The Digital Altitude Receiver has opted to not pursue restoration efforts in opposition to Paradise Media Ventures and proprietor John Souza.
In mild of that being the final excellent motion for the Receivership, the Receiver has filed for discharge.
As a service provider supplier to Digital Altitude, Paradise Media Ventures (PMV) was paid $600,000 in early 2018.
The corporate quickly realized it had overpaid PMV $300,000, and requested a reversal of the $600,000 switch.
PMV’s financial institution refused the reversal, and Souza (proper) ghosted makes an attempt by Digital Altitude to get him to ship the overpayment again.
Within the meantime Digital Altitude was shut down by the FTC, and a Receivership appointed.
Upon studying of the dispute, the Receiver filed a $515,000 clawback lawsuit in opposition to PMV and Souza.
Souza defended the clawback movement, primarily arguing he was entitled to maintain the stolen client funds.
The courtroom denied the Receiver’s movement, recognizing there was a authentic dispute that may should be resolved by way of further litigation.
To that finish the Receiver explored the opportunity of pursuing a civil case in opposition to PMV and Souza in Georgia.
In the end nonetheless, cost-benefit evaluation noticed the Receivership abandon the concept.
As said within the Receiver’s March eleventh Movement to Discharge;
PMV was apparently to have been paid $600,000 in settlement, however in line with the Receiver’s calculations obtained $1,105,000 in settlement funds plus $10,000 in settlement-related overpayments.
The Receiver demanded return of the funds, however Mr. Souza, PMV’s principal (by means of his counsel) disputed the Receiver’s demand and the Receiver filed a movement to compel turnover which this Court docket denied (figuring out that the matter was topic to authentic dispute).
The Receiver additionally sought, and was granted, authority to be reappointed to permit the Receiver to present discover of his appointment in Georgia for functions of pursuing litigation there in opposition to PMV.
The Receiver made repeated makes an attempt to settle the matter each earlier than and after the turnover movement was introduced and denied, however to no avail.
In the middle of these efforts, Receiver ready a Criticism for submitting within the State courtroom in Georgia, and introduced it to counsel for PMV.
Nonetheless, after conducting an intensive cost-benefit evaluation with respect to bringing the litigation, with none engagement in any respect from PMV regarding its willingness to debate potential settlement, and with out waiver of any rights or pursuits any of the Receivership Entities might have with respect to the matter, the Receiver has decided that it isn’t in the very best pursuits of the receivership property to maneuver ahead with litigation in Georgia in opposition to PMV.
In an e-mail obtained by BehindMLM yesterday, Souza incorrectly asserted the case was dropped
as they’d no case and understood that in the event that they tried to pursue it they’d most likely find yourself dropping my countersuit.
You actually imagine that they did a price profit evaluation and determined in opposition to it?
Come on…. you can’t be that naive.
On the finish of the day Souza’s litigation was the final consideration for what has total been a fairly weak Receivership restoration sensible.
It’s certainly not a clear-cut selection, however comprehensible why the choice was made to drop restoration.
Pursuing the matter in George would take who is aware of how lengthy, additional drain already restricted Receivership property and, as with all case, there’s no assure of successful the case.
In protection of his firm being overpaid to help a pyramid scheme that bilked customers out of $54 million, Souza justifies holding the cash as a result of he was underpaid.
After we terminated the settlement with DA on account of non-payment approach earlier than they had been closed down they owed us virtually 2M on unpaid Invoice’s for over 16 months.
On high of all of it we discounted our choices to them considerably.
Souza doesn’t seem involved that the cash he saved or claims he’s owed was obtained by way of fraud.
We went in trusting was was informed to us and we misplaced like everybody else.
We acquired paid 500k after they owed us 2.5M of our companies at a 90% low cost.
We misplaced our asses on the deal
That’s the reality.
Along with not pursue litigation in opposition to Souza, the Receivership has additionally deserted efforts to promote 314,000 shares of Falcon Oil & Gasoline.
The shares look like illiquid and never of serious worth.
The Receiver’s efforts to monetize the shares have been unsuccessful thus far.
Provided that that is the one remaining asset, and its potential restricted worth, the Receiver, doesn’t imagine it’s in the very best pursuits of the receivership property as an entire to carry the receivership open and delay distribution of the receivership funds to the FTC for cost of client redress till these shares will be monetized.
The shares had been obtained as a part of the FTC’s settlement with Digital Altitude CTO Alan Moore.
As an entire, there isn’t any doubt that the Digital Altitude Receivership is without doubt one of the weakest cases we’ve seen.
Internet winners weren’t pursued, a number of restoration efforts had been dropped and total the Receivership solely managed to get well $2.1 million.
Digital Altitude was a $54 million greenback pyramid scheme.
Of the quantity recovered, the Receivership billed $250,213 (13%). As of February seventh, 2020, the Receivership is sitting on $1.68 million.
After ultimate requested charges are paid out, the quantity left to be distributed to Digital Altitude victims is simply $1.488 million.
This quantity is to be turned over to the FTC for distribution to Digital Altitude victims, pending courtroom approval.
A listening to on the movement has been scheduled for June fifteenth.
Replace fifteenth October 2020 – As per an October fifth order, the Digital Altitude Receivership has been formally closed.