Geo-Group Communications, Inc. v. Goldberg et al

Filing 236

OPINION AND ORDER re: 193 MOTION for Summary Judgment Dismissing Plaintiff's Complaint. filed by Ravi Chopra, NYC Telecommunications Corp. Chopra's and NYC Telecom's motion for summary judgment is GRANTED; M. Shah 9;s motion for summary judgment is GRANTED; and V. Shah's motion for summary judgment is DENIED. The Clerk of Court is directed to terminate Ravi Chopra, NYC Telecommunications Corp., and M. Shah as parties to this matter, and is further dir ected to terminate the motion at Docket Entry 193. Plaintiff and V. Shah are directed to appear for a conference with the Court on Friday, August 17, 2018, at 10:00 a.m. in Courtroom 618 of the Thurgood Marshall United States Courthouse, 40 Foley Sq uare, New York, New York 10007, to discuss setting a trial date. SO ORDERED., (Status Conference set for 8/17/2018 at 10:00 AM in Courtroom 618, 40 Centre Street, New York, NY 10007 before Judge Katherine Polk Failla.) (Signed by Judge Katherine Polk Failla on 7/30/18) Copies Mailed By Chambers. (yv)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
:
GEO-GROUP COMMUNICATIONS, INC.,
:
:
Plaintiff,
:
:
v.
:
RAVI CHOPRA; NYC
:
:
TELECOMMUNICATIONS CORP.;
:
MAHENDRA SHAH; and VIPIN SHAH,
:
Defendants. :
:
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USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #: _________________
July 30, 2018
DATE FILED: ______________

15 Civ. 1756 (KPF)
OPINION AND ORDER

KATHERINE POLK FAILLA, District Judge 1:
On July 10, 2014, Plaintiff Geo-Group Communications, Inc. (“Plaintiff”
or “Geo-Group”) obtained an arbitration award against Jaina Systems Network,
Inc. (“Jaina”), and on April 3, 2015, Plaintiff obtained a judgment in New York
State Supreme Court, New York County, confirming that award in the amount
of $2,712,175.51. After Jaina failed to satisfy that judgment, Plaintiff’s
principal, Govind Vanjani, engaged with several agents and delegates of Jaina
to discuss a settlement. When those conversations stalled, Vanjani began to
follow the money; he now alleges that Defendants are the recipients or
beneficiaries of a series of fraudulent conveyances.
After several attempts to plead viable claims, Plaintiff filed its Third
Amended Complaint (“TAC”) on February 22, 2016, based largely on Vanjani’s

1

The Third Amended Complaint named Shalu Suri in the case caption, but dropped all
claims against her. (Third Amended Complaint (“TAC” (Dkt. #105)) ¶ 19). Accordingly,
the Clerk of Court is directed to terminate Suri as a party to this matter.

own analysis of Jaina’s bank statements, and alleged actual and constructive
fraudulent conveyance under the New York Debtor and Creditor Law.
Following a motion to dismiss, Plaintiff’s claims against Defendants Ravi
Chopra (“Chopra”), NYC Telecommunications Corp. (“NYC Telecom” and,
together with Chopra, the “Chopra Defendants”), Mahendra Shah (“M. Shah”),
and Vipin Shah (“V. Shah” and, together with M. Shah, the “Shah Defendants”)
proceeded to discovery. The record now before the Court demonstrates that
Plaintiff’s claims against the Chopra Defendants and M. Shah fail as a matter
of law, but that genuine disputes of material fact preclude summary judgment
in favor of V. Shah.
BACKGROUND 2
A.

The Parties
Geo-Group is a telecommunications company that was in the business of

buying minutes from carriers and reselling those minutes to an array of

2

The facts recounted herein are drawn from the parties’ submissions in connection with
Defendants’ motion. In particular, the Court looks to the Local Rule 56.1 Statements
filed by Chopra and NYC Telecom (“Chopra 56.1” (Dkt. #199)), V. Shah (“V. Shah 56.1”
(Dkt. #202)), and M. Shah (“M. Shah 56.1” (Dkt. #209)), and Plaintiff’s responses (“Pl.
Chopra 56.1 Opp.” (Dkt. #219); “Pl. M. Shah 56.1” and “Pl. V. Shah 56.1” (Dkt. #222)).
The parties have submitted numerous deposition transcripts, affidavits, certifications,
and declarations, with voluminous exhibits attached thereto. These documents will be
referred to using the conventions “[Name] Dep.,” “[Name] Decl.,” and so forth. For
convenience, the Court will refer to Chopra’s and NYC Telecom’s moving brief as
“Chopra Br.” (Dkt. #194), to V. Shah’s brief as “V. Shah Br.” (Dkt. #201), to M. Shah’s
brief as “M. Shah Br.” (Dkt. #207), to Plaintiff’s consolidated opposition as “Pl. Opp.”
(Dkt. #220), to Chopra’s and NYC Telecom’s reply brief as “Chopra Reply” (Dkt. #230),
to V. Shah’s reply brief as “V. Shah Reply” (Dkt. #234), and to M. Shah’s reply brief as
“M. Shah Reply” (Dkt. #233).
Citations to a party’s Rule 56.1 Statement incorporate by reference the documents and
testimony cited therein. Where a fact stated in either party’s Rule 56.1 Statement is
supported by evidence and denied with merely a conclusory statement by the other
party, the Court finds such facts to be true. See Local Civil Rule 56.1(c) (“Each
numbered paragraph in the statement of material facts set forth in the statement
required to be served by the moving party will be deemed to be admitted for purposes of

2

customers. (Vanjani Cert. ¶ 6). Non-party Jaina was a customer of GeoGroup. (Id. at ¶ 7).
Ravi Chopra is the President of NYC Telecom, a company that sells phone
cards and phone card subscriber identification modules (or SIMs). (Chopra
Decl. ¶¶ 1-3). NYC Telecom uses the trade name STI Phone Card Warehouse.
(Id. at ¶ 1). Chopra is also the sole shareholder of non-party entity STI
Consultants, which is the trade name for the corporation New York Main Street
Consulting, Inc., and of which Jaina was a client. (Id. at ¶¶ 1, 4-5, 31).
Mahendra Shah was a shareholder and the President of Jaina. (M. Shah Aff.
¶ 1). Vipin Shah is Mahendra Shah’s brother; Vipin Shah’s wife, Nayana Shah,
was a Jaina shareholder; and Vipin Shah and his wife often transferred money
to Jaina. (V. Shah Aff. ¶¶ 3-4).
B.

Factual Background
The parties do not dispute the fact of the arbitration between Plaintiff

and Jaina; that it commenced on May 30, 2013; that Plaintiff prevailed in that
proceeding on July 10, 2014; or that the award was confirmed by the Supreme
Court, New York County, which issued judgment on April 3, 2015, in the
amount of $2,712,175.51. (Chopra 56.1 ¶¶ 8-10).
The principal dispute among the parties remaining in this litigation
concerns whether certain transfers from Jaina’s accounts to various third

the motion unless specifically controverted by a correspondingly numbered paragraph
in the statement required to be submitted by the opposing party.”); id. at 56.1(d) (“Each
statement by the movant or opponent pursuant to Rule 56.1(a) and (b), including each
statement controverting any statement of material fact, must be followed by citation to
evidence which would be admissible, set forth as required by Fed. R. Civ. P. 56(c).”).

3

parties were made to satisfy antecedent loan debts. Only one of these alleged
loans was reduced to a writing; the loans were otherwise made pursuant to
verbal agreements from private lenders. In consequence, the evidence of these
loans rests entirely on testimony and affidavits from Jaina representatives and
the third parties with which they transacted. Complicating matters further,
two of the key witnesses to these loans — Jaina’s CEO, Surajit Bose, and its
accountant, Jagdish Alwani — are unavailable; Bose is believed to be living
abroad and Alwani has passed away. Thus, while the parties have submitted
bank records, and while these records verify the fact of the transactions, they
do nothing to substantiate any party’s explanation of why the transactions
occurred. Accordingly, when reviewing the record before it, the Court remains
mindful of the admonition that trial courts should not make credibility
determinations to resolve a motion for summary judgment. Soto v. Gaudett,
862 F.3d 148, 157 (2d Cir. 2017).
The TAC, and thus the parties’ submissions in connection with the
instant motion, centers on four groups of allegedly fraudulent transfers; the
Court reviews each in turn.
1.

