Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Absolute Activist Value Master Fund Ltd. v. Devine

United States District Court, M.D. Florida, Fort Myers Division

February 8, 2017

ABSOLUTE ACTIVIST VALUE MASTER FUND LIMITED, ABSOLUTE EAST WEST FUND LIMITED, ABSOLUTE EAST WEST MASTER FUND LIMITED, ABSOLUTE EUROPEAN CATALYST FUND LIMITED, ABSOLUTE GERMANY FUND LIMITED, ABSOLUTE INDIA FUND LIMITED, ABSOLUTE OCTANE FUND LIMITED, ABSOLUTE OCTANE MASTER FUND LIMITED, and ABSOLUTE RETURN EUROPE FUND LIMITED, Plaintiffs,
v.
SUSAN ELAINE DEVINE, Defendant.

          OPINION AND ORDER

          JOHN E. STEELE SENIOR UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on review of defendant's Motion to Dismiss Amended Complaint (Doc. #252) filed on February 12, 2016.[1] Plaintiffs filed a Memorandum in Opposition to Defendant's Motion to Dismiss Amended Complaint (Doc. #318) on March 11, 2016, to which defendant filed a Reply (Doc. #336) on March 25, 2016, and plaintiffs filed a Surreply (Doc. #351) on April 11, 2016. The parties have also submitted supplemental briefing regarding the effect of a recent Supreme Court decision on defendant's Motion to Dismiss (Docs. ##426, 427, 429, 449, 451) and supplemental authority (Docs. ##472, 466, 467, 479, 483, 487, 489, 492, 512, 515).

         Also before the Court are defendant's Motion to Strike plaintiffs' Amended Complaint (Doc. #254), plaintiffs' Memorandum in Opposition thereto (Doc. #319), Reply (Doc. #337), and Surreply (Doc. #352). Defendant also filed a Request for Judicial Notice of Exhibits Attached to Motion to Dismiss Plaintiffs' Amended Complaint (Doc. #253), to which plaintiffs filed a Memorandum in Opposition (Doc. #320).

         I.

         Plaintiffs' Amended Complaint (Doc. #196) contains the following allegations:

         Plaintiffs Absolute Activist Value Master Fund Limited, Absolute East West Fund Limited, Absolute East West Master Fund Limited, Absolute European Catalyst Fund Limited, Absolute Germany Fund Limited, Absolute India Fund Limited, Absolute Octane Fund Limited, Absolute Octane Master Fund Limited, and Absolute Return Europe Fund Limited (the “Funds” or “plaintiffs”) are nine (9) Cayman Islands companies previously operated as mutual (hedge) funds that invested in a variety of asset classes on behalf of hundreds of investors around the world, including many investors in the United States. (Doc. #196, ¶ 9.) Each Fund is a citizen of the Cayman Islands, is incorporated in the Cayman Islands, and has its principal place of business in the Cayman Islands. (Id.) The Funds hired Absolute Capital Management Holdings Limited (“ACM”) to act as its investment manager pursuant to a written Investment Management Agreement. (Id. ¶¶ 12, 40.) ACM typically charged each Fund a monthly management fee of 2% per annum based on the particular Fund's net asset value (“NAV”) and a monthly performance fee of 20% of the increase in value of the Fund's NAV. (Id. ¶ 40.)

         Florian Wilhelm Jürgen Homm (“Homm”) was the Chief Investment Officer at ACM and, in that capacity, was granted discretionary trading authority by the Funds. (Id. ¶ 41.) Conspiring with others from at least September 2004 to September 2007, Homm used the Funds as vehicles for a massive market manipulation scheme (the “Penny Stock Scheme”) that caused the Funds to suffer losses of more than $200 million while generating enormous profits for Homm and those that assisted Homm in executing the Penny Stock Scheme.[2] (Id. ¶¶ 29, 42-84.) A number of manipulative techniques were utilized including placing matched orders, placing orders that marked the close or otherwise set the closing price for the day, conducting wash sales, and backdating trades. (Id. ¶ 47.)

