Xcentric Ventures LLC v. Borodkin et al

Filing 1

COMPLAINT. Filing fee received: $350.00, receipt number PHX 0970-5591148, filed by Xcentric Ventures LLC (submitted by David Gingras). (Attachments: # 1 Civil Cover Sheet)(REK)

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David S. Gingras, #021097
Gingras Law Office, PLLC
3941 E. Chandler Blvd., #106-243
Phoenix, AZ 85048
Tel.: [phone]
Fax: [phone]
[e-mail]

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Attorney for Plaintiff Xcentric Ventures, LLC

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UNITED STATES DISTRICT COURT

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DISTRICT OF ARIZONA

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XCENTRIC VENTURES, LLC, an
Arizona limited liability company,
Plaintiff,

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GINGRAS LAW OFFICE, PLLC
3941 E. CHANDLER BLVD., #106-243
PHOENIX, AZ 85048

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VERIFIED COMPLAINT

v.
LISA JEAN BORODKIN and JOHN DOE
BORODKIN, husband and wife;
RAYMOND MOBREZ and ILIANA
LLANERAS, husband and wife;
DANIEL BLACKERT and JANE DOE
BLACKERT, husband and wife;
ASIA ECONOMIC INSTITUTE, LLC, a
California limited liability company;
DOES 1-10, inclusive,
Defendants.

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Case No: ___________________

For its Verified Complaint Plaintiff XCENTRIC VENTURES, LLC alleges as follows:
1.

This is an action to recover damages arising from a frivolous lawsuit

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maliciously and wrongfully commenced and continued by Defendants against Plaintiff in

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the State of California (“the Asia Litigation”).

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2.

In preparation for and during the course of the Asia Litigation, Defendants

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engaged in a wide variety of unlawful, criminal, tortious, and unethical conduct

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including, but not limited to: perjury in violation of 18 U.S.C. § 1621, subornation of

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perjury in violation of 18 U.S.C. § 1622, false swearing in violation of 18 U.S.C. §

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1623, and multiple/repeated violations of the California Rules of Professional Conduct

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including, but not limited to: Rule 3-200 (prohibiting a lawyer from bringing an action or

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asserting any position in litigation without probable cause and for the purpose of
VERIFIED COMPLAINT

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harassing or maliciously injuring any person); Rule 3-210 (prohibiting a lawyer from

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advising a client to violate the law); and Rule 5-200(B) (prohibiting a lawyer from

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misleading a court by making a false statement of fact).

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PARTIES
3.

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Plaintiff XCENTRIC VENTURES, LLC (“Xcentric”) is an Arizona limited

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liability company which operates, and at all relevant times has operated, the website

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www.RipoffReport.com (“Ripoff Report”).
4.

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Defendant LISA JEAN BORODKIN (“BORODKIN”) is an attorney

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licensed to practice law in the States of California and New York. At all times relevant to

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this action, Defendant BORODKIN was married to JOHN DOE BORODKIN and was

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acting on behalf of, and for the benefit of, their marital community.
5.

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Defendants

RAYMOND

MOBREZ

(“MOBREZ”)

and

ILIANA

GINGRAS LAW OFFICE, PLLC
3941 E. CHANDLER BLVD., #106-243
PHOENIX, AZ 85048

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LLANERAS (“LLANERAS”) are, and at all relevant times were, a married couple

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residing in Los Angeles, California.
6.

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At all times relevant to this action, MOBREZ and LLANERAS were the

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principals of Defendant ASIA ECONOMIC INSTITUTE, LLC (“AEI”) which is a

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California limited liability with its principal place of business in Los Angeles, California.
7.

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Defendant DANIEL BLACKERT (“BLACKERT”) is an attorney licensed

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to practice law in the States of California. At all times relevant to this action, Defendant

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BLACKERT was married to JANE DOE BLACKERT and was acting on behalf of, and

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for the benefit of, their marital community.
8.

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DOES 1–10 are individuals and/or entities, the true names of which are not

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currently known, who are or who may be liable to Xcentric for the conduct alleged

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herein.
JURISDICTION/VENUE

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9.

Defendants, and each of them, have knowingly, intentionally and

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deliberately engaged in tortious activity directed at and within the State of Arizona and

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intentionally directed at Xcentric and Xcentric’s principals, officers, agents and
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VERIFIED COMPLAINT

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employees including non-party EDWARD MAGEDSON (“Magedson”) who are

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residents of the State of Arizona. As more specifically alleged herein, Defendants’

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actions were specifically intended to cause harm to Plaintiff within the State of Arizona

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and, in fact, Defendants’ actions had the intended effect of actually causing substantial

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harm to Plaintiff within the State of Arizona. Defendants, and each of them, are therefore

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properly subject to personal jurisdiction within the State of Arizona.

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10.

Pursuant to 28 U.S.C. § 1332, this Court has subject matter jurisdiction

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because there is complete diversity among the parties and the amount in controversy

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exceeds $75,000.00.

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11.

Pursuant to 28 U.S.C. § 1391(a)(2), venue is proper in this judicial district

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because a substantial part of the events giving rise to Plaintiff’s claims occurred in this

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district.
ALLEGATIONS COMMON TO ALL CLAIMS

GINGRAS LAW OFFICE, PLLC
3941 E. CHANDLER BLVD., #106-243
PHOENIX, AZ 85048

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12.

The Ripoff Report is, among other things, a website for consumer

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complaints.

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connection may use the Ripoff Report website to create and publish complaints about

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companies or individuals who they believe have wronged them in some manner.

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13.

Any member of the public with access to a computer and an Internet

Complaints published on the Ripoff Report are automatically indexed by

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numerous search engines such as Google and such complaints often rank very high in

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Google’s search results. Because of this high ranking, individuals or businesses with

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complaints on the Ripoff Report website may be negatively impacted.

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14.

Since the site began in 1998, because of the negative impact that

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complaints on the Ripoff Report website may have, Xcentric has been sued numerous

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times by plaintiffs seeking to remove reports or otherwise obtain damages from Xcentric

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for the publication of such reports.

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15.

As a matter of law and pursuant to the Communications Decency Act, 47

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U.S.C. § 230(c)(1) (the “CDA”), except as to certain types of intellectual property claims

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and criminal claims, Xcentric is generally immune from any civil cause of action arising
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VERIFIED COMPLAINT

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from material posted on the Ripoff Report site by a third party. As a result of the CDA,

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because Xcentric normally plays no material role in the creation of the reports at issue,

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lawsuits seeking to force the removal of reports through litigation have frequently been

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dismissed or otherwise resolved in favor of Xcentric.

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16.

In addition to frequent praise and nearly unanimous judicial affirmation, the

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CDA has also drawn substantial and widespread commentary and passionate criticism

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from those who disagree with or dislike the law or the results which it sometimes

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requires.

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17.

Among those who have been targeted by online criticism on the Ripoff

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Report website or elsewhere, the CDA is often seen as an unfair law which creates an

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improper “loophole” allowing sites such as the Ripoff Report to publish derogatory and

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even defamatory speech with complete impunity.

GINGRAS LAW OFFICE, PLLC
3941 E. CHANDLER BLVD., #106-243
PHOENIX, AZ 85048

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18.

One well-known commentary regarding both the CDA and the Ripoff

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Report website is an article written by an attorney, Sarah Bird, entitled “The Anatomy of

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a RipOff Report Lawsuit” which was originally published on January 21, 2008 on

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www.SEOmoz.org (the “Bird Article”).

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analysis of the Ripoff Report’s successful litigation history, as well as the author’s

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opinions regarding the CDA and her answers to the following questions, among others:

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“Is it true that RipOff Report has never lost a lawsuit? Is this a failure of the legal

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system? Are the allegations unfounded? If there is truth in the allegations, then how

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is the system going wrong? Why can’t RipOff Report be held responsible for its

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conduct?”

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19.

The Bird Article purports to offer a legal

Among other things, the Bird Article contains a discussion of federal

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racketeering laws, specifically the Racketeer Influenced and Corrupt Organizations Act

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or “RICO”, codified at 18 U.S.C. §§ 1961, et seq., and the predicate act of extortion.

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Among other things, the Bird Article suggests that plaintiffs seeking to avoid the

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limitations imposed by the CDA may be able to do so by pursing federal RICO claims

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against Xcentric predicated upon alleged acts of extortion.
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VERIFIED COMPLAINT

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In closing, the author of the Bird Article specifically encouraged litigants to

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attempt to overcome Xcentric’s CDA immunity by bringing claims of RICO/extortion: “I

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hope that plaintiffs will continue to press the RICO/Extortion combo … .”

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On January 28, 2009, a third party posted a complaint on the Ripoff Report

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website concerning AEI, MOBREZ, and LLANERAS. The report was written from the

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perspective of an unhappy former employee and it contained various derogatory

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statements about AEI, MOBREZ, and LLANERAS.

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subsequently posted on the site by third parties between early 2009 and early 2010.

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22.

Other similar reports were

Based on the publication of these reports, Defendants MOBREZ and

LLANERAS decided to commence litigation against XCENTRIC and Magedson.
23.

Prior to the commencement of the Asia Litigation, Defendants MOBREZ

and/or LLANERAS and/or BLACKERT and/or Does 1-10 performed legal research and

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GINGRAS LAW OFFICE, PLLC
3941 E. CHANDLER BLVD., #106-243
PHOENIX, AZ 85048

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requested that unknown others perform research, on previous lawsuits involving

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XCENTRIC. During the course of this research, Defendants MOBREZ, LLANERAS,

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and BLACKERT reviewed the Bird Article, among other things, and determined that

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based on the CDA, litigation against XCENTRIC and Magedson was extremely unlikely

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to succeed, assuming the litigation merely accused XCENTRIC and/or Magedson of

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publishing material submitted to the Ripoff Report website by a third party.

