Source: https://docs.justia.com/cases/federal/district-courts/arizona/azdce/2:2011cv01426/629799/1
Timestamp: 2019-04-18 15:02:15+00:00

Document:
1 4 David S. Gingras, #021097 Gingras Law Office, PLLC 3941 E. Chandler Blvd., #106-243 Phoenix, AZ 85048 Tel.: (480) 668-3623 Fax: (480) 248-3196 David@GingrasLaw.com 5 Attorney for Plaintiff Xcentric Ventures, LLC 2 3 6 UNITED STATES DISTRICT COURT 7 DISTRICT OF ARIZONA 8 9 XCENTRIC VENTURES, LLC, an Arizona limited liability company, Plaintiff, 10 11 12 GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, AZ 85048 13 14 15 16 19 VERIFIED COMPLAINT v. LISA JEAN BORODKIN and JOHN DOE BORODKIN, husband and wife; RAYMOND MOBREZ and ILIANA LLANERAS, husband and wife; DANIEL BLACKERT and JANE DOE BLACKERT, husband and wife; ASIA ECONOMIC INSTITUTE, LLC, a California limited liability company; DOES 1-10, inclusive, Defendants. 17 18 Case No: ___________________ For its Verified Complaint Plaintiff XCENTRIC VENTURES, LLC alleges as follows: 1. This is an action to recover damages arising from a frivolous lawsuit 20 maliciously and wrongfully commenced and continued by Defendants against Plaintiff in 21 the State of California (“the Asia Litigation”). 22 2. In preparation for and during the course of the Asia Litigation, Defendants 23 engaged in a wide variety of unlawful, criminal, tortious, and unethical conduct 24 including, but not limited to: perjury in violation of 18 U.S.C. § 1621, subornation of 25 perjury in violation of 18 U.S.C. § 1622, false swearing in violation of 18 U.S.C. § 26 1623, and multiple/repeated violations of the California Rules of Professional Conduct 27 including, but not limited to: Rule 3-200 (prohibiting a lawyer from bringing an action or 28 asserting any position in litigation without probable cause and for the purpose of VERIFIED COMPLAINT 1 harassing or maliciously injuring any person); Rule 3-210 (prohibiting a lawyer from 2 advising a client to violate the law); and Rule 5-200(B) (prohibiting a lawyer from 3 misleading a court by making a false statement of fact). 4 PARTIES 3. 5 Plaintiff XCENTRIC VENTURES, LLC (“Xcentric”) is an Arizona limited 6 liability company which operates, and at all relevant times has operated, the website 7 www.RipoffReport.com (“Ripoff Report”). 4. 8 Defendant LISA JEAN BORODKIN (“BORODKIN”) is an attorney 9 licensed to practice law in the States of California and New York. At all times relevant to 10 this action, Defendant BORODKIN was married to JOHN DOE BORODKIN and was 11 acting on behalf of, and for the benefit of, their marital community. 5. 12 Defendants RAYMOND MOBREZ (“MOBREZ”) and ILIANA GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, AZ 85048 13 LLANERAS (“LLANERAS”) are, and at all relevant times were, a married couple 14 residing in Los Angeles, California. 6. 15 At all times relevant to this action, MOBREZ and LLANERAS were the 16 principals of Defendant ASIA ECONOMIC INSTITUTE, LLC (“AEI”) which is a 17 California limited liability with its principal place of business in Los Angeles, California. 7. 18 Defendant DANIEL BLACKERT (“BLACKERT”) is an attorney licensed 19 to practice law in the States of California. At all times relevant to this action, Defendant 20 BLACKERT was married to JANE DOE BLACKERT and was acting on behalf of, and 21 for the benefit of, their marital community. 8. 22 DOES 1–10 are individuals and/or entities, the true names of which are not 23 currently known, who are or who may be liable to Xcentric for the conduct alleged 24 herein. JURISDICTION/VENUE 25 26 9. Defendants, and each of them, have knowingly, intentionally and 27 deliberately engaged in tortious activity directed at and within the State of Arizona and 28 intentionally directed at Xcentric and Xcentric’s principals, officers, agents and 2 VERIFIED COMPLAINT 1 employees including non-party EDWARD MAGEDSON (“Magedson”) who are 2 residents of the State of Arizona. As more specifically alleged herein, Defendants’ 3 actions were specifically intended to cause harm to Plaintiff within the State of Arizona 4 and, in fact, Defendants’ actions had the intended effect of actually causing substantial 5 harm to Plaintiff within the State of Arizona. Defendants, and each of them, are therefore 6 properly subject to personal jurisdiction within the State of Arizona. 7 10. Pursuant to 28 U.S.C. § 1332, this Court has subject matter jurisdiction 8 because there is complete diversity among the parties and the amount in controversy 9 exceeds $75,000.00. 10 11. Pursuant to 28 U.S.C. § 1391(a)(2), venue is proper in this judicial district 11 because a substantial part of the events giving rise to Plaintiff’s claims occurred in this 12 district. ALLEGATIONS COMMON TO ALL CLAIMS GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, AZ 85048 13 14 12. The Ripoff Report is, among other things, a website for consumer 15 complaints. 16 connection may use the Ripoff Report website to create and publish complaints about 17 companies or individuals who they believe have wronged them in some manner. 