         A. The Origins of the Money Laundering Enterprise

         In May 2006, after an email authored by a former ACM employee under a pseudonym (“Arness Email”) was distributed alleging fraudulent activity by Homm, Homm recognized that the Penny Stock Scheme could soon be exposed. (Id. ¶¶ 85-88.) Homm and his former wife, defendant Susan Elaine Devine (“Devine” or “defendant”), established a criminal enterprise to conceal the proceeds of the Penny Stock Scheme (the “Money Laundering Enterprise”). (Id. ¶ 3.) The Money Laundering Enterprise was intended “to conceal and preserve the ill-gotten gains as a ‘multigenerational fortune' for the Devine-Homm family.” (Id. ¶ 95.)

         Over the years, Devine has taken numerous steps to advance the objectives of the Money Laundering Enterprise, such as entering into a sham divorce with Homm in Florida and jointly filing false financial affidavits with the court; moving the proceeds of the Penny Stock Scheme through a complex network of bank accounts around the world; forming entities in various foreign countries through which fraud proceeds were funneled; creating and using accounts for which her children, Conrad and Isabella, were the nominal beneficiaries; using the fraud proceeds to purchase difficult-to-trace gold, fine art, and other assets; engaging in simulated cash transactions to disguise account-to-account transfers of fraud proceeds; moving millions of dollars of fraud proceeds out of accounts in advance of the imposition of freezes by the Swiss against those accounts; and providing false testimony to the Office of the Attorney General of Switzerland (the “Swiss Prosecutor's Office”) regarding her role in the Money Laundering Enterprise. (Id. ¶¶ 3, 7.)

         As a result of the Penny Stock Scheme, Devine has amassed extraordinary wealth. (Id. ¶ 7.) Assets purchased by Devine since the establishment of the Money Laundering Enterprise include, but are not limited to: the $2.2 million dollar house in Naples, Florida in which she currently resides; an $8.5 million villa in Marbell, Spain (which was purchased with Homm after their sham divorce); a $4.1 million property in Mallorca, Spain; and more than $1 million in gold coins. (Id. ¶¶ 7, 189-90.) Devine controls, or has controlled, at least 20 bank accounts holding the equivalent of tens of millions of dollars in the United States, Switzerland, Singapore, and Uruguay. (Id. ¶ 143.)

         1. The Persons and Entities Involved in the Money Laundering Enterprise

         Devine is a citizen of the United States and Brazil, and currently resides in Naples, Florida. (Id. ¶ 10.) Since 1989, Devine has only performed unpaid work. (Id. ¶ 143.)

         Devine and Homm would not have been able to launder the Penny Stock Scheme proceeds without the help of Urs Meisterhans (“Meisterhans”). (Id. ¶ 14.) Meisterhans, a resident of Switzerland, is the founder and principal of the financial services company Sinitus AG. (Id.) The Swiss Financial Market Supervisory Authority, the Swiss equivalent of the Securities and Exchange Commission (SEC), took control of Sinitus AG and, after an investigation, put it into liquidation. (Id.) The liquidator has since filed for bankruptcy. (Id.)

         From at least 2006 through 2008, Meisterhans assisted Devine and Homm in the laundering of the proceeds from the Penny Stock Scheme. (Id.) According to the Swiss Report, Meisterhans transferred at least $17 million to accounts accessible by Homm while he was in hiding in 2007 and 2008. (Id.) He also facilitated Devine's money laundering activities by sending Penny Stock Scheme proceeds via complex routes through at least a dozen countries, employing false identities, using offshore companies, and executing transactions in cash, gold, and fine art. (Id.) Swiss authorities have estimated that, between May 2006 and October 2007, Devine and Homm transferred assets valued at approximately $65.9 million to companies controlled by Meisterhans. (Id.) On May 20, 2015, the Swiss Prosecutor's Office indicted Meisterhans for a number of crimes, including aggravated money laundering, based on Meisterhans role in laundering Penny Stock Scheme proceeds controlled by Homm and Devine. (Id.)