The Transfers to Robinson Brog

Plaintiff alleges that Jaina improperly transferred $1,350,000 to the law
firm Robinson Brog Leinwand Greene Genovese & Gluck, P.C. (“Robinson
Brog”), from February through October 2014. (TAC ¶¶ 23-26). Bank
statements and wire transfer receipts reveal that from October 2013 through
September 2014, Jaina received a series of cash infusions from the entities TD
4

Time and Vision Impex. 3 (Chopra 56.1 ¶¶ 33-47; Siddiqi Decl., Ex. A-3–A-5
(wire transfer receipts), Ex. B-1–B-8 (bank statements)). TD Time is owned by
Surjeet Singh and conducts business in real estate and wholesale cell phones.
(Chopra 56.1 ¶¶ 23-24). Singh testified that Jaina’s accountant, Jagdish
Alwani, approached him to ask for a short-term loan to help Jaina get through
a “financial crisis,” and that Singh loaned Jaina $250,000 through a series of
four transfers spanning October to December 2013. (Singh Dep. 14:12-25,
30:2-31:21, 34:2-36:11; Siddiqi Decl., Ex. A-3–A-5). Singh further testified that
he expected to receive his money back in 90 days, as was customary for shortterm loans in his line of business, but that he still had not been repaid at the
time he testified in September 2017. (Singh Dep. 36:12-37:13).
Later, Singh entered into a transaction to buy wholesale cell phones from
an individual named Dalip Kumar, who owned a company called Vision Impex.
(Singh Dep. 17:10-25). Kumar also knew Alwani and wanted to assist Jaina;
when Kumar billed Singh for the cell phones, he requested that Singh pay the
money he owed for the phones to Jaina directly. (Id.). Singh testified, and
bank records confirm, that he made two transfers to Jaina in January 2014 to
satisfy his payment to Vision Impex — one for $102,500 and one for $211,500.
(Id. at 32:4-25, 39:25-43:21; Siddiqi Decl., Ex. A-2, C-3).
Kumar testified at his deposition that he lent money (through Vision
Impex) to Jaina on other occasions. (Kumar Dep. 13:6-8, 14:22-16:10).
3

Vision Impex has, at times, been transcribed in deposition transcripts as “Vision
Impacts.” Based on the parties’ submissions, the Court understands the company’s
name to be Vision Impex.

5

Kumar recalled that Alwani approached him and told him that Jaina was
having financial troubles and needed money. (Id. at 28:1-18). Kumar testified
that Jaina repaid those loans by sending money into an account held by the
law firm Robinson Brog, which he had retained as counsel to Vision Impex.
(Id. at 16:11-17:7). A. Mitchell Greene, a shareholder at Robinson Brog,
averred that Robinson Brog had been retained by Vision Impex, and that the
transfers identified in Paragraphs 23 to 26 of the TAC had been received in
Robinson Brog’s Interest on Lawyer Account on behalf of Vision Impex.
(Greene Aff. ¶¶ 3-4). Bank statements reflect that in April, May, August, and
September 2014, Vision Impex transferred a total of $938,450 to Jaina.
(Siddiqi Decl., Ex. C-3). In total, by October 1, 2014, Jaina received
$1,252,450 directly from Vision Impex or from Singh on behalf of Vision Impex.
Kumar testified that he charged interest in the amount of 1.5% per
month on his loans to Jaina. (Kumar Dep. 41:4-12). From February 26, 2014,
to October 1, 2014, Jaina transferred $1,350,000 to Robinson Brog. (Siddiqi
Decl., Ex. C-3). On October 16, 2014, and on November 3, 2014, Vision Impex
made additional transfers to Jaina, totaling approximately $200,000. (Id.).
Kumar testified that these loans still have not been repaid. (Id. at 15:6-18).
Defendants are in agreement that the payments to Robinson Brog
represent satisfactions of antecedent loans. At his deposition, Chopra testified
that he helped to broker these loans; that he understood from either Bose or
Alwani that Jaina had taken loans from TD Time and Vision Impex; and that
those loans were repaid through payments to the law firm Robinson Brog.
6

(Chopra Dep. 153:25-155:18, 161:4-9). 4 Chopra disclaims any affiliation with
Robinson Brog, and attorney Greene confirmed that, to the best of his
knowledge, neither Chopra nor NYC Telecom had ever been clients of or
indebted to Robinson Brog. (Chopra Decl. ¶¶ 11-14; Greene Decl. ¶ 5).
M. Shah offers the same explanation for these transactions. (M. Shah 56.1
¶ b). 5 Plaintiff admits that Alwani solicited loans from TD Time, but disputes
that Vision Impex had any role in these loans; Plaintiff likewise admits the fact
of the wire transfers from TD Time and Vision Impex, but disputes that they
represent loans from these entities. (Pl. Chopra 56.1 Opp. ¶¶ 31-51). Plaintiff
also disputes the role of Robinson Brog in the alleged loan repayments. (Id.).
In particular, the TAC alleged that the payments to Robinson Brog were made
at Chopra’s direction to satisfy a debt Chopra owed to that firm. (TAC ¶¶ 2426). There is nothing in the record that supports this assertion.
2.

The Transfers to the LLC Entities

The only one of the putative loans to be reduced to writing was the
January 18, 2013 Commercial Loan Agreement (“CLA”) between Sanjiv Chand
on behalf of his company, Kedis Enterprises LLC (“Kedis”), and M. Shah on
behalf of his company, Neminath, Inc. (“Neminath”). (M. Shah 56.1, Ex. 215).
The CLA memorialized a $600,000 loan from Kedis to Neminath with 15%
annual interest, and with a building Neminath owned in Williston Park, New
4

Despite Chopra’s testimony, Kumar testified that Chopra was not involved in arranging
the loans from TD Time and Vision Impex to Jaina, and that the only time he dealt with
Chopra was when he was having trouble getting repaid. (Kumar Dep. 28:1-29:19).

5

M. Shah used a mix of lettered and numbered paragraphs in his Local Rule 56.1
Statement.

7

York, posted as collateral. (Id.). The loan was personally guaranteed by M.
Shah, V. Shah, and their wives. (Id.). The mortgage was recorded with the
Nassau County clerk. (Id.). A wire transfer receipt from Citizens Bank shows
that on January 22, 2013, Kedis transferred $600,000 to Neminath. (Siddiqi
Decl., Ex. C-18).
Chand stated in an affidavit that he understood that the money he
loaned to Neminath would be used for Jaina’s benefit. (Chand Aff. ¶ 6).
Plaintiff fails to respond to Chopra’s allegation that the transfer from Kedis to
Neminath was a loan, and indeed admits that the money was to be used by
Jaina. (Pl. Chopra 56.1 Opp. ¶¶ 80-81). 6 The parties agree that $570,000
($600,000, less closing costs) was transferred from Neminath to Jaina between
January 22, 2013, and February 6, 2013. (Id. at ¶ 82). Chand states that he
understood that Jaina — and not Neminath — would repay this loan, and that
he assigned Kedis’s right to collect on the loan to the entities 728 Melville
Petrol LLC (“Melville”) and JMVD Hillside (“JMVD,” and together with Kedis and
Melville, the “LLC Entities”). (Chand Aff. ¶¶ 1-2, 9, 11). Chand asked Jaina to
send the loan repayments to the LLC Entities directly, and he avers that the
payments from Jaina to these entities that are recounted in Paragraphs 37 to
44 of the TAC were made in satisfaction of the debt incurred under the CLA.
(Id. at ¶¶ 12-13). Chand also states that Kedis loaned $200,000 directly to

6

Because of a typographical error in Plaintiff’s submission, the numbers after
Paragraph 79 of Plaintiff’s opposition to Chopra’s Local Rule 56.1 Statement are off by
one number. The Court endeavors to correct this problem when citing to Plaintiff’s
opposition, and will use the number of the corresponding paragraph in Chopra’s
statement.