18 13. Any member of the public with access to a computer and an Internet Complaints published on the Ripoff Report are automatically indexed by 19 numerous search engines such as Google and such complaints often rank very high in 20 Google’s search results. Because of this high ranking, individuals or businesses with 21 complaints on the Ripoff Report website may be negatively impacted. 22 14. Since the site began in 1998, because of the negative impact that 23 complaints on the Ripoff Report website may have, Xcentric has been sued numerous 24 times by plaintiffs seeking to remove reports or otherwise obtain damages from Xcentric 25 for the publication of such reports. 26 15. As a matter of law and pursuant to the Communications Decency Act, 47 27 U.S.C. § 230(c)(1) (the “CDA”), except as to certain types of intellectual property claims 28 and criminal claims, Xcentric is generally immune from any civil cause of action arising 3 VERIFIED COMPLAINT 1 from material posted on the Ripoff Report site by a third party. As a result of the CDA, 2 because Xcentric normally plays no material role in the creation of the reports at issue, 3 lawsuits seeking to force the removal of reports through litigation have frequently been 4 dismissed or otherwise resolved in favor of Xcentric. 5 16. In addition to frequent praise and nearly unanimous judicial affirmation, the 6 CDA has also drawn substantial and widespread commentary and passionate criticism 7 from those who disagree with or dislike the law or the results which it sometimes 8 requires. 9 17. Among those who have been targeted by online criticism on the Ripoff 10 Report website or elsewhere, the CDA is often seen as an unfair law which creates an 11 improper “loophole” allowing sites such as the Ripoff Report to publish derogatory and 12 even defamatory speech with complete impunity. GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, AZ 85048 13 18. One well-known commentary regarding both the CDA and the Ripoff 14 Report website is an article written by an attorney, Sarah Bird, entitled “The Anatomy of 15 a RipOff Report Lawsuit” which was originally published on January 21, 2008 on 16 www.SEOmoz.org (the “Bird Article”). 17 analysis of the Ripoff Report’s successful litigation history, as well as the author’s 18 opinions regarding the CDA and her answers to the following questions, among others: 19 “Is it true that RipOff Report has never lost a lawsuit? Is this a failure of the legal 20 system? Are the allegations unfounded? If there is truth in the allegations, then how 21 is the system going wrong? Why can’t RipOff Report be held responsible for its 22 conduct?” 23 19. The Bird Article purports to offer a legal Among other things, the Bird Article contains a discussion of federal 24 racketeering laws, specifically the Racketeer Influenced and Corrupt Organizations Act 25 or “RICO”, codified at 18 U.S.C. §§ 1961, et seq., and the predicate act of extortion. 26 Among other things, the Bird Article suggests that plaintiffs seeking to avoid the 27 limitations imposed by the CDA may be able to do so by pursing federal RICO claims 28 against Xcentric predicated upon alleged acts of extortion. 4 VERIFIED COMPLAINT 1 20. In closing, the author of the Bird Article specifically encouraged litigants to 2 attempt to overcome Xcentric’s CDA immunity by bringing claims of RICO/extortion: “I 3 hope that plaintiffs will continue to press the RICO/Extortion combo … .” 4 21. On January 28, 2009, a third party posted a complaint on the Ripoff Report 5 website concerning AEI, MOBREZ, and LLANERAS. The report was written from the 6 perspective of an unhappy former employee and it contained various derogatory 7 statements about AEI, MOBREZ, and LLANERAS. 8 subsequently posted on the site by third parties between early 2009 and early 2010. 9 10 11 22. Other similar reports were Based on the publication of these reports, Defendants MOBREZ and LLANERAS decided to commence litigation against XCENTRIC and Magedson. 23. Prior to the commencement of the Asia Litigation, Defendants MOBREZ and/or LLANERAS and/or BLACKERT and/or Does 1-10 performed legal research and 13 GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, AZ 85048 12 requested that unknown others perform research, on previous lawsuits involving 14 XCENTRIC. During the course of this research, Defendants MOBREZ, LLANERAS, 15 and BLACKERT reviewed the Bird Article, among other things, and determined that 16 based on the CDA, litigation against XCENTRIC and Magedson was extremely unlikely 17 to succeed, assuming the litigation merely accused XCENTRIC and/or Magedson of 18 publishing material submitted to the Ripoff Report website by a third party. 19 24. Based on this conclusion, Defendants MOBREZ, LLANERAS, and 20 BLACKERT determined that an alternative litigation strategy was necessary such as the 21 RICO/extortion theory advocated in the Bird Article. However, Defendants MOBREZ, 22 LLANERAS, and BLACKERT knew that they could not legitimately present such a 23 theory because at no time was AEI actually extorted by XCENTRIC or Magedson. 