         Sinitus Limited (“Sinitus”) is an affiliate of Sinitus AG incorporated in Mauritius. (Id. ¶ 15.) Sinitus's account at Investee Bank Limited in Australia was a central exchange point for the laundering of Penny Stock Scheme proceeds. (Id.) Money transferred through this account was used to fund the Floma Foundation (“Floma”), one of the many entities controlled by Devine. (Id.) The Swiss authorities have frozen four Sinitus-related accounts holding more than 24 million Swiss francs (“CHF”). (Id.)

         Marcel Eichmann (“Eichmann”), a resident of Switzerland, was a banker at CBH Compagnie Bancaire Helvétique SA, formerly known as Banque SCS Alliance SA (collectively, “CBH”), before co-founding PHZ Privat-und Handelsbank (“PHZ”) in Zurich. (Id. ¶ 16.) Eichmann was the personal banker for Homm and Devine, and Devine and her children were shareholders of PHZ. (Id.) As the head of CBH's Zurich branch, Eichmann managed and monitored Devine and Homm's accounts in 2006 and 2007, which amounted to 25% of Eichmann's overall business at the time. (Id.) The Swiss Report states that in 2006 and 2007, Eichmann accepted almost $20 million worth of Penny Stock Scheme proceeds into Homm's account at CBH. (Id.) After transferring Devine and Homm's assets to PHZ, Eichmann was responsible for at least four accounts controlled by Devine that held over €15 million in assets. (Id.) Between 2007 and 2009, Eichmann facilitated and verified over one dozen cash transactions on behalf of Devine and Homm to assist in their concealment of assets from law enforcement and potential judgment creditors, including simulated transactions falsely and unlawfully recorded as cash withdrawals followed by immediate cash deposits to other accounts at the same bank in order to limit the paper trail. (Id.) In violation of bank policy, Eichmann regularly used a private email address to receive instructions from Devine. (Id.) He is currently the target of a Swiss criminal investigation for aggravated money laundering. (Id.)

         Pascal Frei (“Frei”) is a banker who resides in Switzerland. (Id. ¶ 17.) Frei worked for Eichmann at CBH and PHZ, and assisted with Devine and Homm's money laundering activities. (Id.) Specifically, Frei worked with Eichmann to facilitate certain withdrawals and deposits on behalf of Devine and Homm. (Id.) Frei is also the target of a Swiss criminal investigation for aggravated money laundering involving Homm and Devine's assets. (Id.)

         Sammy Kapleta (“Kapleta”) is a Belgian citizen and former resident of Florida. (Id. ¶ 18.) Devine and Homm used accounts in Switzerland, Luxembourg, Panama, and Spain in the names of Kapleta and Fairland Consulting, a vehicle controlled by Kapleta, to launder more than $6 million in Penny Stock Scheme proceeds. (Id.) According to the Swiss Report, Kapleta is a target of the Swiss money laundering investigation, and the Swiss have frozen a Credit Suisse account in his name. (Id.) The Swiss have also convicted Kapleta of procuring false Irish passports. (Id.)

         Phillipe Meyer (“Meyer”) is an attorney who resides in Switzerland. (Id. ¶ 19.) Meyer has extensive connections with Meisterhans and Sinitus. (Id.) In 2007 and 2008, he assisted Devine in the establishment of, and the subsequent transfer of funds out of, Floma through Singapore, Ireland, and the Czech Republic under the guise of real estate and precious metal investments. (Id.)

         Jürg Brand (“Brand”), a Swiss attorney, ostensibly served as one of Devine's lawyers in connection with her divorce from Homm. (Id. ¶ 20.) Through an account Brand held at CBH, millions of dollars in Penny Stock Scheme proceeds were transferred to accounts controlled by Devine in Florida and elsewhere. (Id.) Brand's account at CBH also served as a conduit for proceeds arising from the sale of 5.2 million ACM shares in August and September 2007. (Id.)