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24.

Based on this conclusion, Defendants MOBREZ, LLANERAS, and

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BLACKERT determined that an alternative litigation strategy was necessary such as the

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RICO/extortion theory advocated in the Bird Article. However, Defendants MOBREZ,

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LLANERAS, and BLACKERT knew that they could not legitimately present such a

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theory because at no time was AEI actually extorted by XCENTRIC or Magedson.

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To solve this problem, at some time in or around April 2009, Defendants

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MOBREZ and LLANERAS devised a plan, to wit: Defendant MOBREZ would contact

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Magedson by telephone and would attempt to induce Magedson to ask for money in

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exchange for the removal of the reports about AEI thereby permitting AEI to proceed

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with litigation under a RICO/extortion theory.
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VERIFIED COMPLAINT

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26.

In furtherance of this plan, in April and May 2009 MOBREZ placed a

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series of seven telephone calls to Magedson using the primary phone number listed on the

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Ripoff Report website; [phone]. The date, time, and duration of each call from

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MOBREZ to Magedson is reflected in the table below:

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TABLE OF CALLS

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Call
#
1
2
3
4
5
6
7

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8
9
10
11
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GINGRAS LAW OFFICE, PLLC
3941 E. CHANDLER BLVD., #106-243
PHOENIX, AZ 85048

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27.

Date
4/27/2009
4/27/2009
4/27/2009
5/5/2009
5/5/2009
5/9/2009
5/12/2009

Start
Time
3:21 PM
3:27 PM
3:28 PM
11:28 AM
1:05 PM
1:10 PM
2:46 PM

Call
From #
[phone]
[phone]
[phone]
[phone]
[phone]
[phone]
[phone]

Length
Min
3.5
1.0
2.9
2.6
2.2
.5
16.5

Defendant LLANERAS was secretly listening to calls #4, 5 and 7 from

Defendant MOBREZ to Magedson without Magedson’s knowledge.
28.

Following the completion of the calls and on the last day prior to the

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expiration of the statute of limitations as to the first report about AEI, on January 27,

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2010 Defendants AEI, MOBREZ, LLANERAS, and BLACKERT commenced the Asia

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Litigation which began in the Los Angeles County Superior Court, Case No. SC106603.

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The action was subsequently removed to the United States District Court, Central District

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of California, Case No. 2:10-cv-01360-SVW–PJW.

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29.

A true and correct copy of the original 33-page Complaint filed in the Asia

Litigation, excluding exhibits, is attached hereto as Exhibit A.
30.

In their initial Complaint AEI, MOBREZ, and LLANERAS asserted twelve

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claims for relief against XCENTRIC and Magedson including two federal RICO causes

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of action, one predicated on “extortion” and one predicated on “wire fraud”.

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Complaint accused XCENTRIC and Magedson of engaging in a “SHAKEDOWN” by,

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among other things, “offer[ing] to enroll Plaintiffs in the CAP program for a fee of at

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least five thousand dollars ($5,000), plus a monthly monitoring fee.”
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VERIFIED COMPLAINT

The

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31.

At a hearing which took place on April 19, 2010, Defendant BORODKIN

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entered an appearance in the Asia Litigation as counsel for AEI, MOBREZ, and

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LLANERAS. From April 19, 2010 through the final conclusion of the case, Defendant

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BORODKIN was actively involved in the Asia Litigation as counsel for MOBREZ,

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LLANERAS, and AEI.

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32.

At the conclusion of the hearing, the District Court issued an order, a true

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and correct copy of which is attached hereto as Exhibit B. In the April 19th order, the

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Court required “plaintiff” (meaning AEI, MOBREZ, and LLANERAS) to “file a

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declaration describing meetings with any representative of defendant regarding

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extortion[]” and to do so within two weeks.
33.

On the last day to do so, May 3, 2010, MOBREZ and LLANERAS filed

their declarations with the Court as ordered. True and correct copies of their declarations

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GINGRAS LAW OFFICE, PLLC
3941 E. CHANDLER BLVD., #106-243
PHOENIX, AZ 85048

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are attached hereto as Exhibits C and D, respectively. Both declarations were sworn to

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as true and correct under penalty of perjury pursuant to 28 U.S.C. § 1746.

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34.

In his declaration, Defendant MOBREZ detailed the alleged contents of his

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telephone calls to Magedson in April and May 2009. In Paragraph 10 of his declaration,

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Defendant MOBREZ described the contents of one such conversation with Magedson as

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follows:

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On May 5, 2009, I again contacted the Ripoff Report office by phone. I
asked the man, who now identified himself as Ed Magedson, if he had
received the e-mail I sent to him February 28, 2009. Mr. Magedson
responded that I would need to enroll in the CAP program. Again, I asked
for more information regarding the program, including the cost of
participation. Mr. Magedson proceeded to describe his Web site and how it
could benefit us. He then emphasized that his Web site has immunity under
the law and, therefore could not be sued. Moreover, he claimed to have a
team of lawyers that would fight us if we chose to sue him. He further
warned that others had tried but failed and that it was best to just “go with
the program.” Ms. Llaneras witnessed this conversation from her office
phone.

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VERIFIED COMPLAINT

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2
3
4
5
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10
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35.

In Paragraph 13 of his declaration, Defendant MOBREZ described the

contents of a second conversation with Mr. Magedson as follows:
Later that day, I responded to Mr. Magedson’s e-mail by phone. I told Mr.
Magedson that I had received his e-mail and was still uncertain what he
wanted me to do. Mr. Magedson responded that I would have to go onto his
Web site and enroll in the CAP program. When asked what it would cost
for us to participate in his program, Mr. Magedson replied that it would cost
us at least "five grand" plus a monthly maintenance fee of a couple hundred
dollars. He stated that these charges were based on the size if [sic]
company. Specifically, he stated that the more money a company made, the
more they would be charged. When asked the reasoning behind this, he was
not responsive. He again instructed me to fill out the CAP forms. Again,
Ms. Llaneras listened from her office phone.
36.

Among other allegations, the allegation that Mr. Magedson demanded “at

least ‘five grand’” from Defendant MOBREZ formed the primary basis for the claim that

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GINGRAS LAW OFFICE, PLLC
3941 E. CHANDLER BLVD., #106-243
PHOENIX, AZ 85048

12

XCENTRIC and Magedson engaged in extortion as to AEI, MOBREZ, and LLANERAS.

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37.

In her May 3, 2010 declaration, Defendant LLANERAS testified under

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penalty of perjury that “I witnessed the conversations that took place between Mr.

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Mobrez and Mr. Magedson on May 5th and 12th, 2009. Specifically, I listened in on the

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conversation from my office phone.”

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38.

In her declaration, Defendant LLANERAS further testified under penalty of

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perjury that “Mr. Mobrez’s Declaration is a true and accurate rendition of the

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conversations that I witnessed between Mr. Mobrez and Mr. Magedson.”

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39.

In her declaration, Defendant LLANERAS further testified under penalty of

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perjury that she took handwritten notes during each conversation between Defendant

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MOBREZ and Magedson as the conversations occurred.

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40.

On Friday, May 7, 2010, Defendant MOBREZ was deposed in Los

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Angeles, California regarding his allegations in the Asia Litigation.

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deposition, Defendant MOBREZ reviewed his May 3, 2010 declaration and reaffirmed,

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again under penalty of perjury, that the statements contained in his declaration were

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truthful and accurate.
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VERIFIED COMPLAINT

During his

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41.

Unbeknownst to Defendants MOBREZ and LLANERAS, all of Defendant

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MOBREZ’s calls to the Ripoff Report website were automatically recorded by Xcentric’s

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phone system. This fact was disclosed to Defendants MOBREZ and LLANERAS for the

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first time near the end of MOBREZ’s deposition on May 7.

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42.

As reflected in the recordings of the conversations between Defendant

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MOBREZ and Magedson, Defendants MOBREZ and LLANERAS each committed

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perjury when they testified that Magedson demanded $5,000 from MOBREZ in a

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telephone conversation on May 5, 2009. This allegation was, and is, completely false.

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43.

In truth, at no time during any telephone conversion or at any other time did

Magedson ever ask for any money from Defendants MOBREZ or LLANERAS.

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Defendants MOBREZ and LLANERAS fabricated this allegation in an effort to create

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causes of action against XCENTRIC and Magedson which they believed would be

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GINGRAS LAW OFFICE, PLLC
3941 E. CHANDLER BLVD., #106-243
PHOENIX, AZ 85048

10

sufficient to avoid CDA immunity. By doing so, Defendants MOBREZ and LLANERAS

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hoped to force the removal of the reports about AEI, MOBREZ and LLANERAS on the

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Ripoff Report website.

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44.

On May 11, 2010, a letter was sent to Defendants BORODKIN and

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BLACKERT, a true and correct copy of which is attached hereto as Exhibit E. Among

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other things, this letter reiterated that Defendant MOBREZ and LLANERAS had

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committed perjury and that their claims against XCENTRIC and Magedson were

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completely groundless.

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45.

In addition, the May 11, 2010 letter reminded Defendants BORODKIN and

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BLACKERT that Rule 3–700 of the California Rules of Professional Conduct required

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the mandatory withdrawal of any attorney who: “knows or should know that the client is

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bringing an action, conducting a defense, asserting a position in litigation, or taking an

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appeal, without probable cause and for the purpose of harassing or maliciously injuring

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any person … .”