24 25. To solve this problem, at some time in or around April 2009, Defendants 25 MOBREZ and LLANERAS devised a plan, to wit: Defendant MOBREZ would contact 26 Magedson by telephone and would attempt to induce Magedson to ask for money in 27 exchange for the removal of the reports about AEI thereby permitting AEI to proceed 28 with litigation under a RICO/extortion theory. 5 VERIFIED COMPLAINT 1 26. In furtherance of this plan, in April and May 2009 MOBREZ placed a 2 series of seven telephone calls to Magedson using the primary phone number listed on the 3 Ripoff Report website; (602) 359-4357. The date, time, and duration of each call from 4 MOBREZ to Magedson is reflected in the table below: 5 TABLE OF CALLS 6 Call # 1 2 3 4 5 6 7 7 8 9 10 11 12 GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, AZ 85048 13 14 15 27. Date 4/27/2009 4/27/2009 4/27/2009 5/5/2009 5/5/2009 5/9/2009 5/12/2009 Start Time 3:21 PM 3:27 PM 3:28 PM 11:28 AM 1:05 PM 1:10 PM 2:46 PM Call From # (310) 806-3000 (310) 806-3000 (310) 806-3000 (310) 806-3000 (310) 806-3000 (310) 801-5161 (310) 806-3000 Length Min 3.5 1.0 2.9 2.6 2.2 .5 16.5 Defendant LLANERAS was secretly listening to calls #4, 5 and 7 from Defendant MOBREZ to Magedson without Magedson’s knowledge. 28. Following the completion of the calls and on the last day prior to the 16 expiration of the statute of limitations as to the first report about AEI, on January 27, 17 2010 Defendants AEI, MOBREZ, LLANERAS, and BLACKERT commenced the Asia 18 Litigation which began in the Los Angeles County Superior Court, Case No. SC106603. 19 The action was subsequently removed to the United States District Court, Central District 20 of California, Case No. 2:10-cv-01360-SVW–PJW. 21 22 23 29. A true and correct copy of the original 33-page Complaint filed in the Asia Litigation, excluding exhibits, is attached hereto as Exhibit A. 30. In their initial Complaint AEI, MOBREZ, and LLANERAS asserted twelve 24 claims for relief against XCENTRIC and Magedson including two federal RICO causes 25 of action, one predicated on “extortion” and one predicated on “wire fraud”. 26 Complaint accused XCENTRIC and Magedson of engaging in a “SHAKEDOWN” by, 27 among other things, “offer[ing] to enroll Plaintiffs in the CAP program for a fee of at 28 least five thousand dollars ($5,000), plus a monthly monitoring fee.” 6 VERIFIED COMPLAINT The 1 31. At a hearing which took place on April 19, 2010, Defendant BORODKIN 2 entered an appearance in the Asia Litigation as counsel for AEI, MOBREZ, and 3 LLANERAS. From April 19, 2010 through the final conclusion of the case, Defendant 4 BORODKIN was actively involved in the Asia Litigation as counsel for MOBREZ, 5 LLANERAS, and AEI. 6 32. At the conclusion of the hearing, the District Court issued an order, a true 7 and correct copy of which is attached hereto as Exhibit B. In the April 19th order, the 8 Court required “plaintiff” (meaning AEI, MOBREZ, and LLANERAS) to “file a 9 declaration describing meetings with any representative of defendant regarding 10 11 extortion” and to do so within two weeks. 33. On the last day to do so, May 3, 2010, MOBREZ and LLANERAS filed their declarations with the Court as ordered. True and correct copies of their declarations 13 GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, AZ 85048 12 are attached hereto as Exhibits C and D, respectively. Both declarations were sworn to 14 as true and correct under penalty of perjury pursuant to 28 U.S.C. § 1746. 15 34. In his declaration, Defendant MOBREZ detailed the alleged contents of his 16 telephone calls to Magedson in April and May 2009. In Paragraph 10 of his declaration, 17 Defendant MOBREZ described the contents of one such conversation with Magedson as 18 follows: 19 20 21 22 23 24 25 26 On May 5, 2009, I again contacted the Ripoff Report office by phone. I asked the man, who now identified himself as Ed Magedson, if he had received the e-mail I sent to him February 28, 2009. Mr. Magedson responded that I would need to enroll in the CAP program. Again, I asked for more information regarding the program, including the cost of participation. Mr. Magedson proceeded to describe his Web site and how it could benefit us. He then emphasized that his Web site has immunity under the law and, therefore could not be sued. Moreover, he claimed to have a team of lawyers that would fight us if we chose to sue him. He further warned that others had tried but failed and that it was best to just “go with the program.” Ms. Llaneras witnessed this conversation from her office phone. 