8

Jaina on December 16, 2013. (Id. at ¶ 14). A wire transfer receipt confirms
this. (Siddiqi Decl., Ex. C-18). Chand states that the transfers recounted at
Paragraphs 51 and 52 of the TAC were made in satisfaction of this loan.
(Chand Aff. ¶ 14).
Plaintiff alleges, and bank statements confirm, that: (i) in January 2014,
Jaina made two transfers to Kedis, totaling $200,000; (ii) on August 13, 2014,
Jaina transferred $200,000 to JMVD; and (iii) in October 2014, Jaina made a
series of transfers totaling $460,000 to Melville. (TAC ¶¶ 37-44, 51-52; Siddiqi
Decl., Ex. C-3). M. Shah states that these payments were made to satisfy loan
debts. (M. Shah 56.1 ¶¶ e-g). Chopra supports this statement; he testified at
his deposition that he was approached by Alwani, who was looking for
financing for Neminath to use for the benefit of Jaina. (Chopra Dep. 45:1952:23). Chopra testified that Jaina was chronically short on cash, and he was
told that Jaina needed money quickly. (Id.). Chopra understood that because
Neminath had a building to put up as collateral, Alwani and Bose decided to
seek funding using Neminath that they could then transfer to Jaina. (Id.).
Chopra helped arrange the loan with Chand and received a broker’s fee. (Id. at
62:4-15, 77:21-24).
Plaintiff disputes that the payments from Jaina to Kedis were made in
satisfaction of existing loan debts. (See, e.g., Pl. Chopra 56.1 Opp. ¶ 83).
Plaintiff points to Neminath’s 2014, 2015, and 2016 tax returns (submitted to
the Court in connection with earlier motion practice) that show an outstanding
$600,000 loan receivable due and owing from Jaina even after these transfers
9

were made. (Id.; see also Dkt. #180-3, 180-4, 180-5). Jaina’s 2014 and 2015
tax returns show liabilities in excess of $600,000, but do not itemize to whom
those liabilities are owed. (Vanjani Cert., Ex. L-M).
3.

The Transfers to Chopra-Owned Entities

Entities owned and controlled by Ravi Chopra also transferred money to
Jaina. In January 2013, STI Consultants issued checks worth $29,500 to
Jaina, and in January 2014, STI Consultants wired $100,000 to Jaina.
(Chopra Decl., Ex. A-C). Copies of checks, wire transfer receipts, and Jaina’s
bank statements confirm these transfers. (Id.; Siddiqi Decl., Ex. C-3). In total,
STI Consultants transferred $129,500 to Jaina.
In January, September, and October 2014, Jaina made a series of
transfers to STI Consultants. (See Siddiqi Decl., Ex. C-3). Chopra states in his
Declaration and testified at his deposition that Jaina only repaid $109,000.
(Chopra Decl. ¶ 27; Chopra Dep. 293:3-15). The Court’s review of Jaina’s bank
statements reveals that Jaina transferred more than $109,000 (even
accounting for alleged transfers that the parties agree did not occur or were
subsequently reversed); at the very least, the bank statements show that Jaina
transferred no less than $109,000 to STI Consultants in 2014. (See Siddiqi
Decl., Ex. C-3).
Chopra’s company, Defendant NYC Telecom, also transferred money to
Jaina. In January 2013, NYC Telecom issued a check for $25,000 to Jaina,
and in November 2013, it issued checks worth $145,088 to Jaina. (Chopra

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Decl., Ex. F-H). 7 In 2014, NYC Telecom engaged in two transactions to sell
merchandise to an entity called Tricom International, LLC (“Tricom”). (Id. at
¶¶ 36-37). Invoices show that on September 24, 2014, NYC Telecom billed
Tricom $182,500 for cell phones and SIM cards, and that on October 2, 2014,
NYC Telecom billed Tricom $148,500 for SIM cards and calling cards. (Id. at
Ex. I-J). Chopra states in his Declaration that he asked Tricom to wire its
payments for the merchandise directly to Jaina. (Id. at ¶ 38).
Charan Narang, Tricom’s manager, states in his Declaration that Chopra
asked him to send his payments for the merchandise to Jaina instead of to
NYC Telecom; Narang understood that those transfers would discharge
Tricom’s debt to NYC Telecom, and that Jaina would thereafter be indebted to
NYC Telecom, not to Tricom. (Narang Decl. ¶ 9). Attached to the Narang
Declaration are two wire transfer receipts — one is dated October 23, 2014,
and shows a transfer of $182,500 from Tricom to Jaina; the other is dated
October 30, 2014, and shows a transfer of $148,500 from Tricom to Jaina. (Id.
at Ex. C-D). Jaina’s bank statements reflect it received these transfers from
Tricom. (Siddiqi Decl., Ex. C-3). In total, Jaina received $501,088 directly
from NYC Telecom or from Tricom on behalf of NYC Telecom.
According to Jaina’s bank statements, Jaina transferred a total of
$406,000 to NYC Telecom from October to December, 2014. (Siddiqi Decl.,
Ex. C-3). Chopra testified at his deposition that he caused NYC Telecom to give
7

Chopra’s Declaration says that one of these transfers occurred in January 2014, but
the checks attached as exhibits to the Declaration are dated January and November
2013.

11

this money to Jaina as a loan, and that Jaina still owed him about $100,000
on that loan. (Chopra Dep. 297:12-298:15). Plaintiff disputes that these
payments to STI Consultants and NYC Telecom were meant to satisfy existing
debts; in particular, Plaintiff notes the absence of writings reflecting the alleged
loans from Chopra’s companies to Jaina. (Pl. Chopra 56.1 Opp. ¶¶ 58-77). 8 M.
Shah states that these payments were made to satisfy antecedent loan debts.
(M. Shah 56.1 ¶¶ c-d).
4.

The Transfers to Defendant Vipin Shah

Finally, the record reflects that V. Shah, whose brother and wife were
Jaina shareholders, transferred large sums of money from his and his wife’s
bank accounts to Jaina over the years. V. Shah attaches to his Local Rule 56.1
Statement copies of checks and transaction receipts showing transfers from his
accounts to Jaina, often in the tens or hundreds of thousands of dollars. (See
V. Shah 56.1, Ex. 301). V. Shah also attaches documentation of a $249,500
line of credit that he and his wife took out on their home on August 28, 2012,
through Capital One Bank, as well as Capital One Bank account records
showing that he drew down the full amount of the credit line on September 5,
2012, and withdrew $260,000 from his account the next day. (Id. at Ex. 302303). The appended documents also include receipts showing that the
$260,000 was transferred to Jaina. (Id.). V. Shah contends that he transferred
nearly $2,000,000 to Jaina from 2010 to 2014. (Id. at Ex. 301).

8

Plaintiff also disputes the validity of the invoices to Tricom, but Plaintiff’s objection is
facially implausible, and the Court rejects it out of hand. (See Pl. Chopra 56.1 Opp.
¶ 74).

12

Plaintiff alleges that Jaina transferred $685,603 to V. Shah between
June 2013 and December 2014. (Vanjani Cert. ¶¶ 104-05). The Chopra
Defendants’ submissions do not address these transfers, as there is no
allegation that they had any involvement in them. M. Shah, like V. Shah,
contends that the transfers from Jaina to V. Shah were made to satisfy
antecedent loan debts. (M. Shah 56.1 ¶ h).
C.

Procedural Background
The parties commenced discovery in this matter on September 14, 2016,

but discovery was stayed on January 27, 2017, in light of the Shah
Defendants’ bankruptcy filings. (Dkt. #139, 158). The stay was lifted on
July 25, 2017, after the Court learned that the Bankruptcy Court would allow
this litigation to proceed. (See Dkt. #172). During a conference with the Court
on July 25, 2017, the Shah Defendants’ counsel requested leave to withdraw
and, following an ex parte discussion with counsel and the Shah Defendants,
the Court found that there were sufficient grounds to grant counsel’s
applications, and the Shah Defendants have since proceeded pro se.
Following the close of fact discovery, Chopra and NYC Telecom filed a
joint motion for summary judgment on December 4, 2017 (Dkt. #193-199);
V. Shah filed his motion for summary judgment on December 11, 2017 (Dkt.
#200-202); and M. Shah filed his motion for summary judgment on December
14, 2017 (Dkt. #207-209). Plaintiff filed a consolidated response on
January 30, 2018 (Dkt. #218-222). Chopra and NYC Telecom filed reply
papers on February 28, 2018 (Dkt. #230-232); V. Shah filed a reply brief on
13

March 14, 2018 (Dkt. #234-235); and M. Shah filed a reply brief on March 15,
2018 (Dkt. #233).
DISCUSSION
A.

Applicable Law
1.