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46.

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In addition, the May 11, 2010 letter cautioned Defendants BORODKIN and

BLACKERT that: “Xcentric has successfully sued parties and their lawyers for
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VERIFIED COMPLAINT

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knowingly commencing and continuing litigation that they knew was factually

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groundless. Xcentric intends to bring such claims against your clients for their wrongful

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actions and we will not hesitate to include claims against either or both of you

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individually if you continue to prosecute any claims in this case which you know are

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factually untrue or if the evidence demonstrates that you brought this case knowing that

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the allegations contained in it were factually untrue.”

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47.

The May 11, 2010 letter to Defendants BORODKIN and BLACKERT

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concluded with the following admonition: “In closing, I want to emphasize one obvious

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fact—your clients have lied about the material facts of this case. As such, just as your

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clients were, you now stand at a crossroads wherein you have a choice: you can do the

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right thing and follow the requirements set forth by the law and by your ethical duties, or

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your can ignore those duties and face the consequences.”

GINGRAS LAW OFFICE, PLLC
3941 E. CHANDLER BLVD., #106-243
PHOENIX, AZ 85048

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48.

Following receipt of the May 11, 2010 letter, Defendants BORODKIN and

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BLACKERT did not withdraw from the Asia Litigation. Instead, despite knowing that

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the claims made by their clients were factually untrue, they continued to pursue the case

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even more aggressively than before.

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49.

On May 20, 2010, Defendants MOBREZ and LLANERAS filed

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“Corrected” declarations with the court, true and correct copies of which are attached

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hereto as Exhibits F and G, respectively. In her “corrected declaration”, Defendant

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LLANERAS substantially recanted all of her prior testimony regarding the extortion

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allegedly committed by XCENTRIC and Magedson.

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50.

In his “corrected declaration”, Defendant MOBREZ also recanted

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substantial portions of his previous testimony regarding the alleged substance of his

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telephone conversations with Magedson in April and May 2009. However, Defendant

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MOBREZ further perjured himself by testifying for the first time, “In addition, there

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were a number of incoming calls to me from Ripoff Report.”

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MOBREZ knew that at no time were any calls ever made from Ripoff Report to him.

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This allegation was simply another lie intended to further his fraud upon the Court.
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VERIFIED COMPLAINT

In truth, Defendant

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51.

Upon information and belief, Defendants BORODKIN and BLACKERT

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assisted Defendant MOBREZ with the creation of his “corrected declaration” and in

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doing so BORODKIN and BLACKERT intentionally suborned perjury from MOBREZ.

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52.

On May 24, 2010, XCENTRIC and Magedson filed a Motion for Summary

5

Judgment in the Asia Litigation which argued that AEI, MOBREZ, and LLANERAS had

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engaged in a fraud upon the Court by lying as to their extortion claims. The motion

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further argued that AEI could not prevail on certain of its other claims due to Defendant

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MOBREZ’s deposition testimony in which he revealed that during nine years of

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existence, AEI’s total revenues were $0.

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53.

Defendants, and each of them, actively and aggressively opposed

XCENTRIC’s Motion for Summary Judgment despite knowing that each and every claim

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in the Asia Litigation was factually groundless and that the action was commenced

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GINGRAS LAW OFFICE, PLLC
3941 E. CHANDLER BLVD., #106-243
PHOENIX, AZ 85048

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wrongfully, maliciously and for the improper purpose of harassment and seeking relief to

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which Defendants were not entitled as a matter of law.

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54.

In an effort to prolong the action and compound the harm caused, one day

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before XCENTRIC’s Motion for Summary Judgment was set to be heard, on July 9, 2010

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Defendant BORODKIN filed a pleading entitled, “PLAINTIFFS’ EX PARTE MOTION

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(1) UNDER RULE 56(f) TO DENY OR CONTINUE DEFENDANTS’ MOTION FOR

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SUMMARY

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COMPELLING DEFENDANT ED MAGEDSON TO APPEAR FOR DEPOSITION WITH

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DOCUMENTS AND (3) FOR SANCTIONS UNDER LOCAL CIVIL RULES 37-4 AND

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83-7.”

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55.

JUDGMENT

TO

CONDUCT

FURTHER

DISCOVERY

AND

(2)

In her July 9 pleading, Defendant BORODKIN vigorously argued against

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the disposition of any of the claims against XCENTRIC and Magedson, claiming,

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“Defendants [XCENTRIC and Magedson] will do anything to avoid the August 3, 2010

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trial date.”

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Magedson, and their counsel of a variety of improper conduct including, but not limited

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to:

To support that position, Defendant BORODKIN accused XCENTRIC,

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VERIFIED COMPLAINT

1

•

2
3

and Rules, and dictating procedural rules of their own making”
•

4
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“With escalating frequency, disobey and misrepresent this Court’s Orders

“Harass Defendants’ [sic] counsel with veiled threats of administrative
proceedings and explicit threats of Rule 11 sanctions without basis.”

56.

At the time she filed the July 9 pleading, Defendant BORODKIN knew that

6

her allegations of improper conduct against XCENTRIC, Magedson, and their counsel

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were completely false.

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57.

On July 19, 2010, the District Court in the Asia Litigation issued a 53-page

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order granting partial summary judgment in favor of XCENTRIC and Magedson as to the

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RICO/extortion claims and denying all relief requested in Defendant BORODKIN’s July

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9 pleading. The court further dismissed the RICO/wire fraud claim pursuant to Fed. R.

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Civ. P. 9(b) but granted leave to amend.

GINGRAS LAW OFFICE, PLLC
3941 E. CHANDLER BLVD., #106-243
PHOENIX, AZ 85048

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58.

Despite knowing that the case was entirely groundless and frivolous, on

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July 27, 2010, Defendants, and each of them, prepared and filed an 84-page First

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Amended Complaint in the Asia Litigation supported by more than 250 pages of exhibits.

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59.

Shortly thereafter, on August 16, 2010, Defendants BLACKERT and

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BORODKIN filed a Motion for Reconsideration requesting that the District Court

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reconsider its summary judgment ruling.

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BORODKIN and MOBREZ each submitted lengthy declarations which purported to

20

describe unlawful “threats” made by Magedson and his counsel during a settlement

21

conference which took place on July 20, 2010.

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60.

In support of this request, Defendants

On September 27, 2010, XCENTRIC filed a Motion for Summary

23

Judgment as to the First Amended Complaint in the Asia litigation. At the time the

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motion was filed, the matter was set for hearing on November 1, 2010.

25

61.

Less than two hours before the November 1, 2010 summary judgment

26

hearing and knowing that XCENTRIC’s counsel would be traveling from Arizona to Los

27

Angeles for the hearing, Defendant BORODKIN filed a second motion requesting relief

28

under Rule 56(f). Defendant BORODKIN supported her second Rule 56(f) motion with
12
VERIFIED COMPLAINT

1

a declaration in which she described, at length, her recent communications with an

2

individual, JAMES ROGERS (“ROGERS”) who was previously employed as a personal

3

assistant to Magedson.

4

continuance was needed due to her inability to obtain ROGERS’ deposition prior to the

5

November 1, 2010 summary judgment hearing.

6

62.

Defendant BORODKIN further declared that a Rule 56(f)

In her declaration, Defendant BORODKIN made knowingly false and

7

misleading statements to the court regarding the circumstances of ROGERS’ deposition.

8

Specifically, Defendant BORODKIN declared:

9
10
11
12

On or about October 22, 2010, I received a telephone call from Defendants’
attorney David Gingras. We again spoke about the possibility of avoiding
this motion – but his proposal – that I fly to Phoenix the next day, Saturday,
October 23, 2010 to do a joint deposition of Mr. Rogers, did not seem
feasible. Plaintiffs had already purchased an airline ticket for Mr. Rogers for
October 23, 2010.

GINGRAS LAW OFFICE, PLLC
3941 E. CHANDLER BLVD., #106-243
PHOENIX, AZ 85048

13
14

63.

Defendant BORODKIN’s declaration was false and intentionally

15

misleading insofar as she implied that the only option she was given for taking the

16

deposition of ROGERS to “fly to Phoenix the next day … .” In truth, on October 22,

17

2010 Defendant BORODKIN received an email from XCENTRIC’s counsel which

18

offered “to allow you to take the deposition of James Rogers immediately at any time

19

prior to Nov. 1st and at any place … .” Defendant BORODKIN intentionally sought to

20

mislead the Court at to this issue in the hopes that doing so would permit her to further

21

harm XCENTRIC and Magedson by prolonging the Asia Litigation.

22

64.

On November 1, 2010 after XCENTRIC’s counsel had arrived in Los

23

Angeles from Arizona, the District Court vacated the hearing on XCENTRIC’s second

24

Motion for Summary Judgment. The hearing was vacated solely due to the last minute

25

filing of Defendant BORODKIN’s second Rule 56(f) motion.

26

65.