27 28 7 VERIFIED COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 35. In Paragraph 13 of his declaration, Defendant MOBREZ described the contents of a second conversation with Mr. Magedson as follows: Later that day, I responded to Mr. Magedson’s e-mail by phone. I told Mr. Magedson that I had received his e-mail and was still uncertain what he wanted me to do. Mr. Magedson responded that I would have to go onto his Web site and enroll in the CAP program. When asked what it would cost for us to participate in his program, Mr. Magedson replied that it would cost us at least "five grand" plus a monthly maintenance fee of a couple hundred dollars. He stated that these charges were based on the size if [sic] company. Specifically, he stated that the more money a company made, the more they would be charged. When asked the reasoning behind this, he was not responsive. He again instructed me to fill out the CAP forms. Again, Ms. Llaneras listened from her office phone. 36. Among other allegations, the allegation that Mr. Magedson demanded “at least ‘five grand’” from Defendant MOBREZ formed the primary basis for the claim that 13 GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, AZ 85048 12 XCENTRIC and Magedson engaged in extortion as to AEI, MOBREZ, and LLANERAS. 14 37. In her May 3, 2010 declaration, Defendant LLANERAS testified under 15 penalty of perjury that “I witnessed the conversations that took place between Mr. 16 Mobrez and Mr. Magedson on May 5th and 12th, 2009. Specifically, I listened in on the 17 conversation from my office phone.” 18 38. In her declaration, Defendant LLANERAS further testified under penalty of 19 perjury that “Mr. Mobrez’s Declaration is a true and accurate rendition of the 20 conversations that I witnessed between Mr. Mobrez and Mr. Magedson.” 21 39. In her declaration, Defendant LLANERAS further testified under penalty of 22 perjury that she took handwritten notes during each conversation between Defendant 23 MOBREZ and Magedson as the conversations occurred. 24 40. On Friday, May 7, 2010, Defendant MOBREZ was deposed in Los 25 Angeles, California regarding his allegations in the Asia Litigation. 26 deposition, Defendant MOBREZ reviewed his May 3, 2010 declaration and reaffirmed, 27 again under penalty of perjury, that the statements contained in his declaration were 28 truthful and accurate. 8 VERIFIED COMPLAINT During his 1 41. Unbeknownst to Defendants MOBREZ and LLANERAS, all of Defendant 2 MOBREZ’s calls to the Ripoff Report website were automatically recorded by Xcentric’s 3 phone system. This fact was disclosed to Defendants MOBREZ and LLANERAS for the 4 first time near the end of MOBREZ’s deposition on May 7. 5 42. As reflected in the recordings of the conversations between Defendant 6 MOBREZ and Magedson, Defendants MOBREZ and LLANERAS each committed 7 perjury when they testified that Magedson demanded $5,000 from MOBREZ in a 8 telephone conversation on May 5, 2009. This allegation was, and is, completely false. 9 43. In truth, at no time during any telephone conversion or at any other time did Magedson ever ask for any money from Defendants MOBREZ or LLANERAS. 11 Defendants MOBREZ and LLANERAS fabricated this allegation in an effort to create 12 causes of action against XCENTRIC and Magedson which they believed would be 13 GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, AZ 85048 10 sufficient to avoid CDA immunity. By doing so, Defendants MOBREZ and LLANERAS 14 hoped to force the removal of the reports about AEI, MOBREZ and LLANERAS on the 15 Ripoff Report website. 16 44. On May 11, 2010, a letter was sent to Defendants BORODKIN and 17 BLACKERT, a true and correct copy of which is attached hereto as Exhibit E. Among 18 other things, this letter reiterated that Defendant MOBREZ and LLANERAS had 19 committed perjury and that their claims against XCENTRIC and Magedson were 20 completely groundless. 21 45. In addition, the May 11, 2010 letter reminded Defendants BORODKIN and 22 BLACKERT that Rule 3–700 of the California Rules of Professional Conduct required 23 the mandatory withdrawal of any attorney who: “knows or should know that the client is 24 bringing an action, conducting a defense, asserting a position in litigation, or taking an 25 appeal, without probable cause and for the purpose of harassing or maliciously injuring 26 any person … .” 27 46. 28 In addition, the May 11, 2010 letter cautioned Defendants BORODKIN and BLACKERT that: “Xcentric has successfully sued parties and their lawyers for 9 VERIFIED COMPLAINT 1 knowingly commencing and continuing litigation that they knew was factually 2 groundless. Xcentric intends to bring such claims against your clients for their wrongful 3 actions and we will not hesitate to include claims against either or both of you 4 individually if you continue to prosecute any claims in this case which you know are 5 factually untrue or if the evidence demonstrates that you brought this case knowing that 6 the allegations contained in it were factually untrue.” 