Motions for Summary Judgment Under Federal Rule of Civil
Procedure 56(a)

Under Rule 56(a), a “court shall grant summary judgment if the movant
shows that there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); accord Celotex
Corp. v. Catrett, 477 U.S. 317, 322 (1986); Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 247 (1986). A genuine dispute exists where “the evidence is such
that a reasonable jury could return a verdict for the nonmoving party,”
Fireman’s Fund Ins. Co. v. Great Am. Ins. Co. of N.Y., 822 F.3d 620, 631 n.12
(2d Cir. 2016) (internal quotation marks and citation omitted), and a fact is
material if it “might affect the outcome of the suit under the governing law[.]”
Anderson, 477 U.S. at 248. The movant may discharge its burden by
establishing that the nonmoving party has “fail[ed] to make a showing
sufficient to establish the existence of an element essential to that party’s case,
and on which that party will bear the burden of proof at trial.” Celotex, 477
U.S. at 322. In reviewing a motion for summary judgment, “a court must
construe the evidence in the light most favorable to the nonmoving party,
drawing all inferences in that party’s favor.” Jeffreys v. City of N.Y., 426 F.3d
549, 553 (2d Cir. 2005). Even so, the nonmoving party may not defeat
summary judgment through a mere “show[ing] that there is some metaphysical
14

doubt as to the material facts[,]” and must instead “come forward with specific
facts showing that there is a genuine issue for trial.” Matsushita Elec. Indus.
Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (internal quotation
marks and citation omitted). Rather, the nonmoving party “must set forth
specific facts showing a genuine issue for trial[,]” and may not rely on “mere
allegations or denials[.]” Anderson, 477 U.S. at 248.
Defendants Mahendra Shah and Vipin Shah have, at times, been
represented by counsel in this case, but have been proceeding pro se since July
2017, and have filed their motions for summary judgment without the
assistance of counsel. The Court will, as it must, liberally read the Shah
Defendants’ submissions “to raise the strongest arguments they suggest.”
Triestman v. Fed. Bureau of Prisons, 470 F.3d 471, 475 (2d Cir. 2006) (quoting
Pabon v. Wright, 459 F.3d 241, 248 (2d Cir. 2006)).
2.

Fraudulent Conveyance Under Article 10 of the NYDCL

The Court has twice set forth the law that governs this case in prior
Opinions, and proceeds to do so a third time. Article 10 of the New York
Debtor and Creditor Law (the “NYDCL”), which comprises sections 270 to 281
of the statute, provides a “set of legal rather than equitable doctrines, whose
purpose is not to provide equal distribution of a debtor’s estate among
creditors, but to aid specific creditors who have been defrauded by the transfer
of a debtor’s property.” HBE Leasing Corp. v. Frank, 48 F.3d 623, 634 (2d Cir.
1995). Plaintiff’s TAC raises claims under sections 273, 273-a, 274, and 276 of
the NYDCL. The purpose of these statutes is to recover money or property that
15

has been fraudulently conveyed by permitting a creditor to set aside the
conveyance. N.Y. Debt. & Cred. L. § 278. However, a creditor may not recover
against “a purchaser for fair consideration without knowledge of the fraud at
the time of the purchase.” Id.
a.

Constructive Fraud Under §§ 273, 273-a, and 274

Section 273 provides that “[e]very conveyance made … by a person who
is or will be thereby rendered insolvent is fraudulent as to creditors without
regard to his actual intent if the conveyance is made … without a fair
consideration.” Insolvency is presumed if a conveyance is made without fair
consideration, and the burden rests with the transferee to rebut the
presumption. United States v. Watts, 786 F.3d 152, 165 (2d Cir. 2015). “A
debtor is considered insolvent when the ‘present fair salable value of his assets
is less than the amount that will be required to pay his probable liability on his
existing debts as they become absolute and matured.’” Id. at 164 (quoting N.Y.
Debt. & Cred. L. § 271).
Section 273-a creates an analogue that applies to conveyances made by
defendants in legal proceedings. It provides:
Every conveyance made without fair consideration
when the person making it is a defendant in an action
for money damages or a judgment in such an action has
been docketed against him, is fraudulent as to the
plaintiff in that action without regard to the actual
intent of the defendant if, after the final judgment for
the plaintiff, the defendant fails to satisfy the judgment.
Section 274 imposes liability for a conveyance “made without fair consideration
when the person making it is engaged or is about to engage in a business or
16

transaction” that leaves the transferor with “unreasonably small capital” on
hand. Such a conveyance “is fraudulent as to creditors and as to other
persons who become creditors during the continuance of such business or
transaction without regard to [the transferor’s] actual intent.” N.Y. Debt. &
Cred. L. § 274.
Sections 273, 273-a, and 274 all ask whether the transfer was made for
“fair consideration.” Under section 272, fair consideration is found when the
transferor, (i) in good faith, (ii) receives “fair equivalent” property or the
discharge of an equivalent antecedent debt. N.Y. Debt. & Cred. L. § 272; see
also In re Sharp Int’l Corp., 403 F.3d 43, 53-54 (2d Cir. 2005) (“The fair
consideration test is profitably analyzed as follows: [i] the recipient of the
debtor’s property must either (a) convey property in exchange or (b) discharge
an antecedent debt in exchange; and [ii] such exchange must be a fair
equivalent of the property received; and [iii] such exchange must be in good
faith.” (citation, internal quotation marks, and brackets omitted)). A lack of
good faith can be established by one of the following factors: “(i) a lack of
honest belief in the propriety of the transfer in question; (ii) an intent to take
unconscionable advantage of others; or (iii) an intent to, or knowledge of the
fact that the activities in question will hinder, delay, or defraud others.” GeoGrp. Commc’ns, Inc. v. Chopra, No. 15 Civ. 1756 (KPF), 2016 WL 4098552, at *3
(S.D.N.Y. July 27, 2016) (quoting Staudinger+Franke GMBH v. Casey, No. 13
Civ. 6124 (JGK), 2015 WL 3561409, at *10 (S.D.N.Y. June 8, 2015)). However,
courts have recognized the tension of a statutory scheme that requires good
17

faith while imposing liability without regard to intent. In re Sharp, 403 F.3d at
54.
A preferential repayment of an antecedent debt is not a fraudulent
conveyance, regardless of “whether or not it prejudices other creditors, because
the basic object of fraudulent conveyance law is to see that the debtor uses his
limited assets to satisfy some of its creditors; it normally does not try to choose
among them.” HBE Leasing, 48 F.3d at 634. However, payments of preexisting loan debts will not constitute fair consideration where those payments
are made “to a debtor corporation’s shareholders, officers, or directors[.]” Id. 9
Liability under sections 273, 273-a, and 274 may be imposed on a party
“who assisted in the fraudulent conveyance where the defendant was itself a
transferee of the assets or a beneficiary of the conveyance.” Amusement Indus.,
Inc. v. Midland Ave. Assocs., LLC, 820 F. Supp. 2d 510, 533 (S.D.N.Y. 2011).
That said, there is no liability for aiding and abetting a fraudulent conveyance,
nor is there constructive fraud liability for a transferor of funds. Id. Finally,
the Court has explained twice before that “the weight of the case law suggests
that while the heightened pleading standard of Rule 9(b) applies to claims of
actual fraud under § 276, it does not govern claims for constructive fraudulent
transfer under §§ 273, 273-a, or 274.” Geo-Grp. Commc’ns, Inc., 2016 WL

9

Plaintiff reads the Court’s prior Opinion in this case to confine the operation of the
corporate insider exception to the antecedent debt rule to section 273 only. (Pl.
Opp. 26). The Court meant no such thing: The law of fair consideration under
section 272 — including the antecedent debt rule and the corporate insider exception —
applies with equal force to claims under sections 273, 273-a, and 274. See Atlanta
Shipping Corp., Inc. v. Chem. Bank, 818 F.2d 240, 248-49 (2d Cir. 1987).

18

4098552, at *4 (citing Geo-Grp. Commc’ns, Inc. v. Chopra, No. 15 Civ. 1756
(KPF), 2016 WL 390089, at *5 (S.D.N.Y. Feb. 1, 2016) (collecting cases)).
b.

