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)

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: [phone]
Facsimile: [phone]
Email: [e-mail]
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: [phone] (Singhvi)
Facsimile: [phone]
Email: [e-mail] (Singhvi); [e-mail] (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 ([e-mail])
Darren J. Lemieux ([e-mail])
E. Leif Reid ([e-mail])
Jeffrey D. Morris ([e-mail])
Ryan C. Hudson ([e-mail])
Nick J. Kurt ([e-mail])
Justin C. Griffin ([e-mail])
Sanford I. Weisburst ([e-mail])
Kathleen Sullivan ([e-mail])
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 ([e-mail])
Linda C. McFee ([e-mail])
Robert Peter Smith ([e-mail])
Attorneys for Relief Defendants Kim C. Tucker and Park 269 LLC
Victoria W. Ni ([e-mail])
Craig B. Friedberg ([e-mail])
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
[e-mail]
Attorney for The Feingold Parties

23

September 13, 2016

24

/s Nikhil Singhvi
Nikhil Singhvi

25
26
27
28
4