 Telephone: (305) 373-9467 Facsimile: (305) 995-6387
By: s/Daniel S. NewmanDaniel S. Newman, P.A. Florida Bar No. 0962767 [email protected] Christopher Cavallo, Esq. Florida Bar No. 0092305 [email protected]
5 As stated above, Elm was running a Ponzi scheme. There is a presumption that transfers made in connection with a Ponzi scheme are fraudulent, and thus, inequitable. See Perkins, 661 F. 3d at 626-27 (11th Cir. 2011).
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on December 27, 2017, a true and correct copy of the
foregoing was served via electronic transmission or U.S. Mail on all counsel or parties of record.
By: s/Daniel S. NewmanDaniel S. Newman, P.A.
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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA
FORT LAUDERDALE DIVISION
GRISEL ALONSO, as Receiver for Elm Tree Investment Advisors, LLC, Elm Tree Investment Fund, LP, Case No. 16-62603-CIV-DIMITROULEAS Elm Tree 'e'Conomy Fund, LP, and Proceeding Ancillary to Elm Tree Motion Opportunity, LP, No. 15-CV-60082-Dimitrouleas/Snow
Plaintiff, v.
JAMES BENVENUTO, an individual, NGU INVESTORS, LLC, a Florida limited liability company; JEAN BENVENUTO, an individual, SURJIT WALIA, an individual, S.W. EQUITIES CORP., a New York corporation, TIMOTHY HARTMANN, an individual, ALEXANDER BUKHSHTABER, an individual, MVS MEDIA GROUP, LLC, a Florida limited liability company, HARRY TAWIL, an individual, EDUARDO DOS SANTOS, an individual, FILOMENA CALABRIA, an individual, JOSE ROFFE, an individual, MIREILLE ROFFE, an individual, SOMESWARI NUKALA, an individual, YAEL TAPIERO, an individual, LAAS W. TURNBULL, an individual, OMRI TINTPULVER, an individual, CONSTANTINO DOS SANTOS, an individual, ARMAND DELMAR, an individual, AHMAD NAQVI, an individual, MERCEDES ELMALEH, an individual, ELIA BLUMIN, an individual, TED GREENWALD, an individual, ALINA TALSKY, an individual, ELVIS PERVAN, an individual, ANGELO ISMIRNIOGLOU, an individual, and JONATHAN VERK, an individual.
Defendants. ________________________________________/
PLAINTIFF GRISEL ALONSO’S FIRST REQUEST FOR ADMISSION TO DEFENDANT SOMESWARI NUKALA
Pursuant to Federal Rules of Civil Procedure 36, Plaintiff Grisel Alonso ("Alonso" or
“Plaintiff”), not individually but solely in her capacity as the Receiver appointed over Elm Tree
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Investment Advisors, LLC, Elm Tree Investment Fund, LP, Elm Tree 'e'Conomy Fund, LP, Elm
Tree Motion Opportunity, LP, and Etopia LP (the “Receivership Entities”) requests that Defendant
Someswari Nukala (“Nukala”) admit under oath the truthfulness of the following requests for
admission within thirty (30) days from the date hereof, in accordance with the Federal Rules of
Civil Procedure and the Local Rules of the Southern District of Florida.
DEFINITIONS AND INSTRUCTIONS
a. "You", "Your", or "Defendant" shall refer to Nukala, as well as her successors,
assigns, and representatives.
b. "Alonso", “Receiver” or "Plaintiff" shall refer to Plaintiff Grisel Alonso, not
individually but solely in her capacity as the Receiver appointed over Elm Tree Investment
Advisors, LLC, Elm Tree Investment Fund, LP, Elm Tree 'e'Conomy Fund, LP, and Elm Tree
Motion Opportunity, LP.
c. “Fred Elm” shall refer to Frederic Elm a/k/a Frederic Elmaleh.
d. “Receivership Entities” shall mean Elm Tree Investment Advisors, LLC, Elm Tree
Investment Fund, LP, Elm Tree 'e'Conomy Fund, LP, Elm Tree Motion Opportunity, LP, and
Etopia.
e. “Elm Tree Funds” shall mean Elm Tree Investment Fund, LP, Elm Tree 'e'Conomy
Fund, LP, and Elm Tree Motion Opportunity, LP.