         2. Concealment of Art and Furniture

         Shortly after the Arness Email, Devine took steps to conceal valuable art and furniture located at her and Homm's home in Mallorca, Spain. (Id. ¶ 96.) Between May 18 and May 23, 2006, Devine created an inventory of art and furniture with an estimated value exceeding €2.2 million. (Id.) Andreas Schaer (“Schaer”), a personal assistant to Homm and Devine, emailed this inventory to Meisterhans on May 23, 2006. (Id.) That same day, Meisterhans emailed Schaer a fraudulent loan agreement, backdated for May 10, 2004, and signed by Meisterhans on behalf of New York Art Trading Limited (“New York Art Trading”), to be signed by Devine. (Id. ¶ 97.) By means of this agreement, New York Art Trading purported to lend Devine art and furniture with an estimated value of €2 million, itemized on an “inventory list to be updated on a regular basis.” (Id.) Devine signed the backdated agreement, which gave the false appearance that the valuable property inventoried by Devine was lent to her, rather than owned by her and Homm. (Id.)

         In September 2007, Devine directed Meisterhans to transport the inventoried art and furniture from Spain to Switzerland for safekeeping. (Id. ¶ 98.) This property was stored in Switzerland until June 2008, when Devine directed Meisterhans to move it back to Mallorca, Spain. (Id.)

         3. Devine and Homm's Strategic Divorce

         In August 2006, Devine and Homm initiated a strategic divorce in Florida. (Id. ¶ 100.) The divorce gave Devine a legal pretext to obtain control of certain proceeds from the Penny Stock Scheme while ostensibly distancing herself from the allegations in the Arness Email. (Id.) The divorce also provided the pretext for Devine and Homm to repeatedly change the beneficiary structure of CSI, allowing the couple, when it suited their purposes, to hide the tainted proceeds behind an entity purporting to benefit Devine and their children, and to distance Homm from CSI while CSI sold off ACM shares. (Id.) In reality, throughout the divorce proceedings and thereafter, Devine and Homm continued to interact as spouses - sending each other personal and intimate emails, purchasing a home together, living together, traveling together, and moving money between each other. (Id. ¶ 101.)

         i. The Divorce Proceedings

         On August 7, 2006, Devine and Homm petitioned for divorce in the Circuit Court for the Twentieth Judicial Circuit in and for Collier County, Florida (the “Florida Circuit Court”). (Id. ¶ 103.) With their petition for divorce, Devine and Homm were required to file Family Law Financial Affidavits stating the value of their assets owned individually and jointly. (Id.) Devine and Homm stated in their affidavits that their total assets amounted to only $1.64 million. (Id.) The affidavits, however, were brazenly false. (Id.) Indeed, on August 7, 2006, the same day the petition was filed, Meisterhans informed Devine and Homm that New York Art Trading had received wire transfers totaling €16.6 million and $2.05 million, which “we are managing and holding on your behalf.” (Id.) Devine later testified before the Swiss Prosecutor's Office that Homm was worth roughly $200 million at that time. (Id.) Furthermore, Devine and Homm did not identify any real estate holdings in their affidavits even though they owned real property worth millions of dollars in Spain, France, Luxembourg, and England. (Id.)

         On September 18, 2006, Devine and Homm entered into a Marital Separation Agreement, the stated purpose of which was to “settle [between Devine and Homm], now and forever, their respective rights, duties, and obligations regarding property, liabilities, and children.” (Id. ¶ 104) (alteration in original). The agreement mandated that Homm make an “equalizing payment” of $1.5 million to Devine, which was made on August 1, 2006. (Id. ¶ 105.) The money used to make the payment came directly from Hunter[3] and was wired to an account controlled by Devine at Deutsche Bank Alex.Brown in the United States.[4] (Id. ¶ 105.)