Actual Fraud Under § 276

Section 276 states that “[e]very conveyance made … with actual intent,
as distinguished from intent presumed in law, to hinder, delay, or defraud
either present or future creditors, is fraudulent as to both present and future
creditors.” Unlike the constructive fraud statutes, section 276’s prohibition on
actual fraud centers on the transferor’s intent and does not have any
requirement regarding consideration or insolvency. Thus, “a cause of action
[under section 276] may lie even where fair consideration was paid and where
the debtor remains solvent.” Amusement Indus., 820 F. Supp. 2d at 530
(internal quotation marks and citation omitted). Proof of intent to defraud is
rare and, thus, courts have held that
creditors may rely on “badges of fraud” to establish an
inference of fraudulent intent. Factors that are
considered “badges of fraud” are [i] a close relationship
between the parties to the transaction, [ii] a secret and
hasty transfer not in the usual course of business,
[iii] inadequacy of consideration, [iv] the transferor’s
knowledge of the creditor’s claim and his inability to pay
it, [v] the use of dummies or fictitious parties, and
[vi] the retention of control of the property by the
transferor after the conveyance.
Id.; see also In re Sharp, 403 F.3d at 56 (“Due to the difficulty of proving actual
intent to hinder, delay, or defraud creditors, the pleader is allowed to rely on
‘badges of fraud’ to support his case, i.e., circumstances so commonly
associated with fraudulent transfers that their presence gives rise to an
inference of intent.” (citation omitted)).
19

B.

Analysis
1.

Chopra and NYC Telecom’s Motion for Summary Judgment Is
Granted
a.

The Robinson Brog Transfers

In the TAC, Plaintiff alleges that the transfers made to Robinson Brog
were made to or for the benefit of Chopra. (TAC ¶¶ 23-36). Specifically,
Plaintiff alleged that these were functionally transfers to Chopra in satisfaction
of a debt that he owed to that firm. (Id. at ¶¶ 24-25). The record does not
support these allegations, and, indeed, is insufficient even to raise a genuine
dispute of fact in their regard.
New York’s fraudulent conveyance statutes do not provide a remedy
against one who merely aids, abets, or otherwise assists in a challenged
transfer or even against the transferor himself. Amusement Indus., 820 F.
Supp. 2d at 527, 532-33. These statutes are, instead, designed to provide a
cause of action against the recipient of a debtor’s funds to enable a creditor to
claw back improper transfers and restore assets that otherwise would have
been available to satisfy a judgment or debt. See id. at 528. Accordingly, a
party may not be held liable in constructive or intentional fraud for a transfer
in which he did not participate as either a transferee or a beneficiary. Id. at
527.
Chopra’s testimony, corroborated by the declaration submitted by A.
Mitchell Greene, a shareholder at Robinson Brog, establishes that Chopra
never had any relationship with or indebtedness to Robinson Brog. (Chopra
Decl. ¶¶ 11-14; Chopra Dep. 154:20-155:2; Greene Decl. ¶ 5). Plaintiff admits
20

that it has no knowledge of a relationship between either Chopra or NYC
Telecom and Robinson Brog, and that it does not have any information
showing that Chopra or NYC Telecom has ever been indebted to Robinson
Brog. (Pl. Chopra 56.1 Opp. ¶¶ 18-21). Chopra testified that he helped broker
the loans from TD Time and Vision Impex to Jaina, and that he understood
that those loans were repaid through transfers to Robinson Brog (see Chopra
Dep. 153:25-155:18, 161:4-9), while Kumar’s and Singh’s deposition testimony
shows that Chopra did not have any ownership stake or other interest in either
Vision Impex or TD Time (see Kumar Dep. 8:12-9:25 (testifying that he has not
conducted business with Chopra since the 1990s); Singh Dep. 10:11-20
(testifying that he did not meet Chopra until 2017)). And since Plaintiff admits
that it has no information to suggest that Chopra has any ownership interest
in TD Time or Vision Impex (Pl. Chopra 56.1 Opp. ¶¶ 25-26, 29-30), there is no
evidence in the record suggesting that Chopra received the funds transferred to
Robinson Brog.
Undaunted, Plaintiff argues in its opposition brief that Chopra made
admissions about having an “economic stake” in Jaina that preclude the entry
of summary judgment, and that in any event, “there is sufficient evidence in
the record that he participated in [the transfers].” (Pl. Opp. 34). Taking the
latter point first, it is well-settled that a mere participant in a transaction is not
properly a defendant in a constructive fraud claim. See, e.g., BBCN Bank v.
12th Ave. Rest. Grp. Inc., 55 N.Y.S.3d 225, 226 (1st Dep’t 2017) (“[T]here is no
cause of action for aiding and abetting a fraudulent conveyance against a
21

person … who is alleged merely to have assisted in effecting the transfer, in a
professional capacity, and who is not alleged to have been a transferee of the
assets or to have benefitted from the transaction.”). Once again, fraudulent
conveyance statutes are aimed at the improperly-transferred funds, not at the
alleged malefactors who made the transfer. Amusement Indus., 820 F. Supp.
2d at 527 (“[T]he transferor of the property — that is, the debtor — is not the
proper defendant in a fraudulent conveyance claim.”). Moreover, it is not
enough that Chopra had a generalized interest in Jaina’s financial stability or
that he stood to benefit, even handsomely, from potential future business he
could do with Jaina if it could remain a going concern. See Roselink Invrs.,
L.L.C. v. Shenkman, 386 F. Supp. 2d 209, 227 (S.D.N.Y. 2004) (holding that
third party to a challenged transaction was not a beneficiary simply because he
would have suffered damage from the debtor’s further financial woes).
On these facts, there is no genuine dispute regarding Chopra’s
involvement in these transfers, and the Court therefore finds that Chopra is
entitled to judgment as a matter of law on Plaintiff’s claims based on the
transfers to Robinson Brog. Even if it could be said that Chopra stood to
benefit from Jaina’s transfers to Robinson Brog — and for the avoidance of any
doubt about these transfers — the Court considers whether the transfers to
Robinson Brog (i) were repayments of an antecedent debt, which would render
the transfers supported by fair consideration and, consequently, not voidable
under sections 273, 273-a, or 274, and (ii) were not made with an intent to
hinder, delay, or defraud sufficient to hold Chopra liable under section 276.
22

It is well-settled that a payment made in “satisfaction of a preexisting
debt qualifies as fair consideration for a transfer of property[.]” Pashian v.
Eccelston Props., Ltd., 88 F.3d 77, 86 (2d Cir. 1996). Plaintiff does not dispute
this legal principle. (Pl. Opp. 25). Documentary evidence and the testimony of
Surjeet Singh and Dalip Kumar make plain that Singh and Kumar made loans
to Jaina through the entities TD Time and Vision Impex because Jaina was in
need of short-term capital infusions, and that each believed those loans would
be repaid in a timely fashion. (Siddiqi Decl., Ex. A-3–A-5 (wire transfer
receipts); id. at Ex. B-1–B-8 (bank statements); Singh Dep. 14:12-25, 30:231:21, 34:2-36:11 (testifying that he loaned money to Jaina and expected to be
paid back); Kumar Dep. 14:11-17:7 (testifying that he loaned money to Jaina
and that he asked Jaina to send loan payments to his attorneys)). Singh
testified that Alwani, Jaina’s accountant, asked that he loan money to Jaina
(Singh Dep. 14:6-16:17), and Plaintiff admits this fact (Pl. Chopra 56.1 Opp.
¶ 32). Kumar similarly testified that Alwani approached him to ask for a loan.
(Kumar Dep. 28:1-18). Greene’s declaration establishes that Robinson Brog
served as counsel to Vision Impex, and that the firm accepted certain transfers
of money from Jaina into its Interest on Lawyer Account on behalf of Vision
Impex. (Kumar Dep. 16:11-17:7; Greene Decl. ¶¶ 3-4).
Plaintiff’s conclusory denials are unavailing. In large measure, this is
because Plaintiff can cite only the absence of evidence: Plaintiff points out that
these loans were not memorialized in writing; that the loans are not reflected in
Jaina’s tax returns; and that the Shah Defendants’ submissions in personal
23

bankruptcy proceedings do not make any mention of outstanding debts to
Singh, TD Time, Kumar, or Vision Impex, even though Singh and Kumar
testified that Jaina still owes them money and even though the Shahs purport
to have personally guaranteed these loans. (E.g., Pl. Chopra 56.1 Opp. at
¶ 34). Significantly, however, every witness to be asked about these payments
substantiated, under oath, what the documents show: Jaina received a total of
$1,252,450 from Kumar or from Singh on Kumar’s behalf; Jaina was charged a
substantial interest rate; and thereafter Jaina paid $1,350,000 into an account
belonging to Kumar’s attorney, as Kumar had directed Jaina to do. 10 On this
record, there can be no genuine dispute that the payments to Robinson Brog
were supported by fair consideration sufficient to preclude Chopra’s liability
under sections 273, 273-a, and 274.
There is likewise no basis to hold Chopra liable under section 276 for
actual fraud. Plaintiff argues that Chopra’s supposed economic interest in
Jaina suggests that there was a close relationship indicative of an improper
purpose behind these transactions, but this also fails. (Pl. Opp. 30-32).
Plaintiff is correct that Chopra’s deposition testimony suggests that he wanted
to see Jaina thrive and thought he could benefit from future business
partnerships with Jaina if the cloud of Plaintiff’s judgment went away and if

10

Plaintiff also cites as evidence Singh’s testimony that his loans were not repaid (e.g., Pl.
Chopra 56.1 Opp. ¶ 34), but Plaintiff’s misses the mark here. Singh testified that the
initial $250,000 that he gave to Jaina was not repaid; he did not say that the money he
gave to Jaina on behalf of Kumar and Vision Impex was not repaid to Kumar. (See
Singh Dep. 36:12-37:13). Singh’s testimony on this point has no bearing on whether
the payments to Robinson Brog were made in satisfaction of antecedent debts Jaina
owed to Kumar and Vision Impex.