On May 4, 2011, the District Court issued an order denying Defendant

27

BORODKIN’s second Rule 56(f) motion in its entirety and granting summary judgment

28

in favor of XCENTRIC and Magedson as to all claims in the Asia Litigation. In a
13
VERIFIED COMPLAINT

1

footnote to its order, on the issue of Defendant BORODKIN’s second Rule 56(f) motion,

2

the District Court noted:

3
4
5
6
7
8

The Court notes that this eleventh hour filing was consistent with
Plaintiffs’ pattern in this case. On Friday, July 9, 2010, one day before to
the previous summary judgment hearing in this case, Plaintiffs also filed an
Ex Parte Application to deny or continue Defendants' motion for summary
judgment so as to allow Plaintiffs to conduct further discovery under
Federal Rule of Civil Procedure 56(f). [Docket no. 87]. That ex parte
application was denied in the Court’s July [Docket no. 94]. Plaintiffs have
demonstrated a pattern of filing papers late in this case and generally
disregarding the scheduling orders of the Court.

9
10

66.

By virtue of the May 4, 2011 summary judgment order, the Asia Litigation

11

was resolved in favor of XCENTRIC and Magedson and against AEI, MOBREZ and

12

LLANERAS with respect to all claims and all relief requested.

GINGRAS LAW OFFICE, PLLC
3941 E. CHANDLER BLVD., #106-243
PHOENIX, AZ 85048

13

67.

On June 15, 2011, a final judgment was entered in the Asia Litigation, a

14

copy of which is attached hereto as Exhibit H. The final judgment resolved the Asia

15

Litigation in favor of XCENTRIC and Magedson and against AEI, MOBREZ and

16

LLANERAS with respect to all claims and all relief requested.

17

FIRST CAUSE OF ACTION

18

WRONGFUL INITIATION OF CIVIL PROCEEDINGS

19

(Against AEI, MOBREZ, LLANERAS and BLACKERT)

20

68.

Xcentric incorporates the above allegations as if fully set forth herein.

21

69.

At the time the Asia Litigation was commenced, Defendants AEI,

22

MOBREZ, LLANERAS and BLACKERT each knew the action was factually groundless

23

as to each and every claim.

24

70.

At the time the Asia Litigation was commenced, Defendants AEI,

25

MOBREZ, LLANERAS and BLACKERT each knew the action was factually groundless

26

in particular as to the allegations of RICO/extortion and RICO/wire fraud.

27
28

71.

Defendants AEI, MOBREZ, LLANERAS and BLACKERT commenced

the Asia Litigation without probable cause.
14
VERIFIED COMPLAINT

1

72.

Defendants AEI, MOBREZ, LLANERAS and BLACKERT commenced

2

the Asia Litigation solely for improper purposes.

3

commenced solely for non-legitimate reasons including, but not limited to, the following:

4

a.

Specifically, the action was

To pressure Xcentric to remove material from the Ripoff Report website,

5

without any legal basis for doing so, rather than incurring significant legal fees

6

defending a frivolous case;

7

b.

MOBREZ, LLANERAS, AEI on the Ripoff Report website in the future;

8
9

To discourage XCENTRIC from allowing consumers to post complaints about

c.

To create the false impression that MOBREZ, LLANERAS, AEI were
“victims” of extortion when, in fact, they were not;

10
11

d.

To provide unwarranted support to critics of the Ripoff Report website;

12

e.

To stifle the First Amendment rights of XCENTRIC and users of the Ripoff
Report website;

GINGRAS LAW OFFICE, PLLC
3941 E. CHANDLER BLVD., #106-243
PHOENIX, AZ 85048

13
14

f.

rather than using those resources to improve the Ripoff Report site;

15
16

To cause XCENTRIC to divert its resources to defending a frivolous case

g.

To intimidate XCENTRIC into limiting the public’s ability to use the Ripoff

17

Report website to publish truthful information and access truthful information

18

published by others;

19

h.

To wrongfully investigate Magedson’s personal life and to obtain and publicly

20

release personal, private, confidential and/or embarrassing information solely

21

for the purpose of embarrassment and harassment.

22

73.

Defendants’ wrongful conduct was the actual and proximate cause of

23

injury, damage, loss, or harm to XCENTRIC in an amount in excess of $75,000.00, the

24

exact amount of which shall be proven at trial.

25

74.

The actions of Defendants AEI, MOBREZ, LLANERAS and BLACKERT

26

were willful, malicious, and the product of an evil hand guided by an evil mind.

27

Defendants, and each of them, specifically intended to harm XCENTRIC to an extent

28

sufficient to entitle it to recover punitive damages in an amount to be proven at trial.
15
VERIFIED COMPLAINT

1

SECOND CAUSE OF ACTION

2

WRONGFUL CONTINUATION OF CIVIL PROCEEDINGS

3

(Against BORODKIN, AEI, MOBREZ, LLANERAS and BLACKERT)

4

75.

Xcentric incorporates the above allegations as if fully set forth herein.

5

76.

At the time the Asia Litigation was commenced, Defendants AEI,

6

MOBREZ, LLANERAS and BLACKERT each knew the action was factually groundless

7

as to each and every claim.

8

77.

As of no later than May 7, 2010, Defendants BORODKIN and

9

BLACKERT knew, with absolute certainty, that Defendants MOBREZ and LLANERAS

10

had committed perjury and that their claims of extortion were totally and completely

11

fabricated and false.

12

78.

Following the deposition of Defendant MOBREZ on May 7, 2010,

GINGRAS LAW OFFICE, PLLC
3941 E. CHANDLER BLVD., #106-243
PHOENIX, AZ 85048

13

Defendant BLACKERT sent an email announcing his intent to withdraw from the Asia

14

Litigation. A true and correct copy of the email is attached hereto as Exhibit I. In his

15

email, Defendant BLACKERT stated, among other things, “You have to realize this is a

16

shock to me. Per my own indepedent [sic] research I need to withdraw from the case and

17

explain why. In light of todays events I have a serious conflict of interest and will

18

withdraw as counsel … Moreover, I urged my client to dismiss this case.”

19

79.

Despite expressing his understanding of the ethical requirement that he

20

withdraw from the Asia Litigation, Defendant BLACKERT did not withdraw from the

21

case. Upon information and belief, Defendant BORODKIN actively urged and pressured

22

BLACKERT not to withdraw and to continue pursuing the matter despite knowing that it

23

was entirely groundless and unlawful.

24

80.

In or around August 2010, although he never formally withdrew from the

25

matter, Defendant BLACKERT ceased participating in the Asia Litigation.

26

information and belief, Defendant BLACKERT ceased participating in the action because

27

he knew that doing so was unlawful, unethical, and wrongful.

28

81.

Upon

At no time did Defendant BORODKIN withdraw from the Asia Litigation.
16
VERIFIED COMPLAINT

1

82.

As alleged herein, the Defendants, and each of them, wrongfully continued

2

the Asia Litigation without probable cause and knowing that the action was brought

3

primarily for a purpose other than that of securing the proper adjudication of the claims in

4

which the proceedings were based.
83.

5

Defendants’ wrongful conduct was the actual and proximate cause of

6

injury, damage, loss, or harm to XCENTRIC in an amount in excess of $75,000.00, the

7

exact amount of which shall be proven at trial.
84.

8

The actions of Defendant AEI, MOBREZ, LLANERAS, BLACKERT and

9

BORODKIN were willful, malicious, and the product of an evil hand guided by an evil

10

mind. Defendants, and each of them, specifically intended to harm XCENTRIC to an

11

extent sufficient to entitle it to recover punitive damages in an amount to be proven at

12

trial.

GINGRAS LAW OFFICE, PLLC
3941 E. CHANDLER BLVD., #106-243
PHOENIX, AZ 85048

13

THIRD CAUSE OF ACTION

14

AIDING AND ABETTING TORTIOUS CONDUCT

15

(Against All Defendants)

16

85.

Xcentric incorporates the above allegations as if fully set forth herein.

17

86.

Upon information and belief, Defendants AEI, MOBREZ, LLANERAS,

18

BLACKERT, BORODKIN and DOES 1–10 each aided and abetted each other in the

19

Asia Litigation as alleged above.

20

87.

Upon information and belief, Defendants AEI, MOBREZ, LLANERAS,

21

BLACKERT, BORODKIN and DOES 1–10 each were each aware that the other

22

Defendants were engaged in the conduct alleged herein for which they are liable to

23

XCENTRIC.

24

88.

Upon information and belief Defendants AEI, MOBREZ, LLANERAS,

25

BLACKERT, BORODKIN and DOES 1–10 each provided substantial assistance or

26

encouragement to each other with the intent of promoting their wrongful conduct.

27
28

89.

Defendants AEI, MOBREZ, LLANERAS, BLACKERT, BORODKIN and

DOES 1–10, each acted in concert with one another during the wrongful commencement
17
VERIFIED COMPLAINT

1

and continuation of the Asia Litigation. Pursuant to A.R.S. § 12–2506(D), Defendants

2

and each of them are jointly and severally liable to XCENTRIC for any and all damages

3

suffered.

4

90.

Defendants’ wrongful conduct was the actual and proximate cause of

5

injury, damage, loss, or harm to XCENTRIC in an amount in excess of $75,000.00, the

6

exact amount of which shall be proven at trial.
91.

7

The actions of Defendant AEI, MOBREZ, LLANERAS, BLACKERT and

8

BORODKIN were willful, malicious, and the product of an evil hand guided by an evil

9

mind. Defendants, and each of them, specifically intended to harm XCENTRIC to an

10

extent sufficient to entitle it to recover punitive damages in an amount to be proven at

11

trial.

12
JURY DEMAND

GINGRAS LAW OFFICE, PLLC
3941 E. CHANDLER BLVD., #106-243
PHOENIX, AZ 85048

13
14

Xcentric demands trial by jury as to all issues so triable.

15
16

WHEREFORE, Plaintiff XCENTRIC VENTURES, LLC prays that this Honorable

17

Court enter judgment against Defendants as follows:

18
19
20
21
22

A.

