Read the first line.
FACTS RELEVANT TO COUNTERCLAIMS
84. Plaintiff developed a scheme whereby it preys upon publicly trading companies in
desperate need of operating capital and makes usurious loans convertible into common stock .
85. Plaintiff set up its “loan arrangements” with defendant with the intent to convert the
defendant’s debt into publicly trading stock at a usurious rate of interest.
86. Plaintiff assured defendant that it would not convert defendants’ stock and would, rather,
work with defendant to avoid enforcing the illegal usurious terms of the agreement.
87. As a result of the subject loan agreement, plaintiff is attempting to usurp common trading
stock from the defendant and then, effectively, dump it into the market and drive the
price of defendant’s stock into near oblivion while enjoying substantial profit.
88. The Plaintiff knowingly, intentionally and willfully advanced sums to the Defendants
which it was aware could not be repaid.
89. The Plaintiff knowingly, intentionally and willfully advanced such sums to the
Defendants upon oppressive, usurious, improper, unlawful and unfair terms.
90. The Plaintiff knowingly, intentionally and willfully advanced such sums to the
Defendants with the understanding that they were under extreme economic duress and would
accede to any terms that the Plaintiff dictated.
91. The Plaintiff knowingly, intentionally and willfully advanced such sums with the
Case 2:15-cv-07254-SJF-GRB Document 14 Filed 01/26/16 Page 13 of 18 PageID #: 51
understanding that it would receive trading common stock well in excess of the value of the
purported loans so that it could then engage in illicit and detrimental trading of such stock, all
to its own benefit and all to the detriment of the Defendants.
FIRST COUNTERCLAIM
92. FRAUDULENT MISREPRESENTATION
a)Plaintiffs made aforesaid representation to defendants concerning the loan and the agreement,
and the Plaintiff and its affiliates such that
b)said representations were false;
c)that when made, the representations were known to be false or made recklessly without
knowledge of its truth;
d)that said representations were made with the intention that the defendants rely on them;
e)that the defendants did rely on them; and
f)that the defendants suffered damages as a result thereof.
SECOND COUNTERCLAIM
93. VIOLATION OF NY PENAL LAW §190.40 (CRIMINAL USURY)
a)that the costs of plaintiffs loans bore interest in excess of 150%
b)that said interest rate exceeds the maximum rate allowable in New York State
c)that Defendants are damaged as a result thereof
Case 2:15-cv-07254-SJF-GRB Document 14 Filed 01/26/16 Page 14 of 18 PageID #: 52
THIRD COUNTERCLAIM
94. FRAUDULENT INDUCEMENT
a)that Plaintiffs made knowing misrepresentation of material facts relating to loans made to
defendants;
b)that Plaintiffs had intention to deceive defendants;
c)that defendants relied on said misrepresentations; and
d)defendants suffered injury therefrom
FOURTH COUNTERCLAIM
95. TORTIOUS INTERFERENCE
a)Plaintiff caused Defendants to retain auditors, brokers, accountants; and
b)Plaintiff required Defendants to pay said professionals fees and costs
c)that Plaintiff’s aforesaid agents caused damages to defendants.
FIFTH COUNTERCLAIM
96. FRAUD
a)that Plaintiff made representation of fact relating to Plaintiffs loan, contracts, and affiliates;
b)that Plaintiff’s representations were false;
c)that said representations were material;
d)Plaintiffs knew of the representations falsity, or were ignorant of the truth;
e)the Plaintiffs had intent that said representations should be acted upon by the defendants in the
manner reasonably contemplated;
Case 2:15-cv-07254-SJF-GRB Document 14 Filed 01/26/16 Page 15 of 18 PageID #: 53
f)that defendants, the injured parties, were ignorant of the falsity of said representations;
g)that defendants relied on the truth of said representations;
h)that defendants had the right to rely thereon; and
I) that said false representations caused consequent and proximate injury to defendants.
SIXTH COUNTERCLAIM
97. RESCISSION
Equity requires that defendants’ transactions with Plaintiffs should be rescinded because it was
consummated through material misrepresentations as set forth above, even if fraud has been
alleged but the facts do not rise to the level of actionable fraud:
SEVENTH COUNTERCLAIM
98. PRIMA FACIE TORT
a) Plaintiffs intended to damage corporate driving price down, and depriving individual
defendant of profit
b)Plaintiffs had intent to cause ill will or knew their acts would damage defendants
c)Plaintiffs acts caused Damage to Corporate Defendant’s Business or Trade
d)Plaintiffs acts not justifiable under circumstances
EIGHTH COUNTERCLAIM
99. NY GBL § 349
a)Plaintiff’s acts or practices were deceptive business practices directed at consumer-oriented
Case 2:15-cv-07254-SJF-GRB Document 14 Filed 01/26/16 Page 16 of 18 PageID #: 54
borrower Defendants;
b)said acts or practices were misleading in a material respect; and
c)the defendants were injured as a result of the deceptive act or practice.
WHEREFORE, Defendants respectfully request that plaintiffs’ complaint be denied in its
entirety, and, that this Honorable Court enters judgment in favor of defendants on their
Counterclaims awarding :actual damages upon proof at trial ; as well as:
- Treble damages;
- Injunctive relief;
- Disgorgement of profits;
- Punitive damages;
-Reasonable attorney fees and costs of litigation; and such other and further relief as to this court
seems just and proper.