24

Jaina could become financially stable. (See id. at 30). Plaintiff makes much of
evidence that Chopra tried to negotiate a settlement with Plaintiff on Jaina’s
behalf and may have tried to frustrate Plaintiff’s efforts to confirm the arbitral
award (id. at 31); but even if this evidence suggests a close relationship
between Chopra and Jaina, there is nothing else in the record to suggest that
Jaina acted with a fraudulent purpose to transfer money to Robinson Brog.
Specifically, the record does not suggest that these transfers were made outside
the normal course of business (indeed, the record shows that Jaina was
constantly taking and repaying loans), that there was insufficient consideration
for these payments, that the payments were made through dummy entities, or
that Jaina retained control over the funds after it was transferred to Robinson
Brog. The Court holds that there is no basis on which to hold Chopra liable for
actual fraud under section 276.
b.

The STI Consultants and NYC Telecom Transfers

Because Chopra is the sole shareholder of STI Consultants and NYC
Telecom (Chopra Decl. ¶¶ 2, 4), he can be said to have benefitted from Jaina’s
transfers to these entities. That said, Plaintiff’s claims against Chopra and
NYC Telecom fail as a matter of law. Chopra and M. Shah claim that these
payments were made to satisfy antecedent debts. (Chopra Decl. ¶¶ 27-28, 42;
M. Shah 56.1 ¶¶ c-d). Chopra’s testimony reflects that he often brokered loans
for Jaina because Jaina was in constant need of short-term financing and had
trouble obtaining that financing from banks. In response, Plaintiff denies the

25

existence of these loans because they were not memorialized in writing and are
not reflected on Jaina’s tax returns. (Pl. Chopra 56.1 Opp. ¶¶ 58-63, 70-77).
The amounts of money sent from STI Consultants and NYC Telecom to
Jaina are circumstantial evidence of the existence and repayment of loans:
First, Jaina received $129,500 from STI Consultants, and Chopra’s testimony
(corroborated by Jaina’s bank records) was that Jaina repaid at least $109,000.
(Chopra Dep. 290:21-294:12; Siddiqi Decl., Ex. C-3). Second, NYC Telecom (or
Tricom, on NYC Telecom’s behalf) transferred $501,088 to Jaina; documents
and the declaration of Charan Narang corroborate Chopra’s testimony that
Chopra arranged for Tricom to pay for merchandise through direct payments to
Jaina, which payments were meant to leave Jaina indebted to NYC Telecom.
(Siddiqi Decl., Ex. C-3; Narang Decl. ¶¶ 7-9; id. at Ex. A-B (invoices); Chopra
Dep. 287:2-288:22). Chopra’s testimony and Jaina’s bank records reflect that
Jaina repaid $406,000, and has about $100,000 outstanding. (Chopra
Dep. 296:13-298:9; Siddiqi Decl., Ex. C-3).
Plaintiff questions the validity of the Tricom invoices — Plaintiff argues
that it is suspicious that the first invoice references the total amount of
Tricom’s order even though the second invoice had not been issued yet — but
Plaintiff’s conjecture is refuted by Chopra’s supplemental declaration and the
invoices themselves. The invoices each note the total amount due on that
invoice as well as a running “job total balance” for the entire order. (Narang
Decl., Ex. A-B). That NYC Telecom had yet to issue future invoices on the
order does not suggest the inaccuracy of any individual invoice. Chopra’s
26

supplemental declaration explains that NYC Telecom’s billing software is
designed to show the total amount outstanding from a customer even if the
individual invoice charges the customer for less than the full amount due.
(Chopra Supp. Decl. ¶ 4). Even though the Court is bound to view the evidence
in the light most favorable to Plaintiff, conclusory denials do not a triable issue
make.
Finally, the Court finds that the record does not support Plaintiff’s
contention that Chopra was a Jaina shareholder, which would render the
transfers to entities he controls transfers to a corporate insider in bad faith.
(See Pl. Opp. 11-12). Plaintiff concedes that the Shah Defendants and Chopra
say Chopra was never a Jaina shareholder. (Id. at 11). In rebuttal, Plaintiff
cites evidence that Jaina lost one of its shareholders in 2011, and that Jaina’s
2013, 2014, and 2015 tax returns do not list Jaina’s shareholders by name.
(Id. at 11-15). It is bridge too far to present evidence that Jaina lost one
shareholder and then extrapolate from that evidence that (i) Jaina later gained
a shareholder and (ii) Chopra was that new shareholder. Plaintiff’s allegations
are little more than conjecture and do not raise a triable issue of fact. The
record before the Court is such that no reasonable jury could find a lack of fair
consideration for the transfers from Jaina to STI Consultants and NYC
Telecom. These transfers are not constructively fraudulent under sections 273,
273-a, or 274.
Plaintiff’s actual fraud claim under section 276 presents a somewhat
closer question. Plaintiff argues that the payments to STI Consultants and
27

NYC Telecom were made with the goal of hindering or delaying Plaintiff’s ability
to collect on the state-court judgment. (Pl. Opp. 29-33). As discussed above,
Plaintiff emphasizes that Chopra wanted to see Jaina succeed financially and
suggests that Chopra “needed the Geo-Group law[]suit to go away” — to the
point of trying to broker a settlement between Plaintiff and Jaina in 2015. (Id.
at 30-31). Plaintiff also argues that the timing of the challenged transfers is
suspect because they “picked up quite dramatically just prior to and after the
July 10, 2014 arbitration award.” (Id. at 31).
Even though a close relationship between the parties to the transaction
and suspect timing are indicia of fraud, the Court does not find these points to
be persuasive on the facts of this case. Plaintiff repaid the loans to STI
Consultants and NYC Telecom after the arbitral award was handed down, but
the debts to STI Consultants and NYC Telecom were partially incurred before
the award. That Jaina continued to incur debts to these entities and repaid
them after the award does not vitiate the existence of fair consideration for an
antecedent debt. As the Court has previously observed, Jaina was in constant
need of short-term loans — it was very much in the normal course of Jaina’s
business to take loans from private lenders and repay them, to the extent it
could — and Chopra testified that he often worked with Jaina to secure such
financing. Moreover, there is no indication that these transfers were made
hastily after the award — indeed, the repayments began before the award and
continued for several months thereafter — or that Jaina retained control over
the money after it was transferred to STI Consultants or NYC Telecom. The
28

Court finds that the badges of fraud are, in this regard, equivocal at best. On
this record, the Court concludes that no reasonable jury could find Chopra
liable under section 276 for actual fraud based on the transfers for STI
Consultants and NYC Telecom. 11 See Kim v. Ji Sung Yoo, No. 15 Civ. 3110
(RWS), — F. Supp. 3d —, 2018 WL 1871177, at *15 (S.D.N.Y. Apr. 18, 2018)
(holding that transfer was not made with fraudulent intent where debtor
transferred an interest in real estate to a family member without consideration,
but where the transfer was “not made in secret and no evidence adduced
indicated the transfer was performed in a hasty or otherwise unusual way”); cf.
Staudinger+Franke, 2015 WL 3561409, at *15 (denying summary judgment
where insolvent debtor hastily conveyed assets to an entity with which it had a
close relationship and retained control over the assets following the transfer).