7 47. The May 11, 2010 letter to Defendants BORODKIN and BLACKERT 8 concluded with the following admonition: “In closing, I want to emphasize one obvious 9 fact—your clients have lied about the material facts of this case. As such, just as your 10 clients were, you now stand at a crossroads wherein you have a choice: you can do the 11 right thing and follow the requirements set forth by the law and by your ethical duties, or 12 your can ignore those duties and face the consequences.” GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, AZ 85048 13 48. Following receipt of the May 11, 2010 letter, Defendants BORODKIN and 14 BLACKERT did not withdraw from the Asia Litigation. Instead, despite knowing that 15 the claims made by their clients were factually untrue, they continued to pursue the case 16 even more aggressively than before. 17 49. On May 20, 2010, Defendants MOBREZ and LLANERAS filed 18 “Corrected” declarations with the court, true and correct copies of which are attached 19 hereto as Exhibits F and G, respectively. In her “corrected declaration”, Defendant 20 LLANERAS substantially recanted all of her prior testimony regarding the extortion 21 allegedly committed by XCENTRIC and Magedson. 22 50. In his “corrected declaration”, Defendant MOBREZ also recanted 23 substantial portions of his previous testimony regarding the alleged substance of his 24 telephone conversations with Magedson in April and May 2009. However, Defendant 25 MOBREZ further perjured himself by testifying for the first time, “In addition, there 26 were a number of incoming calls to me from Ripoff Report.” 27 MOBREZ knew that at no time were any calls ever made from Ripoff Report to him. 28 This allegation was simply another lie intended to further his fraud upon the Court. 10 VERIFIED COMPLAINT In truth, Defendant 1 51. Upon information and belief, Defendants BORODKIN and BLACKERT 2 assisted Defendant MOBREZ with the creation of his “corrected declaration” and in 3 doing so BORODKIN and BLACKERT intentionally suborned perjury from MOBREZ. 4 52. On May 24, 2010, XCENTRIC and Magedson filed a Motion for Summary 5 Judgment in the Asia Litigation which argued that AEI, MOBREZ, and LLANERAS had 6 engaged in a fraud upon the Court by lying as to their extortion claims. The motion 7 further argued that AEI could not prevail on certain of its other claims due to Defendant 8 MOBREZ’s deposition testimony in which he revealed that during nine years of 9 existence, AEI’s total revenues were $0. 10 53. Defendants, and each of them, actively and aggressively opposed XCENTRIC’s Motion for Summary Judgment despite knowing that each and every claim 12 in the Asia Litigation was factually groundless and that the action was commenced 13 GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, AZ 85048 11 wrongfully, maliciously and for the improper purpose of harassment and seeking relief to 14 which Defendants were not entitled as a matter of law. 15 54. In an effort to prolong the action and compound the harm caused, one day 16 before XCENTRIC’s Motion for Summary Judgment was set to be heard, on July 9, 2010 17 Defendant BORODKIN filed a pleading entitled, “PLAINTIFFS’ EX PARTE MOTION 18 (1) UNDER RULE 56(f) TO DENY OR CONTINUE DEFENDANTS’ MOTION FOR 19 SUMMARY 20 COMPELLING DEFENDANT ED MAGEDSON TO APPEAR FOR DEPOSITION WITH 21 DOCUMENTS AND (3) FOR SANCTIONS UNDER LOCAL CIVIL RULES 37-4 AND 22 83-7.” 23 55. JUDGMENT TO CONDUCT FURTHER DISCOVERY AND (2) In her July 9 pleading, Defendant BORODKIN vigorously argued against 24 the disposition of any of the claims against XCENTRIC and Magedson, claiming, 25 “Defendants [XCENTRIC and Magedson] will do anything to avoid the August 3, 2010 26 trial date.” 27 Magedson, and their counsel of a variety of improper conduct including, but not limited 28 to: To support that position, Defendant BORODKIN accused XCENTRIC, 11 VERIFIED COMPLAINT 1 • 2 3 and Rules, and dictating procedural rules of their own making” • 4 5 “With escalating frequency, disobey and misrepresent this Court’s Orders “Harass Defendants’ [sic] counsel with veiled threats of administrative proceedings and explicit threats of Rule 11 sanctions without basis.” 56. At the time she filed the July 9 pleading, Defendant BORODKIN knew that 6 her allegations of improper conduct against XCENTRIC, Magedson, and their counsel 7 were completely false. 8 57. On July 19, 2010, the District Court in the Asia Litigation issued a 53-page 9 order granting partial summary judgment in favor of XCENTRIC and Magedson as to the 10 RICO/extortion claims and denying all relief requested in Defendant BORODKIN’s July 11 9 pleading. The court further dismissed the RICO/wire fraud claim pursuant to Fed. R. 12 Civ. P. 9(b) but granted leave to amend. GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, AZ 85048 13 58. Despite knowing that the case was entirely groundless and frivolous, on 14 July 27, 2010, Defendants, and each of them, prepared and filed an 84-page First 15 Amended Complaint in the Asia Litigation supported by more than 250 pages of exhibits. 16 59. Shortly thereafter, on August 16, 2010, Defendants BLACKERT and 17 BORODKIN filed a Motion for Reconsideration requesting that the District Court 18 reconsider its summary judgment ruling. 19 BORODKIN and MOBREZ each submitted lengthy declarations which purported to 20 describe unlawful “threats” made by Magedson and his counsel during a settlement 21 conference which took place on July 20, 2010. 