Federal Trade Commission v. AMG Services, Inc. et al

Filing 1049

ORDER that 1048 Unopposed Motion to Take Third Party Discovery is GRANTED. Signed by Magistrate Judge Cam Ferenbach on 9/15/16. (Copies have been distributed pursuant to the NEF - MMM)

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 DANIEL G. BOGDEN United States Attorney District of Nevada BLAINE T. WELSH Assistant United States Attorney Nevada Bar. No. 4790 333 Las Vegas Blvd. South, Suite 5000 Las Vegas, Nevada 89101 Phone: (702) 388-6336 Facsimile: (702) 388-6787 Email: Blaine.Welsh@usdoj.gov DAVID C. SHONKA Acting General Counsel NIKHIL SINGHVI JASON D. SCHALL HELEN P. WONG IOANA RUSU COURTNEY A. ESTEP THOMAS E. KANE Federal Trade Commission 600 Pennsylvania Avenue, NW Mailstop CC-10232 Washington, D.C. 20580 Phone: (202) 326-3480 (Singhvi) Facsimile: (202) 326-3768 Email: nsinghvi@ftc.gov (Singhvi); jschall@ftc.gov (Schall) Attorneys for Plaintiff Federal Trade Commission UNITED STATES DISTRICT COURT DISTRICT OF NEVADA 18 19 FEDERAL TRADE COMMISSION, 20 Case No. 2:12-cv-536 Plaintiff, 21 v. 22 23 AMG Services, Inc. et al., Defendants, and 24 25 26 27 28 Park 269, LLC, et al., Relief Defendants. PLAINTIFF FEDERAL TRADE COMMISSION’S UNOPPOSED MOTION TO TAKE THIRD PARTY DISCOVERY INTRODUCTION 1 2 Plaintiff Federal Trade Commission (“FTC”) moves for leave to serve third party subpoenas on 3 EVAS Investments, LLC (“EVAS”), TBC Investments, LLC (“TBC”), and David Feingold (collectively, 4 the “Feingold Parties”). The purpose of this motion is to expand the Court-approved list of 22 entities 5 from whom the FTC may seek pre-judgment asset discovery (ECF No. 1026), by adding to that list two 6 entities and an individual involved with Scott Tucker’s investments in two of the originally-named 22 7 entities. The Feingold Parties and the Tucker Defendants do not oppose this motion. 8 9 1. In this action to recompense millions of consumers harmed by Defendants’ deception, the Court entered a preliminary injunction freezing Defendants’ assets and the assets of their entities. (ECF 10 No. 960, the “Order.”) The Order also requires that Defendants and their asset holders produce 11 information and documents regarding the assets of Defendants and their entities to the FTC. (Id.) 12 2. The Order required Defendant Scott Tucker to provide detailed information on his assets 13 and entities, but he refused to do so based on his Fifth Amendment right against self-incrimination. (ECF 14 983.) The Court accepted Mr. Tucker’s Fifth Amendment invocation, but ordered that the FTC may 15 request leave to take third-party discovery to uncover Mr. Tucker’s assets. (ECF No. 1018, 1030.) 16 3. Upon the FTC’s subsequent motion, the Court reopened limited discovery as to 22 specific 17 nonparty entities and stated, “If the FTC wishes to subpoena additional entities it must file a motion with 18 the court, and the Tucker Defendants will be given an opportunity to oppose.” (ECF No. 1026 at 2.) 19 4. One of the 22 entities upon which the FTC was granted leave to serve third party discovery 20 was EyeVerify, LLC. (ECF No. 1026 at 3; 1018 at 8.) The FTC served a subpoena on EyeVerify on or 21 about August 22, 2016. (Schall Decl. ¶ 2.) In response to the subpoena, EyeVerify explained the 22 following facts with respect to Scott Tucker’s role: 23 • EyeVerify, LLC, was organized in November 2011. (Schall Decl. Atts. A, B.) 24 • On or about May 15, 2013, Scott Tucker executed a Securities Purchase Agreement to 25 invest $1,000,000 in EyeVerify, LLC. He signed the Securities Purchase Agreement as the 26 Authorized Representative for EVAS Investments, LLC. (Schall Decl. Atts. A, C.) 27 28 • Scott Tucker signed the $1 million check for EVAS’s initial investment in Eyeverify, LLC. (Schall Decl. Atts. A, D.) 1 • On or about April 