         The Florida Circuit Court entered a Final Judgment of Dissolution of Marriage (the “Divorce Judgment”) on May 21, 2007. (Id. ¶ 106.) The terms and conditions set forth in the Marital Settlement Agreement were confirmed by the Divorce Judgment, and Devine and Homm were ordered to comply with those terms. (Id.) By causing the filing of this public document declaring that they were no longer married, Devine and Homm were able to modify the beneficiary structure of CSI to capitalize on ACM's inflated share price, and were further able to conceal and facilitate the laundering of Penny Stock Scheme proceeds. (Id. ¶¶ 106-07.)

         ii. Modifications to CSI's Beneficiary Structure

         During the 12-month period following March 3, 2007, CSI, as well as all persons connected to CSI, were not to dispose of their ACM shares without prior notice to and consultation with the nominated advisor, the broker, and the Chairman of ACM's Board of Directors. (Id. ¶ 109.) The restrictions on the assignment of ACM shares held by CSI did not, however, apply to Homm's wife and children.[5] (Id.)

         In March 2007, immediately after the first set of restrictions in the Lock-In Deed had been lifted, CSI began to liquidate its ACM shares without providing the notice required by the Lock-In Deed, thereby capitalizing on ACM's inflated share price. (Id. ¶ 112.) Between March 2007 and September 18, 2007, the date Homm resigned from ACM, CSI sold or transferred approximately 12 million ACM shares for proceeds of at least £20, 161, 668. (Id.) In the days immediately after Homm's resignation, CSI unloaded another 13.2 million ACM shares. (Id.)

         Evidently satisfied that their backdated arrangement had served its purpose, Devine and Homm entered into a new Property Settlement Agreement on August 21, 2007, which upended the previously negotiated divorce terms and once again changed the beneficiary status of CSI. (Id. ¶ 120.) Kravitz, a Florida attorney who is Homm's longtime friend and who at various times served as legal counsel to both Homm and Devine, represented both Devine and Homm in connection with this agreement. (Id. ¶¶ 113(b), 120.) The agreement, which was governed by Florida law, cancelled the June 19, 2007 agreement and restored Homm's status as the sole beneficiary of CSI. (Id. ¶ 120.) As part of the agreement, Homm agreed to give Devine €3.1 million and 4 million ACM shares. (Id.) On August 22, 2007, Devine wrote to CSI director Kranz to confirm the terms of the new agreement and asked him to inform Eichmann of the changes. (Id.)

         On August 30, 2007 and September 7, 2007, a total of €3.1 million was transferred to an account at CBH in the name of Jürg Brand (the “Brand Account”), of which Devine was the beneficial owner. (Id. ¶ 121.) Although this account was in Brand's name, Eichmann regularly accepted instructions on this account directly from Devine. (Id.) On August 24, 2007, Homm transferred a total of 4 million ACM shares to the Brand Account. (Id.) Bank records indicate that these transfers were identified as relating to the Property Settlement Agreement. (Id.) Then, on September 26, 2007, Homm transferred to the Brand Account an additional 1.2 million ACM shares that were not required by the Property Settlement Agreement. (Id.) Between August 2007 and February 2008, all of those ACM shares were sold for a total of £4, 112, 013 and €754, 252, and the proceeds were transferred to Devine's account at PHZ. (Id.)

         iii. Evidence that Devine and Homm Remained Close after their Divorce

         Evidence shows that Devine and Homm remained extremely close after their formal divorce, both financially and in their shared personal life, and never intended to alter their relationship beyond the paperwork dissolving their legal status and establishing the facade of asset separation. (Id. ¶ 123.) For example, on August 1, 2006, just six days before the divorce petition was filed, Devine addressed Homm as “Gorgeous” in an email and signed off, “A big big hug. I love you.” (Id. ¶ 124.) On September 5, 2006, one month after the divorce petition, Devine emailed Homm: “Hi Gorgeous, I have to be very reserved when I reply to your e-mails. Can I be a little bit soppy??? No I shall resist.” (Id. ¶ 125.)