For damages in an amount according to proof at trial;

B.

For punitive damages in an amount according to proof at trial;

C.

For an award of taxable costs;

D.

Any other relief deemed appropriate by the Court.

DATED July 18, 2011.
GINGRAS LAW OFFICE, PLLC

23
/S/ David S. Gingras
David S. Gingras
Attorneys for Plaintiff
XCENTRIC VENTURES, LLC

24
25
26
27
28
18

VERIFIED COMPLAINT

1

VERIFICATION

2
3
4

I, EDWARD MAGEDSON, hereby state that I am the manager of XCENTRIC

5

VENTURES, LLC, I have read the foregoing Verified Complaint and know the contents

6

therein to be true to the best of my knowledge, except as to those matters herein stated

7

upon information and belief, and as to such matters, I believe them to be true.

8
9
10

Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury under the laws of the

11

United States of America that the foregoing is true and correct.

12

GINGRAS LAW OFFICE, PLLC
3941 E. CHANDLER BLVD., #106-243
PHOENIX, AZ 85048

13

EXECUTED ON: July 18, 2011.

_________________________
EDWARD MAGEDSON

14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
19

VERIFIED COMPLAINT

Exhibit A

Exhibit B

Case 2:10-cv-01360-SVW-PJW Document 26

Filed 04/19/10 Page 1 of 1

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV10-1360-SVW-PJWx

Title

Asia Economic Institute et al v. Xcentric Ventures LLC et al

Present: The Honorable

Date

April 19, 2010

STEPHEN V. WILSON, U.S. DISTRICT JUDGE

Paul M. Cruz

Deborah Gackle

Deputy Clerk

Court Reporter / Recorder

Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

Daniel F. Blackert
Lisa Boradkin

David S. Gingras

Proceedings:

1. DEFENDANTS XCENTRIC & MAGEDSON'S SPECIAL MOTION TO
STRIKE & MOTION TO REQUIRE RICO CASE STATEMENT [9] (fld
03/22/10)
2. NEW CASE STATUS CONFERENCE

Hearing and conference held. The motion is denied. Order to issue. The case is set for jury trial
on August 3, 2010 at 9:00 a.m. Pretrial Conference is set for 3:30 p.m. Within two weeks, plaintiff
shall file a declaration describing meetings with any representative of defendant regarding extortion.
Defendant, within ten days of receipt of plaintiff’s declaration, shall file a declaration on the same issue.
Also, within ten days, the parties shall meet and confer to exchange initial disclosures. The Court
bifurcates damages and RICO claims. The trial will only address extortion. Motions for summary
judgment may be filed anytime prior to the trial.

:
Initials of Preparer
CV-90 (06/04)

CIVIL MINUTES - GENERAL

10

PMC
Page 1 of 1

Exhibit C

Case 2:10-cv-01360-SVW-PJW

Document 28

Filed 05/03/10

Page 1 of 7

DANIEL F. BLACKERT. ESQ., CSB No. 255021
LISA J. BORODKIN, ESQ. CSB No. 196412
L

6
7

s

Asia Economic Institute
11766 Wilshire Blvd., Suite 260
Los Angeles, CA 90025
Telephone [phone]
Facsimile (J 10) 826-4448
[)~111 iel, dasiaecun
.oru
13Iackertcsq((j)vaIWO:Culll_
IisaJasiaecul1.orL'.
IiS_~l hu,:()(lk i11' /" post. ban <.lc.<i_ cd_!!
Attorney for Plaintiffs,
Asia Economic Institute,
Raymond Mobrez, and
lIiana L1aneras

UNITED STATES DISTRICT COURT
10

CENTRAL DISTRICT

OF CALIFORNIA

11
, ')

.l.L.

13

ASIA ECONOMIC INSTITUTE, a California)
LLC: RAYMOND MOBREZ an individual;
)
and lUANA LLANERAS, an individual,
)

l~

17

18
19
20

DEC LARA TION OF RAYMOND
) MOBREZ PURSUANT TO THE
) COURT'S ORDER ON APRIL 19,2010
) REGARDING PLAINTIFFS'
RICO AND
) EXTORTION CAUSES OF ACTION

Plaintiffs.

14

Case No.: 2:10-cv-01360-SVW-PJW

~.

XCENTRIC VENTURES,
LLC, an Arizona
LLC, d/b/a as BADBUSINESS
BUREAU
and/or BADBUSINESSBUREAU.COM
and/or RIP OFF REPORT and/or
RIPOFFREPORT.COM;
BAD BUSINESS
BUREAU, LLC. organized and existing under)
the laws ofSt. Kitts/Nevis, West Indies;
EDWARD MAGEDSON an individual, and
DOES I through 100. inclusive,

21
Defendants.

)
)

»
)

Judge: Stephen V. Wilson
Trial Date: August 3, 2010
Time: 9:00 AM
Courtroom: 6

~
)
)
)
)
)

----------------------------)
23
24

26

28

Declaration

of Raymond

Mobrez

- 1

Case 2:10-cv-01360-SVW-PJW

2

Document 28

Filed 05/03/10

Page 2 of 7

I. Raymond Mobrez, declare under penalty of perjury as follows:
I.

My name is Raymond Mobrez. I am a resident of that State of California, and a

over the age of 18 years, and if called to testify in court or other proceeding I could and woul
::_)

give the following testimony which is based on my own personal knowledge unless otherwis
:
8

stated.

2.

I am a principal of Asia Economic Institute ("AEI"). AEI had been in business i

California for the past nine years.

At the time the defamatory posts were posted on Ripof

10

report, AEI operated as a free, on-line, non-governmental publication of current news and events.
II

On or about February

12
13

Google.com

("Goog\e")

2009, Ms. Llaneras

and I conducted

a search

0

and/or Yahoo.com ("Yahoo") using the following terms: Raymon

Mobrez, Mobrez. Iliana Llaneras, Llaneras, and AEI.

Within the first few search results, ou

names appeared in association with a "Ripoff Report." The resulting text also claimed that w
17

had exploited our employees and warned search engine users not to work for AEI. The posts ar
attached to Plaintiffs' Complaint.

19

2C

4.

On February 15,2009, I sent an e-mail to Ripoff Report informing the Defendant

of the "outlandish lies" published on their Web site. In an effort to avoid the judicial process,

21

simply requested that the Defendants remove the posts from their Web site and identify th
22
23

individuals responsible. Likewise, I informed Defendants "Your false publishing has caused m

24

and others that you have named hardship and enormous loss." At this time, I made Defendant
aware of the damage we were suffering because of these posts. Specifically, I told him he ha

26

put me out of business. He was not responsive. Attached hereto as EXHIBIT A is a true an
accurate copy of my February 15. 2009 e-mail to Defendants. Defendants never responded.
28

Declaration

of Raymond

Mobrez

- 2

Case 2:10-cv-01360-SVW-PJW

5.

Document 28

Filed 05/03/10

Page 3 of 7

After there had been no response, AEI tiled a "Rebuttal" on April 3, 2009 fo

each report listed on the Ripoff Report Web site at that time. These "rebuttals," however, do no
appear as "results" on Internet search engines such as Google and Yahoo.

Attached hereto a

EXHIBIT B is a true and accurate copy of the rebuttal.
6.

On April 29, 2009, I contacted the Ripoff Report office using the telephon

number listed on its Web site. I was taken through a series of voice prompts which eventually Ie
8

me to someone who identified himself as the "EDitor." The speaker immediately inquired int
the size and profitability of my business. Based on my recollection, the speaker asked, amon

::'0
11

other things, whether my company was internationally based, the size of the company, and ho

12

we were making money. I responded that AEI is an American company that has been shut dow
by the accusations posted on his Web site. Later in our conversation, he boasted that Ripof

14

Report was at the top of all the search engines. The call was disconnected
thereafter.
17
18

immediatel

Attached hereto as EXHIBIT C is a true and accurate copy of Mr. Mobrez's phon

records from April 27,2009.
7.

I immediately re-dialed the number. During this brief conversation, the "EDitor'

asked if we had read about his Advocacy program. Having not been aware of this program,
20

asked what the program entailed. Our phone call was again disconnected.
22
23
24

See EXHIBIT C t

confirm the second phone call
8.

Again, I re-dialed the number. During this conversation the "EDitor" told me t

read the information online regarding his "CAP." He instructed me to fill out an on-line form.
was then asked to send an e-mail to [e-mail] .. identifying

myself an

26
27

describing the reason for my phone call. See EXHIBIT C to confirm the third phone call.

25

Declaration

of Raymond

Mobrez

- 3

Case 2:10-cv-01360-SVW-PJW

9.

On the following

Document 28

Filed 05/03/10

Page 4 of 7

day, I sent an e-mail to··[e-mail]..

a

instructed. I offered to prove the falsity of the posts and requested the assistance of the "EDitor'
in removing the bogus reports from his Web site. Attached hereto as EXHIBIT D is a true an
::,

accurate copy of my April 28, 2009 e-mail to Defendants.
10.

On May 5, 2009, I again contacted the Ripoff Report office by phone. I asked th

man, who now identified himself as Ed Magedson, if he had received the e-mail I sent to him

0

February 28, 2009. Mr. Magedson responded that I would need to enroll in the CAP program.
Again. I asked for more information regarding the program, including the cost of participation.
10
11

1':

13

Mr. Magedson proceeded to describe his Web site and how it could benefit us. He the
emphasized that his Web site has immunity under the law and, therefore could not be sued.
Moreover, he claimed to have a team of lawyers that would fight us if we chose to sue him. H

14

further warned that others had tried but failed and that it was best to just "go with the program.'
., ".L "

16
17

Ms. L1aneras witnessed this conversation from her office phone. Attached hereto as EXHIBIT
is a true and accurate copy of Mr. Mobrez's phone records from May 5, 2009.
11.