22 60. In support of this request, Defendants On September 27, 2010, XCENTRIC filed a Motion for Summary 23 Judgment as to the First Amended Complaint in the Asia litigation. At the time the 24 motion was filed, the matter was set for hearing on November 1, 2010. 25 61. Less than two hours before the November 1, 2010 summary judgment 26 hearing and knowing that XCENTRIC’s counsel would be traveling from Arizona to Los 27 Angeles for the hearing, Defendant BORODKIN filed a second motion requesting relief 28 under Rule 56(f). Defendant BORODKIN supported her second Rule 56(f) motion with 12 VERIFIED COMPLAINT 1 a declaration in which she described, at length, her recent communications with an 2 individual, JAMES ROGERS (“ROGERS”) who was previously employed as a personal 3 assistant to Magedson. 4 continuance was needed due to her inability to obtain ROGERS’ deposition prior to the 5 November 1, 2010 summary judgment hearing. 6 62. Defendant BORODKIN further declared that a Rule 56(f) In her declaration, Defendant BORODKIN made knowingly false and 7 misleading statements to the court regarding the circumstances of ROGERS’ deposition. 8 Specifically, Defendant BORODKIN declared: 9 10 11 12 On or about October 22, 2010, I received a telephone call from Defendants’ attorney David Gingras. We again spoke about the possibility of avoiding this motion – but his proposal – that I fly to Phoenix the next day, Saturday, October 23, 2010 to do a joint deposition of Mr. Rogers, did not seem feasible. Plaintiffs had already purchased an airline ticket for Mr. Rogers for October 23, 2010. GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, AZ 85048 13 14 63. Defendant BORODKIN’s declaration was false and intentionally 15 misleading insofar as she implied that the only option she was given for taking the 16 deposition of ROGERS to “fly to Phoenix the next day … .” In truth, on October 22, 17 2010 Defendant BORODKIN received an email from XCENTRIC’s counsel which 18 offered “to allow you to take the deposition of James Rogers immediately at any time 19 prior to Nov. 1st and at any place … .” Defendant BORODKIN intentionally sought to 20 mislead the Court at to this issue in the hopes that doing so would permit her to further 21 harm XCENTRIC and Magedson by prolonging the Asia Litigation. 22 64. On November 1, 2010 after XCENTRIC’s counsel had arrived in Los 23 Angeles from Arizona, the District Court vacated the hearing on XCENTRIC’s second 24 Motion for Summary Judgment. The hearing was vacated solely due to the last minute 25 filing of Defendant BORODKIN’s second Rule 56(f) motion. 26 65. On May 4, 2011, the District Court issued an order denying Defendant 27 BORODKIN’s second Rule 56(f) motion in its entirety and granting summary judgment 28 in favor of XCENTRIC and Magedson as to all claims in the Asia Litigation. In a 13 VERIFIED COMPLAINT 1 footnote to its order, on the issue of Defendant BORODKIN’s second Rule 56(f) motion, 2 the District Court noted: 3 4 5 6 7 8 The Court notes that this eleventh hour filing was consistent with Plaintiffs’ pattern in this case. On Friday, July 9, 2010, one day before to the previous summary judgment hearing in this case, Plaintiffs also filed an Ex Parte Application to deny or continue Defendants' motion for summary judgment so as to allow Plaintiffs to conduct further discovery under Federal Rule of Civil Procedure 56(f). [Docket no. 87]. That ex parte application was denied in the Court’s July [Docket no. 94]. Plaintiffs have demonstrated a pattern of filing papers late in this case and generally disregarding the scheduling orders of the Court. 9 10 66. By virtue of the May 4, 2011 summary judgment order, the Asia Litigation 11 was resolved in favor of XCENTRIC and Magedson and against AEI, MOBREZ and 12 LLANERAS with respect to all claims and all relief requested. GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, AZ 85048 13 67. On June 15, 2011, a final judgment was entered in the Asia Litigation, a 14 copy of which is attached hereto as Exhibit H. The final judgment resolved the Asia 15 Litigation in favor of XCENTRIC and Magedson and against AEI, MOBREZ and 16 LLANERAS with respect to all claims and all relief requested. 17 FIRST CAUSE OF ACTION 18 WRONGFUL INITIATION OF CIVIL PROCEEDINGS 19 (Against AEI, MOBREZ, LLANERAS and BLACKERT) 20 68. Xcentric incorporates the above allegations as if fully set forth herein. 21 69. At the time the Asia Litigation was commenced, Defendants AEI, 22 MOBREZ, LLANERAS and BLACKERT each knew the action was factually groundless 23 as to each and every claim. 24 70. At the time the Asia Litigation was commenced, Defendants AEI, 25 MOBREZ, LLANERAS and BLACKERT each knew the action was factually groundless 26 in particular as to the allegations of RICO/extortion and RICO/wire fraud. 27 28 71. Defendants AEI, MOBREZ, LLANERAS and BLACKERT commenced the Asia Litigation without probable cause. 