Dated: January 24, 2016
FACTS RELEVANT TO COUNTERCLAIMS
84. Plaintiff developed a scheme whereby it preys upon publicly trading companies in
desperate need of operating capital and makes usurious loans convertible into common stock .
85. Plaintiff set up its “loan arrangements” with defendant with the intent to convert the
defendant’s debt into publicly trading stock at a usurious rate of interest.
86. Plaintiff assured defendant that it would not convert defendants’ stock and would, rather,
work with defendant to avoid enforcing the illegal usurious terms of the agreement.
87. As a result of the subject loan agreement, plaintiff is attempting to usurp common trading
stock from the defendant and then, effectively, dump it into the market and drive the
price of defendant’s stock into near oblivion while enjoying substantial profit.
88. The Plaintiff knowingly, intentionally and willfully advanced sums to the Defendants
which it was aware could not be repaid.
89. The Plaintiff knowingly, intentionally and willfully advanced such sums to the
Defendants upon oppressive, usurious, improper, unlawful and unfair terms.
90. The Plaintiff knowingly, intentionally and willfully advanced such sums to the
Defendants with the understanding that they were under extreme economic duress and would
accede to any terms that the Plaintiff dictated.
91. The Plaintiff knowingly, intentionally and willfully advanced such sums with the
Case 2:15-cv-07254-SJF-GRB Document 14 Filed 01/26/16 Page 13 of 18 PageID #: 51
understanding that it would receive trading common stock well in excess of the value of the
purported loans so that it could then engage in illicit and detrimental trading of such stock, all
to its own benefit and all to the detriment of the Defendants.
FIRST COUNTERCLAIM
92. FRAUDULENT MISREPRESENTATION
a)Plaintiffs made aforesaid representation to defendants concerning the loan and the agreement,
and the Plaintiff and its affiliates such that
b)said representations were false;
c)that when made, the representations were known to be false or made recklessly without
knowledge of its truth;
d)that said representations were made with the intention that the defendants rely on them;
e)that the defendants did rely on them; and
f)that the defendants suffered damages as a result thereof.
SECOND COUNTERCLAIM
93. VIOLATION OF NY PENAL LAW §190.40 (CRIMINAL USURY)
a)that the costs of plaintiffs loans bore interest in excess of 150%
b)that said interest rate exceeds the maximum rate allowable in New York State
c)that Defendants are damaged as a result thereof
Case 2:15-cv-07254-SJF-GRB Document 14 Filed 01/26/16 Page 14 of 18 PageID #: 52
THIRD COUNTERCLAIM
94. FRAUDULENT INDUCEMENT
a)that Plaintiffs made knowing misrepresentation of material facts relating to loans made to
defendants;
b)that Plaintiffs had intention to deceive defendants;
c)that defendants relied on said misrepresentations; and
d)defendants suffered injury therefrom
FOURTH COUNTERCLAIM
95. TORTIOUS INTERFERENCE
a)Plaintiff caused Defendants to retain auditors, brokers, accountants; and
b)Plaintiff required Defendants to pay said professionals fees and costs
c)that Plaintiff’s aforesaid agents caused damages to defendants.
FIFTH COUNTERCLAIM
96. FRAUD
a)that Plaintiff made representation of fact relating to Plaintiffs loan, contracts, and affiliates;
b)that Plaintiff’s representations were false;
c)that said representations were material;
d)Plaintiffs knew of the representations falsity, or were ignorant of the truth;
e)the Plaintiffs had intent that said representations should be acted upon by the defendants in the
manner reasonably contemplated;
Case 2:15-cv-07254-SJF-GRB Document 14 Filed 01/26/16 Page 15 of 18 PageID #: 53
f)that defendants, the injured parties, were ignorant of the falsity of said representations;
g)that defendants relied on the truth of said representations;
h)that defendants had the right to rely thereon; and
I) that said false representations caused consequent and proximate injury to defendants.
SIXTH COUNTERCLAIM
97. RESCISSION
Equity requires that defendants’ transactions with Plaintiffs should be rescinded because it was
consummated through material misrepresentations as set forth above, even if fraud has been
alleged but the facts do not rise to the level of actionable fraud:
SEVENTH COUNTERCLAIM
98. PRIMA FACIE TORT
a) Plaintiffs intended to damage corporate driving price down, and depriving individual
defendant of profit
b)Plaintiffs had intent to cause ill will or knew their acts would damage defendants
c)Plaintiffs acts caused Damage to Corporate Defendant’s Business or Trade
d)Plaintiffs acts not justifiable under circumstances
EIGHTH COUNTERCLAIM
99. NY GBL § 349
a)Plaintiff’s acts or practices were deceptive business practices directed at consumer-oriented
Case 2:15-cv-07254-SJF-GRB Document 14 Filed 01/26/16 Page 16 of 18 PageID #: 54
borrower Defendants;
b)said acts or practices were misleading in a material respect; and
c)the defendants were injured as a result of the deceptive act or practice.
WHEREFORE, Defendants respectfully request that plaintiffs’ complaint be denied in its
entirety, and, that this Honorable Court enters judgment in favor of defendants on their
Counterclaims awarding :actual damages upon proof at trial ; as well as:
- Treble damages;
- Injunctive relief;
- Disgorgement of profits;
- Punitive damages;
-Reasonable attorney fees and costs of litigation; and such other and further relief as to this court
seems just and proper.
Dated: January 24, 2016