2014, EyeVerify, LLC changed from an LLC to a C Corporation; 1 2 thereafter, EyeVerify, Inc., has been the operative company, and EyeVerify, LLC, has been 3 dormant. (Schall Decl. Atts. A, E.) • EVAS’s current ownership of EyeVerify, Inc., on a fully diluted basis, is 6.70 %. (Schall 4 Decl. Att. F.) 5 • Scott Tucker and EVAS have had no role managing either EyeVerify entity. (Schall Decl. 6 Att. A.) 7 • EyeVerify, Inc. was to be sold on September 9, 2016. David Feingold managed EVAS’s 8 receipt of its proceeds from the sale. (Schall Decl. Atts. A, G.) 9 10 5. In light of this information, the FTC sent the Order to Mr. Feingold and EVAS. They 11 responded claiming that on or about May 5, 2015, Scott Tucker transferred his ownership of EVAS to Mr. 12 Feingold. (Schall Dec. Att. H, I.) 13 6. Another of the 22 entities upon which the FTC was Think Big Partners LLC. Mr. Feingold 14 informed the FTC that Mr. Tucker owned his interests in Think Big Partners LLC via company named 15 TBC Investments, LLC (“TBC”), and that, on May 5, 2015, Mr. Tucker transferred his ownership of TBC 16 to Mr. Feingold. (Schall Dec. Att. J.) 17 7. The FTC moves for permission to serve third-party subpoenas on the Feingold Parties. 18 Further discovery is necessary for the FTC – and Court – to assess whether the May 5, 2015 assignments of 19 Scott Tucker’s ownership interests in EVAS and TBC were valid. Furthermore, Mr. Feingold might have 20 information about other Scott Tucker assets or entities. 21 8. The Feingold Parties informed the FTC via counsel that they do not oppose this motion. 22 (Schall Decl. ¶ 7.) The Tucker Defendants informed the FTC via counsel that they take no position with 23 respect to this motion. (Schall Decl. ¶ 8.) 24 25 26 CONCLUSION For the foregoing reasons, the Court should permit the FTC to serve third party subpoenas on David Feingold, EVAS Investments, LLC, and TBC Investments, LLC. 27 28 2 1 Dated: September 13, 2016 Respectfully submitted, /s/ Nikhil Singhvi Nikhil Singhvi Jason D. Schall Helen P. Wong Ioana Rusu Courtney A. Estep Thomas E. Kane 2 3 4 5 6 Attorneys for Plaintiff Federal Trade Commission 7 8 9 10 11 12 13 14 15 16 9-15-2016 17 18 19 20 21 22 23 24 25 26 27 28 3 CERTIFICATE OF SERVICE 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 I, Nikhil Singhvi, certify that, as indicated below, all parties were served by ECF with PLAINTIFF FEDERAL TRADE COMMISSION’S MOTION TO TAKE THRID PART DISCOVERY filed with the Court. Von S. Heinz (vheinz@lrrc.com) Darren J. Lemieux (dlemieux@lrrc.com) E. Leif Reid (lreid@lrrc.com) Jeffrey D. Morris (jmorris@berkowitzoliver.com) Ryan C. Hudson (rhudson@berkowitzoliver.com) Nick J. Kurt (nkurt@berkowitzoliver.com) Justin C. Griffin (justingriffin@quinnemanuel.com) Sanford I. Weisburst (sandyweisburst@quinnemanuel.com) Kathleen Sullivan (kathleensullivan@quinnemanuel.com) Attorneys for Defendants AMG Capital Management, LLC; Level 5 Motorsports, LLC; LeadFlash Consulting, LLC; Black Creek Capital Corporation; Broadmoor Capital Partners, LLC; Scott A. Tucker; Nereyda M. Tucker, as Executor of the Estate of Blaine A. Tucker Patrick J. Reilly (preilly@hollandhart.com) Linda C. McFee (lmcfee@mcdowellrice.com) Robert Peter Smith (petesmith@mcdowellrice.com) Attorneys for Relief Defendants Kim C. Tucker and Park 269 LLC Victoria W. Ni (vni@publicjustice.net) Craig B. Friedberg (attcbf@cox.net) Attorneys for Intervenor Americans for Financial Reform By prior agreement, David Feingold, EVAS Investments, LLC, and TBC Investments, LLC were served by email to: Phillip G. Greenfield German May 1201 Walnut Street, 20th Floor Kansas City, MO 64106 philg@germanmay.com Attorney for The Feingold Parties 23 September 13, 2016 24 /s Nikhil Singhvi Nikhil Singhvi 25 26 27 28 4

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