14 VERIFIED COMPLAINT 1 72. Defendants AEI, MOBREZ, LLANERAS and BLACKERT commenced 2 the Asia Litigation solely for improper purposes. 3 commenced solely for non-legitimate reasons including, but not limited to, the following: 4 a. Specifically, the action was To pressure Xcentric to remove material from the Ripoff Report website, 5 without any legal basis for doing so, rather than incurring significant legal fees 6 defending a frivolous case; 7 b. MOBREZ, LLANERAS, AEI on the Ripoff Report website in the future; 8 9 To discourage XCENTRIC from allowing consumers to post complaints about c. To create the false impression that MOBREZ, LLANERAS, AEI were “victims” of extortion when, in fact, they were not; 10 11 d. To provide unwarranted support to critics of the Ripoff Report website; 12 e. To stifle the First Amendment rights of XCENTRIC and users of the Ripoff Report website; GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, AZ 85048 13 14 f. rather than using those resources to improve the Ripoff Report site; 15 16 To cause XCENTRIC to divert its resources to defending a frivolous case g. To intimidate XCENTRIC into limiting the public’s ability to use the Ripoff 17 Report website to publish truthful information and access truthful information 18 published by others; 19 h. To wrongfully investigate Magedson’s personal life and to obtain and publicly 20 release personal, private, confidential and/or embarrassing information solely 21 for the purpose of embarrassment and harassment. 22 73. Defendants’ wrongful conduct was the actual and proximate cause of 23 injury, damage, loss, or harm to XCENTRIC in an amount in excess of $75,000.00, the 24 exact amount of which shall be proven at trial. 25 74. The actions of Defendants AEI, MOBREZ, LLANERAS and BLACKERT 26 were willful, malicious, and the product of an evil hand guided by an evil mind. 27 Defendants, and each of them, specifically intended to harm XCENTRIC to an extent 28 sufficient to entitle it to recover punitive damages in an amount to be proven at trial. 15 VERIFIED COMPLAINT 1 SECOND CAUSE OF ACTION 2 WRONGFUL CONTINUATION OF CIVIL PROCEEDINGS 3 (Against BORODKIN, AEI, MOBREZ, LLANERAS and BLACKERT) 4 75. Xcentric incorporates the above allegations as if fully set forth herein. 5 76. At the time the Asia Litigation was commenced, Defendants AEI, 6 MOBREZ, LLANERAS and BLACKERT each knew the action was factually groundless 7 as to each and every claim. 8 77. As of no later than May 7, 2010, Defendants BORODKIN and 9 BLACKERT knew, with absolute certainty, that Defendants MOBREZ and LLANERAS 10 had committed perjury and that their claims of extortion were totally and completely 11 fabricated and false. 12 78. Following the deposition of Defendant MOBREZ on May 7, 2010, GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, AZ 85048 13 Defendant BLACKERT sent an email announcing his intent to withdraw from the Asia 14 Litigation. A true and correct copy of the email is attached hereto as Exhibit I. In his 15 email, Defendant BLACKERT stated, among other things, “You have to realize this is a 16 shock to me. Per my own indepedent [sic] research I need to withdraw from the case and 17 explain why. In light of todays events I have a serious conflict of interest and will 18 withdraw as counsel … Moreover, I urged my client to dismiss this case.” 19 79. Despite expressing his understanding of the ethical requirement that he 20 withdraw from the Asia Litigation, Defendant BLACKERT did not withdraw from the 21 case. Upon information and belief, Defendant BORODKIN actively urged and pressured 22 BLACKERT not to withdraw and to continue pursuing the matter despite knowing that it 23 was entirely groundless and unlawful. 24 80. In or around August 2010, although he never formally withdrew from the 25 matter, Defendant BLACKERT ceased participating in the Asia Litigation. 26 information and belief, Defendant BLACKERT ceased participating in the action because 27 he knew that doing so was unlawful, unethical, and wrongful. 28 81. Upon At no time did Defendant BORODKIN withdraw from the Asia Litigation. 16 VERIFIED COMPLAINT 1 82. As alleged herein, the Defendants, and each of them, wrongfully continued 2 the Asia Litigation without probable cause and knowing that the action was brought 3 primarily for a purpose other than that of securing the proper adjudication of the claims in 4 which the proceedings were based. 83. 5 Defendants’ wrongful conduct was the actual and proximate cause of 6 injury, damage, loss, or harm to XCENTRIC in an amount in excess of $75,000.00, the 7 exact amount of which shall be proven at trial. 84. 8 The actions of Defendant AEI, MOBREZ, LLANERAS, BLACKERT and 9 BORODKIN were willful, malicious, and the product of an evil hand guided by an evil 10 mind. Defendants, and each of them, specifically intended to harm XCENTRIC to an 11 extent sufficient to entitle it to recover punitive damages in an amount to be proven at 12 trial. GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, AZ 85048 13 THIRD CAUSE OF ACTION 14 AIDING AND ABETTING TORTIOUS CONDUCT 15 (Against All Defendants) 16 85. Xcentric incorporates the above allegations as if fully set forth herein. 