         After the Marital Settlement Agreement was executed on September 18, 2006, the spouses continued to contemplate joint financial investments. (Id. ¶ 126.) For example, from January 4, 2007 to November 19, 2010, Devine transferred approximately €240, 000 to Homm for expenses related to a property in Burgundy, France. (Id.) In February 2007, Devine and Homm shopped together for a property in Marbella, Spain, which they eventually purchased. (Id.) In an email to Homm dated February 24, 2007, a real estate broker in Marbella noted that he had shown properties to “you and your wife Susan, ” and Homm responded in part, “Red house, too dark for susan, off list.” (Id.) In connection with the purchase of the Marbella property, Devine sent wire instructions to her bank in March of 2007 on “Susan Devine Homm” stationery and signed the instructions “Susan Devine Homm.” (Id.) On April 23, 2007, Homm received an email advising him that a painting by the Norwegian artist Hans Dahl was available for purchase for £52, 000. (Id.) Homm forwarded that email to Devine, noting that he was “[p]assing this on to my wife.” (Id.)

         On July 12, 2007, less than two months after the Divorce Judgment, Homm executed a will devising half of his estate to Devine. (Id. ¶ 128.) The same day, Devine executed a will devising her estate exclusively to her children. (Id.) Copies of both wills were found in Meisterhans's office. (Id.)

         The divorce also caused no change in the ownership of Devine and Homm's jointly-owned property in London, an asset that is not mentioned in any of the divorce filings. (Id. ¶ 129.) As of April 2015, that property was still owned jointly by Devine and Homm. (Id.)

         Finally, the evidence shows that when Homm was arrested in Florence, Italy on March 8, 2013, he was vacationing with Devine and their son. (Id. ¶ 130.)

         4. Homm's Promise of a “Multigenerational Fortune”

         After the divorce was finalized and Homm had again become the sole beneficiary of CSI, he prepared to escape and bury the Penny Stock Scheme proceeds for use by himself and his family well into the future. (Id. ¶ 131.) At that time, he wrote two revelatory emails to Devine, assuring her that she and their children would always be well taken care of. (Id.)

         On August 28, 2007, Homm promised Devine in an email: “If I can succeed the children and you will sit on a multigenerational fortune.” (Id. ¶ 132.) In the same email, he assured her that, even if he was not successful, she was “fantastically protected already, the optimal outcome has been achieved in that regard.” (Id.) Homm sent Devine another email later that day, informing her that he had “sold a good part of [his] soul and health to protect you and our children under the most extreme business and lifestyle duress for 18 months.” (Id. ¶ 133) (alteration in original). Homm would resign from ACM and go into hiding less than a month later. (Id. ¶ 134.)

         B. Devine's Use, Transfer, and Concealment of Penny Stock Scheme Proceeds

         In collaboration with Homm and her other co-conspirators, Devine steered a breathtaking amount of Penny Stock Scheme proceeds into at least 20 bank accounts under her control around the world, from Florida to Switzerland to Uruguay to Singapore, and used the proceeds to purchase real property, gold, and other valuable assets. (Id. ¶ 143.) The Funds have identified 85 transactions that Devine used to launder the Penny Stock Scheme proceeds. (Doc. #196, App. I.)

         1. Transfers from Homm to Devine

         The Arness Email triggered an urgent need for Devine and Homm to begin liquidating their ACM shares and laundering the proceeds. (Id. ¶ 151.) On May 9, 2006, just four days after Homm learned of the Arness Email, Homm transferred €6.2 million from an account at CBH in the name of Ridgeville Investment Inc. (the “Ridgeville Account”) to an account at CBH in the name of Loyr Stiftung (the “Loyr Account”).[6] (Id.) The funds transferred out of the Ridgeville Account originated from CSI's account at VP Bank in Lichtenstein, which held dividends from ACM and proceeds from the sales of ACM shares. (Id.) On May 22, 2006, Meisterhans coordinated, together with Devine and Homm, the transfer of the assets in the Loyr Account (approximately €8 million) to an account in the name of Ocean Offshore Bank SA (the “Ocean Account”) at Commerzbank (South East Asia) Limited in Singapore. (Id.) Bank records state that the entirety of assets in the Loyr Account were transferred to the Ocean Account on May 25, 2006, for the purchase of a hotel. (Id.) Homm and Devine, however, both denied knowledge of a hotel investment when questioned by the Swiss Prosecutor's Office. (Id.)