19

After our conversation, Ire-sent

Mr. Magedson the April

zs" e-mail.

Attache

hereto as EXHIBIT F is a true and accurate copy of my May 5, 2009 e-mail to Defendants.
12.

On May 5, 2009, Mr. Magedson made a lengthy response describing, among othe

.22

things.

the "Rip-off Report's

Corporate

Advocacy,

Business Remediation

and Custome

23

Satisfaction Program." The program, as described by Mr. Magedson's

24

change ..the negative listings on search engines into a positive along with all the Reports on Rip

e-mail, promised t

}::,

off Report," I never threatened to sue Mr. Magedson or his company; yet, the e-mail warned tha
a lawsuit against the Web site was a losing battle. The e-mail boasted that the Web site "NEVE

Declaration

of Raymond

Mobrez

- 4

Case 2:10-cv-01360-SVW-PJW

Document 28

Filed 05/03/10

Page 5 of 7

lost a case" and that suing would "only get [us] more publicity and additional listings on searc
engines." EXHIBIT G is a true and accurate copy of Defendants' e-mail.
13.

Later that day, I responded to Mr. Magedson's

e-mail by phone. I told Mr.

Magedson that I had received his e-mail andwasstilluncertainwhathewantedmetodo.Mr.
6

Magedson responded that I would have to go onto his Web site and enroll in the CAP program.
When asked what it would cost for us to participate in his program, Mr. Magedson replied that i
would cost us at least "five grand" plus a monthly maintenance fee of a couple hundred dollars.
He stated that these charges were based on the size if company.

11

Specifically, he stated that th

more money a company made, the more they would be charged.

When asked the reasonin

behind this, he was not responsive. He again instructed me to fill out the CAP forms. Again, Ms.
13

Llaneras listened from her office phone. See EXHIBIT E to confirm Mr. Mobrez's phone call.

14

14.

On May 12, 2009, I contacted Mr. Magedson by phone. This phone call laste

IS
16
17

approximately

17 minutes. During this time, I told Mr. Magedson that I was hesitant to join hi

program because I could not stipulate to the allegations in the posts because they were not true.
Again, I offered to prove their falsity. He was not responsive. Mr. Magedson said that I woul

19

have to agree to his terms in order for him to help. When asked what we would receive if w

2C

paid the fees he demanded, Mr. Magedson claimed that "all the negative goes away and you se
21

the positive." At the conclusion of this phone call, Mr. Magedson again insisted that we fill ou
23

the necessary paperwork.

He told me that once I filled out the form and entered CAP "all of th

24

negative goes away and you see the positive." Ms. Llaneras witnessed this conversation from he

25

office. EXHIBIT H is a true and accurate copy of Mr. Mobrez's phone records from May 12
26

2009.
28

Declaration

of Raymond

Mobrez

- 5

Case 2:10-cv-01360-SVW-PJW

15.

Document 28

Filed 05/03/10

Page 6 of 7

Later that day, I received an e-mail from Mr. Magedson. The e-mail complaine

that I had driven Mr. Magedson "crazy" because I "never filled out the form." Again, Mr.
:3

Magedson provided me with a link to the required application form for the CAP.
5

Attache

hereto as EXHIBIT I is a true and accurate copy ofMr. Magedson's May 12,2009 e-mail.
16.

On July 24. 2009, I responded the above e-mail and again informed

Mr.

Magedson that I was hesitant to join the CAP. I refused to stipulate to the false accusation
':1

posted on his Web site. Again, Ioffered to disprove the veracity of the posts and offered to mee
with Mr. Magedson in person to discuss the terms of the CAP. Attached hereto as EXHIBIT J i

10

a true and accurate copy of my May 5,2009 e-mail to Defendants.
17.

11

12

In his e-mail responsedatedJuly24.2009.Mr.

Magedson stated that there was n

sense of meeting. He reiterated that the Web site never removes the reports. He claimed tha
"even if you were the pope .. (sic.) It would not make a difference." Again, he expressed that th

14

Web site has "spent over 3.4 million in legal fees and never lost a case."

Attached hereto a

IS
16

EXHrBlT K is a true and accurate copy of Mr. Magedson's July 24, 2009 e-mail.
18.

17
l8

Despite the unremitting damage to my company, I refused to participate in th

CAP. Again, Ipleaded with him that he put us out of business and ruined our names. Sadly and,
yet again. he was not responsive and, not surprisingly, again brought up the topic of money.

20
2l

Because we refused to pay Mr. Magedson, the accusatory posts continue to appear on Interne
search engines such as Yahoo and Google.
19.

2~

Attached hereto as EXHIBIT L true and accurate copies of hand written note

taken by me during my telephone conversations with Mr. Magedson.

~"

L. ~,

II I
oj

r:

LO

,)r_!
L_

III

!

28

III

Declaration

of Raymond

Mobrez

- 6

Case 2:10-cv-01360-SVW-PJW

1

Document 28

Filed 05/03/10

Page 7 of 7

III
,I I/

:3

Pursuant to 28 U.S.c.. Section 1746, I declare under penalty of perjury under the laws of th
4
5

United States of America that the foregoing is true and correct.

.:;
7

EXECUTED ON: April 2, 2010.

8
9
10
11

12
13
14
15
16

i8

20
2l
22
22
24
25
26

Declaration

of Raymond

Mobrez

Exhibit D

Case 2:10-cv-01360-SVW-PJW Document 27

Filed 05/03/10 Page 1 of 8

Case 2:10-cv-01360-SVW-PJW Document 27

Filed 05/03/10 Page 2 of 8

Case 2:10-cv-01360-SVW-PJW Document 27

Filed 05/03/10 Page 3 of 8

Case 2:10-cv-01360-SVW-PJW Document 27

Filed 05/03/10 Page 4 of 8

Case 2:10-cv-01360-SVW-PJW Document 27

Filed 05/03/10 Page 5 of 8

Case 2:10-cv-01360-SVW-PJW Document 27

Filed 05/03/10 Page 6 of 8

Case 2:10-cv-01360-SVW-PJW Document 27

Filed 05/03/10 Page 7 of 8

Case 2:10-cv-01360-SVW-PJW Document 27

Filed 05/03/10 Page 8 of 8

Exhibit E

GINGRAS LAW OFFICE, PLLC

4072 E Mountain Vista, Phoenix, AZ 85048 ▪ Tel: [phone] ▪ Fax: [phone]

May 11, 2010
VIA FACSIMILE: [phone]
& Email: [e-mail]; [e-mail]
Ms. Lisa J. Borodkin, Esq.
Mr. Daniel F. Blackert, Esq.
Asia Economic Institute
11766 Wilshire Blvd., Suite 260
Los Angeles, CA 90025

Re:

Asia Economic Institute, LLC, et al., v. Xcentric Ventures, LLC, et al.,
U.S. District Court, Central District of California Case No. 10-cv-01360

Lisa and Dan:

This letter is a follow-up to several discussions we have had relating to the events which
transpired during the deposition of your client, Raymond Mobrez, on Friday, May 7,
2010. As Dan knows (because he was there), and as Lisa knows (by virtue of my email
to her on May 8, 2010), both of your clients have committed perjury in this case by
manufacturing and presenting sworn false testimony accusing Mr. Magedson of
demanding $5,000 in order to make negative information disappear from the Ripoff
Report website, among other things. The testimony given by both of your clients could
not have been more material to the claims in this case. Their false testimony literally
constitutes the heart of their extortion/RICO claims. The false testimony also bears on
all of the other claims in the case insofar as your clients apparently were attempting to
argue that the Communications Decency Act immunity should be denied to my clients
because of these acts of extortion.
Based on these events, I am writing to explain my position on several issues and to
demand that you provide me with your position on several issues.
I.

SUMMARY OF XCENTRIC’S POSITION

Our position is very simple – your clients have lied under oath and have commenced and
continued an action which they knew was factually groundless. They clearly did this to
maliciously harm Xcentric, harass Mr. Magedson, and to lend unjustified credibility to the
lies of others who dislike the Ripoff Report’s efforts to foster and promote free speech.
By their actions, your clients have violated Fed. R. Civ. P. 11 and they have exposed
themselves to significant civil liability under Section 674 of the Restatement (Second) of

Ms. Lisa J. Borodkin, Esq.
Mr. Daniel F. Blackert, Esq.
May 11, 2010
Page 2 of 8

Torts which Arizona applies as our common law. Assuming the present federal case in
Los Angeles is resolved in favor of Xcentric, a new lawsuit will immediately be filed
against your clients in Arizona seeking to recover all damages caused by their illegal
conduct.
II.