11

To the extent that Plaintiff seeks to hold Chopra or NYC Telecom liable for Jaina’s
transfers to Kedis, Melville, or Hillside, Chopra and NYC Telecom are entitled to
judgment as a matter of law on those claims. The TAC alleges that Jaina made these
transfers “at the direction or request of Mr. Chopra” (TAC ¶¶ 37, 41, 44, 48, 51, 57), but
the law is clear, as Chopra notes in his moving brief, that New York’s fraudulent
conveyance statutes do not give a creditor a cause of action against “third parties who
aided the debtor’s transfer[.]” Geren v. Quantum Chem. Corp., 832 F. Supp. 728, 737
(S.D.N.Y. 1993). To be sure, Chopra testified that he brokered the loan from Kedis to
Neminath and received a fee for his services. (Chopra Dep. 75:8-77:24). But the record
does not indicate that Chopra or NYC Telecom benefitted from the transfers from Jaina
to Kedis, Melville, or Hillside. Plaintiff’s argument that Chopra had a generalized
interest in Jaina’s financial stability does not suffice to show a benefit. See Roselink
Invrs., L.L.C. v. Shenkman, 386 F. Supp. 2d 209, 227 (S.D.N.Y. 2004) (holding that third
party to a challenged transaction was not a beneficiary simply because he would have
suffered damages from the debtor’s further financial woes). Because Plaintiff cannot
show that Chopra or NYC Telecom participated in the transfers to Kedis, Melville, or
Hillside as a transferee or beneficiary, and because this is an essential element of
Plaintiff’s case on which it will bear the burden of proof at trial, Amusement Indus., Inc.
v. Midland Ave. Assocs., LLC, 820 F. Supp. 2d 510, 527 (S.D.N.Y. 2011), Chopra and
NYC Telecom are entitled to summary judgment on Plaintiff’s claims based on these
transfers, see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).

29

2.

The Shah Defendants’ Motions for Summary Judgment Are
Granted in Part and Denied in Part

In resolving the Shah Defendants’ tandem motions for summary
judgment, the Court begins again with the proposition that New York’s
fraudulent conveyance statutes do not provide a remedy against one who
merely assists in a challenged transfer, or against the transferor himself where
those participants are not alleged to be either a transferee or beneficiary of the
transaction. Amusement Indus., 820 F. Supp. 2d at 527-28. The Shah
Defendants are pro se, and they have each submitted one-page moving briefs
that either do not address this issue or do so in conclusory fashion. (See M.
Shah Br.; V. Shah Br.). That said, the Court liberally construes their
submissions to raise the strongest arguments in favor of summary judgment
that they suggest, though the Court does this with appropriate regard for its
countervailing obligation to read the record in the light most favorable to the
non-movant. The Shah Defendants’ status as transferees or beneficiaries of
the transfers alleged in the TAC is an essential element of Plaintiff’s claims on
which Plaintiff will bear the burden of proof at trial, and accordingly, summary
judgment is appropriate if the Shah Defendants have shown that Plaintiff “fails
to make a showing sufficient to establish” that M. Shah or V. Shah were either
transferees or beneficiaries of the transfers. Celotex, 477 U.S. at 322-23.
a.

M. Shah’s Motion for Summary Judgment Is Granted

M. Shah was a 25% shareholder in and the President of Jaina. (M. Shah
Aff. ¶¶ 1, 11(b)). He argues in his moving brief that the TAC “does not contain
a single allegation to the effect that [he] was a beneficiary or transferee” and
30

“alleges, at most, that [he] aided and abetted the transfers[.]” (M. Shah Br.).
And, indeed, M. Shah is correct. The TAC makes ample allegations that
Chopra, V. Shah, and the LLC Entities (the latter of which are former
Defendants in this action) benefitted from the challenged transfers but,
notably, makes no such allegation as to M. Shah. (See, e.g., TAC ¶¶ 25, 28, 33,
71-72, 75, 80, 84, 91). Plaintiff states in the TAC that M. Shah “knew or
should have known” that: (i) the transfers were not made to satisfy existing
debts; (ii) the transfers were made for the benefit of Chopra or V. Shah and V.
Shah’s wife; (iii) Jaina was a defendant in an arbitration at the time of the
transfers; and (iv) the transfers were not made in good faith because they were
made at Chopra’s direction, served no legitimate purpose, and depleted assets
that could have satisfied Plaintiff’s judgment. (Id. at ¶¶ 90-93). The TAC
alleges that, in consequence, M. Shah is personally liable for all of the
challenged transfers. (Id. at ¶¶ 96, 108). Plaintiff’s allegations bespeak a
misapprehension of New York’s fraudulent conveyance statutes. As the Court
has said before, these statutes do not provide a remedy against the transferor
or against one who orchestrates fraudulent transfers without being either a
beneficiary or transferee thereof. BBCN Bank, 55 N.Y.S.3d at 226. On its face,
the TAC does not allege that M. Shah was either of these things.
Moreover, the Court does not understand the factual record to support a
finding that M. Shah personally benefitted from the challenged transfers.
Though the Court is not swayed by M. Shah’s self-serving statements in his
deposition or in his moving brief, the record does not reflect that M. Shah was
31

himself the recipient of any funds transferred to Robinson Brog, STI
Consultants, NYC Telecom, the LLC Entities, or V. Shah, or that any funds
were subsequently given to him by these transferees. Nor does the record show
that any of these transfers was made to satisfy personal debts or expenses that
M. Shah owed, thereby affording him an indirect financial benefit.
For its part, Plaintiff argues that M. Shah was “motivated by [his] stake
in Jaina to try to frustrate [Plaintiff] from enforcing its judgment.” (Pl.
Opp. 35). Plaintiff contends in its opposition to M. Shah’s Local Rule 56.1
Statement that M. Shah benefitted from the transfers because they “[gave]
Jaina time to secret assets[,]” and Plaintiff presents evidence, including in the
lengthy Vanjani Certification, suggesting that millions of dollars have, simply,
gone missing from Jaina’s books. (Pl. M. Shah 56.1 Opp. ¶ a; Vanjani Cert.
¶¶ 148-53). 12
Plaintiff focuses on Chopra’s testimony to argue that M. Shah benefitted
from the transfers because he (M. Shah) stood to gain from the business
ventures in which Jaina could engage, including getting a substantial line of
credit, if only Plaintiff’s judgment would go away. (Pl. M. Shah 56.1 Opp. ¶ a).
Plaintiff also points to Chopra’s and M. Shah’s alleged efforts to thwart a
settlement between Plaintiff and Jaina as evidence of a desire to avoid paying

12

M. Shah used a mix of lettered and numbered paragraphs in his Local Rule 56.1
Statement, and Plaintiff assigned its own numbers to M. Shah’s statement when it
prepared its opposition. Because the Court cites to M. Shah’s Local Rule 56.1
Statement using the letters and numbers he assigned to his paragraphs, the Court
continues to use those reference points when referring to Plaintiff’s corresponding
opposition statement.

32

on the judgment and to deliver Jaina to more prosperous financial times. (Id.).
Giving appropriate credence to Plaintiff’s arguments, it remains unclear how
M. Shah’s arguably nefarious motives could demonstrate that he benefitted
from the transfers at issue here. Assuming that M. Shah, qua Jaina
shareholder, wanted Jaina to succeed and wanted Plaintiff’s judgment to go
away, the transfers only diminished Jaina’s assets and did nothing to relieve
Jaina of its obligation to satisfy a judgment that continued to loom large. And
thus, from that vantage point, the transfers harmed M. Shah. In effect,
Plaintiff appears to argue that Jaina’s officers looted the company to the point
of insolvency to avoid Plaintiff’s judgment. Once again, even assuming this is
true, it does little to elucidate how M. Shah personally benefitted from the
transfers at issue in this action. Accordingly, the Court finds that Plaintiff
cannot prove this essential element of its claims against M. Shah, and that M.
Shah is thus entitled to summary judgment on Plaintiff’s actual and
constructive fraud claims.
b.