f. “Fraudulent Scheme” shall refer to a fraudulent securities “Ponzi” scheme in which
Fred Elm and the Receivership Entities engaged through the offer and sale of fraudulent
investments that raised more than $17 million from more than 50 investors.
g. “Transfers” shall refer to the transferred funds between Elm Tree Investment
Advisors, LLC (“ETIA”), Elm Tree 'e'Conomy Fund, LP (“ETEF”), Elm Tree Investment Fund,
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LP (“ETIF”), Elm Tree Motion Opportunity, LP (“ETMO”) and Nukala, which are as follows: (1)
$79,980.00 from Nukala to ETEF via wire on or about April 4, 2014; (2) $39,985.00 from Nukala
to ETMO via wire on or about July 7, 2014; (3) $6,750.00 from ETIA to Nukala via wire on or
about July 21, 2014; (4) $2,125.00 from ETMO to Nukala via wire on or about September 23,
2014; (5) $88,000.00 from ETIF to Nukala via cashier’s check on or about October 9, 2014; and
(6) $40,000.00 from ETIF to Nukala via cashier’s check on or about October 29, 2014.
h. The relevant time period for this First Request for Admission shall be from
December 1, 2012 through the date hereof. This time period shall apply to all requests below,
unless otherwise specified.
REQUESTS FOR ADMISSION
1. Admit that You received a total of $136,875.00 from the Receivership Entities.
2. Admit that ETEF and/or ETMO received a total of $119,965.00 from You.
3. Admit that, on or about April 4, 2014, ETEF received from You a wire transfer for
the sum of $79,980.00.
4. Admit that, on or about July 7, 2014, ETMO received from You a wire transfer for
the sum of $39,985.00.
5. Admit that, on or about July 21, 2014, You received from ETIA a wire transfer for
the sum of $6,750.00.
6. Admit that, on or about September 23, 2014, You received from ETMO a wire
transfer for the sum of $2,125.00.
7. Admit that, on or about October 9, 2014, You received from ETIF a cashier’s check
for the sum of $88,000.00.
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8. Admit that, on or about October 29, 2014, You received from ETIF a cashier’s
check for the sum of $40,000.00.
9. Admit that You received $16,910.00 more from the Receivership Entities than You
paid ETEF and/or ETMO.
10. Admit that You did not provide any services to any Receivership Entity.
11. Admit that, other than Your April 4, 2014 wire transfer to ETEF for the sum of
$79,980.00 and Your July 7, 2014 wire transfer to ETMO for the sum of $39,985.00, You have
not provided anything of value to ETEF and/or ETMO.
12. Admit that, other than Your April 4, 2014 wire transfer to ETEF for the sum of
$79,980.00 and Your July 7, 2014 wire transfer to ETMO for the sum of $39,985.00, You have
not provided anything of value to any Receivership Entity.
13. Admit that You benefitted from the Transfers.
14. Admit that the Transfers were inherently fraudulent because they were made as part
of Fred Elm’s Fraudulent Scheme.
15. Admit that the Transfers were made with actual intent to hinder, delay, or defraud
creditors of Fred Elm and the Elm Tree Funds.
16. Admit that You did not provide the Receivership Entities with reasonably
equivalent value in exchange for the Transfers.
17. Admit that, through the Transfers, the Receivership Entities conferred a substantial
benefit on You.
18. Admit that You knowingly and voluntarily accepted and retained a benefit in the
form of the Transfers.
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19. Admit that, other than Your April 4, 2014 wire transfer to ETEF for the sum of
$79,980.00 and Your July 7, 2014 wire transfer to ETMO for the sum of $39,985.00, You did not
return any of the Transfers to any Receivership Entity.
Dated: October 6, 2017
Respectfully submitted,
BROAD AND CASSEL Attorneys for Receiver One Biscayne Tower, 21st Floor 2 S. Biscayne Boulevard Miami, FL 33131 Telephone: (305) 373-9467 Facsimile: (305) 995-6387
By: s/Daniel S. NewmanDaniel S. Newman, P.A. Florida Bar No. 0962767 [email protected] Cavallo, Esq. Florida Bar No. 0092305 [email protected]
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on October 6, 2017, the foregoing document was served via
electronic transmission and Federal Express on all individuals identified on the attached Service
List.
By: s/Daniel S. NewmanDaniel S. Newman, P.A.
SERVICE LIST
Someswari Nukala [email protected] Walworth Court Mississauga, ON Canada L5N 7L4 Defendant Pro Se
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