OPTIONS FOR PROCEEDING
a. Mandatory Withdrawal

As we have already discussed, these events give rise to serious ethical and legal
concerns. Among these are your duties to the State Bar of California and to the Court.
To be clear – while I am not threatening to report you to the bar or to make any reports
of criminal conduct to law enforcement in order to gain any advantage in this case, at
the same time I believe it is appropriate for me to stop and make note of your ethical
and other obligations and to insist that you act lawfully in this case.
In that regard, I note that Rule 3–700 of the California Rules of Professional Conduct
appears to make it mandatory for you to withdraw from this case immediately.
Specifically, the Rule states in pertinent part:
Rule 3-700. Termination of Employment
* * *
(B) Mandatory Withdrawal.
A member representing a client before a tribunal shall withdraw from
employment with the permission of the tribunal, if required by its rules,
and a member representing a client in other matters shall withdraw
from employment, if:
(1) The member knows or should know that the client is bringing an action,
conducting a defense, asserting a position in litigation, or taking an appeal,
without probable cause and for the purpose of harassing or maliciously
injuring any person;
Clearly, at least with respect to the RICO/extortion allegations, you both know that your
client has taken a position that is manifestly without probable cause and which serves no
purpose other than to injure and harass Xcentric. As I already stated, I understand that
I cannot force to you comply with your ethical obligations, but I believe it is appropriate
for me to remind you of what those obligations are and to demand that you comply with
them.
Of course, the events of this case give rise to other serious ethical concerns, among
these are California Rules of Professional Conduct: 3-200 (prohibiting a lawyer from
bringing an action or asserting any position in litigation without probable cause and for
the purpose of harassing or maliciously injuring any person); 3-210 (prohibiting a lawyer

2

Ms. Lisa J. Borodkin, Esq.
Mr. Daniel F. Blackert, Esq.
May 11, 2010
Page 3 of 8

from advising a client to violate the law); and 5-200(B) (prohibiting a lawyer from
misleading a court by making a false statement of fact). Furthermore significant case
law exists for the principle that “an attorney should make a motion to withdraw from
representation when the representation will result in a violation of law or rules of
professional conduct.” People v. Johnson, 62 Cal.App.4th 608, 622, 72 Cal.Rptr.2d 805,
812 (4 DCA 1998) (citing Cal. Rules of Prof. Conduct, rule 3-700(B)(2), (C)(1)(b) & (c));
People v. Brown, 203 Cal.App.3d 1335, 1339–1340, footnote 1, 250 Cal.Rptr. 762
(1988) (same).
For these reasons, I would like you to inform me as soon as possible whether you intend
to withdraw in this case. Normally, this decision would not be exceptionally urgent.
However, because this case is set for trial on an expedited basis, and because Xcentric
will need to take additional steps to protect itself from further harm in the event you
refuse to withdraw, I would like to request that you provide me with your position on
this issue no later than Wednesday, May 12, 2010. If you do not bring a Motion to
Withdraw by that date, I will assume that you have decided not to do so.

b. Continuation Of Case On Modified Factual Theory
Assuming that you do not withdraw, I believe that you may be exposing yourself to
significant liability if you continue to rely on and pursue your clients’ existing factual
allegations regarding extortion/RICO knowing, as you now do, that those allegations are
entirely false. However, based on our conversation yesterday, I understand that you
have indicated that your clients will be filing new declarations/affidavits which seek to
“correct” their previous testimony.
It is unclear to me how these corrections would allow you to proceed with the
extortion/RICO claims. Your clients brought those claims based entirely on specific
factual allegations that you now know are untrue.
However, it may be possible that you believe the case, or some part thereof, may still be
salvageable based on the disclosure of new or different factual theories of some kind.
While I disagree this is even a possibility, if you intend to continue with this case on a
modified and previously undisclosed theory, please let me know immediately, bearing in
mind that the Court ordered your clients to disclose their factual theory as to the
extortion claims no later than last Monday, May 3rd. To the extent you attempt to assert
any new or different factual theories, this plainly violates the Court’s order and I will
object to any modified theory on that basis.
Furthermore, the deposition confirmed and in some cases revealed serious deficiencies
in your evidence related to essential elements of the claims brought. It is exceedingly
clear that your client can not satisfy the elements of extortion or RICO including a lack
of damages and a lack of causation. The remaining claims are barred by the CDA, so
the entire case has no possible hope of succeeding.

3

Ms. Lisa J. Borodkin, Esq.
Mr. Daniel F. Blackert, Esq.
May 11, 2010
Page 4 of 8

c. General Settlement Points
As Maria and I explained to you on the phone, Xcentric has successfully sued parties and
their lawyers for knowingly commencing and continuing litigation that they knew was
factually groundless. Xcentric intends to bring such claims against your clients for their
wrongful actions and we will not hesitate to include claims against either or both of you
individually if you continue to prosecute any claims in this case which you know are
factually untrue or if the evidence demonstrates that you brought this case knowing that
the allegations contained in it were factually untrue.
That fact notwithstanding, although the settlement window will be closing very soon, this
case is actually in a good posture to be resolved without years of additional litigation.
That is so because at present, Xcentric’s attorney’s fees and costs are relatively low
(probably less than $25,000), and based on my discussions with Mr. Mobrez during his
deposition, we believe it is likely that he has information that may be of substantial
value to Xcentric. In a nutshell, I think our clients may be in a position where they can
each receive something of value from an immediate resolution of this case.
Thus, as Maria explained to you on the phone, we may be willing to agree to a
settlement of this case based on several simple points.
The first point is that your clients would need to retract their prior testimony and admit
that they were never asked for money, etc., and immediately agree to the dismissal of
their lawsuit with prejudice.
The second point is that your clients would agree to pay all of the attorney’s fees and
costs incurred by Xcentric to date which we believe are probably less than $25,000
(though this number is increasing with each passing day).
The third point is that your clients would provide a full, complete, and truthful
explanation of each and every third party who aided, solicited, and/or encouraged them
to make their false extortion claims in this case. Ultimately, even though Xcentric has
suffered damage as a result of your clients’ actions, we have a larger goal of ferreting
out and stopping third parties who have helped or directed this type of fraudulent
litigation. As such, Xcentric may be willing to reduce or even completely waive the
amount of damages and fees your clients would have to pay depending upon how useful
the information they are willing to provide is. Of course, further false testimony is of no
interest to us, so we would only be willing to discuss this option in the event your clients
can provide solid, verifiable evidence (preferably in the form of documents) which show
what role was played by any third parties in the initiation of this case. Again, the
opportunity to discuss settlement on these terms presumes that your clients will
immediately end this case and immediately stop causing Xcentric to incur additional
fees, so each day that passes makes this proposal less likely to be acceptable to
Xcentric.

4

Ms. Lisa J. Borodkin, Esq.
Mr. Daniel F. Blackert, Esq.
May 11, 2010
Page 5 of 8

III.

RESPONSE TO SPECIFIC POINTS

Having stated Xcentric’s general position, I also wanted to respond to some of the
specific comments/remarks made in Lisa’s email to me from this past Sunday.
a. CRPC 5–100
Lisa noted that some of my prior comments referred to your clients’ criminal actions and
to my decision to contact the State Bar of California. Lisa cited California Rule of
Professional Conduct 5-100 which provides, in part, “A member shall not threaten to
present criminal, administrative, or disciplinary charges to obtain an advantage in a civil
dispute.”
To be clear—at no time in the past have I threatened anyone with criminal or
administrative charges of any kind, nor should this letter be construed as such a threat.
Obviously, because this case contained allegations of extortion, I am well-aware that it
would be patently illegal and unethical for me to state or imply that I would report your
clients’ criminal actions to any law enforcement agency, or your actions to the State Bar
of California in order to gain any advantage in this case.
So that there is no misunderstanding, I want to offer some explanation of the actions I
have taken along with my reasons for taking such action. Under Arizona’s ethical rules
(specifically, ER 8.3(a) of the Arizona Rules of Professional Conduct), it is mandatory for
a member of the bar to report any conduct by another lawyer which “raises a substantial
question as to that lawyer’s honesty, trustworthiness or fitness as a lawyer in other
respects … .” The failure to report another attorney is, itself, an ethical violation under
Arizona’s rules.
Because I did not know that your clients had perjured themselves until I received their
declarations on Monday, May 3, because I did not know (and still do not know) what
involvement, if any, you may have had, and because I did not know whether California
imposed a similar duty to report ethical violations by another attorney, I contacted the
State Bar of California ethics hotline on Tuesday, May 4th, to ask for their guidance in
this situation. I did not tell them your names nor did I tell them anything else about this
case. I simply inquired about the nature and extent of my duties and obligations upon
learning that the opposing party in a civil case had committed perjury.
The person I spoke to at the bar informed me that unlike Arizona, California does not
require lawyers to report such events, but she also indicated that reporting any
misconduct that may occur is strongly encouraged. Of course, as I have already
explained to Dan, my assumption thus far has been that both of you have been unaware
of the truth. If true, then you would not have engaged in any unlawful or unethical
conduct – at least up until the point where you became aware that your clients had lied
under oath. From that point forward, the situation changes because now that you know
the truth, you could face serious consequences if you continue representing your clients
in this matter.