V. Shah’s Motion for Summary Judgment Is Denied

By contrast, Plaintiff alleges that V. Shah improperly received at least
$685,603 from Jaina during the pendency of the arbitration and after the
award was issued, and Jaina’s bank records confirm these transfers. (Vanjani
Cert. ¶¶ 104-05; Siddiqi Decl., Ex. C-3). 13 V. Shah was thus a transferee and a

13

The TAC alleged that V. Shah received $760,603 from Jaina, but Plaintiff agrees with
V. Shah that certain of the alleged transfers were not received by him, and Plaintiff
notes in its brief that the correct amount of transfers from Jaina to V. Shah from
June 5, 2013, to November 26, 2014, is $685,603. (Pl. Opp. 18). Plaintiff adds,
however, that discovery has revealed transfers about which Plaintiff was unaware at the

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beneficiary of the challenged transactions. V. Shah alleges that over the years
he and his wife (who was a Jaina shareholder) loaned $1,990,200 to Jaina. (V.
Shah 56.1 ¶ 1). V. Shah argues that the payments from Jaina were made in
satisfaction of these antecedent debts (V. Shah Br.) and, indeed, documents V.
Shah submitted in connection with this motion show a revolving door of
payments between Jaina and V. Shah (see V. Shah 56.1, Ex. 301). As one
example, V. Shah alleges that he took out a $249,000 line of credit against his
house and loaned $260,000 to Jaina shortly thereafter. (V. Shah 56.1 ¶ 3).
Documents in the record show that V. Shah took out a home equity line of
credit on August 28, 2012, and that he drew down on this loan on September
5, 2012, and transferred $260,000 to Jaina that same day. (Id. at Ex. 302303). V. Shah argues that the $4,400 monthly payments from Jaina to him —
which are reflected in Jaina’s bank records — were made to satisfy his monthly
home loan payments. (Id. at ¶¶ 4-5).
In this regard, V. Shah’s own testimony complicates the Court’s analysis.
He testified that he loaned roughly $2,500,000 to Jaina over the years, and
that none of it had been paid back. (V. Shah Dep. 39:15-40:5). To use his
words: “It was one-way traffic.” (Id. at 40:8). Later, he indicated that certain
short-term loans he made had been paid back; however, his testimony
indicated that he would often re-issue those short-term loans soon after they

time the TAC was drafted. Plaintiff alleges that the total amount of transfers of which it
is now aware is $848,183.68.

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were repaid, and that those subsequent loans had not been paid back. (Id. at
48:21-52:21).
But even if there is evidence in the record to suggest that Jaina’s
payments to V. Shah were made in satisfaction of an antecedent debt owed to
him — and, to be clear, there is — the Court is struck by the lack of
documentary evidence (aside from the home loan), declarations, and/or
depositions from disinterested parties to corroborate the fact of these loans
from V. Shah to Jaina. The other loan transactions considered by the Court
were substantiated by documents and testimony from third parties who
corroborated the timing and amount of certain challenged transfers, and who
testified that they were loans or payments made on behalf of others who
intended those payments to be loans. Moreover, the other transactions were
supported by circumstantial evidence, insofar as the amounts of the payments
from Jaina to the third parties roughly matched the amounts alleged to be
loans, and where the amounts did not match, witness testimony was often
available to explain the discrepancies. Here, the Shah Defendants say that the
transfers from V. Shah to Jaina were loans; the Court takes them at their word
and appreciates that they are in a better position than Plaintiff to know the
purpose of the contested transactions. But the record is muddied by V. Shah’s
conflicting testimony, and, what is more, the loans are not substantiated by
testimony from third-party witnesses, nor do the amounts of money exchanged
indicate that the payments were loans and not, for example, capital
contributions or investments. The Court believes that the Shah Defendants’
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self-serving contention that the transfers to V. Shah were made to satisfy
antecedent debts “give[s] rise to a credibility question that falls squarely in the
province of the jury.” Corbett v. City of N.Y., No. 15 Civ. 9214 (GHW), 2017 WL
3207783, at *11 (S.D.N.Y. July 27, 2017). On this record, the Court cannot
decide whether the contested transfers were given for fair consideration.
Jaina’s insolvency is an essential element of Plaintiff's section 273 claim,
and under New York law insolvency is presumed where transfers are not made
for fair consideration, such that the burden of overcoming that presumption is
put on the transferee. Watts, 786 F.3d at 165. Plaintiff alleges in the TAC that
the transfers to V. Shah began on June 5, 2013, and continued through
December 26, 2014. (TAC ¶ 59). Bank records reflect that Jaina’s balance at
Capital One Bank fluctuated significantly throughout 2014, but that by the
end of August 2014 Jaina had a balance of $1.55, and by the end of October
2014 the account had a balance of $0.00. (Vanjani Cert., Ex. BB). Jaina’s
Citibank account also had a fluctuating balance throughout 2014, and by
January 8, 2015, the account had a negative balance. (Id. at Ex. Z). In
general, Jaina’s bank records show that significant amounts of money would
pass through Jaina’s accounts each month, but that Jaina’s ending balance
was often low relative to those amounts. (Id. at Ex. Z, BB). By M. Shah’s own
telling, Jaina experienced a “severe cash crunch,” which put it into a
“downward spiral” that ultimately led to Jaina’s “demise[.]” (M. Shah Aff. ¶¶ 47).

36

There is some indication in the record that Jaina possessed computer
hardware of some value (see, e.g., M. Shah Aff. ¶ 10), but the Court does not
have enough information to know if these assets in fact belonged to Jaina or
were of sufficient value to render Jaina solvent. Because the transfers to V.
Shah continued up until the point when Jaina’s two bank accounts — the two
of which the Court has been made aware — had no money, the Court finds that
there is a genuine dispute of fact regarding Jaina’s solvency. The Court
likewise believes there to be a genuine dispute over whether the conveyances to
V. Shah left Jaina with unreasonably small capital on hand, as is required for
liability under section 274. And Jaina was plainly a defendant in an action for
money damages during the relevant time period. Accordingly, Plaintiff's claims
against V. Shah under sections 274, 273-a, and 274 survive.
Plaintiff’s section 276 claim against V. Shah also survives. A claim for
actual fraud under section 276 may stand without regard to fair consideration.
Thus, it matters not whether the payments to V. Shah were made in
satisfaction of an existing debt — if they were made with sufficient “badges of
fraud” to give rise to an inference of fraudulent intent. In re Sharp, 403 F.3d at
56. The Court is mindful that Plaintiff must show the existence of badges of
fraud by clear and convincing evidence, McCombs, 30 F.3d at 328, and finds
that it has. As the Court recognized in a prior Opinion: “A close familial
relationship between transferor and transferee is a well-recognized indicator of
potential fraud.” Geo-Grp. Commc’ns, 2016 WL 4098552, at *10 (citing cases).
Of the four Jaina shareholders, one is V. Shah’s wife, Nayana Shah, and
37

another is his brother, M. Shah. (M. Shah Aff. ¶ 1). V. Shah put up his own
home as collateral to raise money to loan to Jaina, and he submits that he
loaned over $1,000,000 of his own personal wealth to Jaina. (V. Shah 56.1
¶¶ 1, 3-5). There is no evidence in the record that these transfers were made
hastily or in secret, but there is a question as to the adequacy of consideration.
Moreover, the transferor knew about Plaintiff’s potential or actual claim against
it and that it would have trouble paying it. And given the close familial ties
between Jaina and V. Shah, the Court believes there to be a question about
whether Jaina retained control over the money after it was transferred to V.
Shah. Finally, there is evidence of a consistent flow of money between V. Shah
and Jaina, and the Court believes this to raise a triable issue over whether
Jaina could easily take back the money it transferred to V. Shah. Accordingly,
the Court denies V. Shah’s motion for summary judgment.
CONCLUSION
For the foregoing reasons, Chopra’s and NYC Telecom’s motion for
summary judgment is GRANTED; M. Shah’s motion for summary judgment is
GRANTED; and V. Shah’s motion for summary judgment is DENIED. The
Clerk of Court is directed to terminate Ravi Chopra, NYC Telecommunications
Corp., and M. Shah as parties to this matter, and is further directed to
terminate the motion at Docket Entry 193.

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Plaintiff and V. Shah are directed to appear for a conference with the
Court on Friday, August 17, 2018, at 10:00 a.m. in Courtroom 618 of the
Thurgood Marshall United States Courthouse, 40 Foley Square, New York,
New York 10007, to discuss setting a trial date.
SO ORDERED.
Dated:

July 30, 2018
New York, New York

__________________________________
KATHERINE POLK FAILLA
United States District Judge

A copy of this Order was mailed by Chambers to:
Mahendra Shah
30 Liberty Way, Apt. 8
Palm Harbor, FL 34684
Vipin Shah
35 Smith Place
Williston Park, NY 1159

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