Upon learning of an investigation into his Ponzi scheme Mining Capital Coin, Luiz Capuci Jr. abandoned his life in the US and fled to Brazil.
It was a calculated move, with Capuci believing Brazil’s policy of not extraditing its citizens would protect him from justice.
Unfortunately that hasn’t quite panned out.
While the DOJ’s criminal case against Capuci is in a stalemate (Capuci remains a wanted fugitive in hiding), the SEC is pushing forward its civil case through alternative service.
Something Capuci is definitely not happy about.
Capuci made his displeasure known in a September 27th intent filing.
On behalf of Capuci (right), the law firm Wellman and Warren stated in the filing;
Wellman & Warren, LLP, specially appearing for Defendant Capuci, hereby gives notice that it proposes to raise issues of foreign law by intending to rely on the law of the Federal Republic of Brazil.
The SEC filed its alternative service motion on August 26th. In the motion the regulator seeks to serve Capuci and partner in crime Emerson Pires through the Hague Convention.
That can take time, so the SEC has alternatively requested permission to serve Capuci via email. Specifically via email to Capuci’s California-based attorneys.
Supported by a “declaration of Brazilian legal authority”, Capuci’s answer to that is “Brazil does not allow email service on individuals in its country.”
Capuci wants the SEC barred from service via email, because that will waste the most amount of time.
The SEC admits that the Convention applies in this matter. It further admits that it can effectuate service through the Convention. Its only reason for seeking an alternative method of service is because it contends that it will take “eight to 12 months to effect service on the Individual Defendants.”
The SEC does not want to serve pursuant to the Convention, as the SEC believes it will take a time period that is too long for its liking.
This is not a valid reason to circumvent the expressed terms of the Convention.
Capuci also argues that if the court granted the SEC’s motion, it would undermine his pending appeal against the Mining Capital Coin injunction.
The court has given the SEC until October 4th to file its reply to Capuci’s response, which we’re expecting over the next 24 hours.
Speaking of the MCC injunction though, Capuci has also filed a hilarious response to getting caught trying to sell frozen assets.
After discovering Capuci had several frozen property assets listed for sale, the SEC moved for Capuci to be found in contempt.
Capuci filed his response on September 27th, arguing;
The SEC has not presented any evidence to substantiate its assertion.
While it represents to the Court that Capuci disposed of assets covered under the preliminary injunction, the SEC fails to show one example of any property that was either transferred or sold to a third party.
For this reason alone, the SEC’s motion should be denied.
Capuci argues that, while he does indeed have assets frozen by the MCC injunction listed for sale, that doesn’t equate to an intent to actually sell them.
The SEC already acknowledged such conduct is not a violation of the asset freeze. But more importantly, the preliminary injunction order itself does not prohibit such activity.
In other words, Capuci hasn’t violated the injunction until the moment the frozen assets are actually sold.
The order does not contain language that Capuci is prohibited from “attempting” or “trying” to sell his properties.
Instead, the order states that Capuci is only prohibited from actually “disposing of” or “selling” his properties.
The SEC could have included the qualifying language that would have precluded Capuci from even attempting any disposition of his assets, but it decided not to.
Therefore, the SEC must live with the language it chose.
While Capuci’s attempt to weasel out of getting caught is certainly amusing, whether the court buys his bullshit remains to be seen.
In their filing, the SEC noted co-defendant Emerson Pires had already sold a frozen Florida property asset.
Pires (right) is also up for contempt but, also having fled to Brazil, has thus far ignored all filings in the SEC’s case.
As with the alternative service motion, the SEC has been given till October 4th to file a reply to Capuci’s contempt response.