5

Ms. Lisa J. Borodkin, Esq.
Mr. Daniel F. Blackert, Esq.
May 11, 2010
Page 6 of 8

However, please note that I have never threatened to accuse anyone of a crime or to
report any actions of anyone to the State Bar, whether to gain a tactical advantage or
otherwise. Instead, because my clients are plainly victims of your clients’ criminal
actions, I am merely demanding that both you and your clients follow all applicable laws
and ethical obligations.
b. Timing & Admissibility of Recordings
As to the issue of timing, obviously the recordings are rebuttal evidence used solely to
impeach your clients’ testimony. Under Rule 26(a), it is not necessary for any party to
automatically disclose this type of evidence, so that’s why I did not disclose them to you
as part of our original disclosures. I did not intend to suppress evidence, trick you, or
withhold anything from you – I simply did not know that the recordings were going to be
necessary until your clients claimed that the extortionate acts took place during these
calls (Mr. Mobrez could just as easily have claimed they took place in writing, in person,
or in some other manner other than by phone).
Furthermore, as you certainly know, the first time that I learned about your clients’
specific factual allegations was in their declarations that you filed with the court on
Monday, May 3, 2010. Before those declarations, your clients only made generalized
allegations as to when/where/how they had been extorted, so until they both accused
Mr. Magedson of demanding money over the phone on specific dates, I had no idea
whether or not the recordings were going to be necessary at all. As soon as it became
clear to me that the recordings were needed, I disclosed them to you, albeit only after
asking Mr. Mobrez to confirm the story as contained in these declarations (which I felt I
was required to do in order to protect my clients and to prevent Mr. Mobrez from
changing his story again).
In addition, and to respond to another of Lisa’s questions, until I actually saw your
clients’ declarations, I did not know whether the recordings were admissible. This is so
because although the recordings were made in Arizona, and although Arizona does not
require the consent of both parties in order to record a telephone call, the law in
California is different. Under Cal. Pen. Code § 623(a), calls recorded without the
consent of both parties may be inadmissible in a party’s case-in-chief if the
communication was “confidential”. Under § 623(c), the term “confidential” does not
include any calls where the speaker knows or reasonably expects he is being recorded,
nor does it apply to “any other circumstance in which the parties to the communication
may reasonably expect that the communication may be overheard or recorded.”
Until I saw your clients’ declarations, I did not know that Ms. Llaneras was listening in to
any of the calls. Of course, because Mr. Mobrez knew that she was eavesdropping
(which, by itself, may have violated the law), Ms. Llaneras was kind enough to render
these recordings admissible because Mr. Mobrez could not have expected that his
conversations with Mr. Magedson were confidential when he knew they were being
overhead by Ms. Llaneras.

6

Ms. Lisa J. Borodkin, Esq.
Mr. Daniel F. Blackert, Esq.
May 11, 2010
Page 7 of 8

Although I believe there are three calls that Ms. Llaneras did not eavesdrop upon (Call
#1, #3, and #6 according to my list) I am confident the court would find the recording
of every call to be admissible. This is so because two of these calls were voicemails left
by Mr. Mobrez (Call #3 on April 27 and Call #6 on May 6). Obviously, a person who
leaves a voicemail knows that the call is being recorded, so the eavesdropping statute
would not apply at all.
This leaves only Call #1 on April 27. Even assuming arguendo that Mr. Mobrez could
have reasonably expected that this call was not being recorded, that point is irrelevant
because the exclusionary evidentiary sanction of Penal Code § 632 is not a “shield for
perjury” and therefore recordings made in violation of that section can still be used for
impeachment of any witness who takes the stand and lies. See Frio v. Superior Court,
203 Cal.App.3d 1480, 1497, 250 Cal.Rptr. 819, 829 (2 DCA 1988) (explaining, “the
evidentiary sanction of section 632, subdivision (d), cannot be construed so as to confer
upon a testifying witness the right to commit perjury.”)
What this means is simple – if Mr. Mobrez testifies falsely about the contents of Call #1
(as he has already done) the recording of that call can be used for impeachment. Of
course, if Mr. Mobrez chooses to testify truthfully about this call and every other call,
then the recording of Call #1 is would be unnecessary.
c. Authenticity of Recordings
As for the authenticity of the recordings, Mr. Mobrez admitted the voice on the tape was
his, so I do not think this is an issue. In terms of whether the recordings are genuine
and complete, I have a couple of comments.
First, the recordings were NOT made by Mr. Magedson. Rather, they were created by a
third-party vendor to Xcentric who recorded the calls and then emailed the audio
recordings to Mr. Magedson in the usual course of business. These calls are business
records of Xcentric and the original emails from the vendor are kept in the regular
course of our business. I also have the original emails with the original audio files
attached to them (these vary from the ones I gave you only with respect to the file
names which were changed for ease of reference and some of the meta data in the file
header which was redacted in order to protect the name of the vendor until such time as
a protective order can be entered).
Second, if you wish, I am certainly happy to expend additional fees allowing you to
investigate and confirm the authenticity of the recordings. As I already stated, absent a
prompt settlement, your clients will be bearing all costs and fees incurred by Xcentric, so
any costs we incur will ultimately be their responsibility. Even assuming the vendor
does not maintain copies of these recordings beyond a certain date (which I have not
yet been able to confirm), I am confident that an expert could review the files and the
process by which they were emailed to Mr. Magedson and confirm that tampering with
them would have been impossible.

7

Ms. Lisa J. Borodkin, Esq.
Mr. Daniel F. Blackert, Esq.
May 11, 2010
Page 8 of 8

Third, you should note that in many ways, your client’s own speech on the recordings
confirm that they are an accurate version of the discussions between Mr. Magedson and
Mr. Mobrez. For instance, on the final recording (#7 made on May 12), Mr. Mobrez tells
Mr. Magedson that he still does not know what the cost of the CAP program is. Of
course, this is entirely consistent with the rest of the recordings because Mr. Magedson
never told him what the cost was and never asked for any money of any kind. Similarly,
in the recording of Call #6 (a voicemail call made from Mr. Mobrez’s cell phone), Mr.
Mobrez’s message states that he has been talking to someone at Xcentric who “keeps
hanging up and doesn’t seem to want to stay on the phone….” This is completely
consistent with what the previous calls show.
As such, while you might think it is prudent to take the position that there could be a
small chance that the recordings have been altered, I want you understand that the
consequences of taking that position could be substantial—because the facts clearly
show that your clients have lied in virtually every material respect, continuing to
represent them will make you jointly and severally liable for their actions. Thus,
assuming the recordings have not been altered (which is obvious under the facts here),
then travelling down that road in the vain hope of finding support for claims which you
know to be false will not result in any reduction of your liability. In order for counsel to
become personally liable for the tort of wrongful use of civil proceedings, all that is
required is to show that they commenced or continued a case or claim after learning
that the claim lacked “probable cause”; “one who continues a civil proceeding that has
properly been begun or one who takes an active part in its continuation for an improper
purpose after he has learned that there is no probable cause for the proceeding becomes
liable as if he had then initiated the proceeding.” Restatement (Second) of Torts § 674,
comment ‘c’. Hoping against hope that you might find probable cause in the face of
such overwhelming evidence does not mean that you will do so, and if you do not do so,
then you will be exposed to complete liability for continuing this case without probable
cause.
IV.

SUMMARY

In closing, I want to emphasize one obvious fact—your clients have lied about the
material facts of this case.
As such, just as your clients were, you now stand at a
crossroads wherein you have a choice: you can do the right thing and follow the
requirements set forth by the law and by your ethical duties, or your can ignore those
duties and face the consequences. Although your clients have clearly made the wrong
choice, I hope that you display more wisdom and that you decide to make the right
choice while it still remains available to you.
VERY TRULY YOURS,

David Gingras

8

Exhibit F

Case 2:10-cv-01360-SVW-PJW Document 38-1

Filed 05/20/10 Page 1 of 7

Case 2:10-cv-01360-SVW-PJW Document 38-1

Filed 05/20/10 Page 2 of 7

Case 2:10-cv-01360-SVW-PJW Document 38-1

Filed 05/20/10 Page 3 of 7

Case 2:10-cv-01360-SVW-PJW Document 38-1

Filed 05/20/10 Page 4 of 7

Case 2:10-cv-01360-SVW-PJW Document 38-1

Filed 05/20/10 Page 5 of 7

Case 2:10-cv-01360-SVW-PJW Document 38-1

Filed 05/20/10 Page 6 of 7

Case 2:10-cv-01360-SVW-PJW Document 38-1

Filed 05/20/10 Page 7 of 7

Exhibit G

Case 2:10-cv-01360-SVW-PJW Document 36

Filed 05/20/10 Page 1 of 3

Case 2:10-cv-01360-SVW-PJW Document 36

Filed 05/20/10 Page 2 of 3

Case 2:10-cv-01360-SVW-PJW Document 36

Filed 05/20/10 Page 3 of 3

Exhibit H

Case 2:10-cv-01360-SVW -PJW Document 186
#:5106

Filed 06/15/11 Page 1 of 1 Page ID

Exhibit I

David Gingras
From:

daniel F. Blackert, esq. [[e-mail]]

Sent:

Friday, May 07, 2010 10:26 PM

To:

[e-mail]

Subject: Re: AEI et al. v. Xcentric (C.D. Cal. 10-cv-1360) Draft Rule 26f Report

David,
In light of todays events I believe I have a serious conflict of interest between myself and my client. I
will do whatever state bar mandates. I have called today but they do not resume until monday. In light if
todays developments which were contradictory to anything I have heard, seen, or discussed w my
clients. I will act in accordance w my ethical obligations 100 percent. You have to realize this is a shock
to me. Per my own indepedent research I need to withdraw from the case and explain why. In light of
todays events I have a serious conflict of interest and will withdraw as counsel. In addition I explained
to my clients the implications of todays events and that I can no longer represent them per ethical
obligations and will explain to the court why in a dec. My only concern is still seeking correct anaccurae
advice from the state bar and acting accordingly. Moreover, I urged my client to dismiss this case. I need
to review the ethical rules in more detail and talk w the ethics hotline. As lead counsel, I believe in good
faith,sadly, that I can no longer move this case forward and do not intend to do so. I am taking this very
seriously and am completely shocked.
Daniel
Sent from my Verizon Wireless BlackBerry

7/18/2011