         On June 1, 2006, CSI transferred €1.4 million in cash from its account at VP Bank in Liechtenstein to an account in the name of Hosifa Stiftung (the “Hosifa Account”) at EFG Bank von Ernst in Liechtenstein, pursuant to a payment order signed by Homm. (Id. ¶ 157.) This amount came from the proceeds of the ACM shares sold between February 23, 2006 and May 4, 2006, and was transferred to the Hosifa Account for the benefit of Devine and her children. (Id.) The Hosifa Account was transferred to PHZ on April 30, 2009, and the funds in the account were frozen by the Swiss on January 14, 2014. (Id. ¶ 144(h)).

         On October 6, 2006, Homm transferred €510, 000 from CSI's account at CBH to another CBH account in the name of Brek Stiftung (the “Brek Account”). (Id. ¶ 202.) Devine was the beneficial owner of the Brek Account. (Id. ¶ 215.) Homm transferred an additional €8, 386, 000 and €5, 308, 000 from CSI's account at CBH to the Brek Account on March 30, 2007 and May 10, 2007, respectively. (Id. ¶ 202.) The funds in the Brek Account consisted at least in substantial part of proceeds from the Penny Stock Scheme, including dividends from ACM and proceeds from the sale of ACM shares. (Id.) In 2009, funds in the Brek Account at CBH were transferred to the Brek Account at PHZ, and the funds in the account were frozen by the Swiss in June 2014. (Id. ¶¶ 201-02.)

         As previously discussed, pursuant to the Property Settlement Agreement, Homm transferred €3.1 million and 4 million ACM shares to the Brand Account in August and September of 2007. (Id. ¶ 155.) Then, on September 26, 2007, Homm transferred an additional 1.2 million ACM shares that were not part of the Property Settlement Agreement to the Brand Account. (Id.) The funds in the Brand account were transferred to Devine's account at PHZ in September and October 2009, and an amount of €7, 086, 790 was seized by the Swiss on January 13, 2012. (Id. ¶¶ 206-07.)

         2. Post-Divorce Transactions

         Following the entry of the Divorce Judgment on May 21, 2007, Devine, acting in concert with Homm, Meisterhans, Eichmann, Meyer, and others, continued to launder funds throughout the world. (Id. ¶ 159.)

         i. Devine's Purchase and Improvement of Real Property

         In April 2008, Devine purchased a waterfront property in Naples, Florida for approximately $2.2 million (the “Naples Property”). (Id. ¶ 179.) Bank records reflect that the Naples Property was paid for through two transfers from the Brand Account at CBH. (Id. ¶ 180.) The first transfer occurred on March 26, 2008, when $170, 000 was wired from the Brand Account to an account with Citibank N.A. in New York in the name of First Title of Naples, Inc. (“First Title”), a title insurance company located in Naples, Florida. (Id. ¶ 182.) The second transaction occurred on April 4, 2008, when $1, 982, 000 was transferred from the Brand Account to First Title's Citibank account in New York. (Id. ¶ 183.) A memorandum line in the bank records cites the address of the Naples Property. (Id.)