17 86. Upon information and belief, Defendants AEI, MOBREZ, LLANERAS, 18 BLACKERT, BORODKIN and DOES 1–10 each aided and abetted each other in the 19 Asia Litigation as alleged above. 20 87. Upon information and belief, Defendants AEI, MOBREZ, LLANERAS, 21 BLACKERT, BORODKIN and DOES 1–10 each were each aware that the other 22 Defendants were engaged in the conduct alleged herein for which they are liable to 23 XCENTRIC. 24 88. Upon information and belief Defendants AEI, MOBREZ, LLANERAS, 25 BLACKERT, BORODKIN and DOES 1–10 each provided substantial assistance or 26 encouragement to each other with the intent of promoting their wrongful conduct. 27 28 89. Defendants AEI, MOBREZ, LLANERAS, BLACKERT, BORODKIN and DOES 1–10, each acted in concert with one another during the wrongful commencement 17 VERIFIED COMPLAINT 1 and continuation of the Asia Litigation. Pursuant to A.R.S. § 12–2506(D), Defendants 2 and each of them are jointly and severally liable to XCENTRIC for any and all damages 3 suffered. 4 90. Defendants’ wrongful conduct was the actual and proximate cause of 5 injury, damage, loss, or harm to XCENTRIC in an amount in excess of $75,000.00, the 6 exact amount of which shall be proven at trial. 91. 7 The actions of Defendant AEI, MOBREZ, LLANERAS, BLACKERT and 8 BORODKIN were willful, malicious, and the product of an evil hand guided by an evil 9 mind. Defendants, and each of them, specifically intended to harm XCENTRIC to an 10 extent sufficient to entitle it to recover punitive damages in an amount to be proven at 11 trial. 12 JURY DEMAND GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, AZ 85048 13 14 Xcentric demands trial by jury as to all issues so triable. 15 16 WHEREFORE, Plaintiff XCENTRIC VENTURES, LLC prays that this Honorable 17 Court enter judgment against Defendants as follows: 18 19 20 21 22 A. For damages in an amount according to proof at trial; B. For punitive damages in an amount according to proof at trial; C. For an award of taxable costs; D. Any other relief deemed appropriate by the Court. DATED July 18, 2011. GINGRAS LAW OFFICE, PLLC 23 /S/ David S. Gingras David S. Gingras Attorneys for Plaintiff XCENTRIC VENTURES, LLC 24 25 26 27 28 18 VERIFIED COMPLAINT 1 VERIFICATION 2 3 4 I, EDWARD MAGEDSON, hereby state that I am the manager of XCENTRIC 5 VENTURES, LLC, I have read the foregoing Verified Complaint and know the contents 6 therein to be true to the best of my knowledge, except as to those matters herein stated 7 upon information and belief, and as to such matters, I believe them to be true. 8 9 10 Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury under the laws of the 11 United States of America that the foregoing is true and correct. 12 GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, AZ 85048 13 EXECUTED ON: July 18, 2011. _________________________ EDWARD MAGEDSON 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 19 VERIFIED COMPLAINT Exhibit A Exhibit B Case 2:10-cv-01360-SVW-PJW Document 26 Filed 04/19/10 Page 1 of 1 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL Case No. CV10-1360-SVW-PJWx Title Asia Economic Institute et al v. Xcentric Ventures LLC et al Present: The Honorable Date April 19, 2010 STEPHEN V. WILSON, U.S. DISTRICT JUDGE Paul M. Cruz Deborah Gackle Deputy Clerk Court Reporter / Recorder Tape No. Attorneys Present for Plaintiffs: Attorneys Present for Defendants: Daniel F. Blackert Lisa Boradkin David S. Gingras Proceedings: 1. DEFENDANTS XCENTRIC & MAGEDSON'S SPECIAL MOTION TO STRIKE & MOTION TO REQUIRE RICO CASE STATEMENT  (fld 03/22/10) 2. NEW CASE STATUS CONFERENCE Hearing and conference held. The motion is denied. Order to issue. The case is set for jury trial on August 3, 2010 at 9:00 a.m. Pretrial Conference is set for 3:30 p.m. Within two weeks, plaintiff shall file a declaration describing meetings with any representative of defendant regarding extortion. Defendant, within ten days of receipt of plaintiff’s declaration, shall file a declaration on the same issue. Also, within ten days, the parties shall meet and confer to exchange initial disclosures. The Court bifurcates damages and RICO claims. The trial will only address extortion. Motions for summary judgment may be filed anytime prior to the trial. : Initials of Preparer CV-90 (06/04) CIVIL MINUTES - GENERAL 10 PMC Page 1 of 1 Exhibit C Case 2:10-cv-01360-SVW-PJW Document 28 Filed 05/03/10 Page 1 of 7 DANIEL F. BLACKERT. ESQ., CSB No. 255021 LISA J. BORODKIN, ESQ. CSB No. 196412 L 6 7 s Asia Economic Institute 11766 Wilshire Blvd., Suite 260 Los Angeles, CA 90025 Telephone (310) 806-3000 Facsimile (J 10) 826-4448 [)~111 iel, dasiaecun .oru 13Iackertcsq((j)vaIWO:Culll_ IisaJasiaecul1.orL'. IiS_~l hu,:()(lk i11' /" post. ban <.lc.

References: v. 
 § 1621
 § 1622
 § 26
 § 1332
 § 1391
 § 230
 § 1746
 § 12
 § 1746
 v. 
 V.