         Devine thereafter directed Eichmann to make additional transfers from the Brand Account, purportedly for the purpose of renovating and furnishing the Naples Property, as follows: On May 8, 2008, Devine requested by email that $250, 000 be wired to her Bank of America account in Naples, Florida “for renovation and furniture purchase of the house [she] just purchased.” (Id. ¶ 184(a)) (alteration in original). On September 1, 2008, Devine confirmed by email a request for $150, 000 to be wired to her Bank of America account. (Id. ¶ 184(b)). A handwritten note on this email indicates that the stated reason for this wire was to pay for property renovations. (Id.) On June 4, 2009, Devine requested via email that $60, 000 be wired to her Bank of America account in order to pay for a “[n]ew roof and other expenses.” (Id. ¶ 184(c)) (alteration in original). In total, Devine spent nearly $3 million of Penny Stock Scheme proceeds on the Naples property. (Id. ¶ 185.)

         Devine also used the Penny Stock Scheme proceeds to purchase two properties in Spain, in both instances through corporate entities that helped conceal her involvement. (Id. ¶ 188.)

         Devine transferred a total of €5, 086, 600 from the Brek Account at CBH to an account at Banco de Andalucia in the name of Leo Propiedades S.L. on March 21 and 22, 2007. (Id. ¶ 189.) Leo Propiedades S.L. was owned by Benley International S.A., a Panama company controlled by Homm. (Id.) The memorandum lines on the bank records state that the purpose of the wired money was buying property. (Id.) These funds, along with an additional €1.3 million from Homm's account at CBH, were used to purchase a large seaside villa in Marbella, on the Southern coast of Spain. (Id.) As discussed above, Devine and Homm shopped for this property together even as their divorce was being finalized. (Id.)

         Around the same time, Devine used another entity to buy a property in Mallorca, Spain. (Id. ¶ 190.) Malon Consulting AG (“Malon”), a Swiss company registered on November 22, 2006, opened an account with UBS in Switzerland on May 23, 2007, just two days after the Divorce Judgment. (Id.) According to the Swiss Report, Devine is the beneficial owner of this account. (Id.)

         On May 24, 2007, less than a week after Malon's UBS account was opened, Devine transferred €3.2 million from the Brek account at CBH to Malon's UBS account. (Id. ¶ 191.) The payment order, signed by Devine, indicates that the purpose of the transfer was to purchase real estate in Mallorca. (Id.) The €3.2 million originated from transfers from CSI's account with CBH to the Brek Account. (Id.) From that amount, €3.1 million was transferred shortly thereafter from Malon's UBS account to the account of Vatulele S.L. at Caja de Ahorros Bank in order to purchase the Mallorca property. (Id.)

         ii. The Floma Account

         On June 20, 2006, Devine transferred approximately €4 million from the Brek Account, to Sinitus's account at Investec in Australia. (Id. ¶ 158.) These funds consisted at least in part of the Penny Stock Scheme proceeds. (Id.)

         In August 2007, Devine established Floma, an entity organized under Panamanian law. (Id. ¶ 160.) Atica Nominees S.A. (“Atica”), a British Virgin Islands company operated by Meyer and his law partner, served as the foundation council member of Floma. (Id.) Originally, Meisterhans was to assist Devine with Floma, but much of the work was done by Meyer, at Meisterhans' suggestion. (Id. ¶ 161.)

         On January 16, 2008, a bank account in the name of Floma (the “Floma Account”) was opened at EFG Bank in Singapore. (Id. ¶ 163.) On January 21, 2008, Meisterhans sent a payment order by email for the wire of €3.9 million from Sinitus's account to the Floma Account. (Id. ¶ 164.)

         Devine maintained complete control over Floma's assets and instructed Meyer and his colleagues from an email address using the alias “Julia Brown.” (Id. ¶ 165.) On June 29, 2009, Devine, using the “Julia Brown” email account, advised Meyer that she was “making a large investment” and directed him to wire €1 million from the Floma Account to an account in the name of DC Fragments at HSBC in Germany. (Id. ¶ 167.) On August 28, 2009, Devine, using the “Julia Brown” email account, directed Meyer to wire €1 million from the Floma Account to the account of Check Republis at Unicredit Bank in Czech Republic. (Id. ¶ 168.) On August 31, 2009, Meyer emailed Devine: “